Jakarta, Indonesia Sentinel — The European Union Deforestation Regulation (EUDR), set to take effect at the end of 2024, may negatively impact small farmers in Indonesia. Aimed at preventing products linked to deforestation or forest degradation from entering European markets, the regulation could create significant challenges for agricultural producers in tropical countries, including Indonesia.
While the EUDR is designed to address environmental degradation and combat climate change, its effectiveness in halting deforestation in tropical regions is limited and could instead harm small-scale farmers in Indonesia.
The regulation requires companies exporting commodities to Europe to perform extensive due diligence, taking responsibility for monitoring their supply chains. This includes managing documentation, tracing the origin of commodities, ensuring transparent supply chains, and tracking the geographic coordinates of the land where products are cultivated. Larger corporations are better positioned to meet these requirements, leaving small-scale farmers at a disadvantage.
The commodities covered by EUDR include palm oil, timber, soy, coffee, cocoa, beef, and rubber, as well as derived products like leather, chocolate, and furniture. These products must be traceable back to their environmental impact at the source of production.
Impact of EUDR Implementation
The EUDR is designed to prevent commodities contributing to deforestation from entering the EU market. However, critics argue that this regulation could represent a new form of dominance by developed nations over developing countries. Tropical nations that rely heavily on commodity exports will have to comply with the stringent rules set by the EU to maintain access to global markets.
The regulation imposes environmental standards that place a heavy burden on developing nations, without considering local conditions and socio-economic dynamics. Small farmers in these countries, who often lack the resources or technology to meet the new regulations, are at risk of being sidelined.
According to Fortune Indonesia, Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, has stated that while the postponement of the EUDR is a positive step, changes in the regulation’s implementation are far more important.
The regulation has sparked widespread concern and opposition from various countries, with critics arguing that the drafting process did not adequately involve the producers of the commodities regulated by the EUDR. Additionally, the EUDR fails to take into account the local capacities of small farmers, the sovereign regulations of producing countries, or data protection laws.
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Airlangga highlighted the issue of fairness, noting that allowing only the EU to set the terms is unjust. The broader consequences of the regulation extend beyond the forestry sector and could affect the entire trade ecosystem. “The EU is not a ratings agency. For economic matters, there are internationally recognized rating agencies. This regulation needs to be changed, not just postponed,” Airlangga said.
He also pointed out that countries like Indonesia already have sustainability standards in place for commodities such as palm oil, through the Indonesian Sustainable Palm Oil (ISPO) certification. Malaysia uses its own Malaysian Sustainable Palm Oil (MSPO) standard, while Europe has its Roundtable on Sustainable Palm Oil (RSPO). However, the EUDR does not recognize these standards, including Indonesia’s Timber Legality Assurance System (SVLK), despite Indonesia’s compliance.
“If we have to repeat this process, it’s like reinventing the wheel. It’s not a good step forward. The issue is no longer just about Europe, but about setting a global standard for sustainability,” Airlangga stated.
With the postponement, Airlangga hopes Indonesia will have more time to advocate for its position. While the European Union Deforestation Regulation seeks to prevent deforestation, its implementation faces numerous challenges, particularly in terms of verification and its impact on small farmers, which could hinder its ability to achieve its intended goals.
(Raidi/Agung)
