News in brief:
-Â Malaysia and Indonesia are calling for Southeast Asian unity in response to the EU Deforestation-Free Regulation, set to take effect in late 2024, which raises concerns about its impact on palm oil exports.
– Both countries, the world’s top palm oil producers, filed complaints with the WTO, asserting the EU’s regulations as discriminatory.
Malaysia and Indonesia are seeking for a united Southeast Asian stand in response to the European Union’s (EU) upcoming Deforestation-Free Regulation, a news report said.
The regulation, set to take effect in late 2024, has raised concerns among both countries regarding its potential negative impact on their palm oil exports.
Malaysia’s Prime Minister, Anwar Ibrahim, has secured assurances from his Thai counterpart, Srettha Thavisin, that his country is willing to collaborate in addressing the EU’s regulations.
Indonesia and Malaysia contend that the EU’s regulation is discriminatory and unfairly burdens small-scale farmers with excessive bureaucratic hurdles. Both countries, the world’s largest palm oil producers, filed separate complaints with the World Trade Organization (WTO) against the EU.
Indonesia criticised the EU’s approach, describing it as ‘regulatory imperialism’, while Malaysian producers expressed concerns about a potential ‘crop apartheid.’
However, other Southeast Asian nations have engaged in individual discussions with EU officials to gain a better understanding of the regulations.
A key concern for Southeast Asian governments and producers is the extensive documentation required. While it is meant to prove records that their products have not been cultivated on deforested land, the directive also wants companies to provide detailed mapping of their entire supply chains, including geolocation data.
The EU’s compliance mechanisms will become mandatory for larger companies in December 2024 and smaller firms are expected to follow suit a few months later.
Indonesia and Malaysia are seeking alignment between the EU’s demands and the international standard established by the Roundtable on Sustainable Palm Oil in 2004. They also advocate for harmonisation with the deforestation laws of national governments.
An anonymous European Commission official affirmed that the EU is ‘significantly’ increasing its engagement to ensure effective implementation of the new law while working in partnership with producer countries.
The official further revealed that a new initiative addressing these disputes will be launched at COP28, which is scheduled to commence in the United Arab Emirates on Thursday, 30 November, 2023.
