Indonesia Sets Up Task Force to Improve Governance in its Palm Oil Sector



KONTAN.CO.ID - JAKARTA. Indonesia has formed a new task force to improve governance in the palm oil plantation sector, aiming to ensure companies comply with rules including on tax payments, its deputy finance minister said on Monday.

Indonesia is the world's biggest producer and exporter of palm oil.

The formation of the task force followed an industry-wide audit that officials launched last year after a cooking oil supply scarcity at home led to exports of some palm oil products being stopped for three weeks, shocking the global vegetable oil market.


Deputy Finance Minister Suahasil Nazara, who has been assigned to head the task force, said authorities intended to "improve our palm oil industry's compliance on various rules, regarding land permits ... and also on payments to the state".

The ministry's tax office is currently updating its data on companies' plantation area, he added.

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During the first stage of last year's audit, Indonesia found that 16.8 million hectares (41.5 million acres) of its land was planted with oil palm, bigger than the 16.38 million hectares recorded in official database, senior minister Luhut Pandjaitan, who was appointed as the chair for the task force's steering committee told Reuters last year.

The audit was meant to collect data on the size of each plantation, legal status, production level and output prices to improve transparency in the sector as well as better protect the forest.

Indonesia's palm oil exports in the first three months of 2023 were worth $5.92 billion, the statistics bureau said earlier on Monday, down 11.3% from the same period in 2022, partly due to falling prices. 

Editor: Yudho Winarto