KUALA LUMPUR: SD Guthrie Bhd says less than three per cent of its 180,000 hectares of planted oil palm area in Indonesia is currently under review by the Indonesian government.
Addressing concerns over reports suggesting that some of its Indonesian subsidiaries may be operating in forest-designated areas without permits, group managing director Datuk Mohamad Helmy Othman Basha said the matter is not unique to SD Guthrie.
Similar overlaps have affected both Malaysian and Indonesian plantation companies operating in the country, he added.
CIMB Securities recently highlighted growing regulatory risks for Malaysian plantation companies operating in Indonesia.
This followed the Indonesian government’s move to seize land lacking proper forestry permits or in violation of land-use laws.
SD Guthrie’s Indonesian subsidiaries were listed in an official decree, with 3,045 hectares under scrutiny, 1,874 hectares currently under the legalisation process and 1,171 hectares reportedly rejected.
“For context, our total planted area in Indonesia is about 180,000 hectares. Less than three per cent of this has been flagged by the authorities as overlapping with forest zones,” Helmy said at a press briefing here today.
“However, we have our own data that disputes this, and discussions with the Indonesian government are ongoing,” he added.
Helmy said SD Guthrie continues to manage operations in the affected areas and is in active discussions with the Indonesian government to resolve the land classification concerns
Group chief operating officer Mohd Haris Mohd Arsyad said the issue is not about illegal clearing or expansion, but rather differing interpretations of land use boundaries.
“There’s the Perhutanan (forestry) map, and then there’s the map from the ministry that gives us our licenses. Much of this happened before we acquired the land,” he said.
The land in question was acquired from the Indonesian government in 2001 during a post-financial crisis asset restructuring.
Helmy likened the acquisition to Malaysia’s Danaharta model, saying that it was conducted with representations and warranties from the government.
Chief financial officer Renaka Ramachandran clarified that SD Guthrie should not be associated with deforestation, as the plantations were already established prior to the acquisition.
“We never planted the land ourselves. We bought ready-made plantations, and the agreement came with assurances from the government. Accusations of deforestation should not arise,” she said.
The executives reiterated that SD Guthrie holds valid land titles and has complied with relevant processes.
They acknowledged that resolving the matter will require time and continued engagement with authorities.
“We’re confident this will be resolved, but it’s a complex issue that requires ongoing dialogue with the government,” said Haris.
© New Straits Times Press (M) Bhd
