TEMPO.CO, Jakarta - Once more, policy makers at the House of Representatives (DPR) are busy preparing a new law to cater to the interests of a few corporations. If this is true, the DPR will only be a waste of time and the taxpayers' money, producing a lop-sided policy that could further complicate things. Its decision to deliberate and endorse the bill as a priority national legislative program this year is one example.
The DPR on several occasions has stressed the importance of a new law governing palm oil, arguably to eliminate the overlapping of palm plantations in many regencies. The bill is also considered crucial to improving the welfare of farmers and the industry's professionalism.
Regrettably, the bill, instead of serving the aforementioned purposes, seems to have been designed to protect and provide incentives to palm oil corporations. There are articles on tax reduction as well as import duty exemption or relief for capital goods and raw materials, as well as for land and buildings in certain regions. All these tax provisions are obviously counter-productive to the government's endeavors in boosting revenues from the commodities sector.
Another part of the bill also clashes with the current regulation. The provision in paragraph 3 of Article 47, for example, allow oil palm to be cultivated in peatlands, even using the government facilities. This article, therefore, does not correspond with the President Regulation No. 57/2016 on the peatland ecosystem management which precisely stresses on the restoration of peatlands destroyed by forest fires. It is widely known that most forest fires in Sumatra and Kalimantan are caused by land-clearing fires to create new plantations.
All these support the argument that the oil palm bill will not offer any solution to the mess the industry is in. It will not become effective either even if the articles in favor of corporations or contradicting other regulations are revised or eliminated. The issues of plantation fields overlapping the forest areas or lack of plantation licenses in some provinces can be resolved through law enforcement. After all, Law No. 39/2014 on Plantations is already in place to regulate relevant issues.
As for the welfare of farmers, the key is to formulate well-targeted economic policies that, for example, give them access to bank loans or land concessions. Currently, new farmers own 41 percent of 11.6 million hectares of oil palm plantations. Facilitating their access to a more diverse and competitive market coupled with training for better quality harvest is no less important. In this way, farmers can claim a fairer share of oil palm export revenues which in 2016 reached US$19.6 billion.
Given the above, the DPR should abandon this unnecessary draft legislation. Otherwise, it will only confirm public perception that it is pushing the bill at the behest of some corporation.(*)
Read the full story in this week’s edition of Tempo English Magazine
