Indonesia plans to fine palm oil growers, miners $8.5B for forest encroachment

Indonesia has identified potential fines amounting to $8.5 billion that the government could collect in 2026 from palm oil companies and miners operating illegally in forest areas, the country’s attorney general said on Wednesday.

President Prabowo Subianto’s forestry task force, made up of military personnel, police, prosecutors and government officials, has this year cracked down on an unprecedented scale on plantations and mines in what authorities say were supposed to be forest areas.

The military-backed campaign has unnerved the palm oil industry, with analysts predicting that in combination with Indonesia’s ambitious biodiesel plans, the seizures could put even more upward pressure on global prices by disrupting production.

Attorney General Sanitiar Burhanuddin, speaking at a ceremony in front of tall stacks of red rupiah banknotes, said the task force has already taken over 4.1 million hectares (9.8 million acres) of illegal plantations and mines, a total area about the size of the Netherlands.

Burhanuddin also handed to the finance minister over 2.34 trillion rupiah ($139.70 million) in fines the task force collected from 20 palm oil companies and one nickel miner.

“For 2026, there is revenue potential from administrative fines from palm oil plantations and mines within forest areas, amounting to 109.6 trillion rupiah ($6.54 billion) for palm oil and 32.63 trillion rupiah ($1.95 billion) for mining,” Burhanuddin said.

He did not name any of the companies.

Burhanuddin also transferred more than 240,500 hectares of plantations to state firm Agrinas Palma Nusantara, which was set up early in 2025. Agrinas’s total land size has now reached 1.7 million hectares, consolidating its position as the largest palm oil company in the world by area.

At the ceremony, Prabowo praised the task force and railed against those he said had tried to bleed Indonesia dry as well as foreign forces undermining his government.

“Even though the work, the journey is tough, I have an instinct in 2026 we will take even bolder steps … We will save this nation’s wealth without hesitation,” he said.

Indonesia is the world’s biggest exporter of palm oil, thermal coal, nickel and tin.

($1 = 16,750.0000 rupiah)

(By Gayatri Suroyo; Editing by David Stanway)