March 12, 2025
JAKARTA – The government plans to use swaths of confiscated oil palm plantations to continue planting oil palm in the interest of national energy security, while environmental groups demand the areas’ restoration as forest land.
Prosecutors on Monday handed over more than 221,000 hectares of land seized as part of an ongoing corruption probe to state-owned company PT Agrinas Palma Nusantara, which will temporarily manage them.
The plantation areas, much of which is located in protected forest areas in Sumatra and Kalimantan, were confiscated from nine subsidiaries of privately-owned Duta Palma Group, according to Febrie Adriansyah, an investigator at the office of the deputy attorney general for special crimes.
Duta Palma and its subsidiaries, including PT Palma Satu, PT Banyu Bening Utama and PT Kencana Amal Tani, allegedly falsified location and plantation business permits to use the land.
“We have limitations in managing the [plantations],” Febrie told reporters at a press conference in Jakarta on Monday, explaining why the Attorney General’s Office (AGO) had asked the State-Owned Enterprises (SOEs) Ministry to temporarily manage the confiscated plantations.
Teo Reffelsen, the Indonesian Forum for the Environment’s (Walhi) legal and advocacy manager, said the AGO should focus on ways to get the forest areas reforested to undo the environmental damage caused by Duta Palma Group subsidiaries.
“Handing over the confiscated [oil palm] plantations to state-owned firm Agrinas will complicate the [longstanding] tenure conflicts,” he told The Jakarta Post on Tuesday.
The SOEs Ministry did not immediately respond to the Post’s request for comment.
Greenpeace analysis suggests that around 45,280 ha of Duta Palma Group’s oil palm plantations are located in forest areas and hence used illegally. That figure includes some 12,227 ha and 6,015 ha confiscated from PT Palma Satu and PT Banyu Bening Utama, respectively.
“If so, the government should prioritize land restoration instead of allocating it to any other companies,” Arie Rompas, forest campaign team leader at Greenpeace Indonesia, told the Post on Tuesday.
He suggested Duta Palma’s plantations located in forest areas be removed from the concession and restored as forests to protect biodiversity and mitigate climate change.
Indonesia’s highest court handed down a 16-year prison sentence to Duta Palma founder Surya Darmadi last year after convicting him of bribery, running plantations in designated forest areas and money laundering.
The seizure of the plantations transferred to Agrinas took place as part of an investigation that grew out of that prosecution.
Monday marked the first time Indonesian authorities had handed the management of confiscated plantations over to Agrinas. Neither the SOEs Ministry nor Agrinas specified how long they were expected to manage the land, which is almost a third of the size of the Nusantara Capital City project.
Handover of confiscated land to Agrinas ‘problematic’
Greenpeace’s Arie also took issue with the transfer of the confiscated land to Agrinas, highlighting that there had been no auction to appoint the state firm as the temporary operator of the plantations.
“Though Agrinas is a state firm, the confiscated assets must still adhere to the established procedures. SOEs have no grounds to bypass the auction process,” he said, arguing that it was all the more important as the purpose of confiscating the assets was to mitigate the country’s financial losses resulting from unlawful actions.
“The whole process needs to be reassessed. What is the legal basis for the transfer of these assets to Agrinas?” he asked, adding that the case may expose Agrinas to risks: “If the Duta Palma case is lost in court, the land must be returned, even though the government has made investments through the state firm.”
During the press briefing on Monday, Febrie said legal proceedings against Duta Palma could be lengthy.
Earlier this year, President Prabowo Subianto assigned Defense Minister Sjafrie Sjamsoeddin to head a task force to issue fines or take over oil palm plantations discovered in designated forest areas, based on Presidential Regulation No. 5/2025 signed on Jan. 21, Tempo.co reported.
The new team comprises officials from several state institutions, including the AGO, the Development Finance Comptroller (BPKP) and the Forestry Ministry, and is required to report directly to the President every six months.
Land for energy security
The SOEs Ministry is now tasked with maximizing use of the confiscated land in line with the government’s energy security objectives.
Agrinas president director Agus Utomo, a former Indonesian Military (TNI) lieutenant general, said the company had capable human resources “to optimize the management of the palm oil plantations”.
He expressed optimism that palm oil production would help the country achieve energy self-sufficiency under his leadership.
Agus added that the palm oil plantations would be managed in accordance with the Indonesian Sustainability Palm Oil (ISPO) standards.
He vowed there would be no layoffs of previous Duta Palma workers: “We have been approaching them for several days to join, and we will not terminate their employment.”
Palm oil, the most efficient raw material for biofuel production, is a key ingredient of the Prabowo administration’s strategy to use fatty acid methyl esters (FAME) blended biodiesel as a major energy source.
Environmental groups have strongly criticized the path, pointing to scientific evidence showing that Indonesian palm oil plantations have contributed to deforestation, biodiversity loss and carbon emissions.
“Relying on food commodities to support energy security can lead to various problems, including the expansion of plantation land and subsequent deforestation,” Greenpeace’s Arie said.