JAKARTA (Reuters) – Indonesian prosecutors on Monday handed over more than 221,000 hectares (546,000 acres) of illegal palm oil plantations seized as part of an on-going corruption probe to a new state-owned company that will manage them.
Indonesia, the world’s biggest producer of palm oil, is working to improve the edible oil’s global public image in the face of criticism that plantations are a major driver of deforestation.
The confiscated plantations are located in protected forest areas on Sumatra and Borneo islands. They had been managed by units of the privately-owned Duta Palma Group, which is currently being investigated by the attorney general’s office.
They will be taken over, at least temporarily, by Agrinas Palma Nusantara, a state firm previously involved in construction that was converted into a palm oil company this year.
“We have limitations to be able to manage this evidence,” said prosecutor Febrie Adriansyah, referring to the plantations during a handover ceremony in the capital Jakarta. “Business must continue.”
Indonesia’s highest court handed Duta Palma’s founder Surya Darmadi a 16-year prison sentence last year after he was convicted of bribery, managing plantations in designated forest areas and money laundering, according to media reports.
The seizure of the plantations transferred to Agrinas took place as part of an investigation that grew out of that prosecution.
Duta Palma was not immediately reachable for comment.
Monday marked the first time Indonesian authorities have handed over management of confiscated plantations to Agrinas, and it was unclear how long the company was expected to manage them.
Indonesia’s ministry of state-owned enterprises did not immediately respond to a request for comment.
Febrie, however, said that legal proceedings against Duta Palma could take a significant amount of time.
Earlier this year, President Prabowo Subianto assigned Defence Minister Sjafrie Sjamsoeddin to head a task force to issue fines or take over palm oil plantations discovered in designated forest areas.
Sahat Sinaga, head of the Indonesia Palm Oil Board, said he backed the idea of Agrinas managing seized plantation land as it would maintain production and ease concerns within Indonesia’s palm oil industry.
“We hope that, with the coming in of Agrinas, there will be peace of mind in doing business,” he said.
(Reporting by Ananda Teresia and Gayatri Suroyo; Additional reporting by Bernadette Christina Munthe and Dewi Kurniawati; Editing by Joe Bavier)
