New Perpres Separates the Regulatory Nomenclature for the Upstream and Downstream Palm Oil Sectors

The drafting of Draft Regulation of the President (“RPerpres”) on the Sustainable Palm Oil Action Plan (Rencana Aksi Kelapa Sawit Berkelanjutan – “RAN-KSB”) is still underway. The new RPerpres will separate the regulatory framework for the palm oil sector between the Coordinating Ministry (“Kemenko”) for Economic Affairs and Kemenko for Food Affairs.

“The process has essentially reached the final stage and is expected to proceed to legalization or promulgation by the State Secretariat. However, further discussions are currently being held regarding the regulatory nomenclature,” said Prof. Ermanto Fahamsyah, Professor of Economic Law at the University of Jember and a Member of the Advisory Council of the Indonesian Palm Oil Association (Gabungan Pengusaha Kelapa Sawit Indonesia – “GAPKI”), in an interview with Hukumonline.

He explained that, under the proposed new regulation, the upstream segment of the palm oil sector, particularly cultivation activities, will fall under the regulatory authority of Kemenko for Food Affairs. Meanwhile, the downstream segment, which includes downstream industrial development, financing, and bioenergy, will be regulated by the Kemenko for Economic Affairs. The new regulation is intended to serve as a roadmap for the central government, regional governments, and other stakeholders in strengthening the sustainability of the palm oil sector.

Ermanto further explained that the Perpres on RAN-KSB will serve as the primary legal framework governing the sustainability of the palm oil sector. Meanwhile, Perpres on Indonesian Sustainable Palm Oil (“ISPO”) will function as a legal instrument operating within that framework, thereby enabling the two regulations to complement each other in supporting sustainable palm oil governance.