The Palm Scribe

Top five palm oil topics in 2017

Palm oil has remained as one of commodities that came under the spotlight in 2017. Indonesia’s top dollar earner, bringing in Rp239 trillion into the treasury in 2017, palm oil has always been a subject of controversy. Here are the five top most popular palm oil issues in 2017:

ILLUSTRATION. Palm oil fruits. ILLUSTRATION. Palm oil fruits.

1.     Palm Oil Report

The Resolution of the European ParliamentOne of the main palm oil issue that has been talked a lot last year was a resolution issued by the  European Parliament on April 4, 2017. The Report on Palm Oil and Deforestation of Rainforests issued in Strassbourg, France, said that palm oil is a commodity that is closely lied to deforestation, corruption, exploitation of child workers and violations of the rights of customary communities.

The resolution also asked Indonesia to apply clear standards to protect people the ecosystem and the carbon reserve in line with the Paris Agreement and the Sustainable Development Goals (SDGs) of 2030.

Following up this resolution the European Union will introduce a single certification scheme for all palm oil to enter the European Union market in 2020.

The resolution sparked immediate reactions with the Indonesian government and the palm oil industry denying the accusations and in turn deeming the resolution as an irrelevant insult.

Its officials, and also President Joko Widodo even asked that the European Union brought a halt to the discrimination against palm oil.

2. The Draft Bill on Palm Oil

The People’s Representative Council (DPR) and the government have agreed that the draft law on palm oil becomes a priority in the national legislation program for 2017, Up until early April 2017, a total of eight hearing on the matter had been held at the parliament yielded a draft composed of 27 chapters. The government, however, appeared reluctant to forge ahead with the draft while the legislative pushed on.

The DPR claims three reasons for pushing on with the draft law. They are so as to assure the welfare of farmers, the enhancement of professionals in the entire palm oil sector from upstream to downstream, and as a way out from the chaotic permit system and the many illegal plantations located in forest areas or even without land use rights,

The pro palm oil camp deems that the commodity has become a large industry that absorb about 30 million workers, directly or indirectly. The commodity has since 2016, even contributed Rp 260 trillion to the nation’s Gross Domestic Product.

Meanwhile, the government deems that the draft law on palm oil was overlapping with the draft law on plantation, the draft law on trade and the draft law on the protection and management of the environment.

The anti-palm oil camp deems that the draft law would not be enough to protect and help farmers. Only chapter 29 specifically mention the problem of farmers and stipulates that a number of facilities to access land for the planters still must be devised in the form of government regulations.

The other chapters mostly deal with the matter of cultivation and the interests of companies. The draft law on palm oil is also seen as providing special treatment to plantation companies, for example Article 18, point 4 state states that companies are eligible to get a reduction in net income tax that is commensurate with the investment involved and is for a specific period of time.

What happened then?

This year, the debate on the draft law on palm oil will most likely continue because the DPR legislation body has included it in the 2018 national legislation program (Prolegnas).

3. Indonesia Palm Oil Conference (IPOC) 

One of the annual meeting of the palm oil industry is IPOC and in 2017, this conference took place in Bali on November 1-3, 2017. More than 1,500 businessmen, and representatives of palm oil farmers attended it to discuss various issues faced by the industry

IPOC 2017 also featured an exhibition in which companies from various sectors in the palm oil industry chain promoted techniques, know-how, products and services.

4. The Round Table Sustainable Palm Oil (RSPO) Conference  (RT15)

The 15th international conference on sustainable palm oil of the RSPO took place in Nusa Dua, Bali, on November 27-29, 2017. The conference was marred by concerns over the eruption of Mount Gunung Agung in Bali which had forced the closure of the island’s international airports for days. Despite of this, the conference was still attended by hundreds of participants from the various stakeholders in the palm oil industry, both local and global, top business captains and leaders of financial institutions, policy makers, academics and activists from civilian and environmental organizations.

One of the issues discussed was how to increase the RSPO certification among farmers (RSPO smallholder strategy). Taking up the theme of inclusivity and accountability, RSPO is working to encourage a transformation in the value and production process in the palm oil industry that is more responsible.

5. Palm Oil Plantation Rejuvenation

President Joko Widodo launched the national program of palm oil crop rejuvenation with the replanting of 4,446 hectares of palm oil plantation in the South Sumatra district of Musi Banyuasin on October 13,m 2017. The palm oil rejuvenation program is funded by a Rp 25 million subsidy each hectare of palm oil to be replanted, coming from the government, taken from the funds managed by the Palm Oil Plantation Fund Management Agency (BPDP) and another Rp 25 million per hectare to be matched by farmers.

After the program was kicked off in South Sumatra, it was then continued in North Sumatra, Jambi and then in Riau. In 2018, the crop rejuvenation program, better known as replanting, will be expanded to cover a number of people’s palm oil plantations in Kalimantan.

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