Jakarta – The European Union (EU) formally approved the law on deforestation-free products on 6 December 2022. Based on the new law, EU will ban all products linked to deforestation, including coffee, beef, soybean, cocoa, rubber, wood, leather, charcoal, furniture, and palm oil derivative products.

The law will require companies to produce a due diligence statement showing their supply chains are not contributing to the destruction of forests before they sell goods into the EU – or they could face hefty fines.

“I hope that this innovative regulation will give impetus to the protection of forests around the globe and inspire other countries at the COP15,” the European Parliament’s lead negotiator, Christophe Hansen, was quoted by Reuters as saying on Tuesday, 06 December 2022.

Bayu Krisnamurthi, Indonesia’s former deputy minister of trade (2011-2014), said that the new law is an indication that EU is becoming more protective against products imported to Europe. But it should be no problem for Indonesia, considering that there is no deforestation problem caused by oil palm plantations as the  government has applied a moratorium of forest licenses for oil palm plantations.

But he said that Indonesia should find out the details of its implementation. “There are still many details that should be made clear. For example, it’s not yet clear regarding the timeframe of deforestation, although already mentioned that it won’t apply for deforestation before 31 December 2020. Also how to trace it when already in the forms of cooking oil or other consumer goods,” he told CNBC Indonesia on Tuesday, 20 December 2022.

According to him, Indonesia still has time until the next two and half years before the EU will finally implement it as a regulation that binds all member countries. “In the meantime, real businesses won’t be too affected. It will only, perhaps, start affecting business negotiations, as buyers will have to start considering the legal issue,” he said.

He said that so far Brazil, Argentine and Paraguay have filed their protests against the EU’s decision to adopt the new deforestation law. Those three countries produce soybean and beef. “Indonesia, which produces agricultural and forestry products, will also face new challenges in the European market due to the newly-agreed law,” he said. (*)

Source: CNBC Indonesia/Reuters