We Never Intend to Establish New Palm Oil Plantations: Gapki

Jakarta. Indonesian palm oil companies have pledged not to open new palm oil plantations as they come to terms with the government's decision to put a moratorium two years ago but hoped the landmark omnibus law would help unlock two million hectares of plantation area currently under dispute with the forest authorities. 

"We never intend to establish more plantations. But we'd rather focus on what has already existed by replanting [the palm trees] for better productivity. We hope that the regulation is supportive of this," Joko Supriyono, the chairman of the Indonesian Palm Oil Association (Gapki), told the Jakarta Globe in an online media visit on Thursday.

President Joko "Jokowi" Widodo extended the palm oil plantation moratorium in 2018 for an undetermined period as part of Indonesia's pledge to preserve its forest.  And that has been a crucial factor that would limit palm oil supply in the foreseeable future.

That left palm oil companies to rely on independent farmers, who may decide to switch from other crops to palm oil or their existing landholdings that have yet to be developed due to dispute with conservation authorities.

Currently, around 2 million hectares of plantations land overlap with forest area, Gapki's deputy chairman Togar Sitanggang said. Togar said that the overlaps often stemmed from differences in manual or satellite measurements companies and the government used to establish the plantation or forest area.  

Gapki considers the spatial overlap in forest zones as one of the palm oil industry's greatest concerns. 

"There are conflicting perspectives in terms of spatial overlap. The forestry side accuses palm plantations that have penetrated the forest zones because there is no forest release permit. Whilst the palm side sees the forestland is already included in their right to cultivate (HGU). This HGU was even acquired years before the establishment of the forest zone," Joko said.

The 2020 Law about Job Creation Law contains articles to address the land issue, and the association hopes the derivative regulations from the law can settle the palm oil plantation problem.

According to Gapki's executive director Mukti Sardjono, the association has already sent several recommendations on the law's derivative regulation drafts on the agricultural sector and abandoned lands. 

"We are still studying the derivative regulation drafts on the spatial overlap, the business permit as well as environment and forestry. This is because they directly affect the continuity of the investments in the palm oil industry," Mukti said.

For example, Gapki hopes that the government gives a warning first before imposing a fine if there is any violation. 

Also, rather than incentives, the association prefers the government to provide supportive regulations to maintain its existing plantations, directly and indirectly providing 17 million jobs in Indonesia.

"The spirit of the Job Creation law is to facilitate business and investment as well as create jobs. If the [law] cannot do so, that would mean it fails to achieve its goal. This is why we are in the process of discussing and giving input on the eventual derivative regulations," Joko said.