JAKARTA — The Indonesian Palm Oil Association (GAPKI) urged the government to quickly settle the legal problem of oil palm plantations suspected to have encroached forest areas. GAPKI fears that if the problem is not resolved immediately, it could hamper the production process in the plantations that will then result in decrease of national palm oil production and affect the resilience of the palm oil industry as a whole.
GAPKI Executive Director Mukti Sardjono said that of the target of total land take-over of 1.17 million hectares, only around 1.0 million hectares so far managed to be acquired by the government from 369 companies. The data was derived by GAPKI from the Forest Enforcement Task Force (Satgas PKH) as of 23 March 2025.
“Our concern is the continuation of the plantations’ operations. If they are not well managed, our national production of palm oil could decrease significantly,” Mukti said when addressing the Bisnis Indonesia Forum at Wisma Bisnis Indonesia, Central Jakarta, on Tuesday (24/6/2025).
The government had issued the presidential regulation (Perpres) No.5/ 2025 as the legal basis for the formation of the Satgas PKH. The regulation stipulates payment of administrative fines, reacquisitions of forest areas, and recovery of state assets.
Based on the reports of Satgas PKH chairman, as of 23 March 2025, a total of 1,001,674 hectares of lands had been taken over by the government, of which 710,057 hectares have undertaken process of administrative verification, 467,136 hectares through field verification, 221,868 hectares already handed over to PT Agrinas, and 216,997 hectares ready for transfer to PT Agrinas.
“If the lands are not managed well quickly, then it will result not only in production decrease, but also in layoffs of workers,” said Mukti.
Commenting on this issue, the Business Competition Supervisory Commission (KPPU) Member Eugenia Mardanugraha underlined the importance of government’s strategy in maintaining sustainability of palm oil production. Eugenia said that after the government controls around 1.0 million hectares of oil palm plantations, the next steps should be to ensure the operation and production of plantation areas having no legal problems.
“If one million hectares fail to produce, and their productivity averages at 4 ton per hectare, it means there is potential loss of around 4.0 million tons of palm oil. This should be resolved to avoid reduction of national production,” said Eugenia.
She noted that as the world’s largest producer of palm oil, Indonesia should not lose its bright prospect from the sector. The decrease of palm oil production could affect the national economy of Indonesia and the price of global foods.
“Therefore, the government and industrial players have to strengthen their synergy to ensure that Indonesia’s palm oil industries will continue to have a strong, bright and sustainable future,” she concluded. (*)
