- GAPKI has made a submission to the European Commission’s inquiry on simplifying administrative burdens for environmental reporting, focusing specifically on the EU Deforestation Regulation.
- The submission notes the significant costs imposed on smallholder farmers across Indonesia, and calls on the EU to exclude smallholders from reporting requirements, and recognise ISPO as a path to compliance under the regulation.
Read the key quotes below, and see the full submission here.
“[The EUDR’s] stringent reporting and record-keeping obligations undeniably create new administrative burdens for EU importers …However, these burdens are transmitted along the supply chain: Indonesian producers and exporters are the ones who must gather, verify, and supply the requisite information to their EU buyers, or else those buyers cannot lawfully import the goods. The Indonesian government itself has noted that the EUDR imposes a heavy administrative burden on smallholder farmers in particular. In short, what may appear as paperwork requirements in Brussels are in reality substantial on-the-ground obligations for producers in Indonesia.”
“The most severe impacts of these requirements will fall on Indonesia’s hundreds of thousands of independent smallholder farmers … meeting the EUDR’s traceability and geolocation demands is an immense challenge for these rural farmers. Many smallholders have not formally registered their land plots or mapped GPS coordinates, making it difficult to prove the precise origin and legality of their harvests. Issues such as unclear land tenure (overlapping claims, missing titles) further complicate compliance. Digital literacy and internet connectivity in remote farming areas are often limited, hindering the adoption of traceability tools.”
“Recent research found only around 1% of Indonesian smallholders are currently able to fully meet the traceability and legality standards set out by the EU. In other words, without significant changes or support, the vast majority of our small farmers are effectively unprepared for EUDR compliance. The consequence of this compliance gap is that Indonesian smallholders risk being excluded from EU supply chains altogether.”
“We therefore urge the European Commission to consider regulatory flexibilities and support mechanisms within the EUDR framework to mitigate these unintended consequences. In particular, we propose two measures:
- Introduce a smallholder carve-out or simplified due diligence process for smallholder-produced commodities. We recommend that the EUDR’s implementing rules provide exemptions or streamlined reporting requirements for smallholder suppliers, recognizing their limited capacities. For example, shipments comprised of raw material from farms below a certain size (or smallholder cooperative groups below a volume threshold) could be allowed to undergo a simplified due diligence procedure. This de minimis carve-out would significantly reduce the compliance burden on both importers and exporters dealing with many tiny producers, while still maintaining the EUDR’s overall integrity.
- Recognize Indonesia’s Sustainable Palm Oil (ISPO) certification as a basis for compliance. We strongly encourage the EU to formally recognize and incorporate the Indonesia Sustainable Palm Oil (ISPO) standard into the EUDR’s compliance system. ISPO is the Indonesian government’s mandatory sustainability certification scheme for palm oil. It has been significantly strengthened and aligned with international requirements in recent years, and since 2020 it is legally required for all oil palm growers (including smallholder farmers) to obtain ISPO certification within a given timeframe. By accepting ISPO-certified palm oil as compliant (or at least as low-risk) under the EUDR, the EU would streamline the due diligence process for certified suppliers and reward those who adhere to our national sustainability standard.
“We have taken extensive steps domestically – from moratoria on new forest clearance to the ISPO certification mandate – to ensure our commodities are produced responsibly. Our plea is that the EU’s implementation of the EUDR be calibrated to achieve environmental objectives while also safeguarding social and economic wellbeing. The current one-size-fits-all approach risks unintended damage to small farmers who are the backbone of sustainable agricultural development in regions like ours.”