Challenges Faced by Stakeholders Due to Uncertainty in Legal Area Regulations

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Doc. Sawit Fest 2021 / Malik Fajar

PALMOILMAGAZINE, SURABAYA – The palm oil industry in Indonesia is grappling with significant challenges related to the legality of palm oil plantations in forested areas. Data from 2021 reveals that out of the total 3.3 million hectares of palm oil plantations situated in forested regions, only a small fraction have received clearance for forest release.

This presents a source of uncertainty for stakeholders, particularly those affiliated with the Indonesian Palm Oil Association (IPOA) and the Indonesian Palm Oil Farmers Association (Apksasindo). Bustanul Arifin, Chairman of the Indonesian Agricultural Economic Association (Perhepi), noted that President’s Regulation Number 9/2023 has tasked the palm oil governance taskforce with addressing the issue of overlapping areas and addressing the matter of palm oil expansion in forested regions, which is viewed as occurring “too late.”

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Unfortunately, at the same time, many stakeholders faced uncertainty because of the implementation of Laws Number 6 / 2023 about the Establishment of Government Regulation in lieu of Law Number 2 / 2022 about Cipta Kerja, particularly Chapter 110A and Chapter 110B. “Administration fine that would be charged on to area owner in forest regions would raise many interpretations. This would multiply complexity of the issues,” he said as the speaker in Pekan Riset Sawit Indonesia (PERISAI) 2023 in Surabaya that Palmoilmagazine.com attended, Thursday (26/102023).

Also Read : Regulatory Improvements Needed for the Palm Oil Industry in Indonesia

Though rights on land would not directly attach with Chapter 110A and 110B in UU Cipta Kerja, it is clearly regulated in UUPA 5 / 1960 and its additional regulation. The plantations that got complete permits, particularly business rights would need strong legal protection to protect their investment. The sentence of Supreme Court Number 03/HUM/2013 on 30 July 2013 confirmed that business rights is not part of forest regions. It confirms the arguments about legal protection for official palm oil plantation owners.

Meanwhile Government’s Regulation 23 / 2021 about Forestry Administrator propsed to solve ‘too late’ palm oil plantations in forestry regions by having Strategi Jangka Benah. This could be the anticipation to revitalize forest regions that have changed the function to be palm oil plantations.

“The strategy needs acceptance and smallholders’ resilience, preparedness of social economy to face the change of environment and regulation,” Bustanul said. (T2)

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