Omnibus Law Supports Indonesian Palm Oil Industry

JAKARTA – The omnibus law (UU Cipta Kerja) is seen to have accommodated the interests of Indonesian workers, including those in the palm oil sector. It is expected that the new law will further facilitate the development of Indonesian palm oil industry and improve the public welfare, especially the palm oil workers.

Initially, the omnibus law was seen as the most controversial in the country, as it had triggered a series demonstrations, especially from workers, to reject it. But actually, the protestors failed to understand the essence of the law, which is public welfare improvement. Almost all sectors see positive reforms, from economy, entrepreneurship, manpower, and the palm oil industry.

Why should the palm oil industry be helped? Because the palm oil industry had suffered from the black campaigns which had vilified the palm oil at the global market.

But the reality of palm oil industry defies all of the negative campaigns. Having the highest versatility among the other vegetable oils, it has been processed into not only healthy cooking oil, but also many other palm oil-based products needed by the public.

The omnibus law has stipulated that the oil palm smallholders will get the certificates of Indonesian Sustainability Palm Oil (ISPO). The smallholders will not stay as just growers for the rest of their lives. They will be also trained to select quality palm oil, process palm oil into cooking oil, margarine, and other products.

Musdalifah Machmud, Deputy in charge of foods and agribusiness coordination at the economic coordinating ministry said that the smallholders will get financing assistances from the government during the next five years of transition to get the ISPO certificates. So, they will not be just given ISPO certificates, but also financing to help advance their palm oil businesses.

Why the government is so aggressive to help the oil palm smallholders? It is because they have suffered from the palm oil negative campaigns in social media.

The impacts of the black campaigns are really detrimental as many people stopped to consume palm oil and other palm oil-based products. The black campaigns are actually contrary to the reality of palm oil which has been produced based on the principles of sustainability.

Besides, the Covid-19 pandemic has also affected the demand for palm oil, which is potential to reduce the income of smallholders.

The omnibus law is aimed to support the smallholders in increasing their public welfare. All smallholders will be helped to have the ISPO certificates and financial assistances they need to improve their business capability.

The ISPO certification will not bring positive impacts to the smallholders in the short term as they will need at least five years to realize their certificates. The smallholders need the assistance from the government, which has been realizing it through the implementation of the omnibus law. (*)