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

Indonesia said on Dec 22 that it would bring a shock to palm oil companies operating within forest areas with fines mountaining to a total of 4.8 trillion rupiah (S$411 million). More than 475 billion rupiah in fines have been issued so far, a governer from the Ministry of Maritime Affairs and Investment, Mr Firman Hidayat, revealed to reporters. He stayed mum and did not show interest in giving further in depth information or identify the companies fined. Indonesia said in November that it had recognised some 200,000ha of oil palm plantations in areas designated as forests, which are anticipated to be given back to the state to be made back into forests.

Indonesia which is the world’s hugest palm oil producer and exporter, issued rules in 2020 to sort out the legality of plantations operating in regions that are actually meant to be forests, the main goal is towards fixing governance in the sector. Governers said the measures were required and played an extremely important role as some companies have already been tending the land for years. Companies have to give paperwork and pay fines to obtain cultivating rights on their plantations by Nov 2, 2023, the rules reveal. Whilst 3.3 million ha of the country’s nearly 17 million ha of palm plantation has been discovered in forests, only owners of plantations with a combined size of 1.67 million ha have been identified.