Indonesia to use "existing laws" as palm oil moratorium expires

FILE PHOTO: An aerial photo of a palm oil plantation in Batanghari, Jambi province, Sumatra island, Indonesia November 28, 2018. Antara Foto/Wahdi Septiawan/via REUTERS

JAKARTA (Reuters) - Indonesia will use existing laws in a jobs creation bill passed last year to deal with issues around sustainable palm oil production, a senior official said on Wednesday, after a moratorium on new plantation permits recently ended.

The Southeast Asian country, the world's top palm oil producer, launched the moratorium in September 2018 to try to stop deforestation and improve governance in the industry, while seeking to boost output from existing cultivated areas.

The moratorium ended on Sept. 19 with no indication of an extension, raising concerns by environmentalists who say that Indonesia is at risk of losing further large tracts of forest to plantation expansion.

"Let's just run it according to the existing regulations," Indonesia's deputy minister of food and agriculture, Musdhalifah Machmud, told a virtual conference, adding authorities had identified problems with the moratorium that needed to be addressed.

An issue that had cropped up was that some plantations which existed even before the moratorium continued to operate without a permit because they were located within a designated forest area.

"We haven't been able to overcome all of these conditions... let's propose again what regulations might be able to overcome further problems," she said.

The Indonesian government passed the so-called jobs creation "omnibus" law last year which revised over 70 existing laws, in an attempt to cut red tape, spur investment and boost labour market competitiveness.

While the law does not include a clause to halt the issuing new palm oil plantation permits, it does specify a 100,000 hectare (247,105 acres) limit for a new palm oil plantation. The law does not, however, place a limit on how many new plantations are allowed per year.

Green groups say the omnibus law favours business interests at the expense of the environment and labour.

Indonesia, which is the world's third-biggest rainforest area, reduced the rate of deforestation by 75% last year, the Environment Ministry said in March.