InfoSAWIT, MEDAN – A member of Indonesia’s House of Representatives has called on state-owned plantation companies to strengthen downstream development while ensuring greater involvement of local communities.

Budi Sulistyono, a member of Commission VI of the DPR RI, delivered the statement following a working visit to the Regional Office I of PTPN IV in Medan, North Sumatra.

He highlighted persistent social disparities in palm oil plantation management, pointing to historical issues in regions such as Rokan Hulu, Riau. According to him, plantation expansion since the mid-1990s often excluded local communities, particularly customary landowners.

“Since 1995, there have been developments that did not involve local communities. People who own customary land were sidelined and became mere spectators,” Budi said.

He stressed that this issue must be addressed to ensure that local populations can actively participate in and benefit from the palm oil industry.

Beyond social inclusion, Budi also emphasized the importance of shifting strategic focus from upstream expansion to downstream processing. He argued that without developing derivative products, the palm oil sector cannot maximize its economic value.

“We want entities like Agrinas and PTPN to establish directorates for downstreaming and diversification, not just focus on expanding plantations,” he added.

According to him, the establishment of dedicated downstream units would improve competitiveness while ensuring more equitable distribution of economic benefits.

This perspective aligns with broader national efforts to strengthen industrialization within the palm oil sector, reducing reliance on raw commodity exports and increasing value-added production.

By integrating local communities into downstream activities, the industry is expected to become more inclusive and sustainable, addressing long-standing criticisms related to inequality and land use. (T2)