Palm Oil & the Environment: The Moratorium on Palm Oil Plantations for Local Communities and the Environment

The Moratorium on Palm Oil Plantations for local communities and the environment. Credit photo. RMSP.

Indonesia and Malaysia together produce approximately 85% of the world’s palm oil. While this industry drives significant economic growth, especially in Indonesia, it also raises serious concerns—particularly around large-scale deforestation, ecological destruction, and conflicts with local and Indigenous communities.

The Palm Oil Moratorium

In 2011, recognizing the environmental and social risks of unchecked expansion, then-President Susilo Bambang Yudhoyono issued a moratorium on new palm oil plantations. This policy aimed to halt the rapid destruction of forests and peatlands by freezing the issuance of new plantation permits across 5.18 million square kilometers of vulnerable areas.

This marked a turning point in Indonesia’s environmental policy—showing the country’s commitment to balancing economic development with ecological sustainability.

Key Presidential Regulations Supporting the Moratorium

Since its introduction, the moratorium has been strengthened through several presidential decrees:

1. Presidential Regulation No. 10 of 2011 – Prohibited the issuance of new licenses for palm oil development in primary forests and peatlands.
2. Presidential Regulation No. 61 of 2016 – Extended the policy by three years and reinforced protection measures.
3. Presidential Regulation No. 20 of 2018 – Introduced stricter rules, including bans on expansion into peatlands and river ecosystems.
4. Presidential Regulation No. 44 of 2020 – Extended the moratorium until 2024, requiring environmental impact assessments and stricter licensing procedures.

These regulations reflect a growing awareness of the need for sustainable land use and resource governance.

Safeguarding Local Communities and Ecosystems

The moratorium not only protects forests but also safeguards the rights and livelihoods of local communities. Not every region in Indonesia is well-suited for palm oil cultivation. For example, Java faces land scarcity and high population density, while Kalimantan and Papua offer more physical space but lack infrastructure and adequate labor force.

The policy helps:

1. Prevent land grabbing and illegal encroachment.
2. Reduce social conflict.
3. Protect the land rights of Indigenous peoples.
4. Promote long-term environmental and economic stability.

This balanced approach ensures that the development of the palm oil sector does not come at the cost of ecological destruction or community displacement.

Community Oversight Is Key to Enforcement

Despite good intentions, violations of the moratorium continue to occur, often driven by corporate greed and weak enforcement. This makes community engagement and oversight essential.

Local communities should:

1. Monitor the permit approval process.
2. Demand transparency from companies claiming compliance with RSPO (Roundtable on Sustainable Palm Oil) standards.
3. Scrutinize environmental impact reports and waste management practices.
4. Assess whether the economic benefits of palm oil development are being fairly distributed.

Empowered local oversight ensures that palm oil companies uphold legal and ethical standards and that the moratorium produces real results on the ground.

A Path Toward Sustainable Development

The palm oil moratorium serves not only as a shield against environmental degradation but also as a mechanism for ensuring equitable development. It reflects Indonesia’s larger vision of responsible growth—one that honors ecosystems and uplifts local communities.

With strict regulation, transparent enforcement, and active participation from local stakeholders, the palm oil industry can evolve into a model for sustainable natural resource management.

-- Rangkaya Bada