LDN - Business

Forbidden fruit: Indonesia palm oil plantations boost security to stop thieves

[August 09, 2017] By Eveline Danubrata and Stefanno Reinard

JAKARTA (Reuters) - Indonesian security companies have seen a surge in demand for guards to protect palm oil plantations from fruit thieves and land grabbers, amid a rebound in prices of the commodity used to churn out everything from cooking oil to soap.

Palm prices have jumped over 15 percent in the last few months, boosting the temptation for individuals or small-scale criminal gangs to steal fruit to sell to middlemen in the world's biggest producer of the tropical oil.

Security companies said this was driving more business their way, with palm growers looking to step up the number of guards patrolling plantations that can sometimes cover up to 30,000 hectares, equivalent to nearly half the entire land area of nearby Singapore.

Some of those vast plantations are now being guarded by up to 200 people, Agoes Dermawan, secretary-general of the Indonesian Security Industry Association, told Reuters.

"Palm is one of the sectors that require a lot of security forces because the level of theft of fresh fruit bunches is quite high, and other crimes related to plantations have also been rising, Dermawan said.

Unclear regulations on land ownership in palm-growing regions such as Sumatra and Kalimantan have also led to overlapping claims for land, with indigenous people occasionally occupying the concession areas of palm oil companies.

Around 15 percent of the 650 members of the Indonesian Palm Oil Association are expected to use private security services this year, up from 10 percent in 2016, said Eddy Martono, head of the body's agrarian and spatial planning unit.

Thieves of fresh fruit bunches tend to use motorbikes or pickup trucks to speed loot to middlemen, Martono said.

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Dino Hindarto, chief executive of PT Nawakara Perkasa Nusantara, gestures during an interview in Jakarta, Indonesia, August 8, 2017. REUTERS/Beawiharta

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PT Nawakara Perkasa Nusantara, founded over 20 years ago by former police officers, started venturing into security for palm producers after a slowdown in demand for its services from oil and gas companies, said Chief Executive Dino Hindarto.

"Crude oil prices fell, so some of our clients in oil and gas also started slowing down their exploration, and that affected us," Hindarto said, adding that the firm plans to open two offices in palm-growing regions next year.

Security guards trained by Nawakara, which has around 10,000 employees in total, are tasked with preventing "unauthorized people" from accessing palm plantations, especially during the harvest season, Hindarto said.

Most plantation companies declined to comment on their security arrangements, but PT Perusahaan Perkebunan London Sumatra Indonesia Tbk President Director Benny Tjoeng said the firm had hired security personnel relative to the size of its plantations.

Tjoeng added that cases of attempted crime at those sites were "under control", without giving more detail.

Palm prices have been pushed up as key buyer China replenished some of its stocks and as dry weather in the United States prompted buyers to switch to the tropical oil from soybeans.

(Reporting by Eveline Danubrata and Stefanno Reinard; Additional reporting by Cindy Silviana; Editing by Joseph Radford)

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