The Opportunity and six challenge palm oil RUU

The Opportunity and six challenge palm oil RUU

InfoSAWIT, JAKARTA –In the end of 2016, academic text in Palm oil Draft was improved. But for many sides urged to publish it, the Draft was in National Legislation Program in 2017. But in this year, Indonesian Legislators could not publish the regulation. That is why it is now in National Legislation Program in 2018.

Of course the Draft needs fast response from the government and the private so it could be discussed together in the limited time. Besides the Draft would be the moment for the repratriation fund and the result of tax amnesty to strengthen the future industries.

But Palm oil Draft raises arguments from the pro and contra-ones. What about the Draft in the future?

The article written by Sustainability Director of  PT Agro Harapan Lestari, Edi Suhardi, noted some analysis in the Draft, such as, the first, palm oil is as the national strategic commodity. The second, it needs protection and subsidy.


The third, palm oil contributes to the revenue, such as Rp 300 billion in 2015. The fourth, palm oil is as the biggest non oil and gas commodity in Indonesia. The fifth, palm oil provides employement and hire workers. The sixth, the smallholders have the areas reaching about 41% of the total national palm oil areas.


The seven, the government’s and the privates’ companies as the palm oil owners reach about 58% of the total national palm oil areas, the eighth, the other business sectors also support to develop national palm oil, and the nineth, the others.


From what Edi noted, the goals of the regulation are, one, to protect palm oil as the national strategic commodity, to strengthen the upstream and downstream industries, to maintain the national energy security from the biodiesel industry that palm oil industry holistically will be powerful and could compete with other kinds of vegetable oil

The second, it is important that the domestic absorption is better than the exports. It should be implemented so that the supply and demand nationally and holistically could be better and independent. The domestic palm oil supply could be used as the material to develop downstream industries, such as, biodiesel, pharmacy, cosmetic, and personal cares.


The third is  it needs to protect the smallholders and investors from the upstream to downstream sectors. “It is to guarantee them, the law enforcement, business plan of the company and the increasing supply and demand,” he noted in InfoSAWIT February, 2017.


What is the challenge in the Draft? Edi noted, there are six challenges, such as, the first, the unstable governance within corruption, collution, and nepotism which still occur

The second, the overlapping central and regional policies nationally. The third, the clarification and protection of business ownership for the smallholders, companies, and investors legally which regulates the rights and obligation.


The fourth, the decreasing of companies’ ownership by releasing the shares to the people by initial public offering (IPO) so that the companies would be tranparent and accountable. The fifth, the certainty of domestic markets through the roadmap of industries and the support of the government to use environment and degradable products using palm oil as the material. The sixth, the increasing domestic absorption on the products using palm oil as the material.(T1)


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