Indonesian palm oil industry challenges

Stakeholders in the Indonesian palm oil industry are addressing various regulatory, safety, and economic challenges. Initially, industry representatives and journalists collaborated to promote sustainable management and counter global ‘black campaigns’ that use environmental and labor issues to discredit the sector. During this period, concerns were raised regarding the ‘strict liability’ clause in Law No. 32 of 2009, which can hold companies liable for fires occurring outside their concession areas.

As the situation progressed, focus expanded to include occupational health and safety (K3) and the welfare of smallholder farmers. While large corporations face implementation difficulties regarding worker health, small-scale farmers often operate without legal labor protections. Additionally, the Palm Oil Rejuvenation (PSR) program has faced declining targets due to burdensome administrative requirements. Other systemic issues impacting farmers include Fresh Fruit Bunch (TBS) pricing, land legality within forest areas, and the threat of farmland seizure.