ACKNOWLEDGING the differences in their levels of development and EMPHASISING their shared objective of further integrating sustainable development in the fostering of their trade and investment relations;
RECALLING their commitment to implement this Agreement in a manner that contributes to inclusive economic growth, social progress, green transition and environmental protection;
RECOGNIZING the need for joint action to address global sustainability challenges such as climate change and biodiversity loss and pollution, as well as ensuring efforts to eradicate poverty, food insecurity, and inequality;
NOTING the importance of enhancing the resilience and integration of international supply chains, and mindful of the opportunities for SMEs, smallholders and other relevant stakeholders on both sides;
UNDERLINING that it is critical to ensure an open, transparent and rules-based international trade/trading system as well as STRESSING their determination to work together so that their trade and investment relationship enhances sustainable development;
RECALLING the importance of trade for raising standards of living and promoting job creation and decent work, and allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development;
REAFFIRMING their respective commitments under multilateral instruments and agreements such as the ILO Constitution and the fundamental ILO Conventions, the Paris Agreement, the United Nations Framework Convention on Climate Change (UNFCCC), and the Convention on Biological Diversity (CBD);
SEEKING to protect and preserve the environment, to realise decent work for all, and to enhance the means for doing so in a manner consistent with their international obligations and building on their respective growth and development strategies;
AGREE as follows:
PART A
TRADE AND SUSTAINABLE DEVELOPMENT
Article ARTICLE 15.1
Context, objectives and scope
The Parties recall the Agenda 21 and the Rio Declaration on Environment and Development adopted at the United Nations ("UN") Conference on Environment and Development held in Rio de Janeiro on 3 to 14 June 1992, the Johannesburg Plan of Implementation of the World Summit on Sustainable Development of 2002, the International Labour Organisation ("ILO") Declaration on Social Justice for a Fair Globalization, , adopted by the International Labour Conference ("ILC") at its 97th session held in Geneva on 10 June 2008 ("ILO Declaration on Social Justice for a Fair Globalization") and as amended in 2022, the Outcome Document of the UN Conference on Sustainable Development of 2012 entitled "The Future We Want", adopted by the UN General Assembly Resolution 66/288 on 27 July 2012, and the outcome document entitled “Transforming Our World: the 2030 Agenda for Sustainable Development” and its Sustainable Development Goals ("2030 Agenda"), adopted by the UN General Assembly Resolution 70/1 on 25 September 2015.
The Parties affirm their commitment to pursue sustainable development, which encompasses three dimensions: economic development, social development and environmental protection, that are inter-dependent and mutually reinforcing. The Parties shall promote the development of international trade and investment including in their bilateral relationship in such a way as to contribute to the objective of sustainable development. The Parties shall encourage greater policy coherence between trade policies, on the one hand, and economic, social, and environmental policies on the other.
In light of the above, except as otherwise provided in this Chapter, this Chapter covers trade and investment-related aspects of sustainable development in contributing to the implementation of the 2030 Agenda and its Sustainable Development Goals.
The Parties agree on the importance of enhanced dialogue and cooperation as an approach for effective implementation of this Chapter in order to achieve sustainable
development in trade and to improve their trade relationship in a sustainable manner. The Parties emphasize that the implementation of this Chapter should not be used as protectionist trade measures, and be consistent with the Parties’ international obligations under the World Trade Organization and other relevant international agreements to which the Parties are a party.
The Parties recall that that with a view to achieving the purpose of the Paris Agreement, they are to undertake and communicate ambitious efforts, which will represent a progression over time and reflect their highest possible ambition. They also recall that the Paris Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances. They stress the importance of this as part of their actions to address and tackle climate change as a key element to achieve the objective of sustainable development, as reflected in their respective growth and development strategies, policies and priorities.
Article ARTICLE 15.2
Right to regulate and levels of protection
The Parties recognise the right of each Party to determine its sustainable development objectives, strategies, policies and priorities, to establish its own levels of domestic environmental and social protection as it deems appropriate and to adopt or modify accordingly its relevant laws and policies, consistently with internationally recognised standards and agreements, to which it is a party.
Each Party shall strive to ensure that its relevant laws and policies provide for and encourage high levels of domestic protection in the environmental and social areas and shall strive to continue to improve those levels, laws and policies.
Article ARTICLE 15.3
Upholding levels of protection
As sustainable development encompasses the three dimensions of economic development, social development and environmental protection, the Parties stress that weakening the levels of protection in the environmental or social areas is detrimental to the objectives of this Chapter. Accordingly, a Party shall not weaken the levels of protection afforded in domestic environmental or labour law in order to encourage trade or investment.
A Party shall not waive or derogate from, or offer to waive or derogate from its environmental or labour laws, in order to encourage trade or investment.
A Party shall not, through a sustained or recurring course of action or inaction, fail to effectively enforce its environmental or labour laws in a manner affecting trade or investment between the Parties.
The Parties recognise the right of each Party to exercise reasonable discretion and to make bona fide decisions with regard to the allocation of enforcement resources in accordance with priorities for enforcement of its environmental and labour laws provided that the exercise of that discretion is not inconsistent with its obligations under this Chapter.
Article ARTICLE 15.4
Trade and labour
The Parties recognise the importance of full and productive employment and decent work for all, in particular as a response to globalisation and reaffirm their commitment to promote the development of bilateral trade in a way that is conducive to these objectives, including for women and young people.
In accordance with their obligations deriving from ILO membership1 and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, adopted by the International Labour Conference at its 86th Session in Geneva on 18 June 1998 ("ILO Declaration on Fundamental Principles and Rights at Work"), as amended at its 110th Session in 2022, each Party shall respect, promote and effectively implement the fundamental principles and rights at work, as defined in the fundamental ILO Conventions, which are:
freedom of association and the effective recognition of the right to collective bargaining;
the elimination of all forms of forced or compulsory labour;
the effective abolition of child labour;
the elimination of discrimination in respect of employment and occupation; and
a safe and healthy working environment.
Each Party shall effectively implement the ILO Conventions and Protocols ratified by Indonesia and by the Member States of the European Union respectively.
1 For the European Union, ''ILO membership'' means the ILO membership of the Member States of the European Union.
Each Party shall remain a party, in good faith, to the fundamental ILO Conventions ratified by Indonesia and by the Member States of the European Union respectively.
Each Party shall make continued and sustained efforts to ratify the fundamental ILO Conventions to which they are not yet party.
Recalling that the elimination of forced labour is among the objectives of the Agenda 2030, the Parties underline the importance of ratification and effective implementation of the Protocol of 2014 to the Forced Labour Convention.
The Parties shall consult and cooperate, as appropriate, on trade-related labour issues of mutual interest, such as the inter-linkages between trade and full and productive employment, labour market adjustment, core labour standards, social protection, social inclusion, social dialogue and gender equality. This cooperation may be conducted bilaterally, regionally and in international fora. The Parties shall regularly exchange at the meetings of the Specialised Committee on Trade and Sustainable Growth in the Trade and Sustainable Growth and Development configuration as appropriate, in other occasions, information and experiences regarding the implementation of multilateral labour conventions that each Party has respectively ratified as well as information on their respective situations with regard to the ratification of ILO Conventions or Protocols that are classified as up-to-date by the ILO to which they are not yet party.
Recalling the ILO Declaration on Social Justice for a Fair Globalisation of 2008, as amended in 2022, the Parties recognise that the violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes.
Each Party shall promote decent work as expressed in the Declaration on Social Justice for a Fair Globalization of 2008 adopted by the International Labour Conference at its 97th Session, as amended in 2022, in particular with regard to:
decent working conditions for all, with regard to, inter alia, wages and earnings, working hours and other conditions of work;
non-discrimination in respect of working conditions, including for migrant workers.
Each Party shall, consistent with relevant ILO Conventions to which it is a party, and taking into account related ILO Recommendations:
adopt and implement measures and policies regarding occupational health and safety, including the prevention of occupational injury or illness and compensation in case of such injury or illness; and
maintain an effective labour inspection system for the enforcement of its labour provisions.
Article ARTICLE 15.5
Trade and gender2 equality
The Parties recognise that inclusive trade policies contribute to advancing women’s economic empowerment and gender equality, in line with the Sustainable Development Goals of the 2030 Agenda. They acknowledge the important contribution by women to economic growth through their participation in economic activity, including international trade. The Parties commit to implement the provisions of this Agreement in a m
anner that promotes and enhances women’s economic empowerment and gender equality, without prejudice to the right of each Party to establish its own scope and levels of protection in that regard, in a way that is not inconsistent with its relevant international commitments.
The Parties commit to strengthen their trade relations and cooperation in ways that effectively provide equal opportunities and treatment for women and men to benefit from the provisions of this Agreement, including in matters of employment and occupation.
Each Party shall effectively implement its obligations under international agreements addressing gender equality and women’s rights to which it is a party, including the Convention on the Elimination of all Forms of Discrimination Against Women, adopted by the United Nations General Assembly on 18 December 1979 noting in particular its provisions related to eliminating discrimination against women in economic life and in the field of employment.
The Parties shall work together to strengthen their cooperation on trade-related aspects of matters covered by this Article, among others, through activities to improve the capacity and conditions for women, including workers, businesswomen and entrepreneurs, to access and benefit from the opportunities created by this Agreement.
The Parties agree on the importance of monitoring and assessing, in accordance with their domestic procedures, the impact of the implementation of this Agreement on equal opportunities and treatment provided for women in relation to trade.
Article ARTICLE 15.6
Multilateral environmental agreements
The Parties recognise the importance of multilateral environmental agreements and governance as a response of the international community to global environmental challenges and as instruments to facilitate cooperation in addressing environmental
2 For the purpose of this article, each Party may interpret and apply the term “gender” in a manner consistent
with its laws and regulations
challenges, in particular the need to take urgent action to tackle the triple planetary crisis of climate change, biodiversity loss and pollution, and stress the need to enhance the mutual supportiveness between trade and environment policies.
Each Party shall effectively implement the multilateral environmental agreements (MEAs) and their protocols and amendments to which it is a party.
The Parties shall regularly exchange at the meetings of the Specialised Committee on Trade and Sustainable Growth and as appropriate, in other occasions, information on their respective situation with regard to the ratification and where relevant on the implementation of MEAs including their protocols and amendments to such agreements.
The Parties shall consult and cooperate, as appropriate, on trade-related environmental issues of mutual interest, including in the context of multilateral environmental agreements. Such consultations and cooperation may include sharing information on policies and practices and promoting relevant initiatives to encourage the shift to a circular economy.
Nothing in this Agreement shall prevent Parties from adopting or maintaining measures to implement and further the objectives of the MEAs to which they are a party.
Article ARTICLE 15.7
Trade and climate change
The Parties recognise the importance of, and the role of trade in, pursuing the ultimate objective of the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992 ("UNFCCC") and the Paris Agreement under the UNFCCC, done at Paris on 12 December 2015 ("Paris Agreement"), in order to address and to tackle climate change by strengthening the full and effective implementation of the Paris Agreement to reach its temperature goal, reflecting equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
Pursuant to paragraph 1, each Party shall:
effectively implement the UNFCCC and the Paris Agreement, including its obligations with regard to its nationally determined contribution and the pursuit of climate action measures and policies.
encourage the mutual supportiveness of trade and climate policies and measures thereby contributing to the transition towards low-carbon, net zero emissions and climate resilient development, to resource efficiency and to sustainable resource management.
cooperate with the other Party to facilitate trade and investment concerning goods and services of particular relevance for respective climate action policies in a manner consistent with this Agreement.
In this context, recognising the role of trade in contributing to the response to the urgent threat of climate change, each Party shall remain a party, in good faith, of the Paris Agreement. This obligation shall constitute an essential element of this Agreement.
The Parties shall cooperate on trade-related climate change issues bilaterally, regionally and in international fora as appropriate, such as in the UNFCCC, the WTO, the Montreal Protocol on Substances that Deplete the Ozone Layer, concluded at Montreal on 16 September 1987 ("Montreal Protocol"), the International Maritime Organisation ("IMO"), the International Civil Aviation Organization ("ICAO") and the Convention on Biological Diversity, done at Rio de Janeiro on 5 June 1992 ("CBD"). In relation to that, the Parties may work jointly in areas of mutual interest or priority, such as:
preparation, implementation and promotion of frameworks, policies and measures for carbon pricing action including emission trading systems and emissions monitoring;
promotion of domestic and international carbon markets;
preparation, implementation and promotion of frameworks, policies and measures related to renewable energy and its development, including means to promote low-carbon technologies, sustainable bioenergy and biofuels, and sustainable transport;
promotion of climate resilience;
promotion of energy efficiency and low emission technologies, including through technology transfer on mutually agreed terms and capacity building, within the context of Paris Agreement and the Kigali Amendment to Montreal Protocol and its support; and
enhancing the phase-out of ozone depleting substances ("ODS"), and the phase-down of hydrofluorocarbons ("HFCs") agreed under the Kigali Amendment to the Montreal Protocol through measures to control their production, consumption and trade, introduction of environmentally friendly alternatives to them, updating of safety and other relevant standards, combating the illegal trade of substances regulated by the Protocol.
Article ARTICLE 15.8
Trade and biological diversity
The Parties recognise the importance of ensuring the conservation and the sustainable use of biological diversity and the role of trade in pursuing these objectives, consistent with the CBD, its Kunming-Montreal Global Biodiversity Framework, the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity, adopted in Nagoya on 29
October 2010 ("Nagoya Protocol"), the Convention on International Trade in Endangered Species of Wild Fauna and Flora done at Washington D.C. on 3 March 1973 ("CITES"), and other relevant international instruments to which they are party, and the decisions adopted thereunder.
The Parties affirm the importance of ensuring legality and sustainability of wildlife trade as regulated and facilitated under CITES, and recognise that illegal trade undermines efforts to conserve and sustainably manage those natural resources, and has negative economic, social and environmental impacts.
Pursuant to paragraph 1, each Party shall:
adopt and implement appropriate effective measures, which are consistent with its commitments under international agreements to which it is a Party, to combat illegal wildlife trade, including with respect to third countries as appropriate, such as monitoring and enforcement measures, balanced and unbiased awareness raising campaigns and others initiatives;
promote the long-term conservation and sustainable use of the animal and plant species listed in the Appendices to the CITES, and the inclusion of species in the Appendices to the CITES where their conservation status is considered at risk because of international trade, as well as make efforts to conduct periodic reviews which may result in recommendations to amend the Appendices to the CITES in order to ensure that they properly reflect the conservation needs of species subject to international trade;
promote and encourage trade in products obtained through or which contribute to the sustainable use of biological resources and conservation of biological diversity in accordance with relevant international agreements to which it is a party;
take measures to ensure the conservation and the sustainable use of biological diversity in accordance with Kunming-Montreal Global Biodiversity Framework; and
establish appropriate, effective and proportionate measures to ensure compliance with the principles of prior informed consent and fair and equitable benefit sharing arising from the utilization of genetic resources and associated knowledge.
The Parties shall work together to strengthen their cooperation on trade-related aspects of matters covered by this Article, bilaterally, regionally and in international fora, as appropriate, including under the CBD and the CITES. Such cooperation may cover, among others:
exchange information with the other Party on initiatives and good practices concerning trade in products and services derived from the sustainable use of biological resources with the aim of conserving biological diversity, such as strategies, policy initiatives, programmes, action plans, and consumers’ awareness campaigns;
trade and the conservation and sustainable use of biological diversity, including the development and application of natural capital and ecosystem accounting methods, the valuation of ecosystems and their services and related economic instruments;
combatting illegal wildlife trade, including through initiatives to reduce demand for illegal wildlife products and initiatives to enhance information sharing and cooperation; and;
access to genetic resources as well as the fair and equitable sharing of benefits from their utilisation consistent with the Nagoya Protocol, including through measures to address situations of non-compliance with this applicable legislation and regulatory requirements; and
increase the level of financial resources and domestic resource mobilization to implement national biodiversity strategies and action plans in accordance with Target 19 of the Global Biodiversity Framework.
Article ARTICLE 15.9
Trade in timber and timber products and sustainable forest management
The Parties recognise the importance of the conservation and sustainable forest management in contributing to the Parties’ economic, environmental and social objectives and the role of trade, including in timber and timber products, in pursuing this objective.
In light of paragraph 1, each Party shall:
implement respective measures to combat illegal logging and related trade, including, as appropriate, with respect to third countries;
encourage the conservation and sustainable management of forest, and trade and consumption of timber and timber products from sustainably managed forests and harvested in compliance with applicable laws in EU and Indonesia respectively, in particular through the effective implementation and monitoring of the EU-Indonesia Forest Law Enforcement Governance and Trade Voluntary Partnership Agreement (FLEGT VPA); and
exchange information with the other Party on trade-related initiatives on sustainable forest management, forest conservation, forest governance and cooperate to maximise the impact and ensure the mutual supportiveness of their respective policies of mutual interest.
The Parties shall work together bilaterally, regionally and in international fora on issues concerning trade and the conservation of forests, combatting illegal logging, as well as sustainable forest management with a view to minimise deforestation and forest degradation.
Recognising that deforestation is one of the drivers of global warming and biodiversity loss, the Parties shall exchange knowledge and experiences on ways to encourage the consumption and trade in products from supply chains not related to deforestation.
Article ARTICLE 15.10
Trade and sustainable management of marine biological resources and aquaculture
The Parties recognise the importance of ensuring the conservation and sustainable management, in a way that is consistent with achieving economic, social and environmental benefits, of marine biological resources and their ecosystems, as well as the promotion of responsible and sustainable aquaculture, and IUU free fisheries products and the role of trade in pursuing these objectives.
The Parties recognise the efforts and measures already undertaken by the Parties to fight against IUU fishing, recalling their commitment in Article 4 of this Chapter.
Pursuant to paragraph 1, each Party shall:
implement long-term conservation and management measures and sustainable exploitation of marine living resources as defined in the UN Convention on the Law of the Sea, done at Montego Bay on 10 December 1982 ("UNCLOS") and other UN and Food and Agriculture Organization of the United Nations ("FAO") instruments relating to these issues3;
act consistently with the principles and encourage compliance with the objectives of the UNCLOS, the United Nations Agreement for the Implementation of the Provisions of UNCLOS relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks, the FAO Code of Conduct for responsible Fisheries, adopted by Resolution 4/95 of 31 October 1995, and the FAO Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing, done in Rome on 22 November 2009 ("PSMA"), as well as promote coherence with the main objectives of the FAO Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas, adopted in Rome on 24 November 1993 ("Compliance Agreement");
cooperate actively in the work of the Regional Fisheries Management Organisations ("RFMOs") to which they are members, observers, or cooperating non-contracting parties, with the aim of ensuring the sustainable exploitation, management and conservation of marine biological resources and the marine environment, including through effective implementation of adopted decisions, resolutions, and conservation and management measures;
3 The UN Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks of 1995, the FAO Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing of 2009.
implement effective measures to combat IUU fishing and to exclude products obtained from IUU fishing from being imported into each Party’s territories, in accordance with the World Trade Organisation rules and other relevant international instruments, and cooperate to this end, including by facilitating the exchange of information; and
promote the development of sustainable and responsible aquaculture, taking into account its economic, social and environmental aspects, including with regard to the implementation of the objectives and principles contained in the FAO Code of Conduct for Responsible Fisheries.
The Parties shall work together to strengthen their cooperation on trade related aspects of matters covered by this Article, bilaterally, regionally, and international fora, as appropriate, including in the WTO, FAO, RFMOs, and under other multilateral instruments in this field. This cooperation shall aim to achieve the following objectives:
promotion of sustainable fishing practices and aquaculture;
facilitation of trade in sustainable fishery products and trade in fish, and seafood products from sustainably managed fisheries and aquaculture; and
effective fisheries management, including with respect to measures for monitoring and inspection of fishery activities. Cooperation in this regard may include, as may be decided by the Parties, activities on fisheries inspection or on implementation of electronic monitoring and reporting systems, for instance through exchanges of good practices or technical assistance and capacity building in accordance with Chapter 17 (Economic Cooperation and Capacity Building).
Article ARTICLE 15.11
Trade- and investment favouring sustainable development
The Parties confirm their commitment to enhance the contribution of trade and investment to the goal of sustainable development in its economic, social and environmental dimensions.
The Parties recognise that sustainability schemes or standards or other voluntary initiatives can contribute to the achievement and maintenance of high levels of economic development, environmental protection and social development and complement domestic regulatory measures.
The Parties recall their respective commitments on environmental goods pursuant to Article X…. (Elimination of Customs Duties) of Chapter 2 (National Treatment and Market Access for Goods).
The Parties recall their respective commitments on environmental services and manufacturing activities pursuant to Chapter 8 (Services and Investment) in the Agreement’s Investment Liberalisation and Trade in Services chapters.
Pursuant to paragraph 1, each Party shall strive to promote and facilitate trade and investment in:
environmental goods and services of particular relevance for climate change mitigation and adaptation, including through the development of policy frameworks conducive to the supporting access to, financing and deployment of best available technologies;
goods that contribute to enhanced social conditions, and
goods subject to credible, transparent, factual, and non-misleading sustainable assurance schemes and voluntary sustainability standards, such as fair and ethical trade schemes and eco-labels.
The Parties shall cooperate bilaterally, regionally and in international fora on issues covered by this Article, among others, through the exchange of information, best practices and outreach initiatives. This cooperation may cover, among others:
the impact of trade and investment rules on labour and environment laws, regulations, norms and standards, as well as the impacts of labour and environmental rules on trade and investment including on the development of strategies and policies on sustainable development;
encouraging the uptake of credible, transparent, factual, and non-misleading sustainable assurance schemes, and promoting awareness-raising actions and information and public education campaigns, taking into account financial and operational costs for operators, particularly SMEs; and
Sharing information and experience about trade-related aspects concerning the definition and implementation of green growth strategies and policies, including but not limited to sustainable production and consumption, climate change mitigation and adaptation, and environmentally sound technology.
Article ARTICLE 15.12
Trade and responsible business conduct
The Parties recognise the importance of responsible business conduct, corporate social responsibility practices and the responsible management of supply chains and the role of trade in pursuing these objectives.
Pursuant to paragraph 1, each Party shall:
promote coherence between corporate social responsibility and responsible business conduct and its laws, regulations and policies, by providing supportive policy framework that encourage the uptake of relevant practices by businesses, taking into account local needs and circumstances; and
encourage the use of relevant international instruments, such as the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, adopted in Geneva in November 1977, the UN Global Compact, the UN Guiding Principles on Business and Human Rights, endorsed by the Human Rights Council in its Resolution 17/4 of 16 June 2011, and the Organisation for Economic Cooperation and Development ("OECD") Guidelines for Multinational Enterprises, including international sector-specific guidelines4, as appropriate.
The Parties shall work together to strengthen their cooperation on trade-related aspects of matters covered by this Article, bilaterally, regionally and in international fora, as appropriate, among others through the exchange of information, best practices, outreach initiatives, training and education activities, capacity building and technical advice.
PART B