Submission Of 833 Thousand Hectare Palm Oil Land To Agrinas Without Auction Is Called A Violation Of Rules

JAKARTA Indonesian Audit Watch (IAW) appreciates President Prabowo Subianto's move to form a Forest Area Control Task Force (PKH Task Force) through Presidential Regulation Number 5 of 2025. This step is considered a noble effort to return hundreds of thousands of hectares of illegal palm oil to the state.

However, IAW also highlighted a number of irregularities in the technical process of controlling the land. The IAW Founder Secretary, Iskandar Sitorus, said that as many as 833,413 hectares of land from the control were immediately handed over to PT Agrinas Palma Nusantara, a subsidiary of BUMN that does not yet have a Cultivation Right (HGU), has no experience in managing forests, and has never been publicly tested.

"Imagine, Jakarta's five-time land was handed over without an auction and without legal clarity," said Iskandar in a written statement, Thursday, July 31.

Iskandar said there are a number of regulations that have the potential to be violated in this process. Among them is Law Number 1 of 2004 which states that state assets can only be transferred through an auction mechanism. In addition, Government Regulation Number 27 of 2021 stipulates that State Property (BMN) must have valid legality and recording.

"In fact, based on PP Number 24 of 2021, forest areas must be legally released, cannot be left in gray status. The Constitutional Court's decision Number 45/PUU-IX/2011 also confirms that the determination of forest areas should not be speculative," said Iskandar.

Furthermore, IAW revealed that the land handed over to Agrinas has not yet been certified in the name of the state, so the legality is still weak. However, the land has been transferred to companies that have not been publicly tested.

Iskandar explained the results of conservative simulations showing significant economic potential from the land. With an area of 833,413 hectares, 20 tons of palm oil productivity per hectare per year, and a price of fresh fruit bunches (FFB) of IDR 2,000 per kilogram, the gross potential could reach IDR 33.33 trillion per year.

For the period March to July 2025 alone, gross income is estimated at IDR 11.96 trillion, with a minimum dividend potential to the state of IDR 597 billion.

"The question is, does such a large fund really go into the state treasury, or is it just spinning internally with Agrinas?" said Iskandar.

According to him, transparency and a thorough audit are needed to ensure the clarity of the flow of funds and the land management process. He also questioned the reasons for the Agrinas election, considering that the comparison with Perum Perhutani was quite striking in terms of legal status and economic contribution.

Based on the IAW simulation, if managed by Perhutani, the state can even earn an additional income of up to IDR 2.42 trillion per year from the carbon credit scheme. The combination of revenue from palm oil and carbon is said to be able to generate more than IDR 10 trillion per year.

Based on this finding, IAW issued three recommendations. First, an investigative audit was conducted by the Supreme Audit Agency (BPK) on funds, land legality, and potential state losses.

Second, the temporary suspension of PT Agrinas' activities by the Attorney General's Office until its legal status is clear. Third, a review of the land delivery scheme so that it can be transferred back to Perhutani with a model of people's partnership and environmental rehabilitation.

"What Agrinas is currently doing is not governance, but has the potential to become suspicious," concluded Iskandar.