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The EU’s new deforestation regulation faces significant challenges in Indonesia

15 December 2022

Written by: Abil Achmad Akbar and Sri Palupi

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The EU’s new deforestation regulation faces significant challenges in Indonesia

As members of Indonesia’s Civil Society, we support the EU Regulation on deforestation-free products (EUDR) for its potential to improve governance, especially in the palm oil industry.

For the first time, the spotlight will be on importer countries and require European businesses which drive deforestation to take responsibility for it.

Yet aspects of the EUDR - and the approach the EU has taken in developing it - concern us. 

No dialogue

For a start, it was developed unilaterally, with no dialogue between the EU and producer countries. From our discussions with the Indonesian government, we know this is something they are also unhappy about.

We believe this showed a lack of respect for the years of hard work Indonesians from across the spectrum – civil society, timber and forestry sectors, authorities and others - have done to make the Forest Law, Governance and Trade (FLEGT) Action Plan work.

Indonesia is the first – and is still the only - country in the world that is able to award a FLEGT license, which is meant to guarantee that timber has been harvested, processed and exported legally, and giving it favourable access to the EU market. FLEGT’s impact in Indonesia has been positive.

Because of FLEGT and the Voluntary Partnership Agreement (VPA) between Indonesia and the EU, we’re able to independently monitor forests for illegal logging, can access complaint mechanisms when we discover problems, and raise concerns with our government.

Transparency has improved. We have access to companies’ records, and can monitor their activities. Illegal logging has also reduced in Indonesia.  Of course, there is still a lot of work to be done to improve this system.

The FLEGT VPA involved a very long negotiation process, and shows the challenges that will be faced in implementing the EUDR – especially as there are vast differences between the timber and palm oil sectors. In the palm oil sector, there are powerful companies, many conflicts and no transparency.

Impact on smallholders

While we support the EUDR, we know it’s not enough to tackle global deforestation and ensure global justice, and we have a number of specific concerns.

The first is the potential marginalisation of palm oil smallholders, who could be adversely affected by it.

In Indonesia, most of the smallholders are Indigenous Peoples one of the ways they earn money is through agroforestry which combines trees and agricultural crops. So the EUDR’s  definition of deforestation can be problematic for them. Indigenous Peoples, therefore, should have special treatment in the law. For example, it should not be considered deforestation when the area is less than two hectares.

The EUDR could also hit smallholders in another way: by excluding them from direct market access. To counter this, the Regulation should be accompanied by support measures for small holders.

National laws

Our second concern is over the lack of international protections for human rights included in the scope of the law.

The EUDR requires companies to respect human rights insofar as these are protected by the laws in producer countries. But there are different standards and legal systems in different countries. In the palm oil industry in Indonesia, for instance, human rights violations have been rife, including land grabbing and even violence—and Indigenous Peoples’ tenure rights are not properly protected in national law. So simply relying on national laws will not be sufficient to protect forest peoples’ rights to land. 

Our third concern is around transparency and access to justice. It’s important to have easy access to information, for example regarding the due diligence process. Civil society must be involved in independent monitoring – which shouldn’t just be based on satellite data - and in the complaint mechanism process. Without this, implementing human rights standards won’t work.

Our fourth concern is that a positive future for the FLEGT VPA is assured. If the EU is not considering this, the EUDR will discourage many countries who are working to improve forest and industry governance.

Lessons learned

When you see how hard it is for producer countries to implement a regulation concerning only one commodity – timber - you can only imagine how it could be with six commodities, especially in countries that produce a number of them.

Our suggestion is to not simplify benchmarking over all the commodities, because the conditions are different. The benchmarking process should include dialogue with the producer countries and involve independent monitoring.

We think we should learn lessons from the VPA process, because it has not been an easy road.

We have trust in the EUDR but we should respect the VPA process and its results in spreading awareness about legality issues and sustainable forest management.

The EU should have some empathy and consider all the barriers for the producer countries, but also take its responsibility in ensuring that the EUDR is workable for everyone.

If it does so, then the Regulation can potentially help transform the Indonesian palm oil industry, by improving governance, human rights conditions, and tackling environmental degradation.

By Abil Achmad Akbar (Forest Campaigner, Kaoem Telepak) and Sri Palupi (researcher, co-founder and former director of The Institute for Ecosoc Rights, Indonesia). 

Categories: Sustainable Supply Chains, Forest Governance, Forest Law Enforcement, Governance and Trade (FLEGT), EU-Indonesia Free Trade Agreement, Indonesia

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