JAKARTA – The decision of European Union (EU) to apply the EU Deforestation Regulation (EUDR) to protect global forests is not consistent with its massive investments in the sectors of plantations, including oil palm, and livestock in Indonesia.
The EUDR has restricted Indonesia’s plantation and livestock products, such as palm oil, coffee, beef, woods, cocoa, soybean, and rubber to enter the European market. The EU considers the commodities as the cause of deforestation.
Eugenia Mardanugraha, the head of research team of LPEM FEB UI of the University of Indonesia’s (UI), said that based on data from the Investment Coordinating Board (BKPM), the European countries are the biggest investors in the sector of plantations and livestock in Indonesia.
“The EU has issued various regulations, including the EUDR, to block the agricultural products. But the BKPM data shows that they made massive investments in the agriculture sector in Indonesia,” Eugenia said on Thursday, 24 August 2023.
Despite no breakdown on investments in palm oil sector, Eugenia believes that the palm oil industry is the priority of the European countries, considering that Indonesia is the world’s largest producer of palm oil.
She pointed out that among the European investors, Belgium is the biggest investor in the plantations and livestock sectors with a total investment of US$41.8 million or 57.2 percent of its total investments in Indonesia at US$73.1 million.
“Belgium is the biggest investor among the European countries in the Indonesian plantations in 2022. Unfortunately, there is no breakdown on investments in the palm oil sector,” she said.
The second biggest investor is Austria with an investment in the Indonesia’s plantations and livestock at US$8.1 million or 12.1 percent of its total investments in Indonesia at US$67.3 million.
The third biggest investor is Luxembourg with an investment of US$7 million or 10 percent of its total investments of US$64.4 million in Indonesia. Then, the Netherland with an investment of US$2.9 million or 0.2 percent of its total investments in RI at US$1.2 billion.
Below Netherland is Slovenia with an investment of US$1.5 million or 42.2 percent of its total investments of US$3.7 million in Indonesia. Slovenia is a small country in Europe, but the percentage its investment in Indonesia’s plantations and livestock is big enough.
“The Netherland controls palm oil exchange and has gained big profit from its palm oil trading services,” she said.
The EU’s investments in the plantation and livestock sectors are against its EUDR and and negative campaigns against Indonesia’s palm oil products.
Eugenia suspects that there has been a deception strategy launched by EU. According to her, each of the 27 member countries of EU has played a role in investing in the palm oil sector and in controlling the commodities’ market. “In implementing the EUDR and other policies, they’ve assigned certain task for each of them,” she said.
According to her, the Netherland has played a big role in the global palm oil trading, although it is not the producer of palm oil.
The palm oil exchange in Rotterdam, Netherland, plays a big role in determining the benchmark price of palm oil at the international market. (*)
Source: Bisnis.com
