InfoSAWIT, JAKARTA - The central government published a regulation to distribute palm oil profit sharing for palm oil producer provinces and regencies/cities. This could be the new excitement for the regions to make palm oil plantations and the downstream sectors go forward. Palm oil profit sharing to the regions could be the big capital to welfare the local.
In President’s Regulation Number 38 / 2023 about Palm Oil Plantation Profit Sharing, the Government of Indonesia wants to minimize the fiscal gap and externality that would negatively deliver impacts for palm oil plantation activities. That is why the government regulated and decided kinds of palm oil profit sharing.
The consideration on it referred to Chapter 123, paragraph (4) Laws Number 1 / 2022 about Financial Calculation between Central and Regional Governments to regulate Government’s Regulation about Palm Oil Profit Sharing. Besides, the other consideration was Chapter 5, paragraph (2) Undang-Undang Dasar 1945 1945.
Palm oil profit sharing is part of transfer to the regions that should be allocated based on the percentages on certain income in revenue and expenditure, and certain performance. The fund distributed to palm oil producer regions, and non-producer regions is to solve externality that would be negative and or escalate equity in one region.
Palm oil profit sharing derived from percentage allocation on export levy and export citation on palm oil, crude palm oil, and or its derivative products. Palm oil profit sharing is used through Rancangan Kegiatan dan Penganggaran Dana bagi hasil Perkebunan Sawit or RKP DBH Sawit for the rests.
RKP DBH Sawit is the plan of activity and budgeting that could be funded by palm oil profit sharing as same as the regulations/policies in the district in the same year. Through transfer ke daerah (TKD), the fund that derived from Budget and Expenditure should be allocated and distributed to the regions to be managed to fund the government’s maintenance that became the authority in the regions.
It is clear that palm oil profit sharing is part of TKD and deriving from the levy on palm oil, crude palm oil, and or its derivative products based on the regulation of minister about numbers of out fee and levy on palm oil, crude palm oil and or its derivaitive products namely about the numbers of export citation tariff.
The allocation of palm oil profit sharing was decided based on the revenue in one previous year until the end year – of budget. The allocation limit from palm oil profit sharing would be 4% from the revenue and decided by the government as the minimal palm oil profit sharing. Besides, the government could use other revenue with Budget and Expenditure mechanism.
Palm oil profit sharing that is distributed for the regions, used the percentages, as follow, the provinces got 20% allocation; producer regencies/cities got 60%; regencies/cities in borders with producer regencies/cities got 20%. The allocation was from the consideration of palm oil plantation areas, plantation productivity, and or other indicators that related ministers decided and derived from related ministries/institutions.
Referring to Chapter 6, Government’s Regulation Number 38 / 2023, palm oil profit sharing would be handed over based on the weigh up to 90% from the percentage of profit sharing and decision of producer regions, and 10% based on performance in the regions. While the performance in the regency/city to get palm oil profit sharing calculation is the performance to minimize poverty level, develop sustainable palm oil plantations, and or other performances.
It is important to develop sustainable palm oil plantations. What InfoSAWIT noted, it would be the basic to succeed the development and escalate plantation productivity in one region. That is why by implementing the best and sustainable palm oil practices, the successful development would always continue to get poverty alleviation in the society and welfare together.
Referring to sustainable development goals (SDGs) in national scale, palm oil issues that become the latest specter, such as, palm oil plantation legal, should be the main project for the regions to get solution through every available mechanism.
By having solution on the issue, the government could encourage to improve palm oil plantation governance through sustainable palm oil development based on ISPO principles and criteria which has become a national – scale certification mandatorily.
The successful ISPO certification achievement in one region could be the benchmark for the district performance in sustainable palm oil development and also in poverty alleviation. That is why the successful ISPO certification would directly deliver impacts to environment and social management around the plantations, escalate plantation productivity, and encourage the people’s welfare.
If the regions successfully develop sustainable palm oil plantations, Indonesia would be the biggest sustainable palm oil producer in the world and encourage law enforcement in national scale. It would implement the world – class sustainable principles and criteria.
It is the time to succeed sustainable palm oil development, as part of palm oil profit sharing. The success of sustainable palm oil development would encourage the images of palm oil as sustainable product in the world. Hopefully. (*)
