This article was first published in The Forest Scribe, a sister website.
The draft Omnibus Law which is now slated to be passed on October 8, 2020, will not be able to boost investment because the main problems in this sector, including overlapping permits in the plantation and forestry sectors, have remained unaddressed, environmental activists said.
Muhammad Teguh Surya, Executive Director of the Madani Berkelanjutan foundation told an online discussion on Sunday (4/10) that there was not much land left for new investment as 75.6 percent of the country’s land surface was already covered by various usage permits.
“It is registered that 75.6 percent of the land surface of Indonesia is already covered by permits and already has their zoning use, so, in reality 75.6 percent of the land of Indonesia is already occupied and cannot be used for other things,” said Surya.
Besides that, this 75.6 percent, or 143 million hectares, were areas were permits overlapped between them and with protected forest and areas, Surya said adding that an analysis by Madni projected that the easing of environmental protection regulations contained in the draft omnibus law would only lead to the clearing of more land, especially in forests.
The draft Omnibus Law initiated by the government to boost investment flow into Indonesia, has been widely criticized by many sides, including environmentalists, labor unions and rights activists, as being heavily in favor of investors and ignoring the interests of the wider public and was also likely to lead to more massive environmental destruction.
Surya cited as example the palm oil sector where he said overlapping permits were rife. Madani, he said, found that palm oil concessions covered 22.7 million hectares in 2020 but 4.4 million hectares were also in oil and gas concessions, 1,2 million hectares were also included in the indicative map for areas where new concessions should not be issued.
Another 1.12 million hectares were also in customary territories while another 1,1 million hectares were also in minerals and coal concessions. The same overlapping also could be found in timber estates as well as in areas designated for social forestry.
“What is being discussed in the draft omnibus law, the arrangements in the draft omnibus law have no relations whatsoever with the investment problems in this country, especially those related to the chaotic permit sector, and the hindrances have never been addressed by the government itself,” Surya said, adding that it would be impossible for the government not to be aware of these conditions.
Surya said that a more effective way to draw investment would be to improve the management of the environment and natural resources as well as strengthening the Corruption Eradication Commission (KPK).
“These should be the priority because by improving the management of the environment, the chaotic permit sector and strengthening the KPK, there will automatically be a higher trust in Indonesia for investment, and from the market,” he said.
Surya said that Indonesia actually remained attractive as an investment destination in Asia, citing the Business Outlook Survey (2019) by the Economist that ranked Indonesia third after China and India as an attractive country for investment in Asia.
“So, actually Indonesia is alright and there is great interest (for investment),” said Surya, further questioning the real reason for the government to push for the omnibus law
Surya also cited the Global Competitiveness Report 2017-2018 of the World Economic Forum which clearly identified the top hindrances to investment in Indonesia. The top five hindrances were corruption, bureaucratic inefficiency, lack of access to funding, inadequate infrastructure and instability in policies.
The government, he said, should rather strive to address those issues first if it wanted investment to flow in stronger.
“We also think that it would be really wise if the government and the DPR (the People’s Representative Council) would follow up the results of the studies on laws in the natural resources and environmental sector that was conducted by the KPK,” he said adding that the study found that there was really a low level of good management principles contained in the 26 laws studied.
Speaking at the same occasion, the head of Greenpeace Indonesia Team of Campaigners, Arie Rompas said that besides the absence of public consultations and participation in the preparation of the draft omnibus law, the majority of those involved were clearly “serving” the interest of investment and businessmen.
He said that the main actors behind the draft law were business associations and the majority of the 127 members of the taskforce on the omnibus law were entrepreneurs. A study by Tempo media and Auriga also showed that 45 percent of legislators at the People’s Representative Council held high positions in companies or were affiliated to them.
Surya pointed out that the usually lethargic legislators had even met on a Saturday evening (3/10) to agree to pass the law.
Greenpeace Indonesia, Rompas said, called for the cancellation of the entire omnibus law and that the government should rather prioritize efforts to stem the spread of the Covid 19. Greenpeace Indonesia also called on the government to strengthen law enforcement in the natural resource sector and also eliminate corruption there.
More from Bhimanto Suwastoyo.
Forestry industry? Visit The Forest Scribe.
Follow us on our social media to keep you updated about palm oil, you can find the link on the left side of this page.
Subscribe to our newsletter
Stay on top of the industry's news because your informed opinion matters to the palm oil industry.