EU-Indonesia Trade Deal Threatens Communities and Environment

SOMO and Both ENDS strongly condemn the newly revealed investor-state dispute settlement (ISDS) case filed by Petrogas, an Omani oil and gas company operating two shallow-water gas fields in the Dutch North Sea, against the Netherlands under the Netherlands-Oman bilateral investment treaty (BIT).

Recently, many newspapers have written about Brussels’ rush to finalize the trade agreement between the EU and the South American Mercosur countries. According to the European Commission, national parliaments do not need to approve it because the trade part and the “political” part have been separated. This “splitting” means that the trade part can be approved as an EU-only decision by the European Council and the European Parliament, while national parliaments are sidelined and the political-cooperation part is postponed. Both ENDS and its partners are deeply concerned and are calling on the Dutch government to vote against this outdated agreement.

A recent report by Wageningen Economic Research (WER) on the economic consequences of the trade agreement between the EU and Mercosur confirms what civil society organizations, policymakers, and trade unions have been signaling for years: this agreement does not offer a balanced perspective for farmers and the environment. Instead, it increases power inequalities and shifts burdens onto (small-scale) farmers. Moreover, the deal risks reinforcing unsustainable practices that complicate the climate transition and addressing environmental challenges in both the EU and Mercosur countries.

Both ENDS warns that the current debate on “simplification” of EU environmental law must not become an excuse to weaken or postpone urgently needed safeguards. In earlier contributions to the drafting of the EU Deforestation Regulation (EUDR), Both ENDS relayed the voices of local and Indigenous forest-dependent peoples, who consistently urged the EU to take responsibility for the massive deforestation linked to European imports. They underlined how this deforestation destroys biodiversity, undermines climate stability, and erodes their rights, livelihoods and cultures.

Photo blog - In June, I travelled to Indonesia with our partner organization Puanifesto to research the impacts of nickel mining in East Sulawesi. On July 13th, the news broke that the European Union and Indonesia have reached a political agreement on a free trade agreement that was years in the making, called the Comprehensive Economic Partnership Agreement (CEPA). Nickel from Sulawesi is already being used in European cars. This makes it all the more important that we ensure that human and environmental rights are secured in mining and refining operations in Indonesia, before the road is opened to more extraction and exploitation for the European market. The conversations we have had with communities and workers on East Sulawesi show that more binding regulations are necessary to make this happen and ensure an energy transition that is socially and environmentally just.

Together with Indonesian CSOs Both ENDS is calling on  the Asian Infrastructure Investment Bank (AIIB) to intervene and direct its client, the Indonesia Tourism Development Corporation (ITDC), and its borrower, the Government of Indonesia, to immediately halt this week's ongoing forced evictions in Tanjung Aan Beach and surrounding areas in Mandalika, Lombok.

The trade agreement with South America is harmful to farmers, the climate, and biodiversity, on both sides of the Atlantic. It’s time to take this deal off the table once and for all, argues Fernando Hernandez, Senior Policy Officer for Trade and Investment at Both ENDS.