Indonesia bolstering laws to grow downstream palm oil investment


Indonesia is passing laws to better regulate and further incentivise more downstreaming activities in the palm oil industry, said a senior government official.

Dr Wilistra Danny, who is Assistant Deputy Minister of Indonesia’s Coordinating Ministry for Economic Affairs, said Indonesia’s plan for Rancangan Undang-Undang Perkelapa Sawitan (draft bill on the palm oil industry) is being laid down in Parliament.

This new framework of harmonised laws will better regulate and spur the development of Indonesia’s palm oil industry.

“The new framework of laws is being prepared for lawmakers in Parliament to debate. It will cover aspects such as cultivation, investment, trade, land rights and smallholder interests,” he said.

“Right now, there are at least five ministries which oil palm planters have to deal with. With this new framework of laws to harmonise and consolidate laws concerning this sector, my ministry would be tasked to lead,” said Wilistra.

He was speaking to reporters on the sidelines of the Indonesian Palm Oil Conference (IPOC) 2016 here today.

Also present was his colleague Lukita Dinarsyah Tuwo, the secretary of Indonesia’s Coordinating Ministry of Economic Affairs.

Lukita said tax breaks and incentives are part of the palm oil investment policy to promote growth. So far, Indonesia’s Industry Ministry has pledged to facilitate downstream activities.

“The tax holiday and allowances is the same for local or foreign investors,” said Lukita.

Last year, Indonesian government announced plans to develop palm oil industrial zones at Sei Mangkei (North Sumatra), Dumai (Riau) and Pupuk Kaltim (East Kalimantan).

These zones are equipped with natural gas piping and bulking facilities. They will focus on producing palm olein and stearin, both of which are commonly used for cooking oil, margarine and shortening.

The Sei Mangkei industrial zone is being managed by state-run plantation firm PT Perkebunan Nasional III, the Dumai industrial zone by agribusiness giant Wilmar Group and the Pupuk Kaltim industrial estate by state fertiliser company PT Pupuk Kaltim.


Readers choice: TOP-5 articles of the month by UkrAgroConsult