13/04/2012 (Jakarta Post) - The government considers claims of environmental destruction being lodged against the Indonesian palm oil industry as a part of a trade war, which has to be countered by providing accurate information on real conditions, a senior minister said Thursday.

Coordinating Economic Minister Hatta Rajasa said the government could bring such issues, amounting to unfair trade practices, to the World Trade Organization or bilateral meetings to ensure fair treatment of Indonesian oil palm products.

“We have to fight the bad publicity of deforestation [related to palm oil]. We cannot just be quiet. We have to speak, open a forum and check directly in the field,” he said when opening a national working meeting of the Indonesian Palm Oil Producers Association (Gapki) in Bandung.

“When the United States says that our CPO has high emissions, we also have to fight it. We cannot let [their] domestic politics have bad consequences for us.”

Environmentalists have accused Indonesian CPO producers of cutting down virgin forests to expand palm oil production, an allegation which has been denied by both the government and the producers.

Hatta emphasized that almost all of Indonesian palm oil producers had met the Indonesian Sustainable Palm Oil (ISPO). Gapki opted to join the mandatory ISPO and walked out from the voluntary Roundtable Sustainable Palm Oil (RSPO) because it said it was treated unfairly.

Hatta defended Gapki’s decision by saying that Indonesian palm oil producers had met RSPO standards but was denied CPO premium prices in international trade. “We demand a just trade and no discrimination,” he said.

Indonesia exported 23.5 million tons of CPO, worth some US$19.7 billion, in 2011. The government has prepared a number of facilities for producers to maintain CPO’s position as one of Indonesian major non-oil and gas exports.

The facilities include the revision of overlapping export taxes, revitalization of old plantations and providing legal status to plantations in areas of overlapping land usage.

Gapki chairman Joefly J Bahroeny said negative publicity directed toward Indonesian CPO producers would always be there due to tight competition considering Indonesia’s position as the world’s major producer.

He said production costs in Indonesia were between $250 and $300 per hectare with a production of between 4 and 5 tons. On the other hand, he said, the cost in European countries ranged from $500 to $700 per hectare with much less productivity.

“I am quite confused on why Europe, as the second largest CPO consumer, keeps criticizing us,” he said.

“If they say our products are not compatible, why would they still buy our products?” (nvn)