PLANTERS URGED TO SUE E.U.
Jakarta condemns move to classify oil palm as crop that causes deforestation
INDONESIA’S government said yesterday it will encourage the country’s palm oil companies to file suits against the European Union if the bloc goes ahead with a plan to phase out use of the commodity in renewable transport fuel.
Indonesia, the world’s biggest palm oil producer, has strongly condemned the EU move to classify palm as a crop that causes deforestation that should be phased out by 2030 in transport fuel under the bloc’s Renewable Energy Directive (RED II).
The EU is the second-largest market, behind India, for Indonesian palm, which accounted for around 12 per cent of the country’s exports in 2017, according to government data.
Indonesia in recent weeks also pledged to launch a World Trade Organisation (WTO) challenge against the EU and said the government was “examining bilateral relations with member states that have been most supportive” of the European rules.
“Diplomatic approaches continue to take place but we are also taking litigation steps,” said Oke Nurwan, director-general of international trade at Indonesia’s Trade Ministry, yesterday.
“The government (will file at the) WTO, while we are also encouraging companies or industry associations to submit a case through courts of justice,” he said.
Malaysia, the world’s second largest palm producer, has also threatened a WTO challenge against the EU.
Indonesian palm oil producers that are members of the Indonesia Palm Oil Association (GAPKI) would “take the government’s advice into consideration and continue to discuss further steps to take,” said Togar Sitanggang, deputy chairman of GAPKI.
GAPKI is also looking into whether it could take legal action against retailers using “palm-oil free” labelling, said Togar.
The EU has no legislation on palm oil labelling.
The EU has concluded that palm oil is a high risk crop after finding that 45 per cent of palm cultivation expansion during 2008-2015 took place in high carbon stock area, far higher compared to rival crops soyabean and rapeseed.