Govt Amends Regulation on Collection and Use of Palm Oil Funds
The Government amended the Presidential Regulation (Perpres) Number 61 of 2015 on Collection and Use of Palm Oil Plantation Funds in order to improve the development of Human Resources, research and development, rejuvenate facilities and infrastructure of palm oil plantations, boost the use of palm oil plantations funds for biodiesel as well as to streamline the implementation of the Steering Committee tasks.
Based on the aforementioned consideration, on 15 August 2018 President Jokowi signed Presidential Regulation Number 66 of 2018 on the Second Amendment to the Presidential Regulation Number 61 of 2015 on Collection and Use of Palm Oil Plantation Funds (link: Perpres_Nomor_66_Tahun_2018).
The Regulation stipulates that Fund Management Agency shall determine the priority for the use of Funds based on policies set by the Steering Committee and in accordance with Government programs (in the previous provision, Fund Management Agency shall consider the recommendation from the Government and Steering Committees policy, Ed)
The aforementioned palm oil research and development, according to the regulation, is carried out to improve knowledge about breeding, cultivation, postharvest and processing of products, industry, markets, value chains of plantation products from upstream to downstream, and development of palm oil plantations.
“In the framework of research and development of palm oil plantations, research institutions shall be established and / or be strengthened with focus on technological development, industrial sector, product innovation, financing schemes, market knowledge, and environmental adoption,” reads Article 13 paragraph (2) of the regulation.
The regulation affirms that further provisions regarding the use of the Funds for implementation of human resource development as well as facilities and infrastructure of palm oil plantations shall be regulated by the Minister of Agriculture Regulation by taking into account the policy of the Steering Committee.
The regulation also stipulates that the use of the Funds for supply and utilization of biodiesel is intended to cover the gap between the market price index of diesel fuel and the market price index of biodiesel.
“The market price index of diesel fuel and the market price index of biodiesel shall be determined by Minister of Energy and Mineral Resources,” Article 18 paragraph (2) of the regulation reads.
The aforementioned price gap applies to all types of fuel and biodiesel purchasing shall be conducted through direct appointment mechanism, while the price of biodiesel that will be mixed for fuel will be based on the market price index.
“Business entities that distribute biodiesel are obliged to mix biodiesel with diesel fuel based on the percentage set by Minister of Energy and Mineral Resources,” Article 19 paragraph (4) reads.
The regulation explicitly states that the Steering Committee has following responsibilities: a. to formulate policies regarding collection and use of the Funds, including managing the Funds to obtain added value in a sustainable manner; and b. to supervise the implementation of the policy.
The Steering Committee, according to this Presidential Regulation, consists of: a. Chairman: Coordinating Minister for the Economy; b. Members: 1. Minister of Agriculture; 2. Minister of Finance; 3. Minister of Industry; 4. Minister of Trade; 5. Minister of Energy and Mineral Resources; 6. Minister of State Owned Enterprises; 7. Minister of National Development Planning / Head of National Development Planning Agency (in the previous regulation, the last two were not members, Ed).
The Presidential Regulation has been promulgated by Minister of Law and Human Rights Yasonna H. Laoly on August 15, 2018, and comes into force on the date of promulgation.