Indonesia is among the 10 ASEAN countries and China, Japan and South Korea, which has officially signed the Regional Comprehensive Economic Partnership (RCEP) in November 2020. This article explores social and environmental vulnerabilities in the region with a main focus on perspective from Indonesian civil society.
Indonesia is among the 10 ASEAN countries and Asia Pacific countries including China, Japan and South Korea which has officially signed the Regional Comprehensive Economic Partnership (RCEP) on Sunday, November 15, 2020. This agreement marks the formation of the world's largest free trade bloc which makes up nearly a third of the world's gross domestic product. Top officials from Australia, New Zealand and 10 ASEAN countries signed this cooperation agreement on the last day of the 37th ASEAN Summit which was virtually hosted by Vietnam.
Worth noting that India dropped out of the negotiation just a year ago at the ASEAN Summit 2019 in Bangkok. Prime Minister Narendra Modi said the reason why he was pulling out of the agreement negotiation at the last minute was over concerns about how RCEP would affect the livelihoods of Indians, especially for the most vulnerable.
Singaporean Minister of Trade and Industry Chan Chun Sing said that at least six ASEAN countries in addition to three non-ASEAN partners must immediately ratify the RCEP in order to take effect immediately. Singapore plans to ratify the agreement the deal in the coming months.
According to Minister Chan, among the benefits of the agreement include the elimination of at least 92% tariffs on goods traded among participating countries, as well as stronger provisions for dealing with non-tariff measures, and improvements in areas such as consumer protection and online personal data protection, and transparency. It also includes simplified customs procedures while at least 65% of the service sector will be fully open with an increase in foreign shareholding limits.
In response to the economic impact of COVID-19, an economic observer from the Hinrich Foundation, Stephen Olson, stated that in the next few years the value chain will tend to be shorter, take the advantage of geographic proximity, and avoid transoceanic value chains. In this context, RCEP is geographically unifying East Asia, Southeast Asia, Australia and New Zealand will grow faster and strengthen compared to the CP-TPP or the Comprehensive and Progressive Agreement for Trans Pacific Partnership which has been suspended for the time being.
Meanwhile, the Indonesian Minister of Trade Agus Suparmanto emphasized that RCEP will push Indonesia further into the global supply chain by utilizing backward linkage, which is to meet the needs of raw materials or auxiliary materials that are more competitive than other RCEP countries; and forward linkage, namely by supplying raw materials or supporting materials to other RCEP countries. Minister Agus believes that RCEP will turn the trade bloc into a regional power house.
The Executive Director of the Institute for Development of Economics and Finance (Indef) Tauhid Ahmad doubts the state's claim to the benefits of RCEP's commitment to Indonesia. According to Ahmad, "we are oversized. If you want to sign, you need to make sure we really get the benefits. The national economic recovery strategy by strengthening economic liberalization policies that only focus on investment and exports will only further open up space for corporate monopoly over economic resources”.
The Indonesian Civil Society Coalition for Economic Justice released a press statement on 7 September 2020. The coalition assessed that this will have an impact on the loss of economic justice for the main actors of the people's economy such as farmers, fisherfolks, SMEs, and women. These Indonesian Civil Society Groups consider that the Indonesian government's move by strengthening negotiations on international trade and investment agreements, as well as the Omnibus Law/Job Creation Bill as a strategy to attract investment is not the right step in the midst of a pandemic.
TWN (Third World Network) researcher Lutfiyah Hanim said the government's move to ratify the FTA (Free Trade Agreement) and BIT (Bilateral Investment Treaty) which regulates investment protection has major consequences for the state policy space, especially when the investment dispute mechanism between corporations and the state (Investor-State Dispute Settlement) was also committed.
According to Hanim, in the investment agreement and the investment chapter that was put forward is the excessive investor protection so that it can sue the State through the ISDS (Investor-State Dispute Settlement) mechanism in international arbitration. It has even attracted the attention of civil society groups around the world.
"When the state's resources are running low because they have to respond to the COVID-19 crisis, public funds should be focused on saving lives, jobs and living space, rather than paying for claims for compensation for ISDS lawsuits or high costs in ISDS cases," Hanim said through her statement.
Given that the fight against COVID-19 will continue, a series of cases that have emerged today might result in a regulatory chilling effect, where the government removes, delays, and even withdraws policy steps aimed at tackling the pandemic solely to avoid lawsuits and the obligation to pay compensation, it could be a very deadly thing.
Kartini Samon from the Civil Society Coalition for Economic Justice said the COVID-19 pandemic should make many people aware that there is a very high dependence on food. However, farmers, fisherfolks, local ranchers and other small food producers have recently been displaced by giant infrastructure investment projects, expropriation of space, land, water, sea, binding free market policies and depriving them of their rights.
Kartini emphasizes that the ISDS instrument and other policies only protect big investors and entrepreneurs so that it will be detrimental and difficult to overcome the current health crisis, social, economic crisis and food crisis. "Providing space for investors to sue the state on projects that can harm society at large will further add to the burden on the state itself in the future," she said.
According to Sigit Karyadi Budiono from the People's Coalition for the Right to Water (KRuHA), all the efforts of the Government and the parliament by encouraging the acceleration of the discussion of various bills and investment and trade agreements actually marked the era of total liberalization after 1998. The state seemed to have jumped backwards in the orientation of policy making, so that what happens is a political ignorance of the people's interests. The state voluntarily surrenders itself into the confinement of what is conceptually known as regulatory captured by capitalism.
According to Sigit, this is an indication that the current administration has handed over Indonesia as part of the process of reorganizing and reconfiguring global scale space for the liberalization project of the market economy through the expansion of production, distribution and capital reproduction. This of course will exacerbate the struggle for people's rights, including agrarian sources; land, water, etc., then transforming from collective ownership rights (res commune) to as if they do not have owners (res nullius) so that they can be controlled by individuals and ultimately lead to the commercialization of land, water, and commercialization of space, " he concluded.
The signing of the RCEP commitment has disappointed many environmental activists because they are worried that the vulnerability of nature and the environment will be the start of all future disasters.
The Indonesian forests and forests of other ASEAN countries have suffered severe damage as a result of economic systems that do not pay attention to sustainability. The effect of forest loss that triggers global heat and climate change then makes the frequency of forest and land fires higher from year to year. Greenpeace said that at least 64,000 hectares of forest had been burned until July 2020. Even so, that figure is smaller than the area affected in 2019. Central Kalimantan set an emergency alert status for forest and land fires last July, shortly after 700 hotspots were detected in the province.
At least five other provincial governments, namely Riau, South Sumatra, Jambi, West Kalimantan and South Kalimantan, have also set a similar alert status. Meanwhile, the central government cuts the budget for handling forest and land fires. It is claimed that the budget allocation from this sector will be diverted to overcome the COVID-19 pandemic.
Indonesia is still named as the country with the third largest reduction in tropical rainforest tree cover in the world based on the analysis of the UN Environment Program World Conservation Monitoring Center in the FAO report "The State of the World's Forests 2020". Forest Watch Indonesia (FWI) noted that the rate of forest cover loss for the period 2013-2017 reached an average of 1.47 million hectares per year.
Kalimantan and Sumatra dominate (> 50 percent of the total area of deforestation) with a projected trend of forest loss that will shift towards Eastern Indonesia of around 245 thousand Ha / year in the 2017-2034 period. One of the causes of forest destruction is illegal logging (illegal logging) which is still a fairly persistent global issue (FAO, 2020). This forest destruction in particular results in other social vulnerabilities, such as increased human trafficking, which occurs because the land cannot support them to live off of it.
FTAs are about the free movement of goods, services, capital and labour. Migration plays an important role in the economic development of Southeast Asia, but unfortunately, according to UN WOMEN, every year no less than 225,000 women and children are trafficked in Southeast Asia.
The Southeast Asia region is suspected of showing appalling conditions related to the problem of trafficking in women. Indonesia, Myanmar, Thailand and the Philippines are among the top 20 countries that “still practice” modern slavery and approximately 50-60% of the victims of trafficking are women and children.
The causes of increasing numbers of women becoming victims of crime are caused by various factors ranging from poverty, gender inequality, low levels of education, the influence of globalization, to weak policies and border controls between countries (Perry KM and Mc. Ewing. L (2013). Some of these reasons are triggered by loss of land and forest, which have become women's source of livelihoods so far.
The state is actually responsible systematically to protect its citizens, especially the most vulnerable, namely women and children. The government has the authority and capacity to take significant actions to protect women from this crime. Domestic effort is the most essential in fighting human trafficking.
The rise in human trafficking is allegedly due to weak national authority. The US Trafficking in Persons Report (TiP) states that countries in Southeast Asia, such as Cambodia, Brunei, Vietnam, Singapore and Thailand, are included in the Tier 2 category, as countries that have not met the minimum criteria for protection of victims of trafficking in persons. Myanmar is worse, put in the Tier 3 category as a country that shows absolutely no effort to combat trafficking in persons. The complexity of the human trafficking problem, among others, is transnational in nature, which makes efforts to eradicate this serious crime not only in the national domain.
Unfortunately, human trafficking have not been a consideration in any trade agreements and commitments so far in the region, let alone RCEP commitments.
In fact, the joint commitment of countries in the Southeast Asian region to break the chain of human trafficking has been carried out since 2004 through the ASEAN Declaration against Trafficking in Persons, especially Women and Children. This statement was followed up by the ASEAN Convention on Trafficking in Persons, especially Women and Children (ACTIP-WC) in 2015. This convention aims to strengthen ASEAN's joint efforts to combat human trafficking in the region. To what extent is the cooperation between ASEAN members in fighting trafficking of women in Southeast Asia efficient? This is also something that is overlooked in trade commitment notes.
RCEP's commitment can be a breath of fresh air for the pace of trade between countries, but RCEP can also be a whistle for the alertness of each country regarding their respective vulnerabilities. In this regard, Indonesia has several vulnerabilities in the domestic economy, which are still very dependent on the export of raw materials. This of course will increase forest vulnerability, damages to ecosystems and land which will further change the social order.
This could lead to the rise of horizontal conflicts that make children, women and the lower economic class experience not only more vulnerable, but also create more crisis and long-term human security because of trade commitments with no regards for social and ecological justice.
Vincent Fabian Thomas, Tirto.id. "Indonesia Joins RCEP, the Largest Trading Block. Is It Really Beneficial?" (In Bahasa Indonesia). Online Link <https://tirto.id/indonesia-masuk-rcep-blok-dagang-terbesar-benarkah-menguntungkan-f65A>
Stephen Olson, Asian Century Institute. "Keep RCEP in Perspective" Online Link: <https://www.asiancenturyinstitute.com/international/1655-keep-rcep-in-perspective>
Indonesia for Global Justice, "The red carpet investments in the middle of a pandemic result in crisis of people’s sovereignty". Online Link: <https://www.bilaterals.org/?the-red-carpet-investments-in-the >
Kelsey McGregor Perry and Lindsay McEwing. “How do social determinants affect human trafficking in Southeast Asia, and what can we do about it? A systematic review” in Health and Human Rights 15/2. Published December 2013. Link: <https://www.hhrjournal.org/2013/12/how-do-social-determinants-affect-human-trafficking-in-southeast-asia-and-what-can-we-do-about-it-a-systematic-review/ >
*The views expressed in this article are not necessarily those of Heinrich-Böll-Stiftung.