Electronic Theses and Dissertation

Abstract indonesia has imported and exported goods to other nations, including the european union. the eu’s growing partnership with indonesia is based on trade and economic relations. indonesia and the eu are committed to promoting sustainable economic growth and development. the european union deforestation regulation (eudr), which comes into force on june 29, 2023, has significant concern in indonesia due to its strict requirements affecting essential exports such as palm oil, cocoa, coffee, timber, rubber, soy, and beef. articles 1,3,9,10, and 11 of the eudr set strict compliance standards that indonesia considers excessive, potentially limiting indonesia’s access to the eu market. this situation poses an economic risk to millions of indonesians whose livelihoods depend on these sectors, and the implementation deadline was delayed by one year to allow for adjustments, reflecting the difficulty of balancing environmental objectives and economic stability. this study aims to analyze indonesia’s opportunities and challenges as an effect of the eudr. it primarily focuses on three main aspects: the urgency behind the eudr contrary to the wto principles, the impact of the indonesia eudr on indonesia’s economy, and the indonesian government’s approach to addressing the opportunities and challenges presented by the eudr. this research uses a normative legal approach, using library-based research to analyze relevant regulations. it is supported by additional data from interviews with the ministry of foreign affairs of the republic of indonesia, the ministry of trade of the republic of indonesia and the coordinating ministry for economic affairs of the republic of indonesia. this study found that the eudr poses challenges for indonesia, including potential trade restrictions that may conflict with wto principles and economic risk to key export sectors. however, it also presents opportunities to enhance sustainable forest management. this study recommends action for indonesia to ensure compliance with the eudr while minimizing the economic impact to address this eudr, indonesia should review its export restriction policy under the eudr for potential wto violations, encourage export diversification and sustainability in key sectors, and strengthen its monitoring, certification, and traceability systems. additionally, indonesia should collaborate with civil society and support smallholders in meeting the eudr’s sustainability requirements. ### abstract the european union (eu) ratified the european union deforestation regulation (eudr), which came into force on june 29, 2023. this regulation has significant concern in indonesia due to its potential impact on key commodities such as palm oil, cocoa, coffee, timber, rubber, soy, and beef. while the eudr aims to stop illcit deforestation in agriculture and forestry goods, indonesia has not fully accepted the eudr because of perceived stringency of compliance that may cut off access to these commodities in the eu market. this study analyzes the urgency of the eudr, its economic impact on indonesia, and the government’s strategies to address its challenges and opportunities. using a normative legal approach to analyze relevant regulation and interviews with key ministries in indonesia, the study finds that the eudr presents significant challenges, such as potential trade restrictions that may conflict with wto principle and compliance burdens, but also offers opportunities to enhance sustainable forestry practices. the research recommends that indonesia review its trade policies for wto compatibility, diversify its export portfolio, strengthen monitoring and certification systems, and support smallholders in meeting eudr’s sustainability requirements. reserach method this legal research uses normative legal method and adopts a doctrinal legal research approach to justify the legal norms, legal system, and the existing law. this research focuses on analyzing and interpreting the relevant legal frameworks, including the european union deforestation regulation (eudr) and its alignment with the wto principle. additionally, this is utilized to critically assess the challenges and opportunities of eudr for indonesia, evaluating its potential economic. this research provides indonesia’s recommendations to ensure compliance with the regulation (eudr). discuss the eu deforestation regulation (eudr) is urgently needed to prevent worldwide deforestation and its associated serious environmental impacts. the regulation aims to increase forest protection by requiring that only deforestation-free goods enter the eu market. the regulation focuses on seven key commodities linked to deforestation, including cocoa, coffee, palm oil, timber, and others. to comply with the eudr, companies must conduct comprehensive due diligence throughout their supply chains to verify that their products do not contribute to deforestation or forest degradation. this includes submitting a due diligence statement to a european register, established by the european commission, for transparency and accountability. in addition, the eudr's strict restrictions aim to limit the eu's contribution to global deforestation and greenhouse gas emissions, thereby protecting biodiversity and promoting environmental sustainability. this regulatory shift is crucial to addressing the current environmental disaster and encouraging biodiversity conservation. it is also consistent with larger eu goals, such as the european green deal, which highlights the eu's commitment to sustainability and environmental protection. despite initial delays and ongoing discussions regarding its implementation timetable, the eudr remains an important element in the eu's wider efforts to address global environmental degradation. 2. the eudr has been identified as contradicting with several wto principles, including the most-favored-nation (mfn) principle, which is one of the basic principle of gats to avoid discrimination between countries and the implementation of the mfn or non-discrimination principle has a positive impact which encourages the realization of fair trade between countries, the principle of national treatment is a principle of non-discrimination which prohibits discrimination againts dosmetic products and imported products that enter the territory of a country. and the technical barriers to trade (tbt) principle, which establishes rules and procedures for developing, adopting, and implementing voluntary product standards, mandatory technical regulations, and procedures (such as testing or certification) used to determine whether a product meets such standards or regulations. the tbt agreement aims to prevent the use of technical standards as unjustified trade barriers. . furthermore, four aspects of the eudr have the potential wto principle: first, the principle of non-discrimination in trade between countries (most favored nation/mfn). based on article i gatt i994 explained that each member country is prohibited from implementing policies that discriminate against goods and services (like products, direct competitors, and substitutable products) imported by a country from various countries. palm oil functions similarly to other vegetable oils, such as soybean, rapeseed, and sunflower. this is one of the vegetable oils imported by the eu. however, the eudr policy only applies to palm oil and soybeans, while rapeseed and sunflower oils are excluded, violating the wto’s non-discrimination principle. second, the principle of non-discrimination of goods and services between imported and domestic production (national treatment/nt) is both de jure and de facto (art iii gatt 1994). the european union domestically produces rapeseed sunflower, cottonseed, and olive oils, among other vegetable oils. the vegetable oils produced by the eu are also “like products,” “direct competitors,” and “substitutable products” for the palm oil imported by the eu. the eudr also implements discriminatory practices (national treatment) by implementing this policy. the eudr is only for imported palm oil and soybean oil but not for domestically produced eu vegetable oils such as rapeseed, sunflower, cottonseed, and olive oil. third, non-tariff barriers in art. ii and art. ix of the gatt 1994 prohibits members from implementing policies restricting imports to protect domestic industries. according to unctad 2010, non-tarriff measures (ntms) are policies that impact international trade by altering the quantity or price of traded goods. the eudr policy is a non-tariff barrier because of its deforestation-free requirements and proof mechanisms to hinder or stop palm oil trade to the eu. this policy also represents non-price competition to protect eu vegetable oils, such as rapeseed oil, which cannot compete with email despite subsidies. fourth, the technical barriers to trade (tbt) principle in gatt 1994 (art. i, iii, ix, x, xi, and xx) addresses technical barriers such as product quality, packaging, labeling, and safety requirements. non-discrimination, transparency, and harmonization are principles that technical regulations, standards, and conformity assessment procedures must follow. wto members may enforce technical regulation and product standards, but only if they are transparent (publicly announced and notified to the wto), non-discriminatory (between domestic and imported products), and aligned with global standards. according to wto principles, the eu can implement technical requirements and testing procedures under the eudr. however, these requirements must apply to all “like products,” “direct competitors,” and “substitutable products.” if deforestation-free becomes a form of tbt. the eudr must be applied to all products worldwide, including those produced within the eu. while, indonesian can complain the eudr to the wto as it is considered unfair to indonesia through the articles above, the eu can also protect its regulation by using exception xx of the gatt 1994, namely ; a. (a). exceptions necessary to protect public morals; b. (b). exceptions necessary to protect human, animal or plant life or health; c. (d). exceptions necessary to ensure compliance with the implementation of laws or regulations consistent with wto agreements; and d. (g). exceptions related to the conservation of limited (rare) natural resources” the eu can justify the above article of exception with the reason behind the regulation being a legitimate objective such as the protection of health, security, or the environment. for example, this regulation aims to ensure environmental sustainability and prevent deforestation and can be considered legitimate under article xx of the gatt, which allows exceptions for policies related to environmental protection but provides that the policy is proportional, non-discriminatory, and aimed at environmental protection the sustainable certification scheme is one of the challenges that indonesia needs to address if it is to comply with eudr regulations. indonesia has established national certification schemes like the indonesian sustainable palm oil (ispo) and the timber legality assurance system (svlk). these frameworks can be leveraged to demonstrate compliance with the eudr requirements.. if the eu recognizes these certifications, it will simplify compliance processes for indonesian exporters and support smallholder farmers already adhering to sustainable practices. as noted, many smallholders are compliant with zero-deforestation conditions but struggle with documentation diplomats and representatives from 13 dubes "like-minded" countries submitted a letter to the wto committee on agriculture in regard to the eu's proposal for dubes ri's deforestation-free supply chains. this first letter expressed concerns about the regulation's possible implications, including its discriminatory nature and lack of compatibility with multilateral principles such as common but differentiated responsibilities. indonesia has two hopes for the implementation of the joint eudr task force. they first determined indonesia's status as a country with low levels of deforestation. the meeting agreed to establish a consultative mechanism (trilateral joint task force) between indonesia, malaysia, and the eu to ensure fair and non-discriminatory implementation of eudr. they discussed five work streams to develop a common understanding of the eudr's implementation. there are five work streams, such as: - the smallholder inclusion workstream aims at integrating smallholders into supply chains. - certification schemes emphasize discussions on how to align their certificates with eu criteria to ensure compliance. - the traceability system workstream explores existing traceability systems, such as indonesia's national dashboard for commodities and malaysia's palm oil smart management system (sims) to improve traceability from producer to consumer, which is essential to achieve the eudr standards. - the deforestation monitoring workstream involves sharing scientific data related to deforestation and forest degradation, as well as the development of monitoring systems that track deforestation rates and policy effectiveness in both countries. the final workstream is privacy data protection, which addresses the handling of geolocation data and ensures that any data collected does not violate individuals' privacy rights. the indonesia-european union comprehensive economic partnership agreement (ieu-cepa) is a essensial diplomatic effort aimed at mitigating the negative impacts of the implementing the european union deforestation regulation (eudr) in indonesia regulasi deforestasi uni eropa (eudr), yang mulai berlaku pada 29 juni 2023 akan menimbulkan kekhawatiran signifikan di indonesia karena persyaratannya ketat yang mempengaruhi ekspor penting seperti minyak kelapa sawit, kakao, kopi, kayu, karet, kedelai, dan daging sapi. pada pasal 1, 3, 9, 10, dan 11 eudr menetapkan standar kepatuhan yang ketat yang dianggap berlebihan oleh indonesia, yang berpotensi membatasi akses indonesia ke pasar uni eropa. keadaan ini menimbulkan risiko ekonomi bagi jutaan orang indonesia yang mata pencahariannya bergantung pada sektor-sektor tersebut, dan tenggat waktu implementasi diperpanjang satu tahun untuk memungkinkan penyesuaian, mencerminkan kesulitan dalam menyeimbangkan tujuan lingkungan dengan stabilitas ekonomi. penelitian ini bertujuan untuk menganalisis peluang dan tantangan indonesia akibat penerapan eudr. fokus utamanya adalah pada tiga aspek utama: urgensi di balik eudr yang bertentangan dengan prinsip-prinsip wto, dampak eudr terhadap perekonomian indonesia, dan pendekatan pemerintah indonesia dalam menangani peluang dan tantangan yang dihadirkan oleh eudr. penelitian ini menggunakan pendekatan hukum normatif, dengan penelitian berbasis pustaka untuk menganalisis regulasi yang relevan. penelitian ini didukung oleh data tambahan dari wawancara dengan kementerian luar negeri republik indonesia, kementerian perdagangan republik indonesia, dan kementerian koordinator bidang perekonomian republik indonesia. penelitian ini menemukan bahwa eudr menimbulkan tantangan bagi indonesia, termasuk potensi pembatasan perdagangan yang dapat bertentangan dengan prinsip-prinsip wto dan risiko ekonomi bagi sektor ekspor utama. namun, eudr juga menawarkan peluang untuk meningkatkan pengelolaan hutan yang berkelanjutan. penelitian ini merekomendasikan langkah-langkah untuk indonesia guna memastikan kepatuhan terhadap eudr sambil meminimalkan dampak ekonominya. untuk menangani eudr ini, indonesia perlu meninjau kebijakan pembatasan ekspornya terkait potensi pelanggaran wto, mendorong diversifikasi ekspor dan keberlanjutan di sektor-sektor utama, serta memperkuat sistem pemantauan, sertifikasi, dan jejak audit. selain itu, indonesia harus bekerja sama dengan masyarakat sipil dan mendukung petani kecil dalam memenuhi persyaratan keberlanjutan eudr.

The European Union Deforestation Regulation (EUDR), which comes into force on June 29, 2023, has significant concern in Indonesia due to its strict requirements affecting essential exports such as palm oil, cocoa, coffee, timber, rubber, soy, and beef. Articles 1,3,9,10, and 11 of the EUDR set strict compliance standards that Indonesia considers excessive, potentially limiting Indonesia’s access to the EU market. This situation poses an economic risk to millions of Indonesians whose livelihoods depend on these sectors, and the implementation deadline was delayed by one year to allow for adjustments, reflecting the difficulty of balancing environmental objectives and economic stability. This study aims to analyze Indonesia’s opportunities and challenges as an effect of the EUDR. It primarily focuses on three main aspects: the urgency behind the EUDR contrary to the WTO Principles, the impact of the Indonesia EUDR on Indonesia’s economy, and the Indonesian government’s approach to addressing the opportunities and challenges presented by the EUDR. This research uses a normative legal approach, using library-based research to analyze relevant regulations. It is supported by additional data from interviews with the Ministry of Foreign Affairs of the Republic of Indonesia, the Ministry of Trade of the Republic of Indonesia and the Coordinating Ministry for Economic Affairs of the Republic of Indonesia. This study found that the EUDR poses challenges for Indonesia, including potential trade restrictions that may conflict with WTO principles and economic risk to key export sectors. However, it also presents opportunities to enhance sustainable forest management. This study recommends action for Indonesia to ensure compliance with the EUDR while minimizing the economic impact To address this EUDR, Indonesia should review its export restriction policy under the EUDR for potential WTO violations, encourage export diversification and sustainability in key sectors, and strengthen its monitoring, certification, and traceability systems. Additionally, Indonesia should collaborate with civil society and support smallholders in meeting the EUDR’s sustainability requirements.