PALMOILMAGAZINE, JAKARTA – Singapore-listed palm oil company First Resources Ltd has paid US$5.6 million to the Indonesian government in connection with palm oil plantation land that has been handed over to the state.
Citing a report from Reuters on Sunday (8/3/2026), the payment was disclosed in the company’s FY2025 financial report. First Resources described the amount as an “administrative fee” paid last year related to land areas requested by the government following changes in forest spatial planning regulations.
The company stated that the payment was associated with “land areas that have already been surrendered” to the government after new policies governing land use within forest zones were introduced.
Task Force Seized 4.1 Million Hectares
Previously, the Indonesian government formed a special task force that seized approximately 4.1 million hectares of plantation land last year over allegations that the areas were being operated illegally inside forest zones.
The enforcement effort targeted a number of large palm oil companies as well as smallholder farmers, and the government has indicated that the land recovery process will continue.
Indonesia’s Ministry of Forestry of Indonesia has also listed several business units linked to First Resources among entities suspected of operating within forest areas without proper authorization.
In its statement, First Resources acknowledged that it may still be required to pay additional administrative fees for land areas that have been identified by the task force but have not yet been formally handed over to the government.
However, the company said it cannot yet estimate the total potential liability. It also did not disclose the exact size of the land already surrendered or the area that could potentially be subject to seizure.
CPO Production Jumps 30%
Operationally, First Resources reported strong production growth in 2025. The company produced 1.3 million tons of crude palm oil (CPO) during the year, representing an increase of around 30% compared with 2024.
Production of palm kernel also rose significantly, climbing 32% to 289,999 tons over the same period.
As the world’s largest palm oil producer, Indonesia currently has around 16.8 million hectares of oil palm plantations nationwide.
Of the total 4.1 million hectares of seized land, roughly 1.7 million hectares have been transferred to the state-owned company Agrinas Palma Nusantara.
The transfer has transformed the infrastructure services company into the world’s largest palm oil company in terms of managed plantation area, marking a significant shift in Indonesia’s plantation landscape. (P2)
