Universitas Gadjah Mada
Faculty of Economics and Business

Tuesday (11/7), the 9th session of the Global Summer Week 2023 program took place. Dr. Wuri Handayani, S.E., M.Si., M.A., Ak., a lecturer in the Accounting Department at the Faculty of Economics and Business, Universitas Gadjah Mada, filled this session. On this occasion, the topic discussed was related to ethics in the agricultural industry, especially the oil palm plantation sector in Indonesia. "What comes to mind when you hear the word 'ethics'?." Dr. Wuri asked the audience. Participants enthusiastically voiced their opinions through the provided Mentimeter.

Dr. Wuri then defined ethics as a set of norms and values that can guide determining what is good or bad. Ethics is fundamental in the motivation and decision-making of a company. These norms and values are rooted in various sources, such as religion, regulations, authorities, societal customs, or the goals of each human being himself. Ethics is not just an attribute of the individual. As an entity, companies also need ethics in their operations, bearing in mind that they also have goals like individuals.

Companies in the agricultural industry are also inseparable from the implementation of ethics. Agriculture is the art and science of cultivating land, growing crops, and raising livestock. In recent decades, the agricultural industry has developed rapidly. However, this was accompanied by a negative impact on the environment.

For example, Dr. Wuri took a case study in the form of the palm oil industry in Indonesia. From 1998 to 2008, the Indragiri Hulu government granted the Duta Palma Group permission to convert forest areas into oil palm plantations covering an area of 37,095 hectares. However, this conversion violates applicable law, considering that the forest area is part of a protected forest. It was alleged that there had been cases of bribery by the company to be able to carry out these illegal acts. This corruption has a social impact that is detrimental to the state in terms of direct and indirect costs.

On the other hand, deforestation that is carried out when clearing land for oil palm plantations also has a systemic impact on environmental sustainability. Deforestation can cause habitat loss for forest biotas, leading to natural disasters like floods and droughts. Moreover, currently, 50 percent of products found in supermarkets use palm oil as a raw material. Indonesia is also one of the dominant producers of world palm oil. Therefore, companies in the palm oil industry and the agricultural sector in general need to pay attention to business ethics in their operations so that negative social and environmental impacts can be suppressed.

Reportage: Rizal Farizi 
Watch the full video at https://youtu.be/blJ3p9l5Ybs