Minister denies monopoly charges in palm oil sector

Minister denies monopoly charges in palm oil sector

JAKARTA (JP): Minister of Agriculture Sjarifudin Baharsjah has
denied allegations that the government was assisting a large
business group to monopolize the oil palm business by freezing
new foreign investment in the sector.

Sjarifudin argued that state-owned enterprises and
smallholders controlled larger acreage of oil palm plantations
than the Sinar Mas Group, the largest business group in the
sector.

"If we take a closer look, the acreage of oil palm plantations
owned by state firms and the people reaches 600,000 hectares,
much larger than that controlled by the largest conglomerate,"
Sjarifudin said.

"So, news reports that say the ban opens possibilities for
private sector monopoly in the sector are groundless," he said.

He did not mention how many hectares of oil palm plantations
were currently controlled by large private businesses.

Data at the Indonesian Chamber of Commerce and Industry show
that oil palm plantation acreage had grown from 120,000 hectares
in 1968 to 1.47 million hectares last year, of which large
private businesses controlled 1.02 million hectares.

The state minister of investment, Sanyoto Sastrowardoyo, said
earlier the government might totally close oil palm plantations
to foreign investors by including the sector on its negative
investment list. He said this was needed to protect local
companies.

Many parties criticized Sanyoto's planned blanket ban on
foreign investors. They said Sanyoto's argument was weak,
considering that oil palm plantations were already controlled by
big businesses like the giant Sinar Mas and Salim groups, which
were owned by politically connected business tycoons Eka Tjipta
Widjaja and Liem Sioe Liong.

The Indonesian chamber warned that a ban on new foreign
investment in oil palm plantations would harm domestic investment
in the sector and allow a certain business group to monopolize
the sector.

The chamber's vice chairman on agrobusiness, Adiwarsita
Adinegoro, said the government should rethink its ban on new
foreign investment in the sector.

Sjarifudin said the ban on new foreign investment in oil palm
plantations had nothing to do with monopoly.

He contended that even large businesses which had opened large
acreage of oil palm plantations on islands outside Java
cooperated with the people, especially transmigrants from Java,
through a nucleus estate for a transmigrant scheme, locally known
as the PIR-Trans.

Under the scheme, people would be employed at oil palm estates
during the early stage of development. After a certain period,
they would be accorded ownership for a certain portion of the
estates.

"Eka (Tjipta Widjaja), also the Salim Group, Astra Group and
other private large businesses, have built oil palm estates for
the PIR-Trans scheme," Sjarifudin said.

He said the government's freezing of new foreign investment in
oil palm plantations aimed to force the existing license holders
to soon materialize their investment plans.

Besides, he said, the government wanted to consolidate the oil
palm plantation sector and ensure that there would be no
overlapping areas for new investors.

"And we do not want to give land without basis," he said.

In addition, he said, the government was currently conducting
a census on oil palm plantations and palm oil industries to have
a clearer picture on the business. (rid)