PALMOILMAGAZINE, JAKARTA — The Indonesian Ombudsman has urged the government to establish a National Palm Oil Agency as a strategic step to improve governance in the palm oil industry, which remains plagued by overlapping authorities, complex licensing systems, and prolonged land conflicts.
The recommendation was unveiled during the launch of the book “Palm Oil: Between Green Gold and the Thorns of Governance” at the Ombudsman’s headquarters in Jakarta, Thursday (23/10/2025). The publication presents the findings of the Ombudsman’s systemic review aimed at preventing maladministration in palm oil governance.
Ombudsman Chair Mokhammad Najih stated that the book serves as a call for stronger cross-sector collaboration to reform Indonesia’s palm oil governance.
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“This book is not merely an academic report, but a reflection on the future of natural resource management in Indonesia. Our goal is to promote a palm oil industry that is transparent, fair, and sustainable,” Najih said, as quoted by Palmoilmagazine.com on Sunday (26/10/2025).
During the same event, Minister of National Development Planning and Head of Bappenas, Prof. Rachmat Pambudy, emphasized the importance of inter-agency synergy and the creation of an integrated national database as the foundation for sound policy decisions.
“If the National Palm Oil Agency is established, its first task should be to develop a unified national palm oil database. Without integrated data, it’s impossible to resolve governance issues,” he said.
According to Rachmat, a single institution would help eliminate policy overlaps and strengthen coordination between the central and regional governments as well as industry stakeholders.
State Losses Estimated at IDR279 Trillion
Ombudsman member and book co-author Yeka Hendra Fatika revealed that the study, conducted over six months with input from 52 institutions and analysis of hundreds of documents, identified potential state losses amounting to IDR279 trillion due to weaknesses in palm oil governance.
“The most pressing issue lies in overlapping land use—around 3.2 million hectares of oil palm plantations are located within forest areas. It’s essential to fairly determine whether this resulted from coIDRorate negligence or errors in forest zoning maps,” Yeka explained.
He added that resolving agrarian conflicts should not rely solely on the use of authority but must uphold justice and legal certainty.
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Beyond land disputes, the Ombudsman also found persistent issues related to licensing, certification, and pricing policies that fail to benefit smallholder farmers. Yeka proposed that the proposed National Palm Oil Agency integrate the functions of 15 existing institutions that currently operate independently and ensure that a unified data system becomes the foundation for all policy decisions.
“With proper governance, Indonesia’s palm oil competitiveness will strengthen, and smallholder welfare will improve,” he said.
The Ombudsman previously conducted a systemic review of palm oil governance in 2024 and provided several policy recommendations to the government. Through this book, the institution aims to raise public awareness about the benefits, challenges, and complexities of Indonesia’s palm oil industry.
The book launch was attended by representatives from government agencies, academia, the private sector, and civil society organizations. (P2)
