RI SEEKS FOR CPO GREEN LABEL

By Andi Abdussalam

Jakarta, Sept 12 (ANTARA) - Indonesia, the world's largest crude palm oil (CPO) producer, will continue to fight for the inclusion of the commodity in the list of the Asia-Pacific Economic Cooperation (APEC)'s eco-friendly products.         Leaders and representatives from 21 member economies of APEC approved a list of 54 environment-friendly goods, at the summit in Vladivostok in Russia that ended on Sunday, which will result in tariff reductions up to 5 percent by 2015.         However, CPO, one of Indonesia's mainstay products, was not included in the list.         The Indonesian Association of Palm Oil Companies (GAPKI) regretted the APEC rejection of the Indonesian proposal asking for the inclusion of palm oil in the list.          Yet, the Indonesian Chamber of Commerce and Industry (Kadin) is optimistic that CPO will later be added to the list of APEC's green products.  The approved items are not green goods themselves, rather goods which are conducive to environmental protection.          "The exclusion of CPO from the list of environment-friendly products approved during a recent APEC meeting is not really a failure. It is only a matter of time (before crude palm oil is included in the list) and the Indonesian government is still fighting to this end," said Kadin Chairman Suryo B Sulisto on Tuesday.         Earlier, GAPKI expressed regret over the failure of the government to fight for the inclusion of the commodity in the list, saying the Indonesian government failed to rally enough support for its proposal in the Asia-Pacific Economic Cooperation forum in Vladivostok, Russia.          "The APEC meeting was important, although there is no binding regulation on its members to comply with a decision. However, it is still regrettable that CPO failed to gain APEC approval for reasons that are not yet well known," said GAPKI chairman M. Fadhil Hasan on Monday.          Indonesia is the world's largest CPO producer with an annual production of about 24 million tons and has oil palm plantations covering 7.3 million hectares of land area.          In 2011, its CPO production was recorded at 23.5 million tons, of which some 16.6 million tons were exported. Palm oil production in 2010, meanwhile, was recorded at about 22 million tons, with only 15.6 million tons being exported.          By 2020, the country expects to increase its annual production of CPO to 40 million tons. The figures give Indonesia the potential to become the exclusive CPO supplier for the world market in the future.          At present, the crude palm oil industry is the country's second largest foreign exchange earner after the oil and gas sector.     Indonesia has been a target of criticism, especially in Europe, over accusations that the country has destroyed its tropical forests to provide space for oil palm plantations.          "In the beginning, we were hopeful that Indonesia would succeed in having CPO declared as an environment friendly product," Fadhil said.          He added that CPO deserves to be declared environment-friendly because after the implementation of the "Indonesia Sustainable Palm Oil" (ISPO) scheme, palm oil companies are required to adopt sustainable principles while processing their products.         ISPO is a verification system used to strengthen the sustainability of the country's palm oil, domestically and internationally.         "If all palm oil companies in Indonesia adopt ISPO, CPO could be categorized as an environment-friendly product," Fadhil said.           According to Indonesian portal, 'Bisnis.com', the failure to include CPO as one of 54 eco-friendly products in APEC's list is not closing the possibility for Indonesia's CPO to penetrate the global market through a tariff reduction facility.          "CPO demand is still high in the global market, so it is still competitive, although it is subjected to an import tax tariff", said the Head of Fiscal Policy Agency, Bambang Brodjonegoro.          Such a tariff reduction facility will set a maximum import tax tariff cap of 5 percent. The tariff for eco-friendly products will reach 30 percent or go higher, if the facility is not applied.     GAPKI chairman M Fadhil said that APEC approval would be positive for exports as the import duties on CPO would not be more than 5 percent in its member countries.           He, however, added that GAPKI remains optimistic that demand for Indonesian CPO would continue to grow in the world market.          "There is a possibility that import duties on CPO in APEC member countries would be cut under bilateral trade agreements", he said.     Moreover, Bambang says that Indonesia can still propose a tariff reduction facility through the Free Trade Agreement (FTA) mechanism if it fails to do so through APEC.           "Indonesia can, for example, propose a free trade agreement with Pakistan. We export CPO to them with a free import tax tariff," he said.          Indonesia also has other free trade agreements for CPO export such as those with ASEAN FTA and Australia-New Zealand-ASEAN FTA.          "Our export is not only to APEC member countries. It's possible for Indonesia's CPO export to penetrate other markets," Bambang was quoted as saying by Bisnis Indonesia online.           However, the decision to classify CPO as an eco-friendly product is still in the hands of APEC ministers. Such a decision, which is based on the APEC ministers' consensus, is still debatable at the level of APEC's economic leaders.           The Indonesian government, for its part, is continuing efforts to get CPO included in the APEC list of eco-friendly goods.         Kadin is optimistic that CPO will soon be included in APEC's list of eco-friendly products.         "The exclusion is not really a failure. It is only a matter of time before CPO gets included in the list of eco-friendly goods and the Indonesian government is still fighting for it," said Kadin Chairman Suryo B Sulisto.         If Indonesia succeeds in its efforts to get CPO included in the APEC list of environment-friendly products, he added, it would be an important step forward for the country.          "The products included in the APEC list are approved as green products. A number of factors determine whether a product is actually environment-friendly, such as the production mechanism and the number of machines used in its production process," explained Suryo. ***2*** (T.A014/INE/BSR/F001) 12-09-2012 15:48: