Indonesia follows the rule of law in managing development, including the expansion of oil palm plantations. The guidelines and procedures for acquiring additional land for plantations are also regulated by law (Figure).
With reference to Law No. 41/1999 on Forestry, it is stipulated that only production forests can be converted into non-forest areas carrying new functions, including their use as plantations. Converting protected forests and conserved forests, however, is prohibited.
The only institution authorized to consent to and decide on releasing a production forest to be converted into a non-forest area is the government, through the Ministry of Forestry and Environment. After a ministerial decree on the releasing the area for conversion (SK Pelepasan Kawasan) is obtained, the institution authorized to issue the subsequent plantation location permit (Izin Lokasi Perkebunan) is the head of the regional administration –a regent or a governor – in accordance with the Plantation Law and the Regional Administration Law.
The next step in the process is to apply for a plantation business permit (Izin Usaha Perkebunan), which can only be issued by the Agriculture Minister. Only after obtaining this business permit can an application for the right of cultivation (Hak Guna Usaha, HGU) be submitted to the Agrarian and Spatial Planning Minister to use the land as an oil palm plantation.
Such a procedure and mechanism to acquire land for plantation use, in which the government has the final say, does not accord oil palm plantation businesses the chance or the capacity to indiscriminately seize or take over forest areas. In fact, the tiered mechanism to acquire land for plantation use has been designed so as to prevent uncontrolled land use. If a breach in the procedure is committed, the perpetrators must then be brought before the law.