Palm Oil Legality Agrinas Highlighted, BPK Is Considered To Have To Intervene

Illustration of oil palm plantations (ANTARA)

JAKARTA PT Agrinas Palma Nusantara (Agrinas), a company that has the mandate to manage oil palm land confiscated by the state, such as the former Torganda in North Sumatra and the former Palm Ambassador in Riau, has yet to have a strong legal basis.

The company does not yet have a Cultivation Right (HGU), a Business Identification Number (NIB), and is still waiting for a Decree (SK) to release forest areas from the Ministry of Environment and Forestry (KLHK).

Indonesian Audit Watch (IAW) Founder Secretary Iskandar Sitorus explained, legally agrarian and forestry, Agrinas has not become a subject of land rights, but only temporary administrative managers. He said that this position is vulnerable to being referred to as the use of areas without a permanent legal basis.

"For IAW, the request of the President Director of Agrinas, General (Ret.) Agus Sutomo, in the RDP with Commission VI of the DPR RI to issue a Presidential Instruction (Inpres) to accelerate the release of forest areas, is an open recognition that Agrinas' legal status is still fragile, even for the BUMN size," said Iskandar in Jakarta, Thursday, October 16.

According to him, Agrinas should be an example of legal compliance for other SOEs. However, two lawsuits in court actually show the opposite. The first case at the Padangsidimpuan District Court, where indigenous peoples from seven villages in Simangambat District sued Agrinas with the PKH Task Force. The second case in Riau, a community group sued Agrinas regarding the land management of the former Palma Ambassador who was judged without clear permits and without plasma implementation.

IAW also highlighted the findings of the Supreme Audit Agency (BPK) for the 2004 '2024 period which showed delays in plasma realization for 7.8'10 years in a number of national palm oil companies. Iskandar assessed that the same pattern of violations is now visible in Agrinas.

IAW assessed that Agrinas' request for the issuance of the Presidential Instruction to accelerate the legalization of ex-Torganda's land shows the company's inability to pursue a formal legal mechanism as regulated in Government Regulation No. 104 of 2015 concerning changes to the function of forest areas.

The Presidential Instruction is not a source of rights, only a coordinative order. Even if the Presidential Instruction is issued, without a decree on the release of forest areas and HGU permits, Agrinas' legal status remains temporary," said Iskandar.

According to IAW, Agrinas is now stuck in a difficult position: as a new BUMN, this company inherited problematic assets without established governance. "Instead of improving, Agrinas actually continues the practice of managing without adequate legal structure and risks administratively, civilly, and even criminally," said Iskandar.

IAW's internal audit found that Agrinas did not yet have a complete mapping of forestry and plantation regulations, did not have a special unit for compliance, and had not been transparent in financial reports and CSR as mandated by Law no. 19 of 2003 concerning SOEs.

"If SOEs fail to enforce plasma rules, how can the state demand compliance from private corporations," he said.

IAW then recommended five concrete steps: special BPK audit of Agrinas management, cross-ministerial synchronization to accelerate asset legal clarity, publication of plasma realization reports, formation of legal units and compliance within Agrinas, as well as evaluation of officials who do not understand plantation and forestry legal procedures.