Over 120 civil society organisations from Europe and Indonesia, including Human Rights Monitor, have called on the European Union and Indonesia to end negotiations on a proposed Free Trade Agreement (FTA). The EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) being developed will likely pose significant risks to environmental and human rights, particularly for indigenous peoples and other vulnerable groups in the Indonesian archipelago.
In 2016, the European Union and Indonesia launched negotiations for a Free Trade Agreement, aiming to create new market access, increase trade and investment and promote sustainable development. Trade negotiations are not often transparent, and the public is often limited to occasional leaks of draft agreements or deciphering public statements from the two sides to understand what is actually being discussed. Still, in the eight years and nineteen rounds of negotiations since 2016, public documents show no specific consideration of the conflict in West Papua. Perhaps it should not be surprising that the most pressing human rights issue has been taken off the table, as the EU had already reaffirmed its “respect for sovereignty, territorial integrity and national unity of the Republic of Indonesia” in the 2014 Framework Agreement on Comprehensive Partnership and Cooperation between the two parties, which forms the basis for the ongoing FTA negotiations. While respecting these principles is a common international standard, Indonesia expects that human rights violations occurring in the context of secessionist conflicts will not be raised.
When the EU negotiates an FTA, a Sustainability Impact Assessment is typically required to identify potential economic, social, environmental and human rights impacts. This process was conducted by consultants and concluded in 2019, finding that Indonesia’s enforcement of labour and human rights laws was relatively weak. The SIA acknowledged that indigenous rights were particularly at risk, recommending that Convention 169 of the International Labour Organisation (ILO) be specifically referenced in the FTA. However, this was rejected by the European Commission, which instead focused on assigning a central role to the bilateral EU-Indonesia Human Rights Dialogue to raise issues of concern with Indonesian authorities. In the years since, this approach has been seen to be inadequate, as the Indonesian Government delayed the Human Rights Dialogue from 2022 until 2024 and declined to issue a joint statement following the conclusion of the 2024 dialogue.
While the EU is Indonesia’s fifth largest trading partner globally, Indonesia is only the EU’s fifth largest partner in ASEAN. Nevertheless, the EU is particularly interested in finalising an agreement due to Indonesia’s vast nickel reserves. A key component of Electric Vehicle batteries, procuring nickel is an EU priority under the 2024 European Critical Raw Materials Act. However, the Indonesian Government has banned the export of raw nickel ore, insisting on refining the metal within the country, leading to a standstill in negotiations. While this policy is generating significant profits for nickel conglomerates and foreign investors – primarily from China – the surge in mining and refinery activities in Indonesia is destroying local ecosystems, creating widespread deforestation and polluting waterways. This includes nickel mining in the UNESCO Global Geopark of Raja Ampat, where more than 22,420 hectares have been granted in mining concessions.
Another point of contention is the inclusion of an Investor-State Dispute Settlement (ISDS) mechanism. Such mechanisms have regularly been criticized for their lack of transparency and for allowing corporations to challenge governments implementing environmental and human rights policies. Although the EU has claimed to replace ISDS with an improved Investment Court System, this new model continues to give corporations significant power over public interest policies.
The lack of transparency in trade negotiations undermines democratic accountability. The public is typically excluded from the process and only knows the full scope of an agreement when the negotiations have concluded. But there is ample public evidence that since the launch of negotiations, the human rights situation in Indonesia has severely deteriorated. Since the 2019 Sustainability Impact Assessment, civil liberties have come under intense attack by the Indonesian Government and its allies. During this period, the armed conflict in West Papua has escalated, aggravated by the expansion of natural resource extraction and agribusiness – activities that the proposed EU-Indonesia CEPA seeks to further promote.
The European Union should refrain from committing to any new agreements with Indonesia until there is clear improvement in the country’s human rights situation, particularly regarding the conflict in West Papua. With 80,000 indigenous people displaced by the conflict, millions of hectares of primary forest threatened by government-backed investments, and Indonesian security forces allegedly committing Crimes Against Humanity against their own citizens, the EU must put its international human rights obligations over corporate economic interests.
