The EU and Indonesia have long been involved in disputes over palm oil. As fellow democratic countries, they must be able to resolve their disputes justly and effectively.
Palm oil is a strategic commodity for Indonesia. it contributes significantly to RI’s economic growth, provides decent jobs for millions of people and is also important for national energy security. The palm oil industry (from upstream to downstream) has a “labor intensive” profile so that it absorbs a large number of workers both directly and indirectly.
The export value of palm oil reached 21 billion dollars (2018) and palm-based biodiesel can strengthen Indonesia’s energy security when the country has now become a “net oil importer.” Palm oil contributes 3.5 percent of Indonesia’s GDP and makes its trade balance positive. Currently there are 19.5 million workers in the palm oil industry and 2.6 million palm oil planters (small holders) in Indonesia.
From the perspective of achieving Sustainable Development Goals (SDGs), palm oil contributes to (i) job creation; (ii) alleviation of poverty; (iii) reducing income disparities; (iv) achieving national food security and energy security; and (v) reducing the impact of climate change because oil palm trees absorb billions of tons of greenhouse gases from the atmosphere.
According to the World Bank, 1.3 million square kilometers of forest in the world has been lost between 1990-2016 due to deforestation. This means that, every hour, forest cover equal to 800 football fields has disappeared.
The UN Environment Program (UNEP) reports that 70 to 80 percent of deforestation in the world occurs due to the expansion of agricultural production, including animal farming, soya and palm plantations.
According to a report from the European Parliament Research Service (September 2020), land clearing for agriculture is the main cause of deforestation in Southeast Asia. In this regard, palm oil plantations have spread into formerly forested land, especially in Indonesia and also Malaysia.Therefore, the palm oil sector is often described as the cause of massive deforestation in Indonesia.
Is this negative attribution of palm oil fair and justified? This question is very sensitive and we must be careful in answering it.
As an ambassador who served in the Indonesian Embassy in Brussels and took part in handling RI’s palm oil diplomacy in the European Union (2016-2020), I often ask palm oil experts, including several ministers who are familiar with this issue, as well as important NGO figures.
It is important to remember that deforestation in Indonesia occurred long before the oil palm boomIng in 1980s. In fact, massive forest destruction has occurred since the early 1970s due to government policy regarding forest exploitation rights (or “hak pengusahaan hutan/HPH”) via government regulation number 20/1970.
Forest exploitation and business activities that are not properly managed and monitored ultimately cause massive ecological damage in many regions of Indonesia. Forests are disturbed and their function as the world’s lungs declines.
Deforestation also occurs as a result of wrong policies in the past such as “clearing one million hectares of peatland in Central Kalimantan,” as well as government efforts to relocate population through transmigration programs and permission issued for the shifting cultivation. According to several studies (Gunarso et al, 2013; Suharto, et al, 2019), the origin of lands controlled by oil palm plantations in Indonesia in 1990-2018 shows that 62 percent came from degraded land (ie degraded forests, bushes and deforested land); around 35 percent comes from agricultural land, plantations and agro forestry. Facts also show that there has been a lot of conversion of other plantations, such as rubber plantations into oil palm plantations.
