Sale of palm oil plantations not yet final

Sale of palm oil plantations not yet final

JAKARTA (AFP): Indonesian Vice President Megawati Sukarnoputri was quoted as saying on Monday the sale of 25 palm oil plantations to Malaysia's Kumpulan Guthrie Bhd. was not yet final.

"The Vice President has firmly said that it (the sale) is not yet final," Indonesian Association of Farmers (HKTI) executive Bambang Warih said after meeting Megawati.

"She even said that she will do her best to hold the case for further negotiations."

The reported statement by the vice president came after Coordinating Minister for the Economy Rizal Ramli announced last week that the transaction had been closed, and Guthrie had handed over the money.

Ramli said then that Guthrie had paid US$368 million to the Indonesian Bank Restructuring Agency (IBRA) for the plantations, also taking on 500 billion rupiah ($48.6 million) in outstanding debt.

"The vice president said that it should be renegotiated and she will herself make efforts ... so that (the plantations) be sold in consideration of justice and for the sake of national interest," Warih said.

HKTI chairman Siswono Yudohusodo said at the same time that if the deal remained as it was, Guthrie should abide by local regulations.

He was referring to the obligation of large plantations to develop them under the so-called "plasma" scheme where 30 percent is held by the company and the rest by smallholders who are provided with credits by the company to later sell their harvest to the company for processing.

"If it has already been sold to Guthrie, then we will keep asking them (Guthrie) to allot 70 percent to the (smallholders) in line with the regulations," Siswono said.

"We will do everything in our power, if Guthrie does not abide by the regulations in the region. We will file a class action suit in court," he added.

He also said that should Guthrie opt to ignore the regulations, it would face "dangerous social problems" in the long term, because of the plasma-scheme farmers and existing land disputes related to the plantations.

Siswono called the IBRA sale of the some 262,000 hectares from 22 companies of the Salim Group "unfair" because it was done in a single package, preventing national businesses from taking part in the sale.

The sale was among the biggest for IBRA, which has been accused of sluggishness in liquidizing billions of dollars of state assets to pay the country's debt, budget deficit, and hefty bank restructuring costs.

The House of Representatives had initially opposed the Guthrie sale, arguing that it would undermine Indonesia's position as the world's second biggest producer of crude palm oil after Malaysia.

Ramli responded to the criticism by saying Guthrie would be subject to local laws.