Indonesia to issue a moratorium on new palm oil concessions (updated)

Golden Agri-Resources

14/04/2016 12:29

(Recasts, updates throughout) 
    By Bernadette Christina Munthe 
    JAKARTA, April 14 (Reuters) - Indonesia, the world's top 
producer of palm oil, will issue a moratorium on new palm oil 
concessions, President Joko Widodo said on Thursday, part of the 
country's efforts to reduce the sector's impact on the 
environment. 
    Home to the world's third-largest area of tropical forests, 
Indonesia has been criticised by green activists and other 
Southeast Asian nations on its forestry policy and for failing 
to stop the region's annual "haze" problem caused by 
forest-clearing for palm and pulp plantations.  urn:newsml:reuters.com:*:nL3N13C254 
    Palm oil is a major growth driver in Southeast Asia's 
largest economy, and the industry is sensitive to the issue of 
environmental standards, used by global food and consumer goods 
giants like Kellog  K.N , Mars and Unilever  UNc.AS , to 
determine which producers are acceptable. 
    "They can no longer ask for concessions for palm oil  or  
mining," Widodo told reporters on Thursday, when asked about the 
moratorium plans. Widodo said he had spoken to government 
ministers regarding the plan but stopped short of providing a 
timeline for the move. 
    Based on the government's calculations, the area already 
issued to oil palm growers could be more than twice as 
productive "provided they use the right seeds", the president 
said.  
    Agriculture Minister Andi Amran Sulaiman said he agreed with 
the plan, adding that in terms of productivity Indonesian palm 
growers were a long way behind those in Malaysia. 
    "We should invest in sugar, corn and cattle," Sulaiman told 
reporters, noting that Indonesia is already the world's top palm 
oil producer and that output from its existing plantations is 
expected to climb. 
    Earlier on Thursday, the government's anti-monopoly agency 
announced it would investigate suspected cartel practices among 
a grouping of the country's biggest palm oil producers - 
including Wilmar International  WLIL.SI , Cargill Inc  CARG.UL  
and Golden Agri Resources  GAGR.SI  - that are signatories to 
the Indonesian Palm Oil Pledge.  
    The landmark pledge to cut deforestation, agreed in 2014, 
was seen as in direct competition with the government's own 
standards and too difficult for smallholders to comply with. 
 urn:newsml:reuters.com:*:nL3N17H35M    
    Smallholders account for about 40 percent of Indonesia's 
palm output. 
    Last week media reports said Hollywood actor Leonardo 
DiCaprio faced the risk of being banned from returning to 
Indonesia over his comments that palm oil plantations are 
destroying the Sumatran rainforests and endangering wildlife.  
    Later, however, the forestry minister said she shared 
DiCaprio's concerns and that he had acted in good faith. 
 
 (Reporting by Jakarta bureau, Writing by Fergus Jensen; Editing 
by Himani Sarkar and Susan Fenton) 
 ((fergus.jensen@thomsonreuters.com; +62 21 2992 7604; Reuters 
Messaging: fergus.jensen.thomsonreuters.com@reuters.net)) 
 
Keywords: INDONESIA PALMOIL/MORATORIUM