DEFORESTATION FREE POLICIES AND IT’S POLEMIC 2023

Abstract

Palm oil and its derivative products are one of the products targeted by the “deforestation-free” policy that applies in several developed countries, such as the Regulation on Deforestation-Free Commodity/Product in the European Union (EU), the Fostering Overseas Rule of Law and Environmentally Sound Trade Act/FOREST 2021 in the United States (USA), and the UK Environment Act 2021 in the United Kingdom (UK). The policy will face a complicated and lengthy polemic. This is due to the different varied definitions of forest and deforestation that apply between countries. The difference in understanding and context leads to uncertainty in defining and implementing the “deforestation-free” policy. This, of course, is detrimental to Indonesia as a palm oil producer.

Introduction | Deforestation Free Policies and It’s Polemic

After the European Union (EU) issued and enforced the Renewable Energy Directives II Indirect Land Use Change (RED II ILUC) for 2020–2030, and they designing and will enact a new policy, namely the Regulation on Deforestation-Free Commodity/Product (Deforestation-Free), which will be legalized in September 2022 and come into force in 2023. The new regulation prohibits or restricts the commodities and/or products related to deforestation (commodity-link deforestation) into the EU market.

The policy of prohibiting deforestation- related commodities or products is not only carried out by EU countries. In November 2021, the UK passed a law that adopted deforestation-free, namely the UK Environment Act 2021. Likewise, the United States has also issued a deforestation-free as contained in the Fostering Overseas Rule of Law and Environmentally Sound Trade Act or FOREST 2021 in the same period.

One of the commodities that are quite large and has become the target of new policies related to “deforestation-free” is palm oil (palm oil-based products). Indonesia as the world’s largest producer and exporter of palm oil is undoubtedly faced with this new policy. In addition to impacting the palm oil market in these countries/regions, if the new policy not questioned, its impact will spread to other countries/regions in the world.

The policy of “deforestation-free” contains many polemics. How do we determine whether a commodity/product is “deforestation-free” or not? Which definition of deforestation is used, given the wide variations in definitions across countries. Not to mention, since what year was the measurement of “deforestation-free” carried out? Considering that global deforestation has started since the dawn of pre-agricultural civilization.

This article will discuss polemic issues, namely how to design a “deforestation-free” policy. Then will discuss the relationship between the issue of “deforestation-free” and the definition variations of forest and deforestation that apply in different countries in the world.

DEFORESTATION FREE POLICY

Three countries/regions have “deforestation-free” policies, namely: (1) Regulation on Deforestation-Free Commodity/Product issued by the EU in September 2022 and will enter into force in 2023; (2) Fostering Overseas Rule of Law and Environmentally Sound Trade Act/FOREST 2021 from the USA, which has been ratified and comes into force in 2021; and (3) UK Environment Act 2021 from the UK, which will also take effect in 2021. Although there are some differences, the three policies have the same principle of being “deforestation- free” for products and/or commodities in domestic and/or international trade.

Some of the similarities and differences among the “free deforestation” policies of the EU, UK, and USA (UK Parliement, 2021; Weiss & Shin, 2021; Monard & Manistis, 2021; McCarty, 2022; Weiss et al., 2022; Chain Reaction Research, 2022) are: First, the focus of deforestation on these policies are different between the EU, UK, and the USA. For the USA and UK, the deforestation of concern is illegal deforestation. Meanwhile, the EU covers legal, illegal, and even forest degradation. Implicitly, the USA and UK consider that legal deforestation is not an object of a “deforestation-free”. Meanwhile, the EU views that both illegal and legal forest degradation can be subject to “deforestation- free”.

Second, the commodities and products that are subject to “deforestation-free” are palm oil, soybean oil, beef, cocoa, coffee (EU), rubber (USA, UK), wood products and pulp, and corn (UK). The commodities and products are subject to forest risk commodities and the “deforestation-free” policy applies to both domestic and imported products (for the EU and UK). As for the USA, it only applies to imported commodities and products.

Third, although there are several commodities that are the target of the “deforestation-free” policy in these countries/regions, palm oil appears to be the main target of these policies. This can be traced to the background of this policy. For example, in the USA, it is reflected in the statement of Senator Schatz (one of the proponents of the policy) that “… half of the products in American grocery stores contain palm oil and most of that comes from illegally deforested land around the world…”. Likewise, since the beginning of the policy drafting phase in the EU, palm oil has been positioned as EU-driven deforestation without being based on solid empirical facts.

Fourth, the exporting countries of these commodities and products are classified into three groups based on the “deforestation- free” policy: low-risk, standard-risk, and high-risk. The stricter due diligence procedures are implemented for commodities/products identified from high- risk countries.

POLEMIC OF DEFORESTATION

The “deforestation-free” policy adopted by the EU, UK and USA will face a complicated and lengthy polemic because it is related to the definition of forest and deforestation. The definition of forest and deforestation in various sub-tropical countries is differs from tropical countries. Even the definition of forest adopted by FAO (as the reference for “deforestation-free”) has its roots in sub- tropical conditions also different from tropical areas.

Hundreds of definitions of forest and deforestation are adopted by countries in the world, which are a combination of tree density, tree height, land use, legal standing, and ecological function (Schuck et al., 2002; FAO, 2018). The Lund study (2013) discovered that the definition of forest differs depending on the administrative aspect, land cover, land use, and land capability, and discovered nearly 1600 definitions of forest and 240 definitions of trees that apply in various countries around the world, both locally and nationally as well as internationally.

The definition of the forest also differs between countries. Schuck et al. (2002) found that the terms and definitions of forest vary widely between European countries. In Germany, forests define as the “sum total of all areas defined as forest, consisting of a productives wooded area and non-wooded area”. Meanwhile, Norway defines a forest as “productive forest land (as average potential production higher m3/ha/year) and non- productive forest land (average potential production 0.1-1.0 m3/ha/year)”. Meanwhile, France defines a forest as “have a tree (diameter >7.5 cm), have a crown cover percentage reaching at least 10 percent and there are more 500 steam per hectare that viable trees”.

In Indonesia, the terms “forest” and “plantation” are used interchangeably in the community, such as rubber forest or rubber plantation, bamboo plantation or bamboo forest (Soemarwoto, 1992). The formal definition of forest stipulated in Law 41/1999 concerning Forestry means “Forest is an ecosystem unit in the form of a stretch of land containing biological natural resources which are dominated by trees in their natural environment, and cannot be separated from one another”.

Multinational institutions also define forests for their purposes. The European Union Renewable Energy Directive (EU RED II) defines forest as “continuously forested areas, namely land spanning more than one hectare with trees higher than five meters and a canopy cover of more than 30%, or trees able to reach those thresholds in situ; land spanning more than one hectare with trees higher than five meters and a canopy cover of between 10% and 30%, or trees able to reach those thresholds in situ, unless evidence is provided that the carbon stock of the area before and after conversion is such that”.

While the definition of forest from the Inter Parliament for Climate Change (IPCC) is “forest is a minimum area of land of 0.05–1.0 hectares with tree crown cover (or equivalent stocking level) of more than 10–30 percent with trees with the potential to reach a minimum height of 2–5 meters at maturity in situ. A forest may consist either of closed forest formations where trees of various ages and undergrowth covers a high portion of the ground or of an open forest. As are areas that are normally part of a forest but are temporarily unstocked due to human intervention such as harvesting or natural causes but are expected to revert to forest”.

According to FAO (2000), forests include both natural forests and forest plantations. It refers to land with a tree canopy cover of more than 10% and an area greater than 0.5 ha. Forests are determined both by the presence of trees and the absence of other predominant land uses. The trees should be able to reach a minimum height of 5 m. Young stands that have not yet reached a crown density of 10% and a tree height of 5 m are classified as forests, as are temporarily unstocked areas. The term includes forests used for purposes of production, protection, multiple-use, or conservation (i.e., forests in national parks, nature reserves, and other protected areas), as well as forest stands on agricultural lands (e.g., windbreaks and shelterbelts of trees with a width of more than 20 m), and rubberwood plantations and cork oak stands. The term specifically excludes stands of trees established primarily for agricultural production, for example, fruit tree plantations. It also excludes trees planted in agroforestry systems.

These diverse understandings of forest have implications for the notion of deforestation, which also varies, at least as much as there are variations in the definition of forest in the community. The definition of deforestation also varies between countries or institutions following variations in the forest definition adopted.

The World Bank defines “deforestation as the permanent or temporary loss of forest cover or the loss of forest cover that does not produce timber”. Meanwhile, the United Nations Framework Convention on Climate Change (UNFCCC) in 2001 defined “deforestation as the direct human-induced conversion of forest to non-forest land”. The definition of deforestation in Indonesia based on the Minister of Forestry Regulation No. 30/2009 is “permanent change from forested area to the non-forested area caused by human activities”.

FAO (2000) defines deforestation as: “The conversion of forest to another land use or the long-term reduction of the tree canopy cover below the minimum 10 percent threshold. Deforestation implies the long-term or permanent loss of forest cover and implies transformation into another land use. Such a loss can only be caused and maintained by continued human-induced or natural perturbation. Deforestation includes areas of forest converted to agriculture, pasture, water reservoirs, and urban areas. The term specifically excludes areas where the trees have been removed as a result of harvesting or logging, and where the forest is expected to regenerate naturally or with the aid of silvicultural measures. Unless logging is followed by the clearing of the remaining logged-over forest for the introduction of alternative land uses or the maintenance of the clearings through continued disturbance, forests commonly regenerate, although often to a different, secondary condition. In areas of shifting agriculture, forest, forest fallow and agricultural lands appear in a dynamic pattern where deforestation and the return of forest occur frequently in small patches. To simplify reporting of such areas, the net change over a larger area is typically used. “Deforestation also includes areas where, for example, the impact of disturbance, overutilization, or changing environmental conditions affects the forest to such an extent that it cannot sustain a tree cover above the 10 percent threshold.”

Thus, it is clear that, along with variations in the definition of forest, the definition of deforestation also varies between countries. Shrubs that are not categorized as forests in tropical countries are instead considered forests if used the FAO definition. Likewise, the FAO definition cannot categorize savanna grasslands as forests. On the contrary, African classify the savanna as a forest.

To see if a land use change is related to deforestation, it is necessary first to ensure the similarity of the definition of forest to be used with the definition of forest that applies in an area. Although many refer to the FAO definition, the fact is that this definition is not used by every country and not even by multinational institutions. The varied definition of the forest will cause a polemic in relation to the implementing of the policy of “deforestation- free”.

With the FAO definition, an ecosystem in the EU, UK, and USA is categorized as forest. It is possible that the ecosystem isn’t forests in tropical countries. For example, there are 23 types of terrestrial ecosystems and only 5 of them are categorized as forest in Indonesia (Gunarso et al., 2013; Santosa et al., 2020; Santosa, 2021; Suharto et al., 2019), but with the FAO definition, about 20 ecosystems can be categorized as forests. On the other hand, in Indonesia, it is known that there are non-forested areas that are administratively categorized as forest areas, but according to the FAO definition, they are not categorized as forests.

The difference in understanding and contextualization of forest and deforestation leads to uncertainty in defining and implementing “deforestation-free” policy. The determination of forest or non-forest, low-standard to high-risk commodities will be a debate, lengthy negotiations, and so on. In practice, the “deforestation-free” policy will only become a non-tariff trade barrier that prevents the entry of tropical commodities into the UK, EU, and USA.

Conclusion

The new policy, “deforestation-free” implementing in EU, UK and USA, namely: (1) Regulation          on Deforestation-Free Commodity/Product issued by the EU in September 2022 and will enter into force in 2023; (2) Fostering Overseas Rule of Law and Environmentally Sound Trade Act/FOREST 2021 from the USA, which has been ratified and comes into force in 2021; and (3) UK Environment Act 2021 from the UK, which will also take effect in 2021.

There are differences in deforestation in the “deforestation-free” policy that applies in these countries. In the USA and UK, deforestation only includes illegal deforestation. Meanwhile, in the EU, deforestation includes legal, illegal, and forest degradation. Although are several commodities target of the “deforestation- free” policy of the three countries/regions, it seems that palm oil is the main target. This will harm the palm oil producers.

The “deforestation-free” policy implemented by the EU, UK, and USA will face a complicated and lengthy polemic because it is related to the varied definition of forest and deforestation. The definition of forest and deforestation that differs between sub-tropical and tropical countries also differs from the definition of forest adopted by FAO. Differences in understanding and contextual forest and deforestation lead to uncertainty (uncertainty) in defining and implementing the policy “deforestation-free”.

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