Palm Oil Classified as Forest Risk Commodities in EU And UK Policies
In recent years, the green wave trend has emerged in the European Union (EU), both in as a basic ideology/paradigm in government policy and as a lifestyle of the EU community. Environmental issues were also become a central theme in the European Parliament elections in 2019. In this election, the “green” parties also get enough seats so they have strong bargaining position. It’s implication that the “green” ideology more influencing the regulations issued by the EU Commission or Parliament in the future.
One of the environmental issues that are a concern for the EU is global deforestation. Therefore, the EU Commission formulated a policy in order to increase their contribution in addressing the issue of global deforestation by publishing the Communication on Stepping up EU Action to Protect and Restore the World’s Forest in July 2019. Furthermore, to respond this policy, their Parliament also issued three resolutions in 2020.
In a presentation by Andri Hadi, Andri Hadi, Indonesian Ambassador Extraordinary and Plenipotentiary (EP Ambassador) to Kingdom of Belgium, Luxemborg, EU and international organizations in Brussels in the Webinar “Ngobrol bareng Gapki sesi 14“, stated that one of the resolutions issued by the EU Parliament is the EU Legal Framework to Halt and Reverse EU-Driven Global Deforestation. The policy instrument in this resolution is the tightening of imports for Forest and Ecosystem Risk Commodities (FERC), which is palm oil along with soybeans, rubber, corn, beef (and skin), and cocoa are included in this category.
The first idea of Forest Risk Commodities (or Forest and Ecosystem Risk Commodities/FERC) was defined by the Global Canopy Programme (GCP) in 2013. GCP is an NGO that undertakes works on deforestation in tropical countries and most part funded by aid agencies such as the UK Department for International Development (DFID). Term of FRC defined as “globally traded goods and raw materials that originate from tropical forest ecosystems, either directly from within forest areas, or from areas previously under forest cover, whose extraction or production contributes significantly to global tropical deforestation and degradation”.
In his presentation, Ambassador Andri also mentioned that with the import tightening policy for products include in FERC (or FRC) group, the EU Government also formed a Mandatory Due Diligence Process in which EU importers must ensure the supply chain for FERC category products must be free not only from the issue of deforestation and other environmental issues, but also social issues such as human rights violations, child labor, and others.
Not only by the EU Government, the UK Government also classifies palm oil in the FRC group. In November 2020, the government published the outcome of consultations related to regulations that aim at making it illegal for businesses (only large companies above certain turnover threshold) in scope to use FRC, either in production or trade activities within the UK region.
Following the consultation, the government also confirm the changes will be taken forward, such as an amendement will be introduced to the Environment Bill placing new responsibilities on large business-scale companies in the UK that using FRC products in their supply chains and also develop approach based on legality to helping government’s effort and to provide a pathway to recognise national standards and certification schemes for these products. It is expected that large scale companies in the UK can also do due diligence on their supply chains from the first tier supply chain by addressing deforestation and social issues.
Besides the ILUC RED II policy, the FRC regulations that are implemented by the EU and UK Governments are also trade barrier of palm oil in the region by using the issue of deforestation. Western countries consider deforestation to be the responsibility of palm oil, even though other agricultural commodities and livestock also have a greater contribution to global deforestation. This is confirmed by data from the EU Commission (2013) which states that the drivers of global deforestation in 1990-2008 were caused by the production of the livestock sector (24 percent), cereal crops (8 percent), and soybean (6 percent), while the share of oil palm in global deforestation relatively small, only 2 percent.
Another critic for the FRC concept is that other agricultural/livestock commodities, such as poultry, which is actually causes greater deforestation than palm oil, but these commodities are not included in the group considered high risk deforestation (FRC). The idea of a ‘Forest Risk Commodity’ lays the blame for deforestation on a simple set of objects (plants), driven by the misguided belief that inhibiting trade and halting the production of these commodities will magically solve this problem. Whereas historically, global deforestation occurred since before the 1700s in temperate forests, which were found mostly in Europe and North America.
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