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EU Releases Due Diligence Regulation: Will it Follow the UK’s Sensible Approach?

The European Commission published its Due Diligence proposals today, as part of its anti-deforestation Regulation. The proposed EU law would introduce a Due Diligence system to rank countries from ‘high risk’ to ‘low risk’ of deforestation, targeting palm oil and other commodities.

This arbitrary and unilateral approach to Due Diligence risks becoming a new trade barrier.

There is a better way for Brussels to proceed. The UK finalised its Due Diligence rules earlier this month: London’s legality standard means that importers must have proof that local laws on environment, forests and sustainability are all met by the companies and farmers involved in the supply chain. Illegal deforestation will be ended, for all imports to the UK – but this is achieved via a process that respects the sovereignty of producing countries. The EU institutions should learn from this reasonable and pragmatic approach.

President Jokowi set out clearly the principles involved, during his COP26 speech earlier this month in Glasgow:

Certifications, methodologies, and standards should be based on multilaterally recognized parameters, not unilaterally imposed and capricious. Certification must be fair, so that it has an impact on welfare, especially small farmers. Certification must also take into account all aspects of the SDGs, so that forest management is in line with poverty alleviation and community empowerment.”

The Indonesian palm oil community broadly supports policies to prevent deforestation, and believes that this should take place with enforcement and compliance at the domestic level. An indirect measure that curbs trade and exports from developing countries to the European Union – such as a unilateral EU regulation – will not stop deforestation, and will instead undermine efforts to combat it.

Key points for EU decision-makers to assess when it comes to enacting regulations affecting Indonesian trade with the EU:

  • Indonesia has reduced its deforestation rate to its lowest-ever level, thanks to legislative and private sector initiatives;
  • Palm oil is not a major contributor to Indonesian deforestation;
  • Palm oil plays a significant role in the Indonesian economy and is a key part of Indonesia’s trade relationship with the EU;
  • Indonesia and the EU have successfully cooperated on illegal logging, and a similar approach could be extended to palm oil;
  • The EU should recognise ISPO in any due diligence regulation it is proposing.

GAPKI underlines that any final regulatory measure from the EU should:

  • not discriminate against Indonesia;
  • not discriminate against palm oil;
  • provide a level playing field for certification;
  • preference legality rather than sustainability; and
  • uphold Indonesian sovereignty.

The European Union should work with Indonesia’s palm oil community using the tools that have been developed by Indonesians for local and national circumstances. This is the best approach for sustainable development and for aligning with international definitions of sustainability under the United Nations Sustainable Development Goals.

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