New analysis on the EU-Indonesia agreement: Sustainability needs enforcement
The Vienna Chamber of Labour and PowerShift have published a new analysis of the planned EU-Indonesia free trade agreement CEPA. The study critically examines the sustainability chapter of the agreement and shows: The envisaged rules on labour rights, climate protection and environmental protection remain too weak, too vague and insufficiently enforceable.
Although the agreement refers to central standards of the International Labour Organization, the Paris Climate Agreement and other international environmental agreements. However, it is precisely where effective implementation, control and sanctions are important that there are significant gaps.
Risks for employees in mining, industry and palm oil production
This is particularly problematic for employees in Indonesia's export-oriented sectors. In areas such as mining, manufacturing and palm oil production, precarious working conditions, low wages, poor occupational health and safety and restrictions on trade union rights are documented.
CEPA could create additional growth incentives in these sectors in particular – without ensuring that labour rights are effectively protected. The analysis makes it clear: Formal references to international standards are not sufficient if their implementation is not guaranteed in practice.
Climate and environmental protection remain non-binding
In terms of climate and environmental protection, the agreement also falls short of the necessary requirements. Particular emphasis is placed on affiliation with the Paris Climate Agreement. However, the actual implementation of ambitious climate policy remains vague.
The agreement does not sufficiently address key environmental risks in Indonesia, including deforestation, biodiversity loss, the expansion of palm oil production and environmental impacts in the extractive sector. The Palm Oil Protocol focuses primarily on cooperation and trade facilitation, without sufficiently securing binding social and environmental protection standards.
Socially and environmentally oriented trade policy
The analysis shows: Sustainability must not be limited to a separate chapter in trade agreements. Labour and human rights, climate change and environmental protection must be bindingly enshrined in all parts of the agreement, including market access, investment and sectoral regulations.
PowerShift and the Vienna Chamber of Labour therefore demand measurable, binding and enforceable commitments. Trade unions, civil society and affected communities need to be effectively involved and have access to complaint and enforcement mechanisms.
Download the analysis
Further information on the topic can be found here: CEPA: EU-Indonesia trade agreement – background, risks, options for action
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