Changes in Regulations and their Impact on the Development of the Palm Oil Industry in Labuhan Batu Utara

Oct 13, 2025 by talynt.org 8 views

Amendment to the Regulation of the Minister of Agriculture of the Republic of Indonesia No.26/Permentan/OT.140/2/2007 to No. 98/Permentan/OT.92013 and its effect on the increase in the palm oil processing industry in Labuhan Batu Utara Regency

Changes in Regulations and their Impact on the Development of the Palm Oil Industry in Labuhan Batu Utara

The palm oil industry has been a significant contributor to the economy of Labuhan Batu Utara Regency in Indonesia. However, the development of this industry has been hampered by the regulations governing its operation. The Minister of Agriculture Regulation No. 26/Permentan/OT.140/2/2007, which regulates the construction of oil palm factories, has been criticized for being restrictive and harmful to the community. This regulation requires oil palm factories to have their own oil palm plantations, resulting in the transportation of plantation results over long distances, which is costly for the community. Furthermore, the community is only seen as a supplier of raw materials without any opportunity to participate in factory management. Additionally, this regulation does not explicitly regulate environmental responsibility.

The Need for Change

The previous regulation was seen as unjust, uncertain, and lacking in protection for business actors. In response to these concerns, the government issued Minister of Agriculture Regulation No. 98/Permentan/OT.92013, which replaces the previous regulation. This new regulation further accommodates the interests of the community and the environment with several significant changes. One of the important points is the allowance of the construction of oil palm factories without their own gardens, provided that the factory has a written agreement with the community to obtain a supply of raw materials and conducts a partnership program.

Key Changes in the New Regulation

The new regulation requires companies to empower the community through a partnership program by providing land for oil palm plantations of at least 20% of factory processing capacity. This is expected to improve the welfare of the community and encourage the creation of new business opportunities. The company is also required to sell shares to the public through a cooperative of at least 5% in the first year, and gradually increases up to 30% within a period of 15 years. These changes are expected to promote transparency, accountability, and social responsibility in the palm oil industry.

Implementation of the New Regulation in Labuhan Batu Utara Regency

The Labuhan Batu Utara Regency Government has utilized the new regulation to encourage community economic growth through the development of the palm oil industry. Notably, there are already three oil palm factories operating without owning their own gardens in Labuhan Batu Utara Regency. This provides benefits for the community, as plantation results can be marketed closer to the factory, the company facilitates the development of community gardens, and encourages the realization of a sustainable palm oil industry by taking into account social and environmental aspects.

Challenges in the Implementation of the New Regulation

However, the success of the implementation of Minister of Agriculture Regulation No. 98/Permentan/OT.92013 in Labuhan Batu Utara is still overshadowed by a lack of transparency and accountability in the issuance of business licenses. The community still complains of a lack of transparency in licensing costs, information, and permit management processes. The one-door licensing system has not yet been implemented effectively in Labuhan Batu Utara Regency, so the licensing process is still complicated and inefficient.

Recommendations for a Sustainable and Beneficial Palm Oil Industry

To create a sustainable and beneficial palm oil industry for the community, the Labuhan Batu Utara Regency Government needs to increase transparency and accountability in the issuance of business licenses, as well as strengthen the implementation of a one-door licensing system. This is important to create a conducive investment climate and guarantee justice for all parties involved in the palm oil industry.

The Impact of the New Regulation on the Palm Oil Processing Industry in Labuhan Batu Utara Regency

The new regulation has had a significant impact on the palm oil processing industry in Labuhan Batu Utara Regency. The allowance of the construction of oil palm factories without their own gardens has encouraged the development of community gardens and the realization of a sustainable palm oil industry. The requirement for companies to sell shares to the public through a cooperative has promoted transparency and accountability in the industry.

Benefits for the Community

The new regulation has provided several benefits for the community, including:

Improved welfare through the provision of land for oil palm plantations
Creation of new business opportunities through the empowerment of the community
Increased transparency and accountability in the issuance of business licenses
Promotion of a sustainable palm oil industry that takes into account social and environmental aspects

Conclusion

The amendment to the regulation of the Minister of Agriculture of the Republic of Indonesia No.26/Permentan/OT.140/2/2007 to No. 98/Permentan/OT.92013 has had a significant impact on the development of the palm oil processing industry in Labuhan Batu Utara Regency. The new regulation has promoted transparency, accountability, and social responsibility in the industry, and has provided several benefits for the community. However, the success of the implementation of the new regulation is still overshadowed by a lack of transparency and accountability in the issuance of business licenses. To create a sustainable and beneficial palm oil industry for the community, the Labuhan Batu Utara Regency Government needs to increase transparency and accountability in the issuance of business licenses, as well as strengthen the implementation of a one-door licensing system.
Q&A: Amendment to the Regulation of the Minister of Agriculture of the Republic of Indonesia No.26/Permentan/OT.140/2/2007 to No. 98/Permentan/OT.92013 and its effect on the increase in the palm oil processing industry in Labuhan Batu Utara Regency

Frequently Asked Questions

Q: What is the main purpose of the amendment to the regulation of the Minister of Agriculture of the Republic of Indonesia No.26/Permentan/OT.140/2/2007 to No. 98/Permentan/OT.92013?

A: The main purpose of the amendment is to promote transparency, accountability, and social responsibility in the palm oil industry, and to provide several benefits for the community, including improved welfare, creation of new business opportunities, and increased transparency and accountability in the issuance of business licenses.

Q: What are the key changes in the new regulation?

A: The new regulation requires companies to empower the community through a partnership program by providing land for oil palm plantations of at least 20% of factory processing capacity. The company is also required to sell shares to the public through a cooperative of at least 5% in the first year, and gradually increases up to 30% within a period of 15 years.

Q: How has the new regulation impacted the palm oil processing industry in Labuhan Batu Utara Regency?

A: The new regulation has had a significant impact on the palm oil processing industry in Labuhan Batu Utara Regency. The allowance of the construction of oil palm factories without their own gardens has encouraged the development of community gardens and the realization of a sustainable palm oil industry. The requirement for companies to sell shares to the public through a cooperative has promoted transparency and accountability in the industry.

Q: What are the benefits of the new regulation for the community?

A: The new regulation has provided several benefits for the community, including:

Improved welfare through the provision of land for oil palm plantations
Creation of new business opportunities through the empowerment of the community
Increased transparency and accountability in the issuance of business licenses
Promotion of a sustainable palm oil industry that takes into account social and environmental aspects

Q: What are the challenges in the implementation of the new regulation?

A: The success of the implementation of the new regulation is still overshadowed by a lack of transparency and accountability in the issuance of business licenses. The community still complains of a lack of transparency in licensing costs, information, and permit management processes. The one-door licensing system has not yet been implemented effectively in Labuhan Batu Utara Regency, so the licensing process is still complicated and inefficient.

Q: What recommendations are there for a sustainable and beneficial palm oil industry?

A: To create a sustainable and beneficial palm oil industry for the community, the Labuhan Batu Utara Regency Government needs to increase transparency and accountability in the issuance of business licenses, as well as strengthen the implementation of a one-door licensing system. This is important to create a conducive investment climate and guarantee justice for all parties involved in the palm oil industry.

Additional Information

Q: What is the significance of the one-door licensing system in the palm oil industry?

A: The one-door licensing system is a system that allows companies to obtain all necessary licenses and permits from a single agency, rather than having to navigate multiple agencies and processes. This system is expected to promote transparency, accountability, and efficiency in the issuance of business licenses.

Q: How can the community participate in the palm oil industry?

A: The community can participate in the palm oil industry through the empowerment program, which requires companies to provide land for oil palm plantations of at least 20% of factory processing capacity. The community can also participate in the cooperative program, which requires companies to sell shares to the public through a cooperative.

Q: What are the social and environmental benefits of the palm oil industry?

A: The palm oil industry has several social and environmental benefits, including the creation of jobs, the promotion of sustainable agriculture practices, and the conservation of natural resources. The industry also provides several economic benefits, including the generation of revenue and the promotion of economic growth.

Q: What are the challenges facing the palm oil industry in Labuhan Batu Utara Regency?

A: The palm oil industry in Labuhan Batu Utara Regency faces several challenges, including a lack of transparency and accountability in the issuance of business licenses, a lack of effective implementation of the one-door licensing system, and a lack of community participation in the industry.