Issues surrounding palm oil are increasingly causing division between the EU and the Association of Southeast Asian Nations (ASEAN); therefore, at their 22nd ministerial meeting in Brussels, 21 January 2019, they agreed to establish a working group to examine sustainability issues related to palm oil. Little information is available on this group - its role, functions and involvement with on-going and sensitive discussions on the criteria for the Renewable Energy Directive (RED) and negotiations for a free trade agreement between the EU and Indonesia are unclear.
Following extensive campaigns concerning palm oil’s impacts on forests and local communities, the European Parliament voted through a resolution on palm oil and deforestation. This was followed, one year ago with its call for a ban, beginning 2021, on palm oil biofuels, which account for almost 50 per cent of crude palm oil imports. Then in June 2018, the EU decided to exclude crops that drive deforestation from feedstocks eligible to meet the renewable energy targets beyond 2020. The Commission was expected to issue a decision specifying which fuels risk driving deforestation on 1 February, but has not yet done so.
These issues have already impacted trade: between January and November 2018, Indonesian crude palm oil exports declined to US$15.2 million, down from US$16.9 million in the same period in 2017. If the Commission go ahead with plans to include palm oil biofuels among the banned crops, Malaysia and Indonesia have threatened commercial retaliation.
In response to negative campaigns about palm oil, Malaysia and Indonesia have also developed a strong communication strategy asserting the palm oil sector’s contribution to their economy and to the sustainable development goals (SDGs). A study from the World Health Organisationfound that the palm oil industry may have influenced research so that it claimed positive health effects of palm oil, despite mixed results.
Tackling issues related to palm oil requires space for discussions, and it is welcome that the new working group features decision-makers from both the demand and the producer side – but such institutional settings must be much more transparent and inclusive. To find meaningful solutions that are acceptable for all, the group must involve the civil society organisations from producer countries that are best placed to talk about sustainability impacts on the ground.