Indonesia, Netherlands Reach Agreement on Production of Sustainable Palm Oil, Other Vegetable Oils

Indonesia and the Netherlands reached an agreement to increase cooperation in the production of sustainable palm oil and other vegetable oils following a meeting between Indonesian Foreign Minister Retno Marsudi and her Dutch counterpart, Sigrid Kaag, the Jakarta, Antara newswire reported last week.  Under the existing cooperation between the two countries, the Netherlands has, so far, assisted Indonesia in a capacity building program for palm oil growers in Sumatra and Kalimantan, Marsudi noted during an online media briefing from The Hague last week. The five-million-euro program to be implemented from 2019 to 2023 is aimed at helping smallholder farmers in securing Indonesian Sustainable Palm Oil (ISPO) certificates.

“Looking ahead, this cooperation will be expanded to cover other vegetable oils in the context of contributions to SDGs 2030,” Marsudi remarked. In a nutshell, sustainable palm oil is palm oil produced in compliance with the no deforestation, no peat development, and no exploitation (NDPE) policy to ensure sustainability. It also promotes traceability for transparency in the supply chain to ensure environment-friendly practices and community welfare support, including fair transactions for smallholder farmers.

The Netherlands is one of the biggest markets for Indonesia’s palm oil in the European Union. Palm oil constitutes nearly 15 percent of Indonesia’s exports to the Netherlands. In 2019, the Netherlands’ imports from Indonesia were valued at USD3.1 billion, making it the biggest market for Indonesia’s exports among European Union members.  On the other hand, the Netherlands is also the second-biggest investor among European countries in Indonesia after Switzerland with investment value reaching an estimated USD1.4 billion in 2020.