Oil Palm Companies Must Allocate 20% Land for Local Community

AGRICULTURE Ministry reiterated its view that oil palm companies are legally obliged to allocate 20% of land area for local community plantation. The area must be outside their Right to Exploit (HGU)-certified land area. In this sense, oil palm companies must provide another 20% land area for community. Director General of Plantation at Agriculture Ministry Bambang said at the “Oil Palm Companies Mandatory to Contribute in the Development of Community Plantation”-themed seminar Grand Melia Hotel, Jakarta, (12/12/2018). “The government will impose administrative sanctions to oil palm companies fail to meet the mandatory from fines to permits revocation,” Bambang said. Under the Law No 39 Year 2014 on Plantation, plantation companies are obliged to facilitate community plantation development of about 20% from their total plantation area, as regulated on Article 58, Article 59, and Article 60. The community plantation development can be achieved by various scheme such as credits, profit sharing, or other financing methods as agreed by both parties under current regulation.  This obligation must be fulfilled in three years at the latest since HGU is issued and be reported to central and local government. Bambang said the government is formulating technical legislation on the sanction aspect, particularly to determine the types and exact sum of the fine. (Source: Hortus)