The Jakarta Post
Several experts have urged the government to revise the draft of the palm oil bill as they consider it too lenient to companies producing the commodity and fear it could in turn threaten forest sustainability.
Gadjah Mada University researcher and lecturer Rimawan Pradiptyo said during a media briefing on Wednesday that the bill’s drawbacks included the provision of fiscal leeway and too many incentives for palm oil investors.
According to a study carried out by Rimawan in cooperation with Kemitraan, an organization that lobbies for clean government and business, the leeway covers the reduction of income tax, land and building tax and import duties for capital goods. In addition, the bill will allow oil palm plantation owners to demand compensation if their crops are attacked by pests.
“Such excessive incentives will trigger the expansion of oil palm plantations, which will affect the sustainability and diversity of our forests,” said Rimawan, adding that with such incentives, taxpayers would be burdened by having to shoulder part of the cost of oil palm plantations’ activities.
Indonesia is the world’s largest palm oil producer with 31.5 million tons of crude palm oil produced in 2016. However, the country has been widely criticized because its massive expansion of oil palm plantations has caused deforestation.
The bill is also seen as a setback to the government’s current moratorium on oil palm plantations as the proposed law permits oil palm cultivation on peatland. The moratorium strictly limits the use of peatland and natural forests for oil palm plantations.
“The bill should be revised or withdrawn completely as it is no better than the existing regulations,” Rimawan said.
The government has submitted the bill to the House of Representatives for approval. According to the current schedule, the bill will be deliberated by the House this year. (dea/lnd)