The Importance of Palm Oil Diplomacy for Indonesia and the Challenges

Palm oil is currently one of the main priorities of Indonesia’s economic diplomacy. Indonesia continuously intensifies its efforts to strengthen national palm oil diplomacy. Even, Indonesia's Foreign Minister, Her Excellency Mrs. Retno Marsudi said at the annual press statement on Jan 2021 that Indonesia will strengthen the diplomatic efforts to counter trade barriers, including negative campaigns against Indonesia's main commodities, particularly palm oil as one of the diplomacy priority list is boosting economic recovery while also supporting green and sustainable development.

There are at least three things that underlie the need for strengthening the national palm oil diplomacy. Firstly, palm oil is Indonesia`s largest export commodity. In 2017, the total export value of palm oil and its derivatives reached Rp309.15 trillion, far exceeding other national export commodities. Secondly, as a new and renewable energy source, the palm oil industry can be categorized as a strategic industry. The expanded B20 mandatory program will greatly help maintain national energy security. Thirdly, palm oil industry supports millions of jobs and opportunities.About 17.5 million workers, including smallholders works in the national palm oil industry and the number is estimated will continue to grow along with the growth of the Indonesian palm oil industry. All that happened without land expansion. The fact that the Indonesian government has enforced a land expansion moratorium for oil palm plantations deserves applause.

Indonesian sustainable palm oil is based on 3 dimensions of sustainability: health and environmental, social, and economic. Palm oil is not only the most efficient commercial oil bearing crop but also environmentally friendly, healthy, versatile, has multiple uses in our daily life, and contributes to poverty alleviation. Palm oil (Elaeis guineensis jaco) is considered as a zero waste plant. Each and every part of the palm tree itself brings advantages for our daily life. The trunk is commonly used as main material for furniture. The leaves is used as organic fertilizer and animal feed. The stalk is used as organic fertilizer and handicraft. Meanwhile palm fruit can be extracted to be a palm oil and palm kernel oil. Palm Tree productivity could last for 25 years and could be harvested every 10 days.

The palm oil sector is key to Indonesia’s efforts to reach its Sustainable Development Goals (SDGs). Indonesian palm oil guidelines will be under the framework of the World Food and Agriculture Organization (FAO). It will highlight the role of the palm oil industry to the attain SDGs. The Indonesian Government is prioritizing the importance of certification, both according to the standardization of Indonesian Sustainable Palm Oil (ISPO) and Roundtable on Sustainable Palm Oil (RSPO) which can show that the palm oil industry is Managed sustainably.

The Challenges

Unfortunately this a mbitious will increase the risks of deforestation as more tropical forest could be cleared to grow palm oil. Environmentalists have warned, urging policymarkers to implement a long-term ban on new plantations. Indonesia which is home to the world's third-largest tropical forests but also its biggest producer of palm oil has steadily increased the portion in its biodiesel mandate derived from palm oil since 2018 to boost demand. Indonesia was named as one of the top three countries for rain forest loss in 2019, according to Global Forest Watch, a monitoring service that uses satelite data.

Rapid deforestation occurred in Kalimantan due to forest conversion into extractive industries (mining and oil palm plantations). These activities are conducted by neglecting the ecological aspects and also the weak environmental permits, which made South Kalimantan lost two-thirds of their forest. According to the data from Indonesian Space Agency (LAPAN) more than 322,000 hectares of forest land has been destroyed in the past decade. This number indicates that in South Kalimantan or Barito watersheds, the original forest cover has significantly degraded and the natural function of the watershed to absorb the heavy rains and water overflows is also damaged.

Meanwhile, Europe is the country with the third largest CPO export destination for Indonesia after India and China. However, the EU proposed a European Union resolution initiative on palm oil and deforestation of rainforest, which finally passed with the major votes from EU members of Parliament in April 2017. The palm oil industry has come under fire in Europe over its impact on forests. The European Union’s discriminatory policies and regulations on palm oil have hurt economic and political ties. The European Union earlier this 2018 backed a ban on the use of palm oil in biofuels. European lawmakers approved draft measures to reform the power market there and reduce energy consumption to meet more ambitious climate goals. The plan includes a ban on the use of palm oil in motor fuels from 2021.

Source :

- Jakarta Post news paper edition 5 February 2021

- https://jakartaglobe.id/news/health-security-economic-recovery-among-indonesias-2021-diplomatic-priorities

- https://www.instagram.com/KBRIRoma

- http://www.bpdp.or.id/en/indonesia-focusing-sdgs-attaintnent-to-strengthen-palm-oil-diplomacy

- https://www.bpdp.or.id/en/Three-Major-Issues-to-Raise-in-Palm-Oil-Diplomacy

- https://www.thejakartapost.com/academia/2021/01/21/global-recovery-needs-fresh-approach-to-eu-asean-relations.html.

-https://www.channelnewsasia.com/news/asia/malaysia-muhyiddin-indonesia-jokowi-palm-oil-discrimination-14117468