Indonesia has 7.3 million hectares of palm oil plantations, and further development may be affected by a conservation deal with Norway. (GA Photo)

Palm Oil Industry Seeks Clarity From Officials Over Plantation Moratorium

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 non-governmental 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 business people.

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.

Suswono said the productivity of the country's palm oil plantations currently was only 2.5 tons per hectare, while in Malaysia the figure was four tons per hectare. If productivity could be increased to equal that of Malaysia, he said, the national production of crude palm oil could attain a level twice as high as currently.

With its current total of 7.3 million hectares of palm oil plantations, Indonesia is able to produce 21.5 million metric tons of palm oil. By 2020, the country expects to increase production to 40 million tons.

Speaking at a news conference on the sidelines of a forestry and climate conference in Oslo recently, President Susilo Bambang Yudhoyono said Indonesia would not stop its palm oil production.

The president was referring to the agreement under which Norway will provide a $1 billion fund for Reducing Emissions from Deforestation and Forest Degradation (REDD) schemes in Indonesian forests.

"We already have our own plan to fulfill the obligation that has become our part in the cooperation between Indonesia and Norway in reducing our emissions from deforestation and forest degradation," Yudhoyono said.

Indonesia would not indiscriminately open up new forests for new plantations, he promised, adding that the government had undertaken a policy to use degraded land for the continuation of its palm oil industry.

Suswono said the most important thing to do now was to find new markets so that Indonesia would not depend too much on Europe for exports.

In addition, the government will soon apply Indonesia Sustainable Palm Oil (ISPO) standards nationwide to sharpen the competitive edge of the commodity in the international market.

Deputy Trade Minister Mahendra Siregar said: "I have heard ISPO will be made mandatory. So far, Roundtable on Sustainable Palm Oil (RSPO) has been applied voluntarily."

He said the initial draft of the ISPO had been distributed among various players for input.

Antara