Cocoa Governance Readiness in Indonesia for EUDR Compliance: A Policy Review

Abstract

The European Union Deforestation Regulation (EUDR) has become a significant sustainability regulation affecting global agricultural commodity trade. By requiring commodities entering the European Union market to be deforestation-free, legally produced, and supported by traceable supply-chain information, the regulation creates new governance challenges for cocoa-producing countries. Indonesia, as a major cocoa producer, faces growing pressure to strengthen governance systems to support compliance while maintaining the competitiveness of its cocoa sector. This policy review examines the readiness of Indonesia’s cocoa governance system in responding to EUDR requirements. Using a desk study approach, the study reviews policy documents, regulatory frameworks, official statistics, institutional reports, and recent scholarly literature on cocoa governance, traceability systems, sustainability standards, and EUDR implementation. The analysis focuses on four dimensions of governance readiness: regulatory, institutional, traceability, and stakeholder readiness. The findings indicate that Indonesia has established policy instruments and sustainability initiatives that can support EUDR compliance. However,  challenges remain, including fragmented governance arrangements, limited traceability infrastructure, weak farmer institutions, inconsistent data systems, and unequal stakeholder capacities. The study highlights that effective adaptation requires stronger coordination among government agencies, private-sector actors, farmer organisations, and development partners. It concludes that EUDR compliance should be viewed not only as a market-access requirement but also as an opportunity to modernise cocoa governance, improve supply-chain transparency, and support sustainable smallholder-based cocoa systems in Indonesia.