Task Force to Help Enhance Governance in Palm Oil
Indonesia has created a fresh task force to enhance governance in the palm oil plantation sector. The main goal is to ensure that companies in this field follow regulations, encompassing tax payments and other aspects. This action stems from an extensive audit that was conducted across the industry last year.
Based on An Industry-Wide Audit
As the largest global producer and exporter of palm oil, Indonesia took this initiative following the industry-wide audit launched in the preceding year. The audit was triggered by a scarcity of cooking oil in the local market, which halted certain palm oil exports for three weeks, creating disturbances in the worldwide vegetable oil market.
The deputy finance minister, Suahasil Nazara, has been assigned to lead this task force and aims to bolster compliance within the palm oil industry, particularly concerning various rules like land permits and state payments. Concurrently, the ministry’s tax office is updating its records pertaining to companies’ plantation areas to facilitate this undertaking.
More Plantation Than Expected
During the initial stage of the audit conducted last year, it was discovered that 16.8 million hectares of land were planted with oil palm, exceeding the official database record of 16.38 million hectares. This information was conveyed by a senior minister who was appointed as the chair of the task force’s steering committee during the same time.
The audit was meant to collect data on the size of each plantation, legal status, production level and output prices to improve transparency in the sector as well as better protect the forest. Indonesia’s palm oil exports in the first three months of 2023 were worth $5.92 billion, the statistics bureau said earlier on Monday, down 11.3% from the same period in 2022, partly due to falling prices.
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