Indonesia plans to fine palm oil growers and miners $8.5bn for forest encroachment

The Indonesian government plans to collect about $8.5bn in fines in 2026 from palm oil producers and mining companies that it believes have been operating illegally within forest areas. The information was reported by Reuters, citing the country’s attorney general.

Throughout 2025, a special forestry task force established by President Prabowo Subianto intensified inspections of plantations and mines. The task force, which includes military personnel, police, prosecutors and government officials, focused on operations that authorities say were located on land officially designated as forest areas.

The military-backed campaign has unsettled the palm oil industry. Analysts warn that land seizures, combined with Indonesia’s ambitious biodiesel expansion plans, could disrupt production and place additional upward pressure on global palm oil prices.

According to Attorney General Sanitiar Burhanuddin, the task force has already taken control of more than 4.1 million hectares of land from illegal plantations and mines. It has also collected over IDR 2.34 trillion (about $139.7m) in fines from 20 palm oil companies and one nickel miner.

Looking ahead to 2026, potential revenue from administrative fines is estimated at IDR 109.6 trillion ($6.54bn) from palm oil plantations and IDR 32.63 trillion ($1.95bn) from mining. Part of the seized plantations has been transferred to the state-owned company Agrinas Palma Nusantara, which now controls around 1.7 million hectares, making it the world’s largest palm oil company by land area. Indonesia remains the world’s largest exporter of palm oil, as well as a major supplier of thermal coal, nickel and tin.

Tags: Indonesia, palm oil