Indonesia to fine palm oil companies 4.8 trillion rupiah for operating in forests

INDONESIA said on Friday (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$411.5 million).

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

Indonesia said last month it had identified some 200,000 hectares (ha) 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 plantation by Nov 2, 2023, according to the rules.

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While 3.3 million ha of the country’s nearly 17 million ha of palm plantation have been found in forests, only owners of plantations with a combined size of 1.7 million ha have been identified. REUTERS