Indonesia to audit palm oil companies, ask for onshore HQ

JAKARTA (Reuters): Indonesia will audit all palm oil companies operating in the country and require them to move their headquarters onshore amid efforts to improve governance of the sector, senior cabinet minister Luhut Pandjaitan told local media.

The industry has faced heightened scrutiny and a series of flip-flopping regulations in recent months as the government struggles to control supply and prices of cooking oil, which is made using palm oil.

Luhut's spokesperson, Jodi Mahardi, said on Wednesday (May 25) the government will audit companies' land size, partnership with nearby smallholder farmers, and tax reports, among others.

The government will also get palm oil companies to set up headquarters in Indonesia, Jodi said, without elaborating.

Several Indonesian palm oil companies are listed or headquartered in neighbouring Singapore while some Malaysian companies operate plantations in Indonesia through local subsidiaries.

Luhut said the audit could be launched as early as next month.

"The plan is to launch this after supply scarcity has been taken care of and prices return to normal," Jodi said, referring to cooking oil prices that have remained stubbornly high despite a controversial ban on exports of palm oil that was imposed on April 28 and lifted this week.

Trade Minister Muhammad Lutfi in a parliament hearing on March 18 blamed a "palm oil mafia" for exploiting high cooking oil prices. Meanwhile, lawmakers have called for improvement in palm oil sector governance.

Indonesia's Attorney General has launched a corruption investigation in relation to palm oil export permits and has named a senior Trade Ministry official and three company executives as suspects.

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