PALM OIL INDUSTRY: Detrimental to Farmers, Government Seeks Ways to Dissolve IPOP

The Director General of Plantation at the Agriculture Ministry, Gamal Nasir, said the government was determined to dissolve IPOP. A legal basis is required because IPOP continues to operate in Indonesia despite having received a warning letter.
“They are banned from operating in Indonesia, we will seek a legal basis. A discussion is currently being held with the relevant agencies regarding whether a new regulation should be made or we should use existing regulations,” Gamal said on Monday (21/3/2016).
Gamal said that he hoped an administrative letter such as a ministerial decree could be issued to facilitate the swift dissolution of IPOP. However, he is still discussing the legal basis for this with the Ministry of Law and Human Rights (Kemenkumham).
Bisnis noted that the government has been vocal in expressing its opposition to the implementation of IPOP since the middle of last year. This is because, since IPOP was implemented, many farmers have complained that their products are no longer being purchased by companies because they are considered to be sourced from unsustainable practices.
IPOP or the Indonesian Palm Oil Pledge is a commitment by actors in the palm oil sector to apply environmentally-friendly practices in their production activities. Members are banned from cultivating palm in areas with high carbon stock and on peatland.
IPOP is one of the agreements born from a discussion entitled Sustainable Development: The Indonesian Way of Doing Business in the New Millennium at the UN 2014 Climate Summit, which was initiated by the Indonesian Chamber of Commerce and Industry in New York on 24 September 2014.
Four companies participated in the first signing: Golden Agri Resources Ltd, Wilmar International Ltd, Cargill, and Asian Agri. In March 2015, Musim Mas expressed its willingness to join, and in late February, Astra Agro Lestari also joined.
Since IPOP was implemented, a number of government officials, including those from the Ministry of Agriculture and the Coordinating Ministry for Economic Affairs, have indeed questioned this commitment. This is because the IPOP agreement is deemed to have complicated the supply of fresh fruit bunches (FFBs) from farmers.
In several regions, it was reported that farmers were unable to sell their FFBs because they were suspected of having been grown on peatland. This is detrimental to farmers whose purchasing power has already been eroded by the weakening global commodity prices.
Gamal said that the government will soon dissolve the management of IPOP. “So that Indonesian companies will no longer operate it — in the form of a letter from a certain minister who has the authority so that our legal basis is strong,” Gamal said.
He had also previously written to the management of IPOP asking them to cease operations, but the warning was ignored.
Meanwhile, Secretary-General of the Indonesian Palm Oil Farmers Association (Apkasindo), Asmar Arsjad, said that farmers are awaiting steps by the government to dissolve IPOP as the company has reduced its purchases of farmers’ FFBs.

Editor : Yusuf Waluyo Jati

http://industri.bisnis.com/read/20160321/99/530176/industri-sawit-rugikan-petani-pemerintah-cari-cara-bubarkan-ipop