Palm Oil Industry Seeks Clarity After Agreement With Norway

 The government’s plan to impose a moratorium on the development of peatland and primary forest areas as a follow-up to a conservation agreement with Norway has prompted the palm oil plantation business community to ask for official clarity on which areas can and cannot be developed.


“We support the government’s plan to impose a moratorium on the opening up of peatland, but we expect very much that the government will provide clear regulations on which areas can be developed and which cannot,” Widya Wiryawan, president director of PT Astra Agro Lestari, said on Saturday.


On Friday, Agriculture Minister Suswono said: “No further development of palm oil plantations will be allowed on peatland or primary forests.”


He said the government would focus on increasing the productivity of existing plantations rather than opening new areas.


Suswono said the government had issued licenses for the development of 9.8 million hectares of palm oil plantations, but so far only 7.9 million hectares had been realized, leaving another 1.9 million hectares still to be developed.


The industry has asked the government to be more explicit about its plan to impose a moratorium on the development of palm oil plantations on peatland.


Widya said the palm oil industry supported the proposal by nongovernmental organizations to declare a moratorium on new licenses for the development of plantations in natural forests and on peatland so that such ecosystems could be sustained.


The moratorium would be effective only after next January, and Widya said the national palm oil industry would not question the government regulations provided they were clear.


He said it had often been the case that central government regulations did not match regulations issued by regional governments, causing confusion among businesspeople.


He noted that palm oil plantations in the country covered a far smaller area than that of available forest land, only about 7 million hectares while forest areas covered 100 million hectares.


“After all, the development of palm oil plantations in Indonesia began much later than the logging or forest-concession businesses, which have existed for a long time,” he said.


Suswono said the planned moratorium on plantation development from 2011 to 2013 would not disrupt national production of crude palm oil.


The minister said the ban on plantation development on peatland affected only new license holders, while those that held licenses before the ban could still implement development. However, development on peatland could only take place where the peat was less than three meters thick.

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