SOMO and IGJ call for a sustainable Indonesia-EU Comprehensive Economic Partnership Agreement

This week, from 15 till 19 October, the EU and Indonesia will continue to negotiate about a new trade agreement (IEU CEPA: Indonesia-EU Comprehensive Economic Partnership Agreement). SOMO and Indonesia for Global Justice (IGJ) urge the European and Indonesian negotiators to use the negotiations for a ‘reset’ of EU-Indonesia trade and investment relations in support of inclusive growth and sustainable development.

The EU-Indonesia CEPA negotiations

Sustainable development as defined by the UN Agenda 2030 and adopted by the European Consensus on Development, calls for the promotion of sustainable economic growth that is socially inclusive, respects ecological boundaries and promotes democracy. Trade and investment agreements should be understood as a means to achieve the objective of sustainable development. This requires trade regulation, that is, ensuring that trade and investment contribute to the overriding objectives of sustainable development, rather than trade expansion through liberalisation and deregulation.

SOMO and IGJ share concerns about the potential social costs and human rights impacts of a IEU CEPA agreement, as well as about its impact on the environment and climate change. Among our key concerns are:

1. The irreversible economic liberalisation and the negative impacts on Indonesian domestic development; increased investment and trade in energy goods and raw materials such as palm oil;
2. The extension of intellectual property rights and the impact on affordable medicines and food security;
3. The abolition of performance requirements binding incoming foreign investments to national development objectives; the pressure on universal and affordable access to essential public services, such as health, education, water and public transport;
4. The possibilities for foreign investors to challenge government regulations under the investor-state dispute settlement mechanism;
5. And foreign direct investors and service suppliers taking advantage of conditions in Special Economic Zones, where rules and regulations on labour rights and standards, health and safety rules and environmental requirements are often lowered or waived.

In a letter shared with European and Indonesian trade officials, SOMO and IGJ ask to reset the EU-Indonesia negotiations to put human rights, environmental protection and climate mitigation first. The IEU CEPA must ensure the ‘supremacy’ of international human rights law, environmental and climate agreements over free trade and investment rules. The EU and the Indonesian government should develop ambitious joint standards for the protection and enforcement of international climate, environmental, labour and human rights obligations, as well as for the governance and accountability of transnational corporate industry. Forms of investor-state dispute settlement mechanisms should not be included; instead, direct obligations should be imposed on investors to respect human rights in the workplace and the wider community, comply with fundamental labour standards, observe environmental law standards and comply with climate goals, upon the penalty of denial of benefits of the agreement.