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Indonesian parliament pushes for passage of palm oil legislation this year

An oil palm plantation adjacent to tropical forest in Borneo, where a “triple hotspot for biodiversity, carbon and threat, [means] there is a compelling global case for prioritzing their conservation,” the scientists write. Photo by Rhett A. Butler

  • Indonesian legislators have prioritized deliberations of a bill regulating the country’s palm oil industry, hoping to have it passed this year.
  • The bill in its current form conflicts with the government’s own recently adopted measures to protect peatlands, a point that legislators have acknowledged must be addressed.
  • While its proponents say the bill is needed to protect the industry, citing a Western conspiracy against Indonesian palm oil, environmental activists say it will do little to address the ills attributed to the industry.

JAKARTA — Lawmakers in Indonesia are adamant about passing new legislation on the palm oil industry this year, amid concerns from activists and even the executive branch of government.

Environmental groups warn that the bill, in its current form, favors large corporations at the expense of smallholders and rural and indigenous communities. A key criticism is that it advocates the clearing of peatlands  for plantations — a position at odds with the administration of President Joko “Jokowi” Widodo, which has rolled out measures to protect peat areas.

Those measures, introduced following massive land fires in 2015 that blanketed much of the region in a choking haze for months, oblige companies with land concessions that overlap onto peatlands to conserve and restore those areas. The large-scale draining of carbon-rich peat swamps by oil palm and pulpwood planters renders the land highly combustible, and the annual burning has made Indonesia one of the world’s biggest emitters of greenhouse gases.

Legislators backing the bill appear to acknowledge the issue, but insist that economic growth must be prioritized.

“These are regions that have to be protected,” Hamdani, a legislator with the Nasdem Party, who serves on the parliamentary commission discussing the bill, said of peat areas. He added the proposed article implying that palm oil companies were entitled on plant on peatlands “has to be changed.”

Nevertheless, Hamdani, whose constituency covers Central Kalimantan, a province that is home to vast expanses of oil palm plantations, said the legislation would promote economic growth. He said he hoped it could be passed before September 2019, when a new crop of lawmakers takes office.

“This bill serves the public interest,” said Hamdhani, who like many Indonesians, goes by just one name.

Senior administration officials, though, see things differently. Darmin Nasution, the coordinating minister for the economy, has questioned the need for the new legislation.

“Based on a comprehensive study that we’ve done, and after consultation with stakeholders, the government concluded that the bill is not needed yet,” he told a parliamentary hearing in July last year.

The palm oil bill has been included in parliament’s docket of priority legislation for 2018, after getting the same treatment last year. (The fact that it failed to pass in 2017 despite being a “priority” is not unusual; parliament typically achieves only a fraction of the legislative target that it sets itself every year.)

That it’s been prioritized once again in light of the administration’s misgivings has left its critics “surprised and confused,” said Maryo Saputra, campaign head at Sawit Watch, an NGO that monitors the palm oil industry.

One of the bill’s main backers, Firman Soebagyo of the Golkar Party, says it will help protect Indonesia’s palm oil industry from foreign intervention — the argument being that Western stakeholders are behind a smear campaign aimed at boosting their own soybean and rapeseed oil industries. It’s the same theme espoused by the Indonesian Palm Oil Association, known as GAPKI, which often speaks of a conspiracy by foreign vegetable oil interests to undermine Indonesia’s palm oil industry.

United at the other end of the debate are Indonesia’s environmental NGOs, who caution that the bill will benefit the large firms that dominate the industry. They also say it will do little to address the real problems in the industry, including the grabbing of indigenous lands, or the widespread failure on the part of companies to provide local communities with smallholdings as required by law.

Andi Muttaqien, deputy director of the Institute for Policy Research and Advocacy, or ELSAM, says critical voices are being excluded from the public hearings on the bill, during which outside groups are supposed to be invited by legislators to have their say.

“Each year, the bill is always included on the legislative priority list,” Andi said. “But whenever there’s a public hearing, the meeting doesn’t involve many stakeholders.”

Public consultations are being carried out in some regions. But Andi said this in itself was problematic, because it would lend more weight to the views of businesses and local government officials — who have historically sided with the interests of palm oil companies — over those of ordinary citizens. It also undermines the work being done to “harmonize” the bill — a part of the legislative process to ensure the bill doesn’t overlap or conflict with existing laws, regulations or regional bylaws.

“Even though the bill is in the harmonization period, the legislative body keeps conducting public consultations in some regions,” Andi said, adding it was important for the harmonization to be completed before regional consultations began.

“We’re worried that when the bill enters the next stage, which is open hearings, it will have already gained lots of support from the regional level,” he said.


Banner image: An oil palm plantation adjacent to tropical forest in Borneo. Photo by Rhett A. Butler.

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