Ensuring Legal Certainty in Palm Oil and Unpermitted Mining Activities in Forest Areas

Palm Oil Magazine
Doc. Special / The government's policies, specifically outlined in Chapter 110A and 110B of the Omnibus Law on Job Creation (Undang-Undang Cipta Kerja or UUCK), have allocated special provisions for the palm oil and mining industries.

PALMOILMAGAZINE, JAKARTA – The government’s policies, specifically outlined in Chapter 110A and 110B of the Omnibus Law on Job Creation (Undang-Undang Cipta Kerja or UUCK), have allocated special provisions for the palm oil and mining industries. These provisions have been further detailed in Government Regulation Number 24/2021 (PP 24/2021), which focuses on the procedures for imposing administrative sanctions and non-tax revenue from administrative fines in the forestry sector.

One notable aspect of these provisions is the leniency towards criminal action as stipulated in Law Number 41/1999 on Forestry (Laws of Forestry) and Law Number 18/2013 on Prevention and Eradication of Forest Destruction (Laws PEFD). The criminal sanctions specified in these laws have been replaced by fines. However, those found in violation of Chapter 110A are required to pay levies on forest resources and contribute to the reforestation fund. The calculation of these financial obligations is based on the estimation of the wood-stand potential, derived from satellite imagery, before the forest areas were converted into palm oil plantations or mining sites.

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While those that qualified to Chapter 110B violation in forest criminal, but they did not cut off forest areas without having forestry permit and violated spatial, should pay fine, such as, non-tax revenue which the formulation is regulated in the Laws 24 / 2021.  The statement about the will to pay levies on forest resources and reforestation fund and non-tax revenue fine would be only available until 23 December 2023. If they do not, they would pay sanction up to ten times or there would be sentence as it is regulated in Laws of Forestry and Laws PEFD.

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Every plantation and mining company which is identified to cut off forest regions without having forestry permit as regulated in Chapter 110A and 110B UUCK, would be put into radar of ‘mercy’ of criminal after it is regulated in the Decision of Minister of Forestry and Environment which is about the subject of law (business) without having forestry permit. By 5 April 2023, minister had published 12 decisions that there were 2.701 law subjects of business, corporates, unions, personals, and people, and government’s institutions that cut off forest areas without having permits. Riau Province has the most, up to 1.058 law subject. 476 of law subject are mining and palm oil plantation corporates.

The policy of ‘mercy’ of crime, at a glance, delivers ‘red carpet’ for the naughty stakeholders. But on the other hand, it shows the weak supervision and permit governance in forestry sector. The stakeholders did not obey the available regulations in many sectors that show signals about governance, phase, kinds of permits that should be got before conducting business in forest areas. But in fact, many were ignored and raised loss revenue for the country from forestry sectors. The policy of ‘mercy’ of criminal through chapter 110A and 110B UUCK tries to get the loss revenue back.


Blocked Transparency

Policy of ‘mercy’ of criminal in forestry sector by Ministry of Environment and Forestry through Directorate of Criminal Law Enforcement General Directorate of Law Enforcement. The minister established team of ‘mercy’ of Chapter 110A and 110B which is in charge to follow up the ‘mercy’ from mining and plantation actors.

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