Palm Oil News: Indonesia, Malaysia Negotiate, Defying EU’s Palm Oil Sanction

Indonesia and Malaysia vow to cooperate with each other regarding palm oil issues to counter EU's ban.

Palm oil is an essential ingredient used in the kitchen for cooking to making lipsticks in cosmetics production. However, palm oil-producing countries, such as Indonesia and Malaysia, face EU sanctions over products that cause deforestation.

Collaboration to Resume Palm Oil Export to the EU

Palm oil is an excellent alternative to vegetable oil, not to mention its low-cost production. The increased massive demand for it also caused deforestation, clearing more land for planting palm trees. This expansion came with a huge price, such as displacing animals from their natural habitat, particularly orangutans and different bird species.

Members of the European Union are very keen on conservation and put a ban on palm oil export from Indonesia and Malaysia due to deforestation. Both countries are the leading palm oil producers and exporters. The EU’s ban on the commodity can hurt the two ASEAN country’s export industries.

“We need to strengthen this collaboration. We don’t want commodities produced by Malaysia and Indonesia to be discriminated against in other countries,” said Indonesian President Joko Widodo.

Both countries supply almost 85% of palm oil exports worldwide. President Jokowi said they made an agreement to organise a system that will also protect migrant workers’ rights.

Harnessing a Sustainable Approach

A sustainable approach, which emphasises the entire area, can help regions make the goods configured with stricter traceability requirements. This includes thwarting the EU’s impending deforestation regulations. It would considerably deviate from the present focus on accrediting individual estates and companies.

“There is a lack of clarity on how it will be implemented. It’s still in the pilot phase. There can be deficiencies when it comes to governance if there is a voluntary supply chain certification scheme and a lack of regulatory innovation or enforcement, because it really depends on the company and plantations to fully implement,” said Eugene Mark, S. Rajaratnam School of International Studies PhD candidate.

Advocates believe this multilateral approach will become more efficient in rectifying landscape-level issues. It will help distinguish areas with high conservation value and large carbon stock. Additionally, it will tackle land and labour rights.

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