JAKARTA (Reuters): Indonesia will launch a broader crackdown on the illegal exploitation of natural resources after a survey found that palm plantations on 3.7 million hectares (14,300 square miles) were operating in violation of the law, President Prabowo Subianto said on Friday.
The area is almost the size of Switzerland. Prabowo added that a total of 5 million hectares of palm plantations have been under scrutiny for operating in protected forest areas, not reporting their actual size, or not responding to summons from auditors.
He made the comments in his first state of the nation speech, delivered as the country - the world's largest producer and exporter of palm oil - celebrates 80 years of independence this weekend. Prabowo won a presidential election last year, and took power in October.
"We will ensure that the Indonesian people will not fall victim to greedy economics," Prabowo, speaking in parliament, said, adding that the government had already seized 3.1 million hectares of illegal palm plantations with the help of the military.
"We have used the military to accompany the teams that took over the plantations because there often is resistance," he said. Critics have expressed concern about the growing role of the military in civilian life in the country under Prabowo.
In his speech, Prabowo, a former special forces commander known for his aggressive operational tactics, also warned that the state could confiscate assets of companies that "manipulate and violate" Indonesia's laws.
He said his government was also planning a crackdown on mining, adding that authorities had received reports of as many as 1,063 illegal operations throughout the vast, mineral-rich archipelago.
He did not specify what type of mines or the commodities they were extracting.
Indonesian Palm Oil Association (GAPKI) chief Eddy Martono questioned the source of Prabowo's figures and said his organisation had not been consulted on the 5 million hectares number.
On the 3.7 million hectares of plantations found to be operating unlawfully, he said companies and cooperatives running them had been asked to clarify their status and some had permits such as land-use concessions and ownership certificates.
"It will create a negative image internationally, suggesting that Indonesian palm oil is encroaching on forests," he said.
There was no immediate response from the national association of miners to a Reuters request for comment on the president's assertions.
Indonesia is also the world's biggest producer of nickel and a major producer of thermal coal, tin, and copper.
Prabowo added that the government would take action against businesses found to be hoarding and exploiting key commodities in Indonesia.
Large-scale rice mills would also be forced to obtain government permits to ensure rice quality and affordability, he said.
The main stock index touched its all-time high, rising 1.1%, as Prabowo started his speech, but then retreated to trade 0.4% down by the close.
The rupiah, which had strengthened in recent days, also slipped 0.3%.
Later on Friday, Prabowo unveiled the government's budget estimates for the next fiscal year.
(Reporting by Bernadette Christina, Stanley Widianto, Fransiska Nangoy, and Gayatri Suroyo in Jakarta; Writing by Gibran Peshimam; Editing by David Stanway and Raju Gopalakrishnan) - Reuters
