Indonesia plans $8.5 billion fines for palm oil growers and miners over forest encroachment

Indonesia intends to fine firms that produce palm oil and mine, to the tune of as much as $8.5 billion, in 2026, should they carry out their operations within protected forest regions, said the country’s attorney general on Wednesday.

The enforcement comes in the wake of a nationwide crackdown launched by President Prabowo Subianto’s forestry task force, which consists of the military, police, prosecuting attorneys, and government officials. The forestry task force has been cracking down on plantations as well as mining activities that are considered an incursion into forested areas.

But such campaigning has shaken the palm oil industry, and analysts have warned that production disruptions coupled with Indonesia’s ambitious biodiesel development plans could see global palm oil prices escalate further.

Attorney General Sanitiar Burhanuddin said the task force has already taken control of an area containing 4.1 million hectares (9.8 million acres) of illegal plantations and mining activities, an area roughly the same size as the Netherlands. At a ceremony where the stacks of confiscated rupiah currency banknotes were on show, Attorney General Burhanuddin handed over an additional 2.34 trillion rupiah ($139.7 million) in fines paid by 20 palm oil companies and one nickel mining enterprise to the finance minister.

According to Burhanuddin, potential administrative fines that could be imposed in 2026 may come up to 109.6 trillion rupiah ($6.54 billion) from palm oil activities and 32.63 trillion rupiah ($1.95 billion) from mining activities carried out inside forest zones. The companies involved have not been mentioned by Burhanuddin.

Moreover, over 240,500 hectares of seized plantations were assigned to state-owned Agrinas Palma Nusantara, which was established in early 2025. Currently, with a total land ownership of 1.7 million hectares, Agrinas is the largest palm oil plantation firm globally.

The president praised the work of the task force during the ceremony. He said that he would take stronger actions in the future. He complained about using Indonesia’s resources for profit. The president indicated that he would take further actions in the coming year.

“Though it has been tough, we will take much bolder action in 2026, Prabowo predicted. “We will protect the riches of this nation without the least hesitation.”

Indonesia is a major exporter of palm oil, thermal coal, nickel, and tin to the world market.