Indonesia to fine palm oil companies $411 million for operating in forests

Indonesia said in November it had identified some 200,000ha of oil palm plantations in areas designated as forests. PHOTO: REUTERS

JAKARTA – Indonesia said on Dec 22 that it would slap palm oil companies operating within forest areas with fines amounting to a total of 4.8 trillion rupiah (S$411 million).

More than 475 billion rupiah in fines have been issued so far, an official from the Ministry of Maritime Affairs and Investment, Mr Firman Hidayat, told reporters. He did not provide further details or identify the companies fined.

Indonesia said in November that it had identified some 200,000ha of oil palm plantations in areas designated as forests, which are expected to be returned to the state to be converted back into forests.

Indonesia, the world’s biggest palm oil producer and exporter, issued rules in 2020 to sort out the legality of plantations operating in areas that are supposed to be forests, aimed at fixing governance in the sector.

Officials said the measures were necessary as some companies have already been tending the land for years.

Companies have to submit paperwork and pay fines to obtain cultivating rights on their plantations by Nov 2, 2023, according to the rules.

While 3.3 million ha of the country’s nearly 17 million ha of palm plantation has been found in forests, only owners of plantations with a combined size of 1.67 million ha have been identified. REUTERS

This article was originally published on The Straits Times. Its inclusion on this website is solely for education purposes.