Cover Story / May 2018

Dono Boestami: Indonesian Oil Palm First

By Defrizal Muhammad and Tri Listyarini

Dono Boestami, 55, has tended to take a relaxed view of life, preferring to see where his destiny wants to take him. No planning was involved in any of his various career moves from finance and banking, mining and infrastructure to transportation. Now he has been appointed to head the Indonesian Oil Palm Estate Fund ((BPDP KS) aimed at maintaining sustainability of the oil palm industry, now the nation’s number one foreign exchange earner.

Born in Surabaya on January 13, 1963, Dono graduated in civil engineering from the University of Wisconsin. He then joined PT Bank Niaga, which later became PT Bank CIMB Niaga Tbk. In 2006, Dono had the opportunity to enter the mining business at state-owned coal miner PT Bukit Asam. He then became the president director of PT MRT Jakarta before being appointed to the Palm Estate Fund.

Through his many visions, he has come to believe that the key to success is communicating and maintaining credibility. All problems can be solved with effective communication. That has made it easier for him to adapt to any business environment while maintaining credibility. His motivation is to do the best he can to achieve the best results. “Good is not good enough when better is expeted,” Dono told GlobeAsia’s Muhammad Defrizal and Investor Daily’s Tri Listiyarini in an interview at his office.


GA: Can you tell us more about the early part of your career in finance and banking?

DB: After I graduated I joined Bank Niaga through its PPE (executive training program). Then Citibank, Barclays and Danareksa, in the field of investment banking, commercial banking, multifinance. Then at Bukit Asam, I helped in the company’s initial public offering (IPO). What I have been doing did not relate to my formal education as engineer except for MRT which needed a technical background. Now I am in an entirely different world, plantations.

How did you come to work at the Fund?

All that, in my career, I never planned, just followed my destiny. God’s will. At times I was asked to help like when I was at Interpac, a joint venture between Japanese, French and BRI banks. Also at Barclays and Danareksa. Then at MRT. I joined MRT in 2013 after the project had stalled for eight years. I was asked to meet the governor and deputy governor at that time. The first thing I did was to review the project. The same goes with the Fund. The program had stalled. I joined the Fund in February last year. It took six months until October before the Fund’s program was running again.

So your career journey was unintentional?

I wanted to be a lawyer or accountant. Both professions were in my mind. I did not hunt for a job but the job hunted me. But it was difficult during my university student days whether to choose to study law or accountancy. Both require heavy memorizing. If I chose engineering, it’s more about logic. It’s easier. It was only MRT which was in line with my studies and where project and construction management was needed.

Did you meet difficulties in adapting to the Fund?

Actually no. My career in banking and finance exposed me to various industries. I happened to have a client who was in the oil palm business. I went out to the field, the plantation to see the process from planting to production. The problem now, which many people don’t understand, is what the Fund is all about. We have to continue explaining to people. There is no other organization such as the Fund. In Malaysia, they have the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Council (MPOC). The Fund can be said to be a combination of the two Malaysian organizations. In Malaysia, they are the regulators but in Indonesia the Fund is not. We manage funds for sustainability of the plantations. One of the programs is providing funding for replanting so that the players, the farmers and the industry are sustainable. Since October last year, we provided the funding involving the government. The money doesn’t come from the government but from the businesses and collections from exports. We manage the funds from exports to execute the government program in the interest of the oil palm industry. The legal umbrella is the Plantation Law. I studied it and discovered that it was simple. We sat down with the minister, the director general and formulated the People’s Oil Palm Replanting Program (PSR) and we were able to begin implementing it last October.

What is your strategy in advancing the Fund?

The challenges are quite complex and unique, bureaucratic and organizational. The main objective is to formulate a national program which will work but without funding from the state budget. We don’t lead but provide funding support. If an oil palm replanting program stalls, it is not our responsibility. But if the program isn’t working due to lack of funding, that’s where we have to come in.

What is the most crucial problem faced by the national oil palm industry?

There is a gap, especially in diplomacy and communicating on oil palm. When I first came, I discovered an empty room in diplomacy and communicating on oil palm. No systematic campaign had been formulated. Existing campaigns are conducted without coordination. This is the area we are fixing. We are working with the Ministry of Information and Communications. We prepare the information on oil palm obtained from the industry players, associations, analysts and academics. We see that the associations have their own interests. So do the industry players. Oil palm is a complex issue. We need to sit down together for a unified goal to promote the welfare of the oil palm farmers.

If there were no other interests, it would be simple. Replanting works now but why didn’t it in the past? If these interests want to be on their own, have their own programs and own funding, go ahead. We can’t restrict them. But if they want to work with us with the same goal, they are welcome. We have the resources, huge sums of money; the only thing is how to use the funding as efficiently as possible for the sake of the oil palm industry. It’s Indonesia oil palm first. For external affairs, we work with the Ministry of Foreign Affairs, especially for high-level diplomacy. We will provide our diplomats abroad with the ammunition they need to campaign on the image of Indonesian oil palm. On the home front, naturally we work together with the Trade and Industry Ministeries.

What are the hurdles?

Again, it’s communication. In the past, when I first joined Bukit Asam, coal share prices plummeted. With proper communication, the problem could be solved. The same with biodiesel. Why must biodiesel be prioritized instead of oil palm replanting? This must be explained. Currently there are many smart people. But the problems of oil palm still remain. Why didn’t they solve it? If they had done that, maybe there was no need for the Fund to exist. Now there are still many government and local government offices which still don’t understand why we have to sustain the oil palm industry.

How do you stay healthy and deal with the stress?

I like good food, walking, biking and golf. Walking and golf are still routine while biking only once a while. I want to live a healthy life. I have a passion for mountain bikes. I used to have at least five bicycles and ride with the biking community.

Dono Boestami, president director of BPDP Kelapa Sawit (Photo: Muhammad Fadli Rizal/kumparan) He believes that if Indonesia loses its palm oil markets, the biggest losers will be the farmers. And, he adds, if compared with any other form of oilseed, palm oil has the largest productivity per hectare. He believes that will make it difficult for the European Union to switch away from palm oil, especially considering the limited land available in Europe.

Box (for Dono Boestami piece)

EU Delegation Visits Jambi In Dono Boestami’s view, the visit of the EU ambassador and his delegation to an oil palm plantation in Jambi showed that Indonesia has a strong commitment to carry out the principles of sustainability and that the management of Indonesia’s oil palm industry has nothing to hide.

“What more can we do to have this transparency. We facilitated the EU delegation to see for themselves what they probably have never seen,” Dono commented.

On April 15, a number of ambassadors from European Union countries, led by EU Ambassador to Indonesia and Brunei Darussalam Vincent Guerend, visited Jambi to inspect oil palm plantations.

Ambassador Guerend was accompanied by Austrian Ambassador to Indonesia Helene Steinhausl, Irish Ambassador Kyle O’Sullivan, Polish Ambassador Beata Stoczyska and Swedish Ambassador Johanna Brismar-Skoog.

Also included in the delegation were EU climate change and environment counselor Michael Bucki, senior advisor at the Danish Embassy Per Rasmussen, head of the science and technology division of the German Embassy Edmond Svann-Marie Langguth, head of the economic department of the Dutch Embassy Siebe K Schuur, and UK lead forestry adviser at the British Embassy, Paul Eastwood.

Dono explained that Europe is an important oil palm market for Indonesia and ranks third after India and China. Europe is also an important partner for Indonesia but the EU also needs Indonesia as trading partner in Southeast Asia.

“This is where mutual understanding and mutual respect are needed. Both sides lose if a boycott is implemented,” said Dono.

Photo: The EU delegation in Jambi