Monograph Series: Legal dimensions of Trade 2011

Indonesia - 6 December 2012

As one of major exporters of crude palm oil (CPO) and its derivative products,
Indonesia has ever more faced with challenges in its environmentally-friendly
practices of its palm oil industry. Increasing concerns among consumers of CPOrelated
products onthe issue has encouraged CPO producing countries (including
Indonesia) to apply a technical standard on plantation and production processes
of palm oil. Major example of such concerns is that of European one who introduces
a Roundtable on the Sustainable of Palm Oil (RSPO). It has laid down a
regulation based on the Europe Union Renewable Energy Directive (RED) 2009/
28/EC.
RSPO aims to promote the growth and use of sustainable palm oil through a
certification system which comprises of three schemes, namely certification standard,
accreditation requirements, and certification process requirements.Under
such a regulation, exporters of palm oil to Europe have to be the member of RSPO
by entering into a voluntary agreement to gain the certif icate. In addition to
RSPO, Indonesia establishesthe so-called Indonesian Sustainable Palm Oil (ISPO)
which has been laid down on the Regulation of the Indonesian Minister of Agriculture
Number 19/Permentan/OT.140/3/2011. ISPO is designed as a mandatory
policy which aims to implement Indonesia’s law concerning environment, and
applied to parties who grow and produce palm oil in Indonesia. Therefore, parties
which are not fulfiling the ISPO will be given a sanction.
The research attempts to analyse the implication of ISPO to the Indonesia’s export
of palm oil and to offer strategies for Indonesia to improve the export of palm
oil whilst developingthesustainable palm oil in Indonesia. In doing so, it discusses
international trade and WTO covering GATT principles and TBT Agreement, as
well as example of standardisations concerning palm oil in several countries.The
focal point of the research is analysing the implicat ion of ISPO towards the
Indonesia’s export of palm oil, as well as strategies for the improvementof
Indonesia’s palm oil export while fulfilling the policy on the sustainable palm
oil.Finally, it presents the conclusion along with the reccomendation should be
done by Indonesia in the effort to develop sustainable palm oil.

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