Metamorphosis of Palm Oil Settlement in Forest Areas: Policy Trajectories after Government Regulation Number 45 of 2025

Abstract

Palm oil is a strategic commodity that supports Indonesia’s economy. One of the problems in palm oil governance is the overlap between forest areas and palm oil plantations. This problem has caused Indonesian palm oil to receive a negative response in the international market, prompting the government to formulate a resolution policy since 2010. On September 19, 2025, the government released the latest policy through Government Regulation Number 45 of 2025 on Amendments to Government Regulation Number 24 of 2021 on Procedures for Imposing Administrative Sanctions and Procedures for Non-Tax State Revenue from from Administrative Fines in the Forestry Sector. This policy has caused concern because it deemed detrimental to palm oil industry. The study applies a normative juridical method and attempts to analyze the new contents of Government Regulation Number 45 of 2025 to identify policy recency. The study identifies four substantial provisions in Government Regulation Number 45 of 2025, namely the strengthening of Forest Area Control Task Force; revision of the formula for calculating administrative fines; “repossession” of forest areas; and the removal of the legality of continuing operations in Article 110B scheme. There are three crucial issues that have the potential to cause legal uncertainty, namely the lack of clarity on follow-up actions after “repossession” in conservation and protected forests; the weak principle of enforceability of administrative sanction decisions; and the lack of clarity on the agency that manages non-tax state revenue from administrative fines. The study recommends the government to intensify “repossession” in conservation and protected forests and restore the ecosystems; establish a system for delivering administrative sanction decisions that can be immediately accepted by legal subjects; and appoint an agency to manage non-tax state revenue from administrative fines.