The EU-Indonesia Comprehensive Economic Partnership and Investment Protection Agreements
What are they, and what do they mean for forests and peoples?
Last September, the EU and Indonesia signed a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA) concluding nine years of negotiations. In a context of geopolitical tensions, the EU has recently accelerated its strategy to secure trade deals in the name of economic security.
But trade liberalisation without robust regulations to prevent environmental destruction and social unrest creates more inequalities and insecurity - the opposite of what European businesses need.
To analyse these trade deals’ impacts on Indonesian forests and peoples, Fern has worked with leading trade experts Professors Axel Marx and James Harrison. Their analysis identifies the innovations, risks and mitigation measures needed to ensure the CEPA and IPA don’t harm Indonesia’s forests and peoples.
- Innovations: The deals increase the potential for sustainable trade through the introduction of a Protocol on Sustainable Palm oil which could, with adequate resources, be used to strengthen the Indonesian Mandatory Certification Scheme for Palm Oil (ISPO).
- Risks: The deals reduce or eliminate tariffs on palm oil and other Forest Risk Commodities and facilitate investments for companies but provide no additional safeguards against company-community conflict.
- Mitigation: If the EU wants to boost competitiveness and secure supply chains, it must effectively enforce Due Diligence regulations such as the EU Deforestation Regulation, the EU Batteries Regulation, and the EU Corporate Sustainability Due Diligence Directive.
