KL oil palm projects continue despite ban

KL oil palm projects continue despite ban

JAKARTA (JP): The government's recent ban on new foreign
investment in oil palm plantations does not affect Malaysian
investors' oil palm projects in Central Sulawesi, a provincial
official said over the weekend.

The chairman of the Provincial Investment Coordinating Board,
Abdul Azis Tandju, said the government would not cancel their oil
palm projects because they had signed Memorandums of
Understanding (MOUs) to form partnerships with local firms.

"Several Sabah companies agreed to cooperate with local
businesses under the MOUs signed in the beginning of March to
develop plantations here," Tandju was quoted by Antara as saying.

But, he said, the Malaysian investors had to detail their
partnership programs to ensure that they did not harm local
investors' interests.

"The new agreements must guarantee that local investors will
remain the owners of oil palm estates," he said.

The government banned new foreign investment in oil palm
plantations last month because of overwhelming investment in that
sector.

Local economists asked the government to impose the ban only
in western regions so that foreign investors could develop oil
palm plantations in eastern provinces in partnership with local
companies.

Minister of Agriculture Sjarifudin Baharsjah supported their
call, but State Minister for Investment Sanyoto Sastrowardoyo
said a further study was needed before the ban could exclude
eastern provinces.

Investors from Malaysia, the world's largest crude palm oil
producer, run most oil palm plantations in Indonesia.

Early this year, the government revoked its approval of a
Malaysian company's plan to invest in a 27,000-hectare oil palm
plantation in Tanjung Jabung district, Jambi.

Tandju said that Central Sulawesi needed more foreign
investment.

He said the central government had to encourage more foreign
investment in Central Sulawesi because few of the proposed
private investments in the province had been realized in the last
10 years.

"Only 10 percent of the proposed Rp 1.3 trillion (US$548
million) investments by local and foreign investors were realized
by 1996," he said. (02)