ISSN (Online): 2321-3418
server-injected
Law and Legislative Affairs
Open Access

Legal Protection of Long Term Investments in the Field of Palm Oil Plantation Management in Indonesia

, ,
DOI: 10.18535/ijsrm/v12i08.lla01· Pages: 554-564· Vol. 12, No. 08, (2024)· Published: August 22, 2024
PDF
Views: 504 PDF downloads: 185

Abstract

The development of plantation businesses in Indonesia continues to proliferate; the oil palm agriculture sector strongly influences society's economic conditions. However, along the way, investment in palm oil plantations is still faced with regulatory and legal issues. This research aims to analyze the legal protection of long-term investment in the management of oil palm plantations. This research uses qualitative analysis with a literature study approach. Research data uses literature reviews and official government documents such as laws and policies. This research found that regulations influence long-term palm oil investment, providing confidence for investors. Ambiguous regulations regarding palm oil investment will reduce the amount of investment in the palm oil plantation sector. In conclusion, long-term investment regulations and policies in palm oil management in Indonesia still need improvement. Synchronization across institutions with an interest in the plantation sector is critical. Making investment easier while still maintaining environmental sustainability is very necessary. This research contributes to the urgency of comprehensive policies and regulations for legal protection in long-term palm oil investment management in Indonesia.

Keywords

Palm oil plantationsinvestmentlawpolicyagrarian

References

  1. Adigun, O. T. (2021). Televised Interpreted COVID-19 Briefings and Deaf Viewers: A Preliminary Investigation of Associated Concerns. Journal of Social Sciences, 68(1–3), 8–12. https://doi.org/10.31901/24566756.2021/68.1-3.2777DOI ↗Google Scholar ↗
  2. Agegnehu, S. K., Dires, T., Nega, W., & Mansberger, R. (2021). Land Tenure Disputes and Resolution Mechanisms: Evidence from Peri-Urban and Nearby Rural Kebeles of Debre Markos Town, Ethiopia. In Land (Vol. 10, Issue 10). https://doi.org/10.3390/land10101071DOI ↗Google Scholar ↗
  3. Apresian, S. R., Tyson, A., Varkkey, H., Choiruzzad, S. A. B., & Indraswari, R. (2020). Palm Oil Development in Riau, Indonesia: Balancing Economic Growth and Environmental Protection. Nusantara:An International Journal of Humanities and Social Sciences, 2(1), 1–29. https://doi.org/10.6936/NIJHSS.202006_2(1).0001DOI ↗Google Scholar ↗
  4. Assembe-Mvondo, S., Colfer, C. J. P., Brockhaus, M., & Tsanga, R. (2014). Review of the legal ownership status of national lands in Cameroon: A more nuanced view. Development Studies Research, 1(1), 148–160. https://doi.org/10.1080/21665095.2014.927739DOI ↗Google Scholar ↗
  5. Avom, D., Njangang, H., & Nawo, L. (2020). World economic policy uncertainty and foreign direct investment. Economics Bulletin, 40(2), 1457–1464.Google Scholar ↗
  6. Basiron, Y. (2007). Palm oil production through sustainable plantations. European Journal of Lipid Science and Technology, 109(4), 289–295. https://doi.org/https://doi.org/10.1002/ejlt.200600223DOI ↗Google Scholar ↗
  7. Bittlingmayer, G. (2000). Regulatory uncertainty and investment: evidence from antitrust enforcement. Cato J., 20, 295.Google Scholar ↗
  8. Borras, S. (2016). Land politics, agrarian movements and scholar-activism. http://hdl.handle.net/1765/93021Google Scholar ↗
  9. Bouquet, E. (2009). State-Led Land Reform and Local Institutional Change: Land Titles, Land Markets and Tenure Security in Mexican Communities. World Development, 37(8), 1390–1399. https://doi.org/https://doi.org/10.1016/j.worlddev.2008.08.015DOI ↗Google Scholar ↗
  10. Castillo, M., Pérez-Silva, R., Chamorro, C., & Sepúlveda, M. (2022). Public policies, sustainability, and smallholder producers’ access to the market. The Productive Alliance Programme in Chile: A case study. Frontiers in Sustainable Food Systems, 6. https://www.frontiersin.org/journals/sustainable-food-systems/articles/10.3389/fsufs.2022.1020049DOI ↗Google Scholar ↗
  11. Choi, S., Furceri, D., & Yoon, C. (2021). Policy uncertainty and foreign direct investment. Review of International Economics, 29(2), 195–227.Google Scholar ↗
  12. Colchester, M. (2007). Beyond tenure: Rights-based approaches to peoples and forests. Proceedings: International Conference on Poverty Reduction and Forests, Bangkok, Thailand.Google Scholar ↗
  13. Dadashpoor, H., & Ahani, S. (2019). Land tenure-related conflicts in peri-urban areas: A review. Land Use Policy, 85, 218–229. https://doi.org/https://doi.org/10.1016/j.landusepol.2019.03.051DOI ↗Google Scholar ↗
  14. Deininger, K., Xia, F., Kilic, T., & Moylan, H. (2021). Investment Impacts of Gendered Land Rights in Customary Tenure Systems: Substantive and Methodological Insights from Malawi. In Policy Research Working Papers. The World Bank. https://doi.org/doi:10.1596/1813-9450-9520DOI ↗Google Scholar ↗
  15. Edgar, A., & Stack, K. M. (2019). The Authority and Interpretation of Regulations. The Modern Law Review, 82(6), 1009–1033. https://doi.org/https://doi.org/10.1111/1468-2230.12458DOI ↗Google Scholar ↗
  16. Edwards, T. L., Fettweis, X., Gagliardini, O., Gillet-Chaulet, F., Goelzer, H., Gregory, J. M., Hoffman, M., Huybrechts, P., Payne, A. J., Perego, M., Price, S., Quiquet, A., & Ritz, C. (2014). Effect of uncertainty in surface mass balance–elevation feedback on projections of the future sea level contribution of the Greenland ice sheet. The Cryosphere, 8(1), 195–208. https://doi.org/10.5194/tc-8-195-2014DOI ↗Google Scholar ↗
  17. Firdaus, F., & Hendra, R. (2020). Legal Certainty of Investment in Management of Industrial Plantation Forests in Indonesia BT - Proceedings of the Riau Annual Meeting on Law and Social Sciences (RAMLAS 2019). 88–91. https://doi.org/10.2991/assehr.k.200529.275DOI ↗Google Scholar ↗
  18. Fitzherbert, E. B., Struebig, M. J., Morel, A., Danielsen, F., Brühl, C. A., Donald, P. F., & Phalan, B. (2008). How will oil palm expansion affect biodiversity? Trends in Ecology & Evolution, 23(10), 538–545.Google Scholar ↗
  19. Fitzpatrick, D. (2005). ‘Best Practice’ Options for the Legal Recognition of Customary Tenure. Development and Change, 36(3), 449–475. https://doi.org/https://doi.org/10.1111/j.0012-155X.2005.00419.xDOI ↗Google Scholar ↗
  20. Gassler, B., & Spiller, A. (2018). Is it all in the MIX? Consumer preferences for segregated and mass balance certified sustainable palm oil. Journal of Cleaner Production, 195, 21–31. https://doi.org/https://doi.org/10.1016/j.jclepro.2018.05.039DOI ↗Google Scholar ↗
  21. Gebara, M. F. (2018). Tenure reforms in indigenous lands: decentralized forest management or illegalism? Current Opinion in Environmental Sustainability, 32, 60–67. https://doi.org/https://doi.org/10.1016/j.cosust.2018.04.008DOI ↗Google Scholar ↗
  22. Gellert, P. K., & Andiko. (2015). The Quest for Legal Certainty and the Reorganization of Power: Struggles over Forest Law, Permits, and Rights in Indonesia. Journal of Asian Studies, 74(3), 639–666. https://doi.org/10.1017/S0021911815000613DOI ↗Google Scholar ↗
  23. Goldstein, M., & Udry, C. (2008). The Profits of Power: Land Rights and Agricultural Investment in Ghana. Journal of Political Economy, 116(6), 981–1022. https://doi.org/10.1086/595561DOI ↗Google Scholar ↗
  24. Goodale, M. R. G., & Sky, P. K. (2001). A comparative study of land tenure, property boundaries, and dispute resolution: case studies from Bolivia and Norway. Journal of Rural Studies, 17(2), 183–200. https://doi.org/https://doi.org/10.1016/S0743-0167(00)00041-3DOI ↗Google Scholar ↗
  25. Gupta, S., Saksena, S., & Baris, O. F. (2019). Environmental enforcement and compliance in developing countries: Evidence from India. World Development, 117, 313–327. https://doi.org/https://doi.org/10.1016/j.worlddev.2019.02.001DOI ↗Google Scholar ↗
  26. Hanbali, L., Hannon, E., Lehtimaki, S., McNab, C., & Schwalbe, N. R. (2023). Independent monitoring and the new pandemic agreement. BMJ Global Health, 8(11), e013348. https://doi.org/10.1136/bmjgh-2023-013348DOI ↗Google Scholar ↗
  27. Harris, M. (1941). Legal Aspects of Land Tenure. Journal of Farm Economics, 23(1), 173–184.Google Scholar ↗
  28. Hebous, S., Kher, P., & Tran, T. T. (2020). Regulatory risk and FDI. 2019/2020 Global Investment Competitiveness Report: Rebuilding Investor Confidence in Times of Uncertainty.Google Scholar ↗
  29. Ivancic, H., & Koh, L. P. (2016). Evolution of sustainable palm oil policy in Southeast Asia. Cogent Environmental Science, 2(1), 1195032. https://doi.org/10.1080/23311843.2016.1195032DOI ↗Google Scholar ↗
  30. Kansanga, M. M., Bezner Kerr, R., Lupafya, E., Dakishoni, L., & Luginaah, I. (2021). Does participatory farmer-to-farmer training improve the adoption of sustainable land management practices? Land Use Policy, 108, 105477. https://doi.org/https://doi.org/10.1016/j.landusepol.2021.105477DOI ↗Google Scholar ↗
  31. Koh, L. P., Butler, R. A., & Bradshaw, C. J. A. (2009). Conversion of Indonesia’s peatlands. Frontiers in Ecology and the Environment, 7(5), 238.Google Scholar ↗
  32. Koh, L. P., & Wilcove, D. S. (2008). Is oil palm agriculture really destroying tropical biodiversity? Conservation Letters, 1(2), 60–64.Google Scholar ↗
  33. Kotler, P. (2011). Reinventing Marketing to Manage the Environmental Imperative. Journal of Marketing, 75(4), 132–135. https://doi.org/10.1509/jmkg.75.4.132DOI ↗Google Scholar ↗
  34. Kresnanda, S., Abin Syamsudin M, T., Ratnawulan, T., & Syaodih, C. (2022). Management Of Training Systems In Improving Hr Competency In Oil Palm Plantation Companies PT. Kayung Agro Lestari, And PT. Austindo Jaya Nusantara Agri Siais. International Journal of Science, Technology & Management, 3(4 SE-Articles), 866–874. https://doi.org/10.46729/ijstm.v3i4.553DOI ↗Google Scholar ↗
  35. Liao, L., Warner, M. E., & Homsy, G. C. (2019). Sustainability’s forgotten third E: what influences local government actions on social equity? Local Environment, 24(12), 1197–1208. https://doi.org/10.1080/13549839.2019.1683725DOI ↗Google Scholar ↗
  36. Liu, N., Tang, S.-Y., Zhan, X., & Lo, C. W.-H. (2018). Political Commitment, Policy Ambiguity, and Corporate Environmental Practices. Policy Studies Journal, 46(1), 190–214. https://doi.org/https://doi.org/10.1111/psj.12130DOI ↗Google Scholar ↗
  37. Manthovani, R. (2022). The Implementation of Environmental Law Protection in Indonesia. YURISDIKSI: Jurnal Wacana Hukum Dan Sains, 17(4), 421–431.Google Scholar ↗
  38. Maskun, Ilmar, A., Naswar, Achmad, & Assidiq, H. (2020). Synchronization of Indonesian regulation in sustainable palm oil management to reduce greenhouse gas emissions. IOP Conference Series: Earth and Environmental Science, 423(1), 12006. https://doi.org/10.1088/1755-1315/423/1/012006DOI ↗Google Scholar ↗
  39. Meyer III, W. (2017). Re-envisioning Sustainable Oil-Palm in SE Asia. EnviroLab Asia, 1(3), 1–13. https://doi.org/10.5642/envirolabasia.20170103.02DOI ↗Google Scholar ↗
  40. Molfetas, A., & Wille, J. (2018). Leveraging Technology to Support Construction Regulation and Permitting Reform: Insights from Recent Country Experience. World Bank.Google Scholar ↗
  41. Noojipady, P., Morton, C. D., Macedo, N. M., Victoria, C. D., Huang, C., Gibbs, K. H., & Bolfe, L. E. (2017). Forest carbon emissions from cropland expansion in the Brazilian Cerrado biome. Environmental Research Letters, 12(2), 25004.Google Scholar ↗
  42. Nugroho, A. P., & Dayanti, S. (2023). The Impact of Oil Palm Plantations on The Achievement of Sustainability Development Goals From An Islamic Economic Perspective. Indonesian Journal of Business Analytics, 3(3), 759–768.Google Scholar ↗
  43. Nurliza, Aditya Nugraha, Morteza Muthahhari, Pamela, & Adi Suyatno. (2022). Do Sustainability Standards Provide Environmental, Social and Economic Benefits for Independent Oil Palm Smallholders? Jurnal Penyuluhan, 18(02 SE-Articles), 232–245. https://doi.org/10.25015/18202240523DOI ↗Google Scholar ↗
  44. Obidzinski, K., Andriani, R., Komarudin, H., & Andrianto, A. (2021). Environmental and Social Impacts of Oil Palm Plantations and their Implications for Biofuel Production in Indonesia. Ecology and Society, 17(1). https://doi.org/10.5751/ES-04775-170125DOI ↗Google Scholar ↗
  45. Paaga, D. T. (2013). Good Urban Planning and Management : New Aspects and Methodologies. International Journal of Humanities and Social Science, 3(18), 843–848. http://www.ijhssnet.com/journals/Vol_3_No_18_October_2013/26.pdfGoogle Scholar ↗
  46. Pacheco, P., Gnych, S., Dermawan, A., Komarudin, H., & Okarda, B. (2017). The palm oil global value chain: Implications for economic growth and socialand environmental sustainability.Google Scholar ↗
  47. Patunru, A., & Surianta, A. (2020). Attracting FDI Post Covid-19 by Simplifying Indonesia’s Regulatory Framework. In Center for Indonesian Policy Studies. Center for Indonesian Policy Studies. https://doi.org/10.35497/310046DOI ↗Google Scholar ↗
  48. Pirard, R., Rivoalen, C., Lawry, S., Pacheco, P., & Zrust, M. (2017). A policy network analysis of the palm oil sector in Indonesia: What sustainability to expect? (Vol. 230). CIFOR.Google Scholar ↗
  49. Pretty, J., Attwood, S., Bawden, R., van den Berg, H., Bharucha, Z. P., Dixon, J., Flora, C. B., Gallagher, K., Genskow, K., Hartley, S. E., Ketelaar, J. W., Kiara, J. K., Kumar, V., Lu, Y., MacMillan, T., Maréchal, A., Morales-Abubakar, A. L., Noble, A., Prasad, P. V. V., … Yang, P. (2020). Assessment of the growth in social groups for sustainable agriculture and land management. Global Sustainability, 3, e23. https://doi.org/DOI: 10.1017/sus.2020.19DOI ↗Google Scholar ↗
  50. Purnomo, E. P., Ramdani, R., Agustiyara, Tomaro, Q. P. V, & Samidjo, G. S. (2019). Land ownership transformation before and after forest fires in Indonesian palm oil plantation areas. Journal of Land Use Science, 14(1), 37–51. https://doi.org/10.1080/1747423X.2019.1614686DOI ↗Google Scholar ↗
  51. Purnomo, H., Okarda, B., Dermawan, A., Ilham, Q. P., Pacheco, P., Nurfatriani, F., & Suhendang, E. (2020). Reconciling oil palm economic development and environmental conservation in Indonesia: A value chain dynamic approach. Forest Policy and Economics, 111, 102089. https://doi.org/https://doi.org/10.1016/j.forpol.2020.102089DOI ↗Google Scholar ↗
  52. Putri, E. I., Dharmawan, A. H., Hospes, O., Yulian, B. E., Amalia, R., Mardiyaningsih, D. I., Kinseng, R. A., Tonny, F., Pramudya, E. P., Rahmadian, F., & Suradiredja, D. Y. (2022). The Oil Palm Governance: Challenges of Sustainability Policy in Indonesia. In Sustainability (Vol. 14, Issue 3). https://doi.org/10.3390/su14031820DOI ↗Google Scholar ↗
  53. Qaim, M., Sibhatu, K. T., Siregar, H., & Grass, I. (2020). Environmental, economic, and social consequences of the oil palm boom.Google Scholar ↗
  54. Qin, P., & Xu, J. (2013). Forest land rights, tenure types, and farmers’ investment incentives in China. China Agricultural Economic Review, 5(1), 154–170. https://doi.org/10.1108/17561371311294829DOI ↗Google Scholar ↗
  55. RAMDANI, F., & HINO, M. (2013). Transition of development policies related to the palm oil industry in Indonesia. Tohoku University.Google Scholar ↗
  56. Rao, F., Spoor, M., Ma, X., & Shi, X. (2016). Land tenure (in)security and crop-tree intercropping in rural Xinjiang, China. Land Use Policy, 50, 102–114. https://doi.org/https://doi.org/10.1016/j.landusepol.2015.09.001DOI ↗Google Scholar ↗
  57. Richardson, B. (2015). Making a Market for Sustainability: The Commodification of Certified Palm Oil. New Political Economy, 20(4), 545–568. https://doi.org/10.1080/13563467.2014.923829DOI ↗Google Scholar ↗
  58. Richartz, C., & Abdulai, A. (2022). The role of information in consumer preferences for sustainable certified palm oil products in Germany. PLOS ONE, 17(7), e0271198. https://doi.org/10.1371/journal.pone.0271198DOI ↗Google Scholar ↗
  59. Riggs, R. A., Sayer, J., Margules, C., Boedhihartono, A. K., Langston, J. D., & Sutanto, H. (2016). Forest tenure and conflict in Indonesia: Contested rights in Rempek Village, Lombok. Land Use Policy, 57, 241–249. https://doi.org/https://doi.org/10.1016/j.landusepol.2016.06.002DOI ↗Google Scholar ↗
  60. Ruiz, V. (2018). Collective land tenure in Colombia: Background and current status.Google Scholar ↗
  61. Saeed, R., Sattar, A., Iqbal, Z., Imran, M., & Nadeem, R. (2012). Environmental impact assessment (EIA): an overlooked instrument for sustainable development in Pakistan. Environmental Monitoring and Assessment, 184(4), 1909–1919. https://doi.org/10.1007/s10661-011-2088-5DOI ↗Google Scholar ↗
  62. Sahide, M. A. K., & Giessen, L. (2015). The fragmented land use administration in Indonesia – Analysing bureaucratic responsibilities influencing tropical rainforest transformation systems. Land Use Policy, 43, 96–110. https://doi.org/https://doi.org/10.1016/j.landusepol.2014.11.005DOI ↗Google Scholar ↗
  63. Santika, T., Wilson, K. A., Budiharta, S., Law, E. A., Poh, T. M., Ancrenaz, M., Struebig, M. J., & Meijaard, E. (2019). Does oil palm agriculture help alleviate poverty? A multidimensional counterfactual assessment of oil palm development in Indonesia. World Development, 120, 105–117. https://doi.org/https://doi.org/10.1016/j.worlddev.2019.04.012DOI ↗Google Scholar ↗
  64. Setiawan, E. N., Maryudi, A., Purwanto, R. H., & Lele, G. (2016). Opposing interests in the legalization of non-procedural forest conversion to oil palm in Central Kalimantan, Indonesia. Land Use Policy, 58, 472–481. https://doi.org/https://doi.org/10.1016/j.landusepol.2016.08.003DOI ↗Google Scholar ↗
  65. SINAULAN, R. L., HAMDI, H., & RAHMAT, A. (2018). Investment and Liability on Oil Palm Land Use and Environmental Sustainability. Journal of Environmental Management and Tourism; Vol 9 No 1 (2018): JEMT Volume IX Issue 1(25) Spring 2018. https://doi.org/10.14505//jemt.v9.1(25).02DOI ↗Google Scholar ↗
  66. Sugiyono, H., & Haryanto, I. (2021). Plantation Regulation In The Palm Industry Sector In The Omnibus Law Of Employment Creation (Cipta Kerja). Veteran Law Review, 4(1), 14–34.Google Scholar ↗
  67. Susilawati, D., & Kanowski, P. (2020). Cleaner production in the Indonesian pulp and paper sector: Improving sustainability and legality compliance in the value chain. Journal of Cleaner Production, 248, 119259. https://doi.org/https://doi.org/10.1016/j.jclepro.2019.119259DOI ↗Google Scholar ↗
  68. Sutrisno, E., Artadi, I., Sutrisnno, E., Mawar, R., & Fikri, A. (2019). The Study on Legal Issuance of the Statement of Environmental Management for Micro Industry of Lambak Cracker (A case study in Plered subdistrict–Cirebon regency). International Symposium on Social Sciences, Education, and Humanities (ISSEH 2018), 59–63.Google Scholar ↗
  69. Thom, A., & Jonas, N. (2014). Assessing the impacts of a donor-funded agricultural extension service on smallholders in Umzimkhulu, South Africa. XXIX International Horticultural Congress on Horticulture: Sustaining Lives, Livelihoods and Landscapes (IHC2014): 1128, 305–314.Google Scholar ↗
  70. Tulloch, V. J. D., Brown, C. J., Possingham, H. P., Jupiter, S. D., Maina, J. M., & Klein, C. (2016). Improving conservation outcomes for coral reefs affected by future oil palm development in Papua New Guinea. Biological Conservation, 203, 43–54. https://doi.org/https://doi.org/10.1016/j.biocon.2016.08.013DOI ↗Google Scholar ↗
  71. Unruh, J. D. (2008). Toward sustainable livelihoods after war: Reconstituting rural land tenure systems. Natural Resources Forum, 32(2), 103–115. https://doi.org/https://doi.org/10.1111/j.1477-8947.2008.00184.xDOI ↗Google Scholar ↗
  72. Wahyudi, S. T., Hadi, S., & Ibrahim, A. L. (2020). Veteran Law Review. Veteran Law Review, 5(1), 74–88.Google Scholar ↗
  73. Yasminingrum. (2020). Legal Harmonization of Red Program in the Protection of Forest Management in Indonesia BT - Proceedings of the International Conference on Law, Economics and Health (ICLEH 2020). 455–459. https://doi.org/10.2991/aebmr.k.200513.089DOI ↗Google Scholar ↗
  74. Ye, Q., Huang, R., & Tan, K. J. K. (2023). Missing the boat: Regulatory approval delay and investment project outcomes. The British Accounting Review, 55(6), 101186.Google Scholar ↗
  75. Young, M. A. (2023). Implementing international law: capacity-building, coordination and control. Cambridge International Law Journal, 12(1), 4–23. https://doi.org/10.4337/cilj.2023.01.01DOI ↗Google Scholar ↗
  76. Zhang, X., Xiong, S., Dong, X., & Du, S. (2023). Synergistic Classification of Multilevel Land Patches (SC-MLPs): Reducing Conflicts and Improving Mapping Results for Land Uses and Functional Spaces With Very-High-Resolution Satellite Imagery. IEEE Transactions on Geoscience and Remote Sensing, 61, 1–17. https://doi.org/10.1109/TGRS.2023.3327381DOI ↗Google Scholar ↗
Author details
Kurniadi
Law Doctoral Program, Universitas Islam Riau, Pekanbaru,
✉ Corresponding Author
👤 View Profile →
syafrinaldi
Professor in International Law Universitas IslamRiau,Pekanbaru,
👤 View Profile →🔗 Is this you? Claim this publication
Thamrin, S
Professor in International Law Universitas IslamRiau,Pekanbaru,
👤 View Profile →🔗 Is this you? Claim this publication