“Strengthening Indonesia’s Readiness to Navigate the European Union Deforestation-Free Regulation through Improved Governance and Inclusive Partnerships”

The European Union ratified a regulation last year that changed the global trade paradigm. Palm oil, wood, soybeans, cattle, rubber, cocoa, and coffee entering the European Union are now subject to a stringent due diligence process. These products must originate from traceable sources, adhere to legal standards, and not result from forest conversion after December 31, 2020. Commencing on January 1, 2025, this regulation will come into force, affecting the exports of Indonesia’s primary commodities including palm oil, wood, rubber, cocoa, and coffee.

Indonesia faces a many of challenges in implementing these regulations. These challenges encompass overlapping land and plantation data, a lack of transparency in licensing data, the imperative for enhanced legal compliance, conflicts between plantation and forest area, and injustices endured by farmers. Deforestation, both legal and illegal, persists as a significant issue. Hence, enhancing land and commodity management is pivotal, not only to adhere to the EUDR but also to realize equitable and sustainable natural resource management as mandated by the 1945 Indonesian Constitution.

The Indonesian government, in collaboration with Malaysia and the European Commission, has established an Ad Hoc Joint Task Force to tackle EUDR-related issues. Topics under discussion include the participation of smallholders or farmers in the supply chain, pertinent national certification schemes, traceability systems, data on deforestation and forest degradation, and personal data protection. The second meeting of the Joint Task Force is slated for February 2, 2024, in Malaysia.

This article aims to contribute to strengthening Indonesia’s land and commodity governance in response to European Union deforestation regulations, which are expected to drive improvements. It also seeks to stimulate public discussion by examining data on legality and deforestation trends relevant to the due diligence and benchmarking processes under the EUDR.

The partnership between Indonesia and the European Union carries significant potential to support governance in Indonesia and elevate the competitiveness of Indonesian export commodities in aligning with the EUDR. This article proposes four priority areas for governance enhancement within this partnership: Strengthening the Regulatory Framework for Deforestation-Free Commodity Production, Accelerating Fulfillment of Legality and Traceability Requirements, Improving Data Transparency and Accountability in Licensing, and Facilitating Multi-stakeholder Participation and Collaboration. This partnership should be conducted with transparency, inclusivity, and the active involvement of all interested parties.

* Revisions have been made to Figure 9 page 18, and the first paragraph in subsection page 83.