European Union: EUDR Due Diligence Terms Irreplaceable
The EU is of the view that all sustainability certificates, including ISPO, RSPO, MSPO and SVLK, can support forest and environmental sustainability, but cannot replace the due diligence required by the EUDR.
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JAKARTA, KOMPAS — The European Union Commission emphasized that various sustainable commodity certificates cannot replace due diligence obligations required by the European Union's Deforestation or EUDR Free Products Act . In addition, the European Union also does not prohibit exports and discriminate against certain commodities through the EUDR.
Environmental, Climate Action, and Digital Counselor of the Delegation of the European Union (EU) for Indonesia and Brunei Darussalam, Henriette Faergemann stated on Thursday (24/8/2023) that many commodities in various countries, including Indonesia, have sustainable certificates. However, the standardization of third-party verification-based certificate systems varies, making it impossible for the EU to control everything.
The EU Commission and Parliament also do not have the mandate to verify these sustainable certificates. In addition, the EU does not have sufficient resources to check all sustainable certificates from hundreds of countries.
”We are of the view that all of the sustainability certificates, including the ISPO, RSPO, MSPO and SVLK, can support forest and environmental sustainability, but cannot replace the due diligence required by the EUDR. The certificate is good, but we want to strengthen the verification system through due diligence," he told Kompas in Jakarta.
We believe that all sustainable certificates, including ISPO, RSPO, MSPO, and SVLK, can support forest and environmental sustainability, but they cannot replace the thorough testing required by EUDR.
Faergemann also emphasized, through EUDR, the EU does not prohibit any country from exporting its commodities to the EU market. He gave an example, almost around 80 percent of products in various EU supermarkets contain palm oil. The EU does not ban those products. However, the EU wants to ensure that EU consumers consume products that do not come from deforested forests.
"EDUR also does not discriminate against certain commodities. The determination of the seven commodities has gone through various studies. In addition, the regulation also applies to products produced in the EU or imported from other countries," he said.
EUDR mandates that seven commodities entering the EU market must not originate from deforested or degraded land after December 31, 2020. The seven commodities are coffee, palm oil, cattle, soybeans, cocoa, wood, charcoal, and rubber, as well as derived or processed products such as meat, furniture, paper, leather, and chocolate.
The regulation requires products to be certified for verification or due diligence (due diligence) based on geolocation or based on satellite imagery and global positioning system (GPS) coordinates. Large companies have 18 months and small companies 24 months to comply with various requirements in the regulations that took effect on June 29, 2023.
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Faergemann explained, the EU Commission initially proposed only six commodities to be targeted by the EUDR. Meanwhile, the EU Parliament and a number of EU non-governmental organizations (NGOs) are proposing a wider scope. A number of EU NGOs proposed a 2010 deadline for clearing new land for plantations, while the EU Parliament proposed more commodities to be monitored in the EUDR.
The European Parliament proposed a deadline for the opening of forests to become plantations, agriculture, or livestock areas, between NGOs and the EU Commission. The EU Commission proposed the final deadline of 31 December 2020. After the political process, a consensus was finally reached, namely the deadline for the opening of the forest on 31 December 2020 and a total of seven types of monitored commodities. Derivative products of these commodities are also monitored.
"Over time, coverage could possibly be expanded. Expansion may be carried out if new supporting evidence is found. For now, the search is not a priority for the EU. Brussels is still focused on identifying the level of risk of the regions and countries that produce various commodities. The identification process is to determine the verification steps for commodities that will enter the EU," said Faergemann. "
Currently, the EU is compiling and soon completing the identification mechanism. Thus, each region and producer country can immediately know the level of risk. Commodities from low-risk areas are practically not mandatory to undergo complete testing. As for commodities from standard or higher-risk areas, they must undergo a complete testing process.
The EU will compare satellite images to determine the origin of commodities. The EU will compare images before and after December 31, 2020. If the origin location of the commodity is still a forest before that date, the commodity may not be able to enter the EU. If the location is not a forest before that date, the commodity may be eligible to enter the EU.
Chairman of the Presidium of the Indonesian Furniture and Crafts Association (Himki) Abdul Sobur is of the opinion that EUDR due diligence will increasingly burden Indonesian furniture and handicraft exporters. Currently, furniture exporters are required to have SVLK which is obtained at a cost of around Rp. 40 million.
To enter the EU market, furniture exporters are still required to have a Forest Stewardship Council (FSC) certificate. To obtain it, the exporter must pay $10-15 US dollars per document per shipment.
"If SVLK and FSC are still applied and added with the cost of UE's thorough testing, we strongly object. Our product's competitiveness in the EU market will also be increasingly pressured. Therefore, we still hope that the EU adopts SVLK in the EUDR thorough testing requirements," said Sobur.
If SVLK and FSC are still applied and added with the cost of complete testing from the EU, we strongly object. The competitiveness of our products in the EU market will also be further suppressed.
Chairman of the Association of Indonesian Palm Oil Producers (Gapki) Eddy Martono stated that the certification of deforestation-free land which was mandated in the EUDR had actually been formulated in the IPO and RSPO. However, the RSPO as a product that is also made by the EU is not recognized in the EUDR. This is very unfortunate and will burden business actors and smallholders in Indonesia.
In response to that, Faergemann stated that the testing obligations will be charged to the importers. However, he did not confirm whether the importers will eventually pass on the verification and testing costs to the suppliers or consumers. It is also uncertain how much the verification costs will be.
The verification process for suppliers, especially small farmers, is relatively easy. The most important thing is legality or proof of land ownership. Farmers also need to show the coordinates of their land. Based on these coordinates, cross-checks will be conducted, including comparing satellite images.
The EU ensures to continue to engage in dialogue with supplier countries. With Indonesia, the EU has established a task force to align the understanding of the parties. Cooperation and dialogue are part of the EU's efforts to ensure that suppliers can meet the standards set by Brussels.
"We will still buy various commodities. However, we want to ensure that the commodities do not contribute to deforestation," he said.
UE will issue guidelines that are easily understood by suppliers and traders. In addition, there is also support for improving forest governance and addressing the root causes of deforestation.