Plantation Law lacks detail: Executive
Plantation Law lacks detail: Executive
Zakki P. Hakim, Jakarta
The new Plantation Law approved by the House of Representatives
earlier this week still lacks key details, which might create new
uncertainties for plantation companies, said an industry
professional.
Vice president of publicly listed plantation firm PT Astra
Agro Lestari Benny Tjoeng said on Wednesday plantation companies
would take a wait-and-see attitude until government regulations
or ministerial decrees covering the details were issued.
"The Plantation Law is a positive thing, but it only serves as
a guideline. We need elaboration of details," Benny told The
Jakarta Post.
"Instead of luring new investment, it would discourage foreign
and local businesses," he added.
The Plantation Law, drafted under initiative of the House,
aims to attract new investment to one of the country's most
promising economic sectors.
According to Benny, one of the issues needing clarification
was the maximum size of property that may be owned by a
plantation company.
Article 10 of the law stipulates only that the Minister of
Agriculture would determine the maximum size of property based on
a set of criteria including crop type, capital, factory capacity,
population density and geographical conditions.
The initial draft of the law set the maximum size of property
owned by a plantation firm at 20,000 hectares in a single
province and 100,000 ha nationwide. However, the final draft
omitted the ruling.
Regarding title deeds, Benny said the law did not regulate a
regional government's role in settling land disputes with locals,
which was a common problem in rural areas.
He said big plantations also objected to the criminal
sanctions imposed on those using the slash-and-burn land clearing
method.
Article 48 and 49 stipulate maximum sanctions of up to 10
years' imprisonment and Rp 10 billion in fines against those who
deliberately, or out of negligence, use the slash-and-burn
method.
Indonesia faces annual forest fires generally attributed to
slash-and-burn, which has contributed to haze and environmental
damage both domestically and among neighboring countries.
Benny said the government should define clearly what it meant
by "deliberate" and "negligence", as fires could be caused by
external factors, third parties or even force majeure -- yet
plantations were still held responsible, as had occurred in the
past.
"Businesses require legal certainty. The law is a good start,
but we are waiting for technical details," he said.
Astra Agro Lestari operates 195,000 hectares of oil palm
plantations in Sumatra, Kalimantan and Sulawesi. Some 45,000
hectares of these are plasma plantations owned by small farmers.
The Plantation Law has also drawn protests from farmers and
pro-farmer activists, who claimed it did not protect the
interests of farmers, minor stakeholders and indigenous tribes in
land allocation.
Key points of Plantation Law
Article 10: Maximum and minimum size of a plantation is
determined by a minister in charge of plantation affairs, while
title deeds are granted by an institution authorized in landed
property affairs.
Article 11: Land titles are granted for 35 years maximum.
Article 12: Agriculture minister may recommend the cancellation
of a title if the plantation firm abandons the property for three
consecutive years.
Article 14: Ministerial input and recommendations must be made
prior to shifting ownership of a bankrupt non-listed plantation
company to a foreign company.
Article 17: Business licenses are granted by governors or
regents, according to the location of estates to be developed.
Article 47: Those who deliberately damage a plantation and its
assets or disrupt the business may face a maximum imprisonment of
five years and a maximum fine of Rp 5 billion.
Articles 48, 49: Those who deliberately, or out of negligence,
apply slash-and-burn farming may face maximum penalties of up to
10 years' imprisonment and Rp 10 billion in fines.