Juggling different balls

Indonesia and Europe need to reach an understanding on palm oil and the environment. Can they do it?

Juggling different balls

The objective of this essay is to contribute to a better understanding of the many different facts and issues that are indispensable for designing a process to ensure constructive cooperation on achieving three existential priorities of our time: fighting climate change (United Nations FCCC Paris Agreement); achieving the UN Sustainable Development Goals (UN-SDG 2030); and fair global trade, especially between the European Union and tropical countries.

Understanding that such work is only possible with geopolitical stability, it means that successful cooperation on the above goals will also promote peace. Working on peace for prosperity for a sustainable world will resolve the causes of flight and migration of people who want to love their countries – the countries they grew up in.

About Indonesia

During the past decade, environmental and social nongovernmental organizations have attracted attention to the negative sides of accelerated economic development in Indonesia. It is the world’s fourth-largest nation and 10th-biggest economy. It houses the earth’s third-largest tropical rainforest and most biodiverse area, and it is one of the biggest producers of tropical commodities. Regular disasters caused by nature‚ such as earthquakes‚ volcanic eruptions‚ flooding during the wet season and wildfires during the extreme dry seasons, strengthen the image of poverty and misery in Indonesia‚ with the huge challenge of avoiding and resolving these disasters in a country with unimaginable geographic‚ infrastructural and ethnic realities.

With the world’s largest Islamic population and polls continuing to confirm that Europeans fear Islam‚ Indonesia’s image suffers even more. This despite the facts of a country that has “Unity in Diversity” (“Bhinneka Tunggal Ika”) as its national slogan, where the doors of the region’s biggest mosque and cathedral stand immediately opposite each other on the road, and with one of the world’s lowest number of terrorism victims since the 2002 Bali bombings. Indonesia made one of the biggest improvements in the Global Peace Index and is ranked as the 41st-most peaceful country in the world, ahead of France, Greece and Great Britain.

Joko Widodo, a former forestry student, furniture maker and governor of Jakarta, was elected president of Indonesia in 2014 and re-elected in April. Joko built a team that achieved impressive results. This government understands that it needs to apply a “jurisdictional approach”: it can only effectively protect and support its citizens when the country has one precise‚ legally valid land map, and when all its citizens, businesses and civil society organizations are registered and have an electronic identity
and fiscal number. Only in such situations can lawbreakers be held accountable, and local, regional and national governments be held accountable for their decisions and failures. Only when governments know they can monitor each citizen and business can they effectively protect and support the public. And only with sound fiscal income from an inclusive number of citizens and businesses can a physical infrastructure be built of high-quality roads, schools, health care, telecommunications and so forth. And only with sound fiscal income and effective regulation can corruption be fought with a stronger, more accountable legal system.

Second, through both economic and social programs, Indonesia’s citizens and businesses have jumped up in global social and business indexes.

A detailed Pricewaterhouse Coopers study on the world economy going toward 2050 predicts that the growth prospects of Indonesia are the best, along with those of China, India and Vietnam, Each year since President Joko’s election in 2014, Indonesia has been one of the fastest-improving nations in the World Competitiveness Yearbook. Indonesia demonstrates the best development potential worldwide for the next three decades in terms of trade and investment, consumer income growth‚ tourism and creative industries‚ as well as research and innovation. Indonesia is strategically located between the Indian and Pacific oceans, and within the Association of Southeast Asian Nations (Asean)‚ a region of nearly 630 million people‚ with strongly performing neighbors Singapore‚ Malaysia, Thailand and Vietnam. And data from Nielsen shows that Indonesians have strong confidence in the future and trust their government and businesses, in contrast with other countries.

Third, Indonesia has made huge progress in reinforcing a balance between building an inclusive, prosperous economy and conserving its tropical nature and climate. Since 2010, large plantation businesses have worked with the world’s best-known experts to develop the High Carbon Stock (HCS) tool to optimize the decisions in a landscape of plantations, settlements, rivers, roads and forests. HCS is being copied all over the world. Indonesia’s government has reinforced its legal framework and policies to effectively reinforce its laws on land usage and licensing, plantations, labor, local community laws and so forth. Furthermore, since the terrible forest and peatland fires of 2015 in Sumatra and Borneo, a year of exceptional dryness because of the El Niño phenomenon, President Joko has built upon existing community networks to explain that forest and farm communities need to change their traditional habits (“slash and burn”), and explain why healthy, wet peatland and forest lands are also the key for successful tropical farming. Together with the private sector and local communities, Indonesia has been extremely successful in avoiding and managing wildfires.

Joko’s team also reinforced forest conservation and plantation moratorium regulations. Following regular extensions since his predecessor, President Susilo Bambang Yudhoyono, Joko in August signed a permanent moratorium on land-use licenses for 66 million hectares of forest and peatland, one-third of Indonesia’s land surface and an area nearly twice as large as Germany. Because of the country’s performance in reducing

deforestation, Norway’s government made its first REDD “carbon payment” to Indonesia. Some of the world’s best research institutes, such as Cambridge University, Southampton University, Wageningen University and CIRAD-France, have helped plantation companies optimize tropical wealth diversity to enhance organic farming, reducing the use of fertilizers and pesticides while increasing yield with new, traditionally developed seeds. And smallholder farmers, local communities and indigenous peoples are integrated in these programs. This makes plantation expansion unnecessary for growth.

Unfortunately, one can still find legal violations, which nongovernmental organizations use to continue making sweeping statements, keeping Indonesia’s image bad. On the European side‚ the agricultural, food, forestry (including paper) and energy industries in particular have used the perceived bad image of Indonesia to push their own agendas.

The distrust of Europeans toward Indonesia bears the risk of them drifting apart and threatens achieving the priorities that both have set: fighting climate change and poverty (it being the main cause of migration), and working together on fair trade and investment. The European Union and Southeast Asia are the only remaining regions that have the capacity to show the world that transparent, effectively accountable democracies can be successful in raising the prosperity of all citizens in stability and environmental sustainability. To achieve these results, long- term investments in innovation are needed, as well as free trade to ensure adequate returns.

Risks of a crisis came over the European Union’s decision to exclude palm oil from renewable energy sources. Palm oil is Indonesia’s main export and source of foreign exchange income, as well as one of the country’s biggest employers. The Renewable Energy Directive was written upon firm negative public opinion against palm oil, not only in terms of environment (deforestation and peatland drainage, often with incorrect figures) and labor rights, but also with scientifically wrong health allegations. Furthermore, the main tool for qualifying whether an energy source is considered “renewable” is defined as Indirect Land Use Change, or ILUC. Land-use change is considered on two levels – whether food crops are used for fuel purposes and whether nature as high conservation value land has been sacrificed to agriculture. The EU decided to take the year 2008 as a cut-off date in its Delegated Act for an early, fast phaseout of palm oil in biofuels. In April, government delegations went from Indonesia to Europe to again engage in stakeholders’ dialogues on palm oil and the allegations on sustainability. They explained in detail that the allegations were ill-founded, that enormous work had been done and that results had been achieved with strong commitments going forward.

Indonesia’s largest English-language newspaper, The Jakarta Post, now calls for regional opposition to the European Union. This is a quote from one article: “With Singapore an exception, all Asean members are major commodity and resource exporters. Therefore, Asean should send a strong warning to their trading partners, especially in the Western bloc, to think twice before playing with fire with Southeast Asia. The EU should remember that times have changed and Asean is in a quite strong position to retaliate against any punitive and discriminatory acts by their trade counterparts. Decades ago, European countries often acted arbitrarily, citing various pretexts, such as the protection of the environment and human rights, to ensure their economic domination.

“We don’t believe the EU’s palm oil policy is solely based on noble motives to protect our planet. They pretend to forget the major efforts undertaken by Indonesia and Malaysia

to protect the environment. Evidently the EU opts to punish Asean just to protect their uncompetitive products. Issues of human rights, labor protection, unfair trade practices, corruption or abuse of power are often cited by Western countries to dictate to developing nations, although they are not entirely wrong. There are still many problems, but the EU should stop using rotten tactics to force its will in trade and economic affairs.”

In July, Professor Saeed Khan, senior lecturer in the Department of Near East and Asian Studies at Wayne State University in the United States, wrote an article for the publication Foreign Policy in Focus. It had the title “To Defeat Trump, ‘the Resistance’ Must Own Up to Its Own White Supremacy.” An entire chapter was devoted to “Europe’s War against Asia and Africa.” Kahn explains that banning palm oil from the European Union’s Renewable Energy Directive illustrates that the “politics of palm oil has become increasingly radicalized.” Although experts say that palm oil is a fantastic crop on which sustainability criteria Europe could cooperate with tropical countries, “A nexus of overwhelmingly white environmental campaign groups” do not seem to be interested that European crops are far less efficient and more polluting, or that cattle (with soy and corn as feedstock) is the main driver of deforestation, nor do they seem interested to cooperate to build a sustainable palm oil certification system.

Indonesia’s business community does not have representatives in Europe able to convincingly explain and promote the country and the production of tropical commodities. Where most foreign countries have their own chambers of commerce or specialized experts in embassies, one of Indonesia’s politically most powerful agencies, its domestic chamber of commerce, known as Kadin, only recruited a public relations agency. Its director never visited Indonesia before his recruitment. Furthermore, the European Chamber of Commerce organizes the EU-Indonesia Business Dialogue (EIBD). The EIBD focused on explaining the EU’s strategy on the circular economy. What was not explained is that an important goal of this strategy is to reduce agrifood imports and replace exotic raw materials with locally produced products. As is tradition in Indonesia, trade delegations to Europe are large, but a well-coordinated interministerial negotiation strategy that optimally benefits Kadin’s expertise, efforts and point of view has been lacking.

Finally, there is the relationship between the Netherlands and Indonesia – countries with a long history. Since colonial times, the Netherlands has been the world’s biggest importer of tropical commodities. In 2018, it imported 2.2 billion euros worth of cocoa, 1.2 billion euros of palm oil, 1.5 billion euros of soy and 1.1 billion euros of coffee (third after Germany and France). Also, in spices, rubber, tea and sugar, the Netherlands is an important trading partner for Indonesia.

The European Union, along with China, Japan, India and North America, is the largest trade and investment partner of Indonesia and Southeast Asia. The Asean region is the world’s fourth-largest exporter following the EU, North America and China. And within the European Union, the Netherlands is its key country for trade and investments.

About half of Indonesia’s exports to the Netherlands are vegetable oils and chemical products, both mainly made from palm oil. A major part of the Netherlands’ exports to Indonesia is agrifood, petrol and petrochemical products and machines. As such, it is surprising to note that the world’s top-ranked agricultural university, Wageningen, presented at its one- century anniversary in 2018 that it received subsidies from the European Union to replace tropical commodities: palm oil, rubber and cocoa. The university was proud to show these projects to its main foreign guests from Indonesia’s and Malaysia’s embassies in March 2018. During the past two years, the Netherlands was one of the few countries that showed decreasing figures in trade and investment with Indonesia. It went from the fifth-largest investor country to ninth in 2018, according to Indonesia’s investment agency.

The Netherlands’ business chamber in Indonesia was closed in 2018. Indonesia and the Netherlands share high priorities: sustainable food security (improving farming while conserving nature), fighting
climate change, nature conservation, water management, the UN Sustainable Development Goals (including fighting poverty) and fair trade. These three priorities need to convince governments and all stakeholders to quickly resuscitate the relationship between Indonesia and the Netherlands.

Decisions against palm oil

The “Food Not Fuel” argument is a public, deeply rooted and emotional outcry in Europe that does not apply to palm oil or to tropical countries in general. First, oil palms, with their amazing huge fruit bunches, grow within and around tropical rainforests. Other food crops cannot; they are not grown in or around rainforests in a commercial manner. Such plantations would be damaged by animals from bugs to elephants. Indonesia’s food crops are mainly commercially grown on the most fertile land that is also the most densely populated, especially in Java, southwest Sulawesi and in south and northeast Sumatra.

This means that only crops such as oil palm fruit can be used within the Sustainable Landscape Management approach of HCS: the only crops that can commercially be grown in and around tropical rainforests.

On the contrary, the balance of vegetable oil production in the European Union is most
vulnerable: any oil used for fuel will require imports from outside the EU to respond to food and feed needs. And corn farmers, for instance, are being mobilized to sell their crops at a better price when they are used for fuel. Consequently, the public outrage of “Food not Fuel” applies only to Europe, not to Indonesia or other palm oil-producing countries.

It was during the expansion of palm oil use for biofuel in the European Union that more research started to be done on the carbon sink and greenhouse gas emissions from land on which oil palms were being grown. It was in 2010 that environmental non-governmental organizations such as Greenpeace and The Forest Trust (known as the Earthworm Foundation since 2018) began to interact and work with palm oil companies and the Indonesian government. Environmental experts, palm oil producers and the governments of Indonesia and Malaysia together undertook important steps toward the No Deforestation, No Peat, No Exploitation (NDPE) policy for the palm oil industry. The
signing of the New York Declaration on Forests on Sept 23, 2014, symbolized this movement.  Many events were organized for the five-year anniversary of the declaration, which received added attention because of the immense wildfires destroying the Amazon, Siberia’s taiga ecoregion and Central Africa’s peatlands. The declaration was signed in 2014 at an official meeting chaired by the UN secretary general, the chairmen of Greenpeace, Cargill, Unilever and Indonesia’s Sinar Mas business group. Many countries, companies and NGOs joined the list of signatories.

Since his election, President Joko and his government have taken substantial steps toward effectively regulating forests and peatlands, and labor protection. Illustrating these results, the European Commission approved the International Sustainability and Carbon Certification (ISCC) system certifying that all palm oil imported into the EU for biofuels is neither a result of deforestation nor grown on peat. As such, European biofuel expert Navigant has corrected the Global Biosphere Management Model (Globiom) study that stated that all palm oil was three- times more polluting than diesel, as it assumed that all palm oil was planted on peat. Navigant seems to admit that NDPE palm oil is the most sustainable biofuel, and that oil palm plantations have the highest biomass compared to other vegetable oil crops. The European Commission approved the German ISCC agency, ensuring that only “no deforestation, no peat” palm oil is being imported into the EU for biofuel. Consequently, and in the words used by the European Parliament, the European Union does not import deforestation for palm oil biofuel.

It’s clear that only when Europe works together with Southeast Asia, and with Indonesia in particular, in an honest and transparent manner will it demonstrate to the world that work on food security, sustainable agriculture and building an inclusive, prosperous economy can go together with fighting climate change and effectively conserving nature. During the current period of nationalist opportunism and weak interest in fighting climate change, especially practiced by governments of major nations such as China, India, Russia and the United States, Europe and Southeast Asia need to work together. The above-mentioned four nations are undertaking activities in Europe and Southeast Asia that are undermining the strategic alliance-building of these regions.

The recent publication of the components of the European Union’s future Agricultural Policy seems to have overlooked the issue of international cooperation. It ignores that the European Union is the world’s biggest exporter of agrifood products, including to Indonesia. It also seems to ignore that many consumer goods produced in Europe require raw materials from Indonesia, including palm oil, rubber, cocoa, spices, tea and coffee, as well as mineral commodities such as gold, copper and coal.

Conclusions

The European Union, its member states, environmental groups and companies that are strongly committed to sustainability need to recognize and acknowledge the above basic needs of all citizens, including those in the tropics. They need to quickly conclude that there is no alternative to organizing and ensuring honest cooperation with Indonesia (and Malaysia) on sustainable palm oil, one of the main tropical commodities. Such cooperation could then be the basis for forging cooperation on agriculture, the economy, society, nature conservation and fighting climate change in Southeast Asia.

Such cooperation could immediately start with palm oil in renewable energy, in agrifood products, beauty products and in industries such as lubricants, oils, tires, pastes, chemical processing and others. Energy transition, food security, efficient land management, sustainable natural resources management, fighting climate change and nature conservation need palm oil. The current black campaigns and threats of boycotts put at risk the future of two of the world’s largest and diversified democracies. It would put at risk the urgent task of fighting climate change, conserving nature and ensuring free, fair trade.

The Netherlands shares a long history with Indonesia, a history that can still be felt in both countries, with many young and old people. Furthermore, both countries share a passion and knowledge for sustainable agriculture and fair global trade. And Indonesia’s government has indicated to the Dutch government that it would, as a priority, like to work with Dutch academic institutions on sustainable land-use and food security. Such cooperation seems to hold a trove of discoveries that will be part of the construction of a global bioeconomy.

I hope that in this essay, the commitment and performance of Indonesia’s president, Joko Widodo, has been well explained. On Europe’s side, different parts of society are still supporting an alliance toward
international cooperation on the above global priorities. This process is being undermined by nationalist opportunists and climate change deniers. At the same time, Europe’s forests continue to be thinned out, peatlands continue to be drained and soil continues to be polluted. Its biodiversity is decreasing to a minimum. Such poor land threatens Europe’s capability to maintain a prosperous, inclusive society. Western youth is apparently massively partying on laughing gas, the same polluting gas that comes from peatland drainage: nitrous oxide. Europe’s youth is being cynical about society’s divisions and nature’s destruction. Its politicians urgently need partners to face existential challenges, as they need to publicly join President Joko to stimulate cooperation between Southeast Asia and the European Union.



"a Dutch national, is a lawyer by training who worked on sustainable development in Africa and Asia for 25 years."

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