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Revision of the Minister of Agriculture Regulation No. 26/2007 regarding Plantation Business Permit
August 16th 2013
 

The Issue

The issue of revising the Minister of Agriculture Regulation (Permentan) No. 26/2007 regarding Plantation Business Permit has been flowing since early 2012. Latest Revision draft has been announced on 19 June 2013 and until now is still being discussed before eventually ruled.

Generally, the revision was done for the purpose of complying regulations in agricultural field with  other related laws, either the laws that had been ruled  after or before Permentan No. 26/2007 being ruled  without considering such rules  while drafting the Permentan No. 26/2007.  

Consideration rules

Several laws that become the foundation for Revision Draft of Permentan No. 26/2007 are:

[1] Law No. 1/1999 regarding the Ban on Monopoly Practices and Unfair Bussiness competition.

[2] Law No. 41/1999 regarding Forestry

[3] Law No. 25/2007 regarding Investment

[4] Law No. 40/2007 regarding Limited Company

[5] Law No. 14/2008 regarding Public Disclosure

[6] Law No. 32/2009 regarding Enviromental Protection and Management

[7] Law No. 41/2009 regarding Protection of Sustainable Farmlands

[8] Law No. 4/2011 regarding Geo-spacial Information

[9] Presidential Regulation No. 36/2010 regarding List of Business and Limited Business with Requirement in Investment;

12 important issues

Herein a few important issues on Permentan 26/2007 revision concept:

[1] Agricultural companies  with IUP-B Permit have to acquire land area 25 Ha at minimum, with the exception of Oil Palm commodity, which limited on 25 Ha to <1000 Ha. For Tea commodity, the limitation is 25 Ha to <240 Ha and Sugarcane commodity limited to 25 Ha to 2.000 Ha;

[2] Oil Palm plantation, Tea plantation or Sugarcane plantation that meet the maximum limit of area or even exceeded the limit must be integrated to Crops Processing Industry with IUP Permit;

[3] Agricultural companies with IUP-P Permit must establish business partnership with public (surrounding people) shareholding scheme or gradual divestment starting from the 5th year with minimal 5% interest until minimum of 51% in the 10th year;

[4] Transparency in issuance of permit in agricultural field in accordance with Public Disclosure Law. According to draft of Permentan, documents of IUP, IUP-B and IUP-P will be available for public access;

[5] The procurement of  Cultivating Rights for agricultural companies with IUP-B, IUP-P or IUP permit published before the passing of (Revision) Permentan No.26/2007 must be done in 2 years at the latest;

[6] The obligation to submit digital map of the farmland with 1:100.000 – 1:50.000 in scale, and for the companies that requested for IUP-B and IUP permit have to submit Certificate of Forest Area or Non-Forest Area from Ministry of Forestry and certificate of company status as an independent business or as a part of company group that have not yet possessed land exceeding the maximum limit as mentioned:


IUP-B 

Commodity

Provincial limit (Ha)

Indonesian limit (Ha)

Coconut

20.000

100.000

Rubber

6.000

20.000

Coffee

5.000

10.000

Cocoa

5.000

10.000

Cashew Apples

5.000

10.000

Pepper

1.000

1.000

Clove

1.000

1.000

Jatropha

20.000

100.000

Cotton

5.000

20.000

 IUP

Commodity

Provincial limit (Ha)

Indonesian limit (Ha)

Oil Palm

20.000

100.000

Tea

10.000

20.000

Sugarcane

60.000

150.000

 

[7] The maximum limit for one business does not applied to State Owned Enterprises or Provincial Owned Enterprises, Cooperative and Agricultural Open Companies;

 

[8] Technical recommendation from Agricultural Directorate General for foreign investment or local investment made by agricultural companies whose investment permit was issued by BKPM.

 

[9] The addition of Agricultural Minister’s rights to oversee regents who breaches the agricultural permit issuance process;

 

[10] Revocation of company’s Right to Cultivate, if the company does not procure their bussiness permit in 1 year time;

 

[11] Companies with IUP-B and IUP are obligated to establish a public farmland with area size 20% of total area size at minimum;

 

[12] Attachment that contain format of:

[a] STD-B, STD-P, Governor’s/ Regent’s/ Mayor’s Decree regarding Agricultural Bussiness Permit IUP-B, IUP-P and IUP format;

[b] Statement of Ability, statement of company or group not yet possessing land over maximum limit, statement of guarantee for Processing Industry material supply and statement of readiness for partnership format;

[c] Partnership Agreement for Sustainable Processing Industry, Guarantee of Processing Industry’s Material Supply Agreement.

 

Copyright 2013 by LexRegis
 
 
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16/08/2013
Revision of the Minister of Agriculture Regulation No. 26/2007 regarding Plantation Business Permit
05/07/2013
LexRegis Trip to Pari Island
18/06/2013
Seven Important Points of BKPM Regulation No. 5/2013
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