Jakarta’s land crackdown brings ‘short-term pain’ but long-term clarity: Golden Agri-Resources

[SINGAPORE] Golden Agri-Resources expects “short-term pain” from Indonesia’s sweeping land-use review, but sees the land crackdown as a necessary step to resolve “a legacy issue” of overlapping land tenures and provide businesses with long-term clarity.

During a results briefing on Friday (Aug 15), the vertically integrated palm oil plantation company acknowledged that ongoing discussions with Indonesian authorities could lead to adjustments in its landbank.

“Addressing this legacy issue of overlapping land tenure gives businesses long-term confidence. Of course, getting there requires some of this short-term pain as we go through the review process to determine which bits are in and which bits are out,” said Anita Neville, chief sustainability and communications officer at Golden Agri-Resources.

Even as uncertainty lingers over potential land losses, Neville noted that the government’s move should “provide clarity to where plantation companies and other land-use managers can operate moving forward”.

“We see this as a good thing… a positive development for Indonesia in the future,” she added.

Given active engagement with the regulators, Golden Agri-Resources is “not in a position” to give any indication on material impact at the moment, Neville highlighted.

As the government expects to complete the process by end-2025, she said the company could provide an update by year-end.

Its head of investor relations Richard Fung highlighted the upstream segment – plantations and palm oil mills – as the largest contributor to the company’s earnings for the first half, which grew 56.5 per cent on the year. “This was driven by more favourable weather conditions, which gave us more production – more than compensating for the replanting process.”

Fung noted that replanting activity during the first half covered 6,000 hectares (ha). The segment’s earnings before interest, taxes, depreciation and amortisation were up 51 per cent at US$320 million and its revenue grew 30 per cent to US$1.2 billion.

Since early 2025, Jakarta has confiscated more than 2 million ha of allegedly illegal forest concessions.

In early July, a government taskforce announced that it transferred nearly 400,000 ha of seized oil palm plantations – previously controlled by 232 companies – to Agrinas Palma Nusantara, a new state-owned company formed in January by Indonesian President Prabowo Subianto’s administration.

Neville noted that the movement has been a “long time coming”, with implications for not just the palm oil industry but any industry involved in natural resource management.

Golden Agri-Resources did not disclose potential exposures, but emphasised active cooperation in the process.

Shares of Golden Agri-Resources were trading up 1.9 per cent or S$0.005 at S$0.27 as at 11.43 am on Friday.