By Noke Kiroyan, Chairman and Chief Consultant of Kiroyan Partners
JAKARTA, PRINDONESIA.CO – Related to international trade, the issue that has drawn the attention of the public is the conflict with the European Union. The climax of the conflict occurred when the Renewable Energy Directive (RED) II was passed on March 13, 2019. This regulation would have a negative impact on palm oil export from Indonesia to Europe because palm oil is classified as a product that does not meet the principle of sustainability. Starting in 2030, palm oil cannot be used as biofuel.
The European Union runs a policy about biofuel as their commitment to combating climate change as stated in the Paris Agreement on December 12, 2015.
At first glance, the position of Indonesia and the European Union is difficult to reconcile, because the conflict is at two different levels. Indonesia’s economic interests in palm oil are huge. On the European Union side, the commitments they undertake have a long=term aim to mitigate climate change. In addition, their steps have been through a complicated legislation process and agreed by all member countries. The obstacles on both sides have caused the negotiation of the Comprehensive Economic Cooperation Agreement between Indonesia and the European Union to halt until today.
We can analogize the European Union as a complex of 28 buildings. That complex is surrounded by thick and high walls. On the contrary, Indonesia is outside of the complex. No matter how angry we are, it could be undetected and blocked by high walls. Occasional visits or the effort to break through the wall through high-level visits will be less effective. There needs to be a consistent effort to influence policy.
The path that we need to take is how we can jump over the wall. Make efforts to lobby in a planned and systemic manner from within. The European Union is a complex construction and difficult to understand by ordinary people in Europe, so it requires a public affairs consultant based in the European Union. Through stakeholder analysis, we map the parties who are stakeholders as well as what underlies their attitudes. Thus, it can be seen who is an obstacle to our palm oil commodity or on another hand can be an ally in fighting for the interest of Indonesia.
In addition, lobbying has become an activity that is welcomed by the European Union as an instrument for obtaining input from various parties. All activities are in the Transparency Register which records complete locations of companies, specific organizations/NGOs, to whom officials are met, and for what matters. This list can be accessed by anyone on the European Union Website.
There is an assumption that the European Union is a monolithic block that aims to block palm oil production. They are considered as rivals for biofuels developed in Europe itself, especially in the east, which is a plant called rapeseed. In fact, the world’s largest producer of this commodity is China, not the European Union. So, how far this cause becomes the main consideration that needs to be reexamined. We will find out through stakeholders analysis and after that advocacy through groups that can be made allies. This is where the palm oil industry (not individual companies) plays an important role.
Other than the government’s effort at the level of government to government (G2G) through multilateral diplomacy, including bringing this issue to the World Trade Organization (WTO), the palm oil industry needs to take steps to maintain its market share in this high purchasing power continent through a public affairs approach. We still have time until 2030 to bring a change of attitude in the European Union.