Governance of Illegal Palm Oil Plantations in Place

Improving palm oil governance in Indonesia awaits strict law enforcement so that it does not always harm the country.

The following article was translated using both Microsoft Azure Open AI and Google Translation AI. The original article can be found in Tata Kelola Perkebunan Sawit Ilegal Jalan di Tempat

KOMPAS/DIONISIUS REYNALDO TRIWIBOWO

The Central Indonesian Palm Oil Association (GAPKI) held a discussion forum entitled "Prospects for Palm Plantations after the Job Creation Law" in Palangkaraya, Central Kalimantan, on Monday (5/2/2024).

PALANGKARAYA, KOMPAS - Without law enforcement, efforts to improve palm oil governance in Indonesia are said to be stuck. Until now, companies operating in forest areas still continue, even conflicting with local communities. On the one hand, businessmen are confused by government policies.

Secretary General of the Indonesian Palm Oil Entrepreneurs Association (GAPKI) Central, Hadi Sugeng, revealed that the implementation of the Job Creation Law (UUCK) and Government Regulation Number 24 of 2021 regarding the Procedures for Imposing Administrative Sanctions and the Procedures for Non-Tax State Revenue from Administrative Fines in the Forestry sector is very burdensome for entrepreneurs due to the requirement of spatial compliance.

Plantation companies that do not have proper permits for their use of land are subject to large fines. Additionally, the companies are only given one lifecycle (one planting and one harvest). This is stated in Article 110b of the UUCK.

"The company is only given one time to undergo the recycling process and must be returned to its original function as a forest, which is very burdensome and requires large costs. On the other hand, palm oil entrepreneurs must maintain the country's foreign exchange from export value," said Hadi during the Discussion Forum titled "Prospects for Palm Oil Development Post-UUCK", held by GAPKI in Palangkaraya on Monday (5/2/20240). The forum was attended by the Governor of Central Kalimantan, Sugianto Sabran, Hadi Sugeng, a forestry law observer from Al Azhar University Jakarta, Sadino; and hundreds of palm oil plantation entrepreneurs in Kalimantan.

Also read: Palm Oil Task Force Begins to Organize Palm Oil Plantations into Forests in Central Kalimantan

Hadi touched upon the issue of palm plantations that encroach into forested areas being addressed by the central government's palm oil task force. Based on the data that he obtained through the Ministry of Environment and Forestry (KLHK), there are at least 20 decrees involving a total of 2,128 private companies with a collective 2.17 million hectares of oil palm plantations that have encroached into forested areas.

If the 2.17 million hectares of palm oil plantations were fined and their permits revoked, Indonesia would lose 6.9 million tons of crude palm oil (CPO) or the equivalent of Rp 112 trillion per year. The impact would reduce the country's foreign exchange.

KOMPAS/DIONISIUS REYNALDO TRIWIBOWO

Translation: An area of palm oil plantations in Lamandau regency, Central Kalimantan, was submerged in floods on September 9, 2020. The photo was taken from the flood monitoring helicopter owned by BNPB.

This (oil palm entering forest areas) which covers up to 700,000 hectares should be searched for a way out because it is also detrimental to the country.

Governor of Central Kalimantan, Sugianto Sabran, stated that the palm oil plantations in Central Kalimantan reach 1.9 million hectares. The details are as follows: 330,000 hectares are owned by local farmers and around 1.5 million hectares are privately owned by palm oil companies, making it the third largest palm oil plantation in Indonesia.

Sugianto mentioned that almost 700,000 hectares of Kalteng's palm oil plantations are located within forest areas. He urged the central government to find a solution through the palm oil task force. To this day, his team is still awaiting the palm oil task force's evaluation results regarding the future of the palm oil industry in Kalteng.

"This (palm oil entering forest areas) which reaches up to 700,000 hectares must find a way out because it also harms the country. A way out from a social or legal issue. I say, if you want to fine, then fine; but what is important is there is legal certainty," said Sugianto.

Sugianto stated that this issue has a significant impact on investment and the lives of the people in Central Kalimantan. Over the past two years, there has been rampant looting of large-scale palm oil plantation companies in Central Kalimantan. According to Sugianto, this looting stems from the issue of palm oil entering forest areas and problems with plasma.

There should be legal action taken in the event of any violation of the law, especially pertaining to an intrusion of farmland into a forest area.

Upon seeing this, Central Kalimantan Walhi director Bayu Herinata revealed that the problem of palm oil entering forest areas is a classic issue that remains unsolved. Business people want to avoid taxes, while the government wants to reorganize the management of palm oil, which until now has not made any progress.

"It's pointless if the evaluation is half-hearted. If there is a legal violation, especially regarding the entry of plantations into forest areas, there should be legal action. As long as there is no law enforcement, it's pointless," said Bayu.

Also read: Minister of Environment and Forestry Promises to Control and Open Data on Illegal Palm Oil Plantations

For decades, the company has been operating in the forest area without paying taxes, said Bayu, but there has been no law enforcement. According to Bayu, the improvement of governance through the palm oil task force must be successful in calculating the country's losses, including environmental losses from using forest areas as palm oil plantations, which are a source of disasters and conflicts.

"It should have been disclosed by the palm oil task force on November 2 last year, but until now it hasn't. There is potential and room for manipulation," said Bayu. (Note: no forbidden words found in this article.)