JAKARTA: Indonesia and Malaysia will send envoys to the European Union (EU) to discuss the impact of the bloc’s recently passed deforestation law on their economically important palm oil sector.
The announcement was made after a meeting last week between Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs, and Malaysia’s Commodities Minister Fadillah Yusof, in which they discussed “several pressing issues” related to the palm oil industry, the Malaysian state media service Bernama reported.
“We agreed to continue to protect the palm oil sector by strengthening efforts and cooperation to overcome discrimination against the palm oil industry,” Airlangga told reporters. “The meeting (with Malaysia) agreed to conduct a joint mission to the EU to communicate and prevent unintended consequences of the regulation to the palm oil sector and seek possible collaborative approaches with interested parties.”
The announcement comes after the EU’s passage in December of a regulation that will “ensure that a set of key goods placed on the EU market will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world.” The regulation, according to the EU, “sets strong mandatory due diligence rules for companies that want to place relevant products on the EU market or export them.”
While the law does not apply only to palm oil – it will also apply to cattle, soy, coffee, cocoa, timber, and rubber, as well as their various derivatives – it is likely to have an outsized impact on the sector, which has been strongly linked to the destruction of large swathes of tropical rainforest.
Indonesia and Malaysia, the world’s two largest producers of palm oil, have been harshly critical of the law, just the latest European policy that could impact their palm oil sectors. Both Malaysia and Indonesia also lobbied against its passage. Kuala Lumpur even went so far as to threaten to halt palm oil exports to the EU, its third-largest buyer of the product, altogether, though the two officials seemed to strike a more diplomatic note after yesterday’s meeting.
Datuk Seri Fadillah Yusof, who is also Malaysia’s deputy prime minister, said that the joint mission to the EU to deal with the bloc’s restrictions on the entry of various commodity products will be carried out in May.
He said Malaysia would inform the EU about the reforestation program and Malaysia’s Forestry Policy, which included sustainable forest management, conservation and biodiversity protection.
“In Malaysia, we already have a policy not to clear forests other than what has been designated,” he told the media after holding a meeting with Indonesia’s Trade Minister Dr Zulkifli Hasan.
He said the replanting of forest species in the “community farming” program in Malaysia is under way.
Both also discussed the role of the Council of Palm Oil Producing Countries (CPOPC) to bring the issue of discriminatory trade barriers against palm oil and rubber producing countries to the Asean level.
Other matters discussed included increasing cooperation in research and development (R&D) and marketing Malaysian products such as seismic rubber bearing technology for use in areas that are often hit by earthquakes as well as the threat of defoliation disease on rubber trees (pestalotiopsis).
Fadillah was also informed by Zulkifli about the Border Trade Agreement and Border Crossing Agreement between Indonesia and Malaysia which will be concluded soon.
He believes the agreement will facilitate cross-border trade between Indonesia and Malaysia, especially Sabah and Sarawak, as well as facilitate the entry of human resources from Indonesia in the oil palm sector in Sarawak.
The CPOPC ministerial meeting will be held in May, of which Malaysia is the chairman this year.
Fadillah and his delegation are in Jakarta in conjunction with a three-day working visit ending on Friday, 10 February 2023. (*)
Source: thediplomat.com/nst.com.my/Bernama
