INVESTMENT INTEREST DECLINE AFTER PEATLAND MORATORIUM

Government’s policy on moratorium on development of oil palm estate on peatland is proven to generate problems. The policy which has been going on since last year has hampered plantation business. Investment interest after the issuance of Presidential Instruction No. 10/2011 on the moratorium is declining.

Data of the Agriculture Ministry stated that total recommendation for plantation development prior to the moratorium (2007-2011) reaches 169 companies located in 12 provinces with plan on development of oil palm estate of 2.49 million hectare and oil palm processing factory (PKS) with a capacity of 9,115 ton of fresh fruit bunches (TBS) per hour.

But, after 2011, the government issued rec­ommendations for 124 companies located in 22 prov­inces. Plan of area development drops drastically, and only reaches 1.37 million hectare, including construc­tion of PKS with a capacity of 4,466 ton of TB5 per hour.

Gamal Nasir, Director General of Plantation at the Agriculture Ministry, said that prior to the mor­atorium policy, which is since 2007 to May 2011, number of plantation concessions (IUP) issued by the government is 78 IUP with area development plan at 948,342.92 hectare. After the issuance of the policy (May-September 2012), total IUP issued by the government is only 48 IUP with sixe of area of 386,849.88 hectare.

Since the issuance of Presidential Instruction No. 10/2011, IUP is granted in consideration of in­dicative map on suspension of new concessions, the Agriculture Ministry has identified and optimalized utilization of abandoned land with concession rights. This activity is carried out in coordination with the National Land Agency.

Supiandi Sabilhm, General Chairman of In­donesian Peat Association, said that Indonesia is a country having the biggest size of peat area reaching 17 million hectare. Peat area is spreading mostly in low land.

Traditionally, since 1930, the local communities have managed peatland in a traditional way. But, since the 1990s, privets companies and the society developed land area for large-scale plantations.

The problem in peatland development is that many do not understand about peatland character­istics. Some of them are careless of its long-term, local, and global consequences. Basically, peatland could create benefits. But, problems arise due to human error in choosing the right technology for peatland utilization.

Data of Tropenbos International stated that peatland utilization for development of oil palm estate increases continually. In Sumatera, in 2000, there is only around 704,474 hectare and In Kalimantan 19,334 hectare, and in Papua there is none at all. But, in 2010, size of oil palm estate on peat area in Sumatera has reached 1.39 million hectare, in Kalimantan 317,515 hectare, and in Papua around 1,727 hectare.

To prevent problems, in the future, peatland development must be oriented toward thick peat be­cause it is relatively difficult to find thin peat. So, there should be a policy reorientation based on peat capacity and suitability. Regulations concerning peat management must proportionally accommodate so­cial welfare and environmental aspects.

Oil palm-based peatland development is one of the attempts to increase social welfare, but it must be based on conservation and management concepts.

Business News - November 30, 2012