Business and Economy
Canada-Indonesia trade deal risks deepening global troubles
FILE: View of palm oil plantation in Cigudeg, Bogor (Photo By Achmad Rabin Taim from Jakarta, Indonesia – P3260481, CC BY 2.0)
Canadian chemical fertilizers are being sent in large quantities to Indonesia. Rubber and palm plantations are major users of chemical fertilizers in that country to produce goods often linked to deforestation that are then exported back to Canada. At the same time, wood products already flow in both directions with questionable transparency regarding corporate ownership or environmental protections.
This March we learned negotiations are accelerating towards a Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA). The first round took place in Jakarta, followed by an in-person meeting between Foreign Minister Melanie Joly and her Indonesian counterpart Retno Marsudi in mid-April. A second round of talks in Ottawa is imminent.
This deal is likely to entrench reliance on chemical fertilizers, exacerbate deforestation and threaten the rights of local communities and Indigenous peoples. It will rely on bilateral trade in risky commodities like forest products, rubber and palm oil.
A better trade deal is possible, however. One that both Canadian and Indonesian governments should cooperate on to deliver. A new agreement that is radically transparent, focuses on climate change and the biodiversity crisis and centers the rights of Indigenous peoples and local communities.
Chemical fertilizer, rubber plantations and big agribusiness
Rubber, writing paper and clothing are among the top five imports from Indonesia into Canada every year, worth over $250 million as of 2019. In the other direction, chemical fertilizers and wood pulp are among the largest exports from Canada to Indonesia, amounting to roughly $400 million.
Chemical fertilizers are the second largest category of exports from Canada to Indonesia – roughly $240 million in 2019. Much of these are synthetic nitrogen fertilizers, also known as “fossil-fertilizers.” These generate vast amounts of greenhouse gasses in their production and then lead to enormous emissions of nitrous oxide when applied to the soil. Nitrous oxide is a greenhouse gas over 250 times as potent as carbon dioxide.
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Globally, Greenpeace is calling for a phase out of these chemical fertilizers as part of a shift to more ecological farming methods. These include practices that lead to lower emissions and provide greater fairness for farmers who shouldn’t be dependent on high-cost artificial fertilizers for their essential livelihoods.
Big agribusiness interests like rubber and palm oil plantations in Indonesia often get the lion’s share of available fertilizers. Rubber is the number one export from Indonesia to Canada. Rubber plantations in Indonesia are connected to deforestation and Indigenous rights violations.
So too has palm oil, which has seen imports to Canada rise over 1,600 per cent in the past 20 years alone. Wilmar – a prominent palm oil producer in Indonesia – is also a leading importer of chemical fertilizers from Canada.
Next up, forest products
Chemical wood pulp was the third largest export from Canada to Indonesia in 2019, worth $155 million. Wood pulp is a key component in writing paper, which is then again one of Indonesia’s largest exports to Canada – the fifth largest, amounting to $45 million that year.
What’s more, the largest wood pulp producer in Canada – Paper Excellence – has been linked to the Sinar Mas Group, a palm oil, pulpwood and property empire, recently valued at U.S. $45.8 billion. The Sinar Mas Group has a long track record of deforestation, peatland destruction and social conflict in Indonesia, which has been well-documented by Greenpeace Indonesia and others on the ground.
The logging industry in Canada is itself under pressure for “some of the worst forestry in the world” responsible for tremendous loss of biodiversity and massive greenhouse gas emissions from unsustainable logging. Given this, it’s hard to imagine the deal will take pressure off some of the world’s last great forests, whether Indonesian rainforest, Canadian boreal or coastal temperate.
Where does this all leave us?
The Canadian government promotes potential benefits of the deal for “upholding labour rights and promoting environmental sustainability.” But a closer analysis reveals looming commodity driven risks to communities, climate and nature. More than 50,000 Canadians have signed a petition opposing this deal already.
Greenpeace Canada and Greenpeace Indonesia are both opposing this deal given the enormous risks. But another deal is possible. One which supports local communities, small farmers and Indigenous peoples, not transnational corporations. One which takes us closer to our climate and biodiversity goals, not further away.
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Here’s what a good deal would include.
First, more transparency. The deal and its draft texts should be shared with the public in both countries and independent impact assessments should be conducted with the involvement of civil society organizations, evaluating effects on human rights and the environment.
This would allow an evaluation of the effects in both countries. Monitors could be set up over time, with particular attention paid to Indigenous rights, species at risk and large-scale operations. This would also allow us to assess whether Canada ends up reducing emissions from synthetic nitrogen fertilizers within Canada, only to increase the market for these fertilizers globally and driving associated emissions and deforestation overseas.
Second, the public has a right to know how the deal will contribute to both governments’ commitments under the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), Convention on Biological Diversity (CBD), Paris Agreement and Glasgow leaders’ Declaration to end Deforestation.
The most recent report by the Intergovernmental Panel on Climate Change (IPCC) made abundantly clear that “food, forests and farming” must be transformed to limit global warming. Clear goals in these areas are essential for the right kind of outcomes.
Third, any deal should distinguish between goods based on how they are produced or harvested and guarantee traceability of all products and investments. This requires enforceable guarantees that Canadian forest products are not originating without the free, prior and informed consent of Indigenous peoples or originating in threatened species habitat. And the same must be said for Indonesia products originating from deforestation or linked to human rights abuses.
Fourth, protecting people’s rights and the environment should not be viewed as “barriers” to trade. A good deal would explicitly recognize social and environmental regulations as necessary protection measures for the environment, communities, consumers and workers, health and public services. It should enable the continuous improvement of these standards.
Trade deals go a long way towards defining the cooperation that takes place among nations around the world. In that spirit, we need to see a Canada-Indonesia deal that truly reflects the most urgent global issues that require cooperation to resolve. These are climate change, the biodiversity crisis, rampant social inequalities and the concentration of resources in the hands of a wealthy few. Complete transparency and public oversight are the best ways to achieve it.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
