InfoSAWIT, JAKARTA – Calls are growing in Indonesia for a dedicated Palm Oil Law as policymakers seek a stronger legal framework to govern one of the country’s most strategic industries.
Lawmakers argue that the palm oil sector—now a major source of export revenue, a key supplier of renewable energy feedstock through biodiesel programs, and a critical provider of employment—has outgrown the regulatory framework typically applied to conventional plantation commodities.
Firman Soebagyo, a member of People's Representative Council of the Republic of Indonesia Commission IV, said Indonesia needs a lex specialis, or sector-specific law, focused entirely on palm oil governance.
According to Firman, regulating the industry solely through presidential decrees and ministerial regulations is no longer sufficient given the scale and complexity of the sector.
“The scale and complexity of the palm oil industry have evolved significantly. It can no longer be governed only through presidential regulations,” he said.
He noted that Indonesia’s palm oil industry continues to face persistent structural challenges, including overlapping regulations across ministries, lengthy licensing processes, and weak legal certainty for Smallholders and businesses throughout the supply chain.
These regulatory inefficiencies directly affect the investment climate. At the field level, Smallholders often face uncertainty over land management rights and legal access, while investors continue to encounter regulatory bottlenecks that slow expansion and downstream industrial development.
Firman said a dedicated Palm Oil Law could provide a comprehensive legal umbrella governing the industry from upstream to downstream, covering cultivation, trade, downstream processing, Smallholder protection, sustainability standards such as Indonesian Sustainable Palm Oil (ISPO), and even the establishment of a national palm oil authority body with cross-sector coordinating powers.
Such an institution, he argued, would improve policy synchronization and eliminate fragmented governance spread across multiple ministries.
“This law is also essential to strengthen Indonesia’s bargaining position amid global policies that frequently disadvantage our national palm oil industry,” Firman stressed.
He urged lawmakers to immediately include the Palm Oil Bill in Indonesia’s National Legislative Program for cross-party parliamentary deliberation.
For Firman, the proposed legislation is more than a sectoral initiative—it is part of a broader strategy to safeguard Indonesia’s economic sovereignty.
With millions of Smallholders relying on palm oil for their livelihoods, he said a robust legal framework has become increasingly urgent to ensure the industry remains competitive, sustainable, and capable of delivering wider economic benefits for Indonesia’s people. (T2)
