Why Indonesia is pushing back against EU rules | DW News

Summary

The transcript discusses tensions between the EU and Indonesia over environmental policies, particularly the EU's deforestation laws, which Indonesia's ambassador to Germany argues are harming small farmers and hindering trade. The ambassador calls for fair treatment and readiness from the EU to implement agreed treaties, while also highlighting Indonesia's openness to foreign investment in its nickel industry. The conversation touches on trade imperialism, Indonesia's economic strategies to avoid the resource curse, and a call for Germany to support Indonesia in finalizing a free trade agreement and fostering industrial collaboration.

Takeaways

• 😡 The EU's policy on deforestation is criticized as being poorly thought out and harmful to small holders rather than large corporations.
• 🌳 The EU's law to ban deforestation from supply chains is seen as hypocritical, especially considering the loss of mature forests in Europe itself.
• 📋 Indonesia is willing to abide by anti-deforestation laws but seeks fair treatment and non-discriminatory implementation from the EU.
• 🤝 The Indonesian ambassador to Germany emphasizes the readiness of Indonesia to engage in robust cooperation against deforestation.
• 💼 There is a call for the EU to work with Indonesia, rather than impose policies that may harm small farmers and local economies.
• 🌐 The ambassador highlights the importance of fair trade and the need for the EU to be ready for agreements like the UDR (Unilateral Deforestation Regulation).
• 🤔 The EU's stance on nickel production and trade with Indonesia is questioned, with the ambassador pointing out a perceived double standard.
• 🏭 Indonesia is inviting foreign investment to improve its smelting systems and meet the world's demand for nickel, despite trade challenges.
• 📉 The nickel industry in Indonesia faces challenges such as falling prices and the need for better environmental practices.
• 🌐 The ambassador suggests that the EU's approach to trade and investment in Indonesia is imperialistic and not inclusive.
• 📊 Indonesia's economy has been performing well, with a focus on managing resources wisely and developing sectors like the digital economy.

Q & A

What is the main concern of small holders regarding the EU's policy on deforestation?

Small holders are concerned that the EU's policy is not well thought out and is negatively impacting them, as they are being accused of contributing to deforestation despite not being directly involved.

How does the EU's law to ban deforestation affect trade partners like Indonesia?

The EU's law is frustrating trade partners abroad, such as Indonesia, which has valuable minerals for tech use and claims that the regulation is harming its small farmers.

What is the current situation with the free trade deal between the EU and Indonesia?

The two parties are currently thrashing out a free trade deal, with the issue of the EU's environmental principles and its impact on Indonesia's small farmers being a point of contention.

What is Indonesia's stance on the EU's requirements for anti-deforestation?

Indonesia is ready to abide by the anti-deforestation requirements but questions whether the EU is ready to implement them without discriminations, especially regarding vegetable oils like palm oil.

How does the ambassador of Indonesia to Germany view the EU's approach to environmental standards?

The ambassador believes the EU's approach is hypocritical, pointing out that Europe's mature forests are dying without the same level of protest as deforestation in the global South.

What is the issue with the EU's implementation of the UDR (User's Data Regulation)?

The ambassador suggests that the EU is not fully implementing what has already been agreed upon in legally binding treaties, and questions the EU's commitment to fair treatment.

How does the ambassador perceive the impact of the EU's policy on small holders in Indonesia?

The ambassador argues that the EU's policy is killing small holders who have nothing to do with deforestation, and that the policy is not well thought out.

What is Indonesia doing to address the challenges in the nickel industry?

Indonesia is working on improving its smelting system and inviting foreign investors to help meet the world's needs for nickel, which is crucial for battery manufacturing.

How does the ambassador view the EU's stance on Indonesia's ban on the exportation of nickel ore?

The ambassador believes the EU is being hypocritical by not allowing Indonesia to process its raw materials, similar to how Chile is treated under the FDA between Brussels and Chile.

What is the ambassador's message to the EU regarding their policy on deforestation and trade?

The ambassador's message is that the EU's policy is not well thought out and is harming small holders. He suggests that the EU should engage more robustly with Indonesia in the fight against deforestation.

How does Indonesia manage to avoid the resource curse and maintain a strong economy?

Indonesia focuses on a digital economy, services, e-commerce, fintech, and a strong domestic consumption driven by a young population, as well as prudent fiscal policies and controlled inflation.

What is the ambassador's request to Germany's ambassador, Olaf Scholz?

The ambassador asks for Germany's help in finishing the FDA with the US and encourages more German industries to invest in Indonesia, highlighting the country's readiness with 'red carpet' treatment.

Outlines

00:00

🌳 EU Deforestation Policy Critique and Indonesia's Trade Concerns

The first paragraph discusses criticisms of the EU's policy on deforestation, which is perceived as detrimental to small farmers and hypocritical given Europe's own forest loss. The speaker, presumably Indonesia's ambassador to Germany, argues that the EU's ban on deforestation in supply chains is frustrating trade partners like Indonesia, which has valuable minerals for tech industries. The ambassador emphasizes that Indonesia is ready to comply with anti-deforestation laws but questions the EU's readiness and fairness in implementation, highlighting the disparity in treatment between palm oil and other vegetable oils. The paragraph also touches on the impact of these policies on small holders and the broader implications for trade agreements and supply chains.

05:01

🤝 Addressing Trade Disputes and Investment Opportunities in Indonesia

The second paragraph delves into Indonesia's efforts to meet global nickel demands for electric vehicle batteries and mobile phones, despite challenges like falling nickel prices and carbon-intensive production. The ambassador highlights Indonesia's improved smelting systems and openness to foreign investment from various countries, including a push for German investment. The paragraph addresses the trade dispute with the EU over Indonesia's ban on nickel ore exports, which the EU and WTO opposed. The ambassador invites the EU to invest and collaborate in Indonesia instead of imposing trade barriers and criticizes the EU's alleged double standards in trade practices.

10:01

📈 Indonesia's Economic Growth and Strategies to Avoid the Resource Curse

The final paragraph outlines Indonesia's economic achievements and strategies to sidestep the resource curse, focusing on the digital economy, which includes e-commerce, fintech, and media services. The ambassador mentions the country's large domestic market, supported by a young population with high consumption rates, and prudent fiscal policies that have contributed to controlled inflation and reduced unemployment. The ambassador also discusses Indonesia's balanced trade relations with various global powers, including the US, EU, China, and others, emphasizing openness and the avoidance of colonialist or imperialistic practices. The paragraph concludes with a message to Germany's ambassador, inviting further investment and cooperation, and highlighting the positive historical relations between Germany and Indonesia.

Keywords

💡Deforestation

Deforestation refers to the clearing or thinning of forests by humans. In the video, the EU's law to ban deforestation from its supply chains is criticized for harming trade partners and small farmers, particularly in Indonesia. This term is central to the discussion on environmental regulations and their economic impacts.

💡Supply Chain

A supply chain encompasses the steps involved in producing and distributing a product. The video highlights the EU's regulations aimed at removing deforestation-linked products from its supply chains, which affects trade with countries like Indonesia, especially in commodities like palm oil and minerals.

💡Small Holders

Small holders are farmers who manage small plots of land. In the video, Indonesian small holders are said to be adversely affected by the EU's deforestation regulations, as large companies might stop buying their products due to compliance issues, thus impacting their livelihoods.

💡Environmental Standards

Environmental standards are rules and guidelines aimed at protecting the environment. The EU's strict environmental standards, particularly around deforestation, are a focal point in the video, as they are seen as potentially hypocritical and damaging to small farmers in Indonesia.

💡Trade Deal

A trade deal is an agreement between countries that regulates the terms of trade between them. The video discusses the ongoing negotiations of a free trade deal between the EU and Indonesia, where environmental regulations are a contentious issue.

💡Nickel

Nickel is a metal used in various industries, including battery manufacturing. Indonesia is a major supplier of nickel, and the video discusses the challenges it faces in meeting global demand, improving smelting processes, and attracting foreign investment amidst trade disputes with the EU.

💡Certification

Certification refers to the official approval of compliance with standards. The video mentions the stringent certifications required for palm oil compared to other vegetable oils like rapeseed and soybean, highlighting perceived double standards in the EU's regulatory approach.

💡Investment

Investment is the act of allocating resources, usually money, to generate income or profit. The video mentions various countries investing in Indonesia's nickel industry, and calls for the EU to similarly invest and collaborate rather than impose restrictive regulations.

💡World Trade Organization (WTO)

The WTO is an international body that regulates trade rules between nations. The video references a WTO ruling in favor of the EU regarding Indonesia's export ban on nickel ore, illustrating the complex legal and trade disputes involved.

💡Resource Curse

The resource curse refers to the paradox where countries with abundant natural resources tend to have less economic growth and worse development outcomes. The video discusses how Indonesia has managed to avoid this trap by diversifying its economy and boosting digital sectors.

Highlights

Policy critique on small holders: The speaker argues that the EU's policy is inadvertently harming small farmers rather than addressing deforestation effectively.

EU hypocrisy on environmental standards: The speaker accuses the EU of being hypocritical, pointing out the lack of protest over Europe's own forest loss compared to the outcry over deforestation in the global South.

Indonesia's readiness for anti-deforestation measures: The ambassador asserts that Indonesia is prepared to comply with anti-deforestation regulations, questioning the EU's readiness to implement them without discrimination.

Challenges in the palm oil industry: The impact of the EU's UDR on small palm oil farmers is discussed, with concerns raised about the potential exclusion of small holders from supply chains.

Call for EU investment in Indonesia: The ambassador invites EU investment to improve smelting systems for nickel production, suggesting that collaboration could resolve trade disputes.

WTO ruling on nickel export ban: The discussion touches on the WTO's decision in favor of the EU regarding Indonesia's ban on nickel ore exports, and the implications for trade relations.

Indonesia's openness to EU investment: The ambassador emphasizes Indonesia's willingness to accept EU investment in its nickel industry, paralleling opportunities given to other foreign investors.

EU's alleged double standards: The speaker alleges that the EU treats Chile more favorably than Indonesia, suggesting a double standard in processing raw materials and investment policies.

Indonesia's economic performance: The ambassador outlines how Indonesia has managed to avoid the resource curse through the growth of its digital economy and prudent fiscal policies.

Importance of the digital economy: The role of the digital economy in Indonesia's economic success is highlighted, with a focus on services, e-commerce, and fintech.

Demographic advantage for domestic consumption: The young population of Indonesia and its impact on domestic consumption and economic growth is noted.

Indonesia's balanced trade relations: The ambassador discusses how Indonesia maintains balanced trade relations with various global powers, including the US, EU, and China.

Request for German assistance: The ambassador asks for Germany's help in finalizing the FDA with the EU and attracting more German industries to Indonesia.

Historical relations with Germany: The ambassador reflects on the positive historical relations between Indonesia and Germany, dating back 500 years, and the absence of colonialism.

Message to Olaf Scholz: A direct appeal to the German chancellor for support in trade negotiations and investment attraction to Indonesia.

Indonesia's preparedness for future relations: The ambassador expresses optimism for the next 500 years of relations with Germany, emphasizing the positive and non-colonial history.

Transcripts

your policy is not well thought out you

are actually killing the small holders

do you think that Europe has been

hypocritical on this absolutely

Brussels should have helped us instead

of attacking

us the eu's law to ban deforestation

from the supply chains of its companies

is frustrating trade Partners abroad

just take Indonesia which has valuable

minerals for use in Tech like batteries

and computer chips it says the

regulation is harming its small farmers

the bat comes as the two are thrashing

out a free trade deal so does the EU

back down in its environmental

principles or put at risk its

relationship with Indonesia and

potentially cut off a vital supply chain

I spoke with Indonesia's ambassador to

Germany asking him if they're close to

sealing a deal for us

is in general uh the largest uh uh

element which is uh Timber and palm oil

I think we confident it is not a big

problem so I think uh all in all uh the

question for us is that is EU ready is

EU ready because the EU would be asking

are you ready to abide by the

anti-deforestation we are ready we are

ready because it has to be the question

is that uh will EU Implement UDR without

discriminations for instance uh

vegetable oils okay palm oil

palm oil is the

only vegetable oil with stringent

certifications rep seed in Europe no

certifications um soybean in Europe no

certifications will EU farmer that has

received billions and billions of Euros

of subsidy are they willing to be uh uh

you know putting a stringent uh

requirement so we are

ready you said in a tweet Europe mature

forests are dying EU lost 2.2 million

hectares of forest but I hear no massive

protest from those who scream about

deforestation in the global South why so

do you think that Europe has been

hypocritical on this absolutely

absolutely um exactly that is my

question is EU ready in the in the UDR

for instance we've done a survey with

Professor from Guan University and

Indonesian University

gamada out of 27 members

states only half knows the treat that we

signed in

2013 member states don't really either

you know I want to be blunt you know

they don't they don't they're not

willing or they're not able to promote

our product so this is a legally binding

treaty mind you okay ratified by all

members of parliament in EU ratified by

our Parliament so it's very strong

stronger than

UDR and yet

Brussel has no commitment to implement

what is already agreed so then the

question is always from my side where is

your fair treatment and are you ready

look at it from the eu's position right

they're going to say if we say we want

you know environmental standards and

this kind of thing and yet let big

financial institutions invest in

companies that are carrying out

deforestation then that is going to be a

massive point of hypocrisy for the EU so

they have to do something you're saying

small holders won't be affected by this

at all everything will be fine as long

as the the EU implements what has been

agreed fully

false because the problem is with the

small holders the big companies the the

big investor as you rly mentioned they

are sensitive to Public Image right

they're sensitive to criticism thetive

to attacks by NGO so they are the one

who actually have the drive positive

Thrive to become green and sustainable

the problem with the small holder is

that we have first of all around

41% of the 16 million hectare of palm

oils uh Plantation owned by small

holders small mean half hectar up to

three four hectares and they might not

have the land title so what what is

going to happen is that uh because of

the segregation system that EU uh uh put

on the UDR so the big companies they

said well okay I'm sorry small farmers

I'm not going to take your

products I want to be sure this coming

from my own property and um you know I'm

sorry about you it's it's not my problem

because I'm going to sell to to EU but

what's your what's your message to the

EU on that point the message is very

simple that your policy is not well

thought out your your your aim is to

create uh uh free deforestation

but you are actually killing the small

holders who have nothing to do with

deforestations okay so if you really

want to be serious in in this fight

against deforestation which we are also

very serious uh you can uh engage us

much more uh uh robustly okay yeah I

want to move on to to Nickel

specifically nickel so Indonesia is

expected to meet 2/3 of the world's

needs for nickel which is obviously in

the manufacturer of batteries for

electric vehicles mobile phones and so

on but there are complexities so the

nickel price has come down um quite a

bit in the last 18 months it's a very

carbon intensive industry and not all of

the nickel being produced is yet battery

grade so what is Indonesia doing to meet

these challenges so first of all I think

it's to get a better smelting system the

furnace is better okay and uh in that in

that that regard uh we are inviting

foreign investors so now we have Chinese

already in Indonesia we have Canadians

we have Korean we have Japanese and I've

been working very hard to bring German

investors uh on this uh kind of a

project so

Brussels should have helped us instead

of attacking us because in the context

of uh FDA between Brussels in

Chile they are willing uh to allow Chile

to process in

Chile so again is a double standard with

Chile they are willing to process the

raw materials in Chile they will willing

to allow investment in Chile but with

Indonesia is definitely aack but the

World Trade Organization ruled in the

eu's favor so just to just to dig into

this to explain so Indonesia imposed a

ban on the exportation ofal or so that

you could support these um smelting

Industries and so on inside Indonesia

cor um but the EU says that that's

unfair and the World Trade Organization

ruled in its favor so what is the way to

settle this dispute at a time when

appeals are just not being processed

yeah number one the question of fair

that they are

claiming um our data shows that we never

actually exported to

EU there is a shipment from Indonesia to

one EU country and one one EU Port but

the information that I receive is that

this is a port that collect nickel from

Africa but the you might want to in the

future hang on hang on but this this

this this this nickel that came from

Indonesia sitting in one European Port

they're going back to

China

so the question is what is EU actually

wants okay uh it wants to secure

strategic minerals exactly so why don't

you just work work with us instead of

you know uh they can't because you've

imposed a ban no we open the opportunity

for EU to come and to invest in

Indonesia you know as uh what the

Chinese Korean Japanese Canadians the

French what's the differ between the

French and and Brussel it's it's the

same so if we have already French

investment and we hope to have uh two

German companies in investing India so

you know what's what's the what's the

what's the me and if you have a concern

about your nickle is not green enough so

come and assist us we are open for your

uh assistance we open for your uh

discussions if if you want to be part of

the discussion that is

inclusive non

colonis uh you know uh just just uh you

know extend your hand and so you're

saying that the EU is behaving in a as

in a colonialized manner it's uh it's

not colonialism it's just imperialism

okay I want I want to dig more into what

you're saying about the industrial was

it trade imperialism yeah how does

Indonesia balance its trade relations

and the perhaps conflicting interests

between the US the EU and China yeah I

think first I would like to address the

number of the trade basically trade uh

with China is increasing because we have

the FDA with China and now we are now

increasingly having more trade with the

us because we signed EPF we sign uh

International partnership so where is

Brussel if if they say we are not open

we are open to the us we have a open

relations with Australia with Western

countries with with China with Japan

with with South Korea so I

think coming back to my thesis is EU

ready whether it in trade whether in UDR

whether in the nickel so that is the

questions that we want to pose okay so

um Indonesia's economy has consistently

performed well lately how have you

managed to achieve that and avoid the

Trap that some countries have fallen

into called the resource curse so it's

not just a matter of having lots of

resources therefore you become a

developed economy but rather it's how

you manage them so how has Indonesia

managed to do that um um digital economy

is one of them so if you look at the

size of digital economy they they're big

and they have nothing to do at all with

resource there are Services there are

five area media is the largest of uh our

digital economy

e-commerce uh fintech okay and then also

um hotels services and then uh food

delivery very simple but we are 282

million people

so uh delivery uh business is very very

big especially during the pandemic and

the second I think is the age we have a

average is of 29 years old and it means

domestic consumption is quite high and

we have a very good controlled

inflations of course uh prudent uh in in

the uh state budget and declining of the

unemployment and coming of the

investment and the investment that comes

are not necessarily resource but also

manufacturing as well okay I just want

to end on on one thing quite simply what

is your message to Olaf Schultz as

ambassador of Germany if you can tell

him one thing about what he should do to

work with

Indonesia what is your request what is

your ask of him help us in the uh

discussions with the you to finish the

FDA with the US as soon as possible and

of course uh the effect will be bringing

more uh German Industries in Indonesia

we even prepare um German industrial

parks uh in

Indonesia um we have red carpet for

German Industries um German tourists

German colleagues in Indonesia we have a

very long tradition of relation with

Indonesia and Germany not very many

people know that uh but uh the first

European who came to Indonesia was not

the Dutch it were it was not the Spanish

it was the German

doctors 500 years ago so I would say

that we have a very long relations uh

and is a very positive relation because

it's not colored by

colonialism um so you know Germany has a

very positive vibes in Indonesia so

you're looking forward to the next 500

years absolutely thank you very much for

taking the time to talk to yeah welcome

yeah welcome