How Does RED II Discriminate Indonesian and Malaysian Palm Oil Industry?

By Intan Tawaddada Ilaiha (Photo: World Resource Institute Indonesia)

The banning of Palm oil usage in the European Union ruins the economy of smallholder farmers in Indonesia and Malaysia. It remains the issue of poverty for developing countries to suffer.

In December 2018, the European Union revised Renewable Energy Directive (RED) called RED II, which bans the use of palm oil (WTO, 2018) and closes the opportunity for Indonesia and Malaysia to export their palm oil production. They maintain to use another biofuel such as sunflower oil that they start to produce themselves. The reason to ban the use of palm oil is that the European Union claims that the production of palm oil causes a lot of deforestation in Indonesia and Malaysia. Leaving the palm oil market in Indonesia and Malaysia makes the smallholder farmers suffer from being collapsed as Indonesia and Malaysia are the biggest exporters for European Countries. Almost 85 percent of palm oil in European Countries is from Indonesia and Malaysia. Moreover, palm oil is versatile if we compare it to other oil for cosmetics, pharmaceutical, food, fuel, etc.

The main reason to ban is because of bad practices of palm oil plantation. The fact is that palm oil-producing countries have done so much to solve this issue such as the commitment of reforestation, conservation, research, and also the stricter certification for sustainable palm oil industry such as ISPO (Indonesia Sustainable Palm Oil) Certification, MSPO (Malaysia Sustainable Palm Oil) Certification, and RSPO (Round Table for Sustainable Palm Oil). It is called discrimination because in RED II they do not give a clear explanation about how a sustainable plantation should be. There is no such amount of how large the plantation is. So, no matter how hard Indonesia and Malaysia have tried to prove that they have improved their palm oil production sustainability, it will be no use since the European Union will claim the whole production of palm oil as a non-sustainable production that will damage our environment.

The problems remain with the ban and the significant difference of palm oil tariffs in Europe. The Netherlands maintains its partnership with Indonesia and Malaysia to buy palm oil. The Netherlands is one of the countries in the European Union territory that does not want to bind its regulation with the RED II result. The Netherlands itself is also a producing country of palm oil, but they can sell their palm oil at way higher prices in the European Union Countries. The difference is around USD 150 per-metric ton (CPOPC, 2020), it remains unfair since we can say that the Netherlands palm oil is mainly from Indonesia and Malaysia. The tariffs sanctions exist because the European Union claims Indonesia and Malaysia have bad practices of palm oil plantation. Under the same logic, it means the Netherlands also distributes the palm oil that has the chain of bad practices palm oil plantation, but why does the Netherlands not have the same tariffs sanctions? So, the European Union proclaimed aim to stop the deforestation of Indonesian and Malaysian rainforests by giving them tariffs sanctions is questionable.

From 9 December 2019 to 2 November 2020, Indonesia has requested consultation in WTO to talk about the palm oil dispute (WTO, 2020). Other countries such as Argentina, Brazil, Canada, China, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, India, Japan, Korea, Malaysia, Norway, Russia, Singapore, Thailand, Turkey, and the United States reserved their third-party rights in that consultation (ibid). Nevertheless, the palm oil settlement dispute remains unclear for Indonesia, Malaysia, and the European Union. This means that the future of smallholder farmers in Indonesia and Malaysia remains unclear as well.

This whole regulation from the European Union will give no benefit at all to Indonesia and Malaysia. Nevertheless, I can assure you that banning palm oil from Indonesia and Malaysia will give no benefit the decreasing global warming and climate change. The whole world will rely on Indonesia and Malaysia for its reforestation to the lungs of the world. At the same time, they also give no benefit at all to Indonesia and Malaysia with a ban from the European Union. How can the world expect Indonesia and Malaysia somehow to change its palm oil plantation into a complete forest by giving them sanctions? The people in Indonesia and Malaysia especially smallholder farmers of palm oil are suffering from this regulation while the world forces them to change their lifestyle and jobs drastically. Furthermore, there is no such guarantee if the European Union leaves the Indonesian and Malaysian palm oil market and they will change its plantation into the forest due to the economy of hundreds of smallholder farmers. The worst case scenario will find another market apart from the European Union Countries market to survive and we cannot guarantee this new market will demand sustainability. We are sure if Indonesia and Malaysia still try their best for a sustainable palm oil industry even though the new market will not demand sustainability. But it is really unfair because Indonesia and Malaysia do not get the reward they deserve for trying their best to sustain the sustainable palm oil industry amid economic setback due to the coronavirus outbreak.

At the end of the day, saving the environment has to be everyone’s commitment on this whole planet due to our existence, and we all take advantage of it. It is a selfish act to leave this issue to Indonesia and Malaysia just because the forests are located there while we all take advantage of it no matter what country we live. Then, we close our eyes when their smallholder farmers are suffering from the impact of discrimination regulation. We cannot leave the palm oil market, but we can demand to reform the palm oil market to be a better one.

Intan Tawaddada Ilaiha is a Final Year Student of Communication Science from the Social and Political Faculty in Universitas Sebelas Maret. She concerns about low politics, international relations, and humanitarian issues.

2 replies
  1. Yogz
    Yogz says:

    We have polycentric issues on palm oil. Palm oil not only leading Indonesia to severe climate change that affect whole nation but whole society livelihoods too. Even with Sertification like RSPO not guarantee its fulfilled the good practice. But with million acre of monoculture palm we must look for another source of livelihoods.

  2. levisd77
    levisd77 says:

    Health Benefits of Sunflower Oil

    sunflower oil (Helianthus annuus) is a non-volatile oil extracted from the seeds of sunflower. It is a triglyceride and mainly consists of palmitic acid, stearic acid, oleic acid and linoleic acid.

    When it comes to its nutritional value and benefits to health it is an amazing natural ingredient. This article will highlight the health benefits of sunflower oil and reasons why you should add it to your diet.

    1. Improves Heart Health
    High cholesterol content in the body means that one is more likely to develop atherosclerosis, high blood pressure, and increased chances of heart attack or a stroke. Sunflower oil is a good choice for keeping a healthy heart. It is rich in oleic-acid (monounsaturated fatty acid- MUFA) and has favorable outcomes on blood lipids and factor VIIc (coagulant activity). Moreover, it contains Vitamin E, which prevents dangerous free radicals from oxidizing the body’s cholesterol. Thus, sunflower seed oil can be a great ingredient to be used for cooking. A diet full of MUFA is beneficial to keep a check on atherosclerosis and many cardiovascular diseases can be prevented.

    2. Improves Skin Health
    Sunflower seed oil has remarkable impact on skin. In a study it has been demonstrated that it preserves stratum corneum integrity, does not cause erythema, and improves hydration. Not only for adults, it is also of great importance for neonates as well. The infant massage using this oil enhances skin barrier function and completely moisturizes the skin. Research also suggests that it is a better alternative than olive oil for dry skin. It is full of vitamins E, A, D, C which keeps the skin supple and works as an excellent face moisturizer with its antioxidant activity. This oil helps the skin cells to regenerate and prevent acne.
    Vitamin E in sunflower oil protects against hazardous effects of UV radiation. It offers photoprotection and effectively works on wrinkles, blemishes & patchy skin.
    3. Prevents Arthritis
    Sunflower seed oil has been shown to have anti-inflammatory capacity. Its major lipid is linoleic acid, which possibly decreases inflammation in the skin by activating peroxisome proliferative-activated receptor-alpha (PPAR-α). It has been linked to a reduction in severity of rheumatoid arthritis when used within recommended limits.

    4. Prevents Asthma
    Vitamin E reduces and prevents oxygen damage to the tissue and is useful for the treatment of pain, inflammation and allergic reactions. A number of studies suggest that vitamin E reduces bronchoconstriction associated with asthma. It shows lower prevalence of wheezing, cough and shortness of breath compared to those with lower intakes. So, sunflower oil which is a rich source of Vitamin E can be a good option to prevent asthma.

    5. Prevents Cancer
    Sunflower seed oil is also rich in vitamin A and carotenoids. The antioxidant content helps to fight the free radicals that cause degeneration of cells and inhibits the growth of cancerous cells. Moreover, the selenium present in sunflower seeds repairs cellular damage. So, the incorporation of sunflower oil in the diet can play a major role in reducing colon cancer, and uterine cancer as well.
    6. Improves Immune System
    Sunflower oil provides adequate linoleic acid for maintenance of the immune response. Linoleic acid is needed for normal immune response, and essential fatty acid (EFA) deficiency impairs B and T cell-mediated responses. It helps in building new cells and tissues of the body, which is beneficial in boosting the immune system.
    7. Improves Hair Health
    Higher amounts of tocopherol are available in sunflower oil. The study shows that the intake of natural vitamin E may help against collagen cross-linking & thus hair health. It can treat problems of baldness & hair loss.

    8. Improves Digestion
    Sunflower seed oil contains high content of polyunsaturated fatty acids (PUFA). PUFA are found to increase digestibility thus, healthy digestion.

    9. Helps Aid Weight Loss
    Adiponectin is basically involved in the fatty acid breakdown. According to a study, sunflower oil increases adiponectin levels in post-menopause women thus, reducing weight.

    10. Reduces Depression & Anxiety
    It contains magnesium which has been found to work in mood disorders like depression & anxiety.  Magnesium ions regulate calcium ion flow in neuronal calcium channels that helps to regulate neuronal nitric oxide production. Thus, it treats the associated symptoms.
    Sunflower Oil Nutritional Value
    Sunflower seed oil can be considered to be one of the healthiest ingredients for cooking. It contains both polyunsaturated and monounsaturated fatty acids. Sunflower kernels indeed are excellent sources of Vitamin B-complex like folic acid, niacin, pyridoxine, and minerals. Daily consumption of this oil in recommended limits can be very beneficial for the overall maintenance of health.
    Nutritional Profile of Sunflower Seed Oil
    Fats: Sunflower oil is low in saturated fats but especially rich in polyunsaturated fatty acid linoleic acid, which constitute about 50% fatty acids in them. Linoleic sunflower oil has a high content of polyunsaturated fats, particularly omega-6 fatty acids that are involved in a number of body processes such as lowering LDL (low-density lipoprotein) or bad cholesterol, building strong hair and immune system. Research studies suggest that diet rich in monounsaturated fatty acids help to prevent coronary artery disease, and stroke by maintaining healthy blood lipid profile.


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