JAKARTA – The government needs to revise the prevailing regulations on palm oil industry to avoid Indonesia’s top commodity palm oil from getting worse in the market, a legal analyst said.

Sadino, the legal analyst from the law faculty of the University of Al-Azhar Indonesia, said that the regulations issued by the government during the last two years have created many problems in the palm oil industry, from the upstream to downstream sectors, which have resulted in palm oil being not competitive at home and abroad.

According to him, the government should realize that the palm oil sector has a strategic and important role in Indonesian economy that should be protected as a means to improve the welfare of Indonesian people. “The government should also understand the position of the private sector as the biggest players in the palm oil sector. That’s why in designing government regulations, the government should differentiate the legal position of the  private sector in the palm oil industry, especially in the suspected corruption cases of cooking oil,” he said.

“The nature of the private companies is to earn profits, while the state and the government should provide public services to the people. Such public services include giving direct cash assistances (BLT) to the needy people,” Sadino said in Jakarta on Tuesday, 19 September 2023.

Sadino stated that it is not right for the government to give sanctions to the private companies based on the audit result of the development and finance supervisory board (BPKP) that the private companies have incurred a state loss of Rp6.47 trillion. “The audit result of BPKP cannot be made as a basis to make the private companies responsible for certain things caused by the state loss. The profit and loss for the private sector must be assessed through audit of accountants. If they are publicly listed companies then they have to be audited by public accountants. So, it’s not right to impose sanctions of state loss to the private companies as the basis for assessing them is different,” he said.

Sadino questioned why the government has not yet paid the subsidized price of cooking oil to retailers at a total of Rp344 billion. The unpaid subsidy could trigger a serious problem as the retailers have planned to reduce their purchase of the subsidized cooking oil from distributors if their previously subsidized price is not paid by the government soon.

“This could cause a shortage of cooking oil in the market, as the retailers are  feeling uncertain when the government will pay them the cooking oil subsidy,” he said.

Sadino also criticized the policy of the ministry of environment and forestry (KLHK) on the 3.3 million hectares of oil palm plantations claimed to be located at forest areas and are charged with non-tax state income (PNBP) in the forms of reforestation fund (DR) and forest resource levy (PSDH). The regulation is actually based on the law (UU) No.41/1999 on forestry. Actually, the DR and PSDH only apply for companies which get licenses for reaping forest products and for logging trees.

“The oil palm plantations do not deal with taking woods or other forest products. So, it’s strange that the oil palm plantations are obliged to pay the DR and PSDH,” said Sadino. (*)

Source: Mediaindonesia.com