Critical Analysis of the Nucleus–Plasma Scheme and Community Plasma from the Perspective of Community Economic Growth and Business Law
DOI:
https://doi.org/10.58818/ijlrsa.v4i2.309Keywords:
Community plasma, palm oil plantations, business law, economic growth, plantation policyAbstract
The plantation sector, particularly palm oil plantations, is one of the strategic sectors in Indonesia's economic development. The policy of granting Plantation Business Licenses (IUP) and Land Cultivation Rights (HGU) to plantation companies is essentially accompanied by an obligation to develop community plasma plantations amounting to at least 20% of the total cultivated land area. However, in practice, the implementation of this community plasma policy has not fully provided a significant impact on improving the welfare of communities surrounding plantation areas. This study aims to critically examine the relationship between plantation companies as the nucleus and local communities as plasma from the perspective of community economic growth and business law. The research method used is a normative juridical approach with deductive-descriptive analysis of legal policies governing plantations and the management of community plasma schemes. The findings indicate that weak legal policies and the lack of optimal government supervision are the primary factors causing the ineffective implementation of community plasma obligations. Therefore, the establishment of a special institution with national authority, such as the National Authority Agency for Indonesian Plantation Plasma (BONPPI), is necessary to supervise, coordinate, and ensure the implementation of community plasma obligations in a fair and transparent manner. The existence of such an institution is expected to improve community welfare, strengthen people's economic empowerment, and support equitable national economic growth.
Downloads
References
Alisjahbana, A., & Busch, J. (2020). Forestry, palm oil, and sustainability in Indonesia. Environmental Research Letters, 15(9).
Ananda, R., Nurliza, & Suyatno, A. (2024). Increasing participation of independent oil palm smallholders in farmer group institutions. Indonesian Journal of Agricultural Science, 30(1), 216–223.
Anggara, R. T., & Alfahma, E. G. (2025). Efficiency analysis of smallholder palm oil plantations in Indonesia: Implications for sustainable resource management. Journal of Indonesian Applied Economics, 13(1). https://doi.org/10.21776/ub.jiae.2025.013.01.5
Ardiansyah, F., Marthen, A. A., & Amalia, N. (2021). Forest and land-use governance in Indonesia: A review. Land Use Policy, 99.
Austin, K. G., Mosnier, A., Pirker, J., McCallum, I., Fritz, S., & Kasibhatla, P. S. (2021). Shifting patterns of oil palm expansion in Indonesia. Global Environmental Change, 34.
Budidarsono, S., Susanti, A., & Zoomers, A. (2019). Oil palm plantations in Indonesia: The implications for migration, settlement, and local economic development. Land Use Policy, 89, 104207. https://doi.org/10.1016/j.landusepol.2019.104207
Colchester, M., Chao, S., & Dallinger, J. (2019). Oil palm expansion and community rights in Indonesia: Implications for equitable development. Forest Policy and Economics, 104, 65–73. https://doi.org/10.1016/j.forpol.2019.03.011
Cramb, R. (2019). The role of smallholders in the oil palm sector in Indonesia and Malaysia: A review. Journal of Peasant Studies, 46(4), 747–774. https://doi.org/10.1080/03066150.2019.1572607
Cramb, R., & McCarthy, J. (2021). The Oil Palm Complex: Smallholders, Agribusiness and the State in Indonesia and Malaysia. Singapore: NUS Press.
Dharmawan, A. H., & Nugroho, B. (2021). Institutional arrangements of smallholder oil palm in Indonesia. Sodality: Journal of Rural Sociology, 9(1).
Dharmawan, A. H., Putri, E. I. K., & Wulandari, C. (2019). Rural transformation and livelihood strategies in Indonesia’s oil palm frontier. Journal of Rural Studies, 68, 1–11. https://doi.org/10.1016/j.jrurstud.2019.02.002
Esidorus, S., Suyatno, A., & Kurniati, D. (2025). The influence of palm oil plantation partnership patterns on farmers’ income in Bengkayang Regency. Journal of Social Economics of Agriculture, 14(2), 100–109.
Gatto, M., Wollni, M., & Qaim, M. (2019). Oil palm expansion and livelihood dynamics in Indonesia. World Development, 120, 138–151. https://doi.org/10.1016/j.worlddev.2019.04.004
Gatto, M., Wollni, M., & Qaim, M. (2020). Oil palm boom and land-use dynamics in Indonesia. World Development, 127.
Hall, D. (2019). Corporate expansion and community relations in the palm oil sector. Journal of Agrarian Change, 19(3), 513–531. https://doi.org/10.1111/joac.12311
Hall, D. (2021). The political ecology of palm oil expansion in Southeast Asia. Journal of Peasant Studies, 48(6).
Hidayatullah, T. (2023). An empirical analysis of palm oil production on farmers’ welfare. Budget Journal: Issues and Problems of State Finance, 8(1). https://doi.org/10.22212/jbudget.v8i1.152
Jelsma, I., Schoneveld, G. C., Zoomers, A., & van Westen, A. (2019). Unpacking Indonesia’s independent oil palm smallholders: Livelihood impacts and policy implications. World Development, 120, 17–26. https://doi.org/10.1016/j.worlddev.2019.03.023
Jelsma, I., Schoneveld, G., Zoomers, A., & van Westen, A. (2020). Unpacking Indonesia’s independent oil palm smallholders. World Development, 129.
Lee, J. S. H., Ghazoul, J., & Obidzinski, K. (2021). Oil palm smallholder yields and sustainability. Nature Sustainability, 4.
McCarthy, J. F., Vel, J. A. C., & Afiff, S. (2019). Oil palm expansion and rural development in Indonesia: Impacts and policy challenges. Journal of Rural Studies, 66, 60–70. https://doi.org/10.1016/j.jrurstud.2019.01.004
McCarthy, J. F., Vel, J. A. C., & Afiff, S. (2020). Trajectories of oil palm expansion and rural development. Journal of Rural Studies, 70.
Obidzinski, K., Andriani, R., Komarudin, H., & Andrianto, A. (2019). Environmental and social impacts of oil palm plantations and their implications for sustainable development. Land Use Policy, 87, 104031. https://doi.org/10.1016/j.landusepol.2019.104031
Obidzinski, K., Andriani, R., Komarudin, H., & Andrianto, A. (2021). Environmental and social impacts of oil palm plantations. Land Use Policy, 99.
Purnomo, H., Okarda, B., Dewayani, A. A., & Ali, M. (2020). Reducing deforestation through sustainable palm oil governance. Forest Policy and Economics, 118.
Revi, L. (2025). Barriers and readiness for the implementation of Indonesian sustainable palm oil in independent smallholder plantations. Holistic: Journal of Tropical Agriculture Sciences, 2(2), 131–147.
Rist, L., Feintrenie, L., & Levang, P. (2019). The livelihood impacts of oil palm: Smallholders in Indonesia. Biodiversity and Conservation, 28(1), 100–115. https://doi.org/10.1007/s10531-018-1626-0
Rist, L., Feintrenie, L., & Levang, P. (2020). The livelihood impacts of oil palm. Biodiversity and Conservation, 29.
Sari, N., & Prasetyo, M. S. E. (2025). Legal protection analysis of profit-sharing in palm oil plasma partnerships according to Law of the Republic of Indonesia Number 39 of 2014. Journal of Comprehensive Science, 4(8), 2423–2433. https://doi.org/10.59188/jcs.v4i8.3513
Schoneveld, G. C. (2019). Sustainable palm oil governance in Indonesia: Policy challenges and opportunities. Forest Policy and Economics, 104, 62–70. https://doi.org/10.1016/j.forpol.2019.04.006
Schoneveld, G. C., Ekowati, D., Andrianto, A., & van der Haar, S. (2021). Modeling oil palm expansion and rural livelihoods. Land Use Policy, 103.
Sumardjo, & Saharuddin. (2019). Community empowerment and participation in plantation development programs. Jurnal Penyuluhan, 15(2), 150–160.
Sumardjo, & Saharuddin. (2020). Community empowerment in plantation development. Jurnal Penyuluhan, 16(2).
Susanti, A., & Maryudi, A. (2022). Political economy of palm oil governance in Indonesia. Forest Policy and Economics, 138.
Susilo, S., Yurisinthae, E., & Oktoriana, S. (2025). Comparative analysis of welfare levels between independent palm oil farmers and plasma farmers. Daun: Scientific Journal of Agriculture and Forestry, 12(2), 84–93. https://doi.org/10.33084/daun.v12i2.10814
Syahza, A., & Asmit, B. (2019). Regional economic development through oil palm plantations in rural Indonesia. Journal of Indonesian Economy and Business, 34(2), 150–168. https://doi.org/10.22146/jieb.42923
Syahza, A., & Asmit, B. (2020). Regional economic development through oil palm plantations. Journal of Indonesian Economy and Business, 35(1).
Syahza, A., Bakce, D., & Asmit, B. (2021). Impact of palm oil plantation development on rural economies. International Journal of Economics and Financial Issues, 11(3).
Taufiqurrahman, & Santoso, B. (2023). Legal framework of oil palm plantation management in Indonesia. Journal of Indonesian Legal Studies, 8(1).
Wicke, B., Sikkema, R., Dornburg, V., & Faaij, A. (2020). Exploring land-use changes related to palm oil production. Renewable and Sustainable Energy Reviews, 12.
Wijaya, A., Glasbergen, P., & Leroy, P. (2021). Corporate sustainability and palm oil certification. Journal of Cleaner Production, 278.
Zen, Z., Barlow, C., & Gondowarsito, R. (2019). Oil palm expansion and socio-economic development in Indonesia. Agricultural Economics, 50(5), 635–647. https://doi.org/10.1111/agec.12516
Zen, Z., Barlow, C., & Gondowarsito, R. (2020). Oil palm in Indonesian socio-economic development. Agricultural Economics, 51.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Suhardi Somomoeljono
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright and License Statement
Authors who publish their manuscripts in this Journal agree to the following conditions:
The copyright for any article in The International Journal of Law Review and State Administration is fully held by the author under a Creative Commons CC BY 4.0 license:
- The author acknowledges The International Journal of Law Review and State Administration (IJLRSA) has the right to publish for the first time with a Creative Commons Attribution 4.0 International License / CC BY 4.0.
- Authors can enter writings separately, arrange non-exclusive distribution of manuscripts that have been published in this journal into other versions (eg sent to the author's institutional repository, publication in a book, etc.), by acknowledging that the manuscript has been published for the first time in The International Journal of Law Review and State Administration (IJLRSA)
- The International Journal of Law Review and State Administration (IJLRSA) published under the terms of a Creative Commons Attribution 4.0 International License / CC BY 4.0. This license permits anyone to copy and redistribute this material in any form or format, compose, modify, and make derivative works of this material for any purpose, including commercial purposes, so long as they include credit to the Author of the original work.
