A Critical Review of Government Regulation Number 38/2023: Assessing Palm Oil Plantation Profit Sharing Policies

Palm Oil Magzine
Doc. Special / Jamaluddin, Chief Coordinator of Koperasi Perkebunan Kelapa Sawit, Village of Muai, Sub district of Kembang Janggut, Kutai Kartanegara.

PALMOILMAGAZINE, JAKARTA – Government Regulation Number 38/2023 concerning Palm Oil Plantation Profit Sharing represents a significant milestone in addressing the fiscal gap and mitigating the adverse effects of the palm oil sector in Indonesia.

While its intentions are commendable, the regulation brings forth crucial aspects that require careful consideration to ensure its effective and sustainable implementation.

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One major issue to consider is the allocation fairness. Fund allocation is based on palm oil plantation width, area productivity, and other indicators that related ministry regulated. Though the approach make sense, the critics is that allocation criteria is not fully fair.

Some regions with bigger potential may got smaller allocation than the regions within less criteria. That is why it needs to evaluate and adjust allocation criteria to encourage equal distribution and fairness for every palm oil regional producer.

Also Read : Palm Oil Profit Sharing Scheme Set to Launch Pending Presidential Approval

The next is that it is important to make sure that the profit sharing would be aimed as the mandate. Though the regulation mentioned that the fund should be used namely to infrastructures, such as, developing (improving) ways, it needs to confirm that the fund use would be really effective t solve the negative impacts, but encourage economic progress, public services in palm oil producers.

The government should also confirm that the fund would be used right for but not for personal interests or other irrelevant goals.

Transparency and close monitoring would be the key elements to succeed the policy. It needs to emphasized that the fund use and palm oil profit sharing should be transparently reported and the public could access. The effective and independent monitoring mechanism would help prevent the fund misuse or fraud in the allocation. The firm action should run to solve the issue of less numbers or more numbers so that there would be unclarity or fund fraud that would be a loss for those who should get their rights to get the allocation.

In the palm oil profit sharing, environment impact should be the major consideration. The related policy with palm oil plantation sector should consider environment impact from this activity. Conservation and protection on environment should be the integrated part of the fund plan and use to support sustainable practices in palm oil industries. This would confirm that the economic progress would not damage ecosystem ad environment vulnerably.

Also Read : The Dual Impact of Palm Oil Industries in Indonesia

Regular evaluation is the important aspect that needs to be integrated in the regulation. It would help assess effectiveness and efficiency from palm oil profit sharing evaluation to realize the goals. The evaluation should help to deliver real impact of the policy to each palm oil plantation producer in a whole. It is also hoped the government could identify the weakness and potential of improvement in the policy.

It is important to know that Government’s Regulation Number 38 / 2023 about Palm Oil Plantation Profit Sharing is the good thing to solve fiscal gap and negative impact in palm oil plantation. But the way to escalate allocation fairness, confirm fund use according to its goal, escalating transparency and monitoring, consider environment impacts, regular evaluation would be the successful keys in the policy. Critics and inputs from others need to be listened wisely to improve and escalate the policy to realize more optimal results to support and encourage sustainable (palm oil) development for Indonesia.

By: Jamaluddin/ Chief Coordinator of Koperasi Perkebunan Kelapa Sawit, Village of Muai, Sub district of Kembang Janggut, Kutai Kartanegara.

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