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Preparing for the EUDR Amendment

By: Teguh Iman Affandi

Kaoem Telapak will hold a Media Briefing on Tuesday, 18 October 2022, in Jakarta. The Media Briefing discusses the progress of due diligence regulations in the European Union Parliament.

The Media Briefing entitled Development of European Union Regulations on Deforestation-Free Commodities invited Mardi Minangsari, President of Kaoem Telapak, and a researcher from the Ecosoc Institute, Sri Palupi, to share the updates.

Mardi Minangsari, President of Kaoem Telapak (middle), shared the progress of EUDR

“So we have three texts at this time, the original version of the European Union Committee which was published in November 2021, the text of the amendments to the Council of the European Union, and the amendment text from the European Union Parliament.

The trialogue is a process between three bodies in the European Union to discuss the final text of the proposal that will become law. Minangsari said she did not know when the process would be completed. However, Minang stated that the Committee and Parliament hope that the final text of the due diligence will be completed by the end of the year, before the EU Presidency for this administration ends.

On 13 September 2022, the European Union Parliament passed an amendment to the due diligence proposal text of the European Union Deforestation Regulation (EUDR). The step was taken as evidence of the European Union’s commitment as a consumer country to reduce the rate of global deforestation.

Ratification was carried out through a voting mechanism with details of 453 votes in favour, 57 against, and 123 abstentions. In the amended version of the EUDR, Parliament expands the scope of regulated commodities and includes human rights as well as the rights of indigenous peoples as indicators of due diligence. This amendment will also oversee financial institutions because these institutions are considered to contribute to deforestation either directly or indirectly.

The EUDR proposal has been published by the European Union since November 2021 under the name Europe Union Due Diligence (EUDDR). In its press release at that time, the European Union Commission presented data that from 1990 – 2020, the Earth had lost 420 million hectares of forest. The area of ​​forest loss is wider than the European Union area. About 10% of global deforestation comes from EU consumption. Therefore, the EUDR will ensure that the products purchased and consumed by EU citizens are free from deforestation and forest degradation activities. This regulation will target six commodities, namely soybeans, beef, palm oil, cocoa, wood and coffee.

As the biggest palm oil producer, Indonesia have to prove that the commodity is free from deforestation

The regulation will require companies to carry out due diligence if they want to trade their commodities on the EU market. The European Union Commission will apply benchmarks to measure the risk of deforestation and forest degradation in a country related to the production activities of these six commodities.

“All countries will be categorized as a standard or moderate risk by default. The implication is the commodities originating from high-risk countries will be inspected more frequently,” said Minang.

In April 2022, civil society groups (CSOs) in Indonesia issued a joint statement in response to the EUDR. Indonesian CSOs are aware that, as a producer country for the six commodities, this regulation will impact them. Thirty-five civil society organizations signed a joint statement last April.

Indonesian CSOs provided a critical note for the EUDDR. According to Indonesian CSOs, cleaning up the supply chain of commodities and products entering the EU market is not enough to halt the rate of deforestation. Incentives for supporting work to reduce and prevent deforestation are crucial. The one-sided approach of the European Union can hinder the initiatives that have been taken by producing countries to improve land and forest governance through policy reforms. The regulation also needs to involve smallholders because this regulation will have a direct impact on them. The rights of Indigenous Peoples to their territories also need to be given a place in the EUDDR because there are many cases of tenure conflicts between Indigenous Peoples and Plantation Companies.

June 2022, the EUDDR proposal was amended. The European Union’s Committee on Environment, Public Health and Food Safety voted on the revised EUDDR. As a result, 60 votes were in favour, 2 against, and 13 abstentions. The parliamentarians want that in reducing the rate of deforestation, and the rights of Indigenous Peoples must be respected.

The scope of regulated commodities was also expanded. They include pork, lamb and mutton, chicken, corn, rubber, charcoal, and paper.
“Many of these rule amendments respond to the actual demands of Indonesian CSOs,” said Palupi.

Sri Palupi (right) discussed the CSO’s response to EUDR

To date (12 October 2022), Indonesia has not officially responded to the EUDDR. The regulation will impact Indonesia’s export activities. The European Union is an important market share for Indonesia. Data from the Central Bureau of Statistics (BPS), in 2019, as much as 19.59% of Indonesian palm oil entered the European Union market, the second most after India. According to BPS data, in 2021, Indonesia exported 61 thousand tons of coffee to the European Union, the highest compared to any other country. If Indonesia does not adapt to this regulation, then Indonesia will lose a strategic market which will ultimately reduce state revenues in the non-oil and gas sector.

Minang sensed that politically the Indonesian government’s attitude was negative. According to Minang, Indonesia still has an agreement with the European Union regarding FlEGT VPA to regulate timber commodities. The approach taken by the European Union to unilaterally issue new rules leaves a question mark as to whether the FLEGT VPA agreement is still valid. Minang herself supports the government in reviewing how the European Union realizes its commitments related to the agreement.

Minang shared a story about the EUDR proposal that was first published. The Ministry of Foreign Affairs held an event inviting groups that would be affected. Then, provide direction on how to mitigate risk if Europe Union implements the rule.
“I see two things, politically, the government has responded negatively, but practically, the government has prepared efforts so that the affected groups can mitigate the risk,” said Mardi.

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