Detail

Switzerland

Oilseeds, oils and meals

Palm oil

01/03/2021

Trade

Sector-specific, bilateral trade initiatives

Under the Comprehensive Economic Partnership Agreement between members of the European Free Trade Association and Indonesia, Switzerland offered to grant preferential treatment to sustainably produced crude palm oil, palm-kernel oil and palm stearin exported from Indonesia. In this regard, Switzerland would accept products certified by three globally recognized and third-party verified certification schemes. Furthermore, palm oil would need to be shipped in containers not exceeding 22 tonnes, so as to facilitate product traceability.

Bilateral/regional trade initiative – Switzerland / Indonesia – palm oil trade: In March, Swiss voters backed the Indonesia-Europe Comprehensive Economic Partnership Agreement (IE-CEPA), which Switzerland signed as a member of the European Free Trade Association, EFTA (see also MPPU Dec.’18). Controversy surrounding the importation of Indonesian palm oil and its sustainability had triggered a public referendum on the agreement. Under the deal, Switzerland’s import tariffs on crude palm oil, palmkernel oil and palm stearin from Indonesia will be lowered by 20–40 percent on an annual volume limited to 10 000 tonnes (rising to 12 500 tonnes over 5 years). The preferential treatment will only apply to importers able to demonstrate that the imported products were produced sustainably. In this regard, the Swiss Government tabled draft implementation guidelines listing relevant sustainability criteria and traceability requirements. According to the document, initially, Switzerland would rely on the following three globally recognized and third-party verified certification schemes: i) the Roundtable on Sustainable Palm oil (RSPO), limited to its ‘segregated’ and ‘identity-preserved’ supply chains; ii) the International Sustainability and Carbon Certification (ISCC), in its PLUS Segregated version; and iii) the Palm Oil Innovation Group (POIG), in combination with RSPO’s segregated/identity-preserved channels. Furthermore, palm oil may only be imported in containers up to 22 tonnes, so as to facilitate product traceability. Through these provisions, Switzerland wishes to provide a concrete incentive for sustainable palm oil production in Indonesia, while ensuring that trade in palm oil produced at the expense of society and the environment is not encouraged. The country’s reliance on existing certification schemes is expected to promote healthy competition between industry-led standard setting bodies. Switzerland also reiterated its commitment to fully adhere to all relevant WTO regulations and to minimize disruptions to commercial trade in palm oil.