PT Perdana Intisawit Perkasa Implements ICC’s Order To Improve Its Partnership With The Bunga Idaman Palm Cooperative In Riau.

Wednesday, November 22, 2023

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Jakarta (11/10) The Indonesia Competition Commission (ICC) has once again resolved the issue of partnerships between micro, small, and medium enterprises (MSMEs). This time, the partnership between PT Perdana Intisawit Perkasa (PT PISP) and around 830 plasma farmers who are members of Sawit Bunga Idaman Cooperative (Kospa Bunda) in Rokan Hulu Regency, Riau. The settlement is in line with the submission of the Stipulation of Termination of Case Number 07/KPPU-K/2022 concerning Alleged Violation of Article 35 Paragraph (1) of Law Number 20 Year 2008 from the Director of Partnership Supervision of ICC, Lukman Sungkar, to the President Director of PT PISP, Harianto Tanamoeljono, on October 11, 2023, at the ICC Head Office in Jakarta. The stipulation was given in line with the implementation of behavioral changes by PT PISP after the issuance of Written Warning Letters I, II, and III after the monitoring period for the implementation of improvements carried out by ICC for 1 year.

This issue originated from a public report to the ICC regarding the control behavior carried out by PT PISP over the business activities of plasma farmer partners of Kospa Bunda members, which allegedly violated Article 35, Paragraph 1, of Law Number 20 of 2008. The handling of this issue continued with the issuance of a written warning. In the written warning, the ICC ordered PT PISP to make various improvements, namely:

  1. Held a meeting with Kospa Bunda to explain the details of all debts for development and management costs that are the responsibility of the plasma;
  2. Provide technical guidance and training to Kospa Bunda on oil palm plantation agronomy techniques and cooperative management;
  3. Submit reports on the production and sales of oil palm fruit bunches (TBS), as well as reports on maintenance, harvesting, and transportation costs from each planting year since the TBS entered the producing crop period, and submit the cooperative’s rights from the sale of TBS that have entered the age of 48 months (in the pre-conversion period);
  4. Together with Kospa Bunda, prepare a financial accountability report on the management and maintenance of the plasma plantation;
  5. Together with Kospa Bunda to inspect the plasma plantation to check the physical condition and infrastructure of the plasma plantation and re-discuss the completion of oil palm plantation development in accordance with what was agreed in the cooperation agreement, especially related to land area, number of trees per hectare, and plant maintenance, with the cost charged to the Reported Party;
  6. Together with Kospa Bunda, develop an operational work plan and implement it responsibly; and
  7. To apply for and complete the process of Kospa Bunda’s land use right (HGU) certificate.

PT PISP implemented all of these corrective orders, so the ICC decided to terminate Case Number 07/KPPU-K/2022. With this change in behavior, around 830 smallholder partners of Kospa Bunda members will be able to receive benefits from the partnership cooperation carried out. These benefits include:

  1. In the skills and knowledge transfer process, smallholders receive technical guidance on oil palm agronomy and cooperative management from core;
  2. Involvement in the preparation of financial reports on the maintenance and management of plasma oil palm plantations;
  3. Transparency of information regarding all debts for the development and management of plasma oil palm plantations;
  4. Receipt of reports on TBS production and sales;
  5. Receipt of rights from the sale of TBS;
  6. Physical and infrastructure improvements of plasma oil palm plantations at the expense of PT PISP; and
  7. Assistance in managing the HGU certification of Kospa Bunda land by PT PISP.

ICC hopes that the partnership can increase positive impacts in the future and that plasma farmers increasingly understand their respective rights and obligations to optimize the benefits of the partnership relationship. Meanwhile, oil palm plantation companies can carry out their role as core companies by continuing to prioritize the principles of mutual trust, mutual need, mutual strengthening, and mutual benefit.