The moratorium policy is aimed at preserving Indonesias tropical rain forest, the worlds third largest after forests in Amazon and Congo.
The deforestation rate in the country, however, is very fast since land is being converted, particularly for plantation, and also due to forest fires.
"There will be a moratorium on oil palm and mining," the head of state, popularly known as Jokowi, stated at the launch of a National Movement for Plants and Wild Animals protection in conjunction with the World Forest Day, in Karya Island of Thousand Islands, Jakarta, on April 14.
The president said entrepreneurs and small business holders will not be allowed to expand land for oil palm concessions.
According to the President, the government is also planning to declare a moratorium on mining areas.
"Let there be no more clashes related to mining concessions with forest conservation. There should be no more of such things," said President Jokowi.
The existing oil palm plantations need to increase their productivity by using high quality seeds and maximizing the potential, he said.
Indonesia is the worlds largest crude palm oil producer with 31.5 million ton production in 2015. The sector provides jobs for six million people.
The countrys oil palm industry contributed at least US$19 billion in 2015, compared to oil and gas sectors US$12 billion contribution, according to Tofan Mahdi, spokesman of the Indonesian Palm Oil Association (GAPKI).
Smallholders account for about 40 percent of Indonesias 32 million palm oil output last year.
Rainforest Action Network (RAN) has welcomed the announcement of a moratorium on oil palm and mining permits by President Jokowi.
"The announcement of a moratorium on palm oil and mining permits by the Indonesian President Joko Widodo is a welcome development," Gemma Tillack of Rainforest Action Network wrote on the NGOs website www.ran.org, on April 18.
This announcement, in the run up to the signing of the Paris Agreement in New York City where delegates will discuss the urgency of taking action to mitigate climate change, is a sign that Indonesia recognizes the importance of keeping its remaining forests and peatlands intact, the NGO said.
"If enforced and extended to forests within existing palm oil concessions, this effort to halt the destruction of forests and peatlands, and to stop the forest fires set intentionally to aid the expansion of industrial palm oil development, will reduce Indonesias carbon footprint, the severity of the annual haze crisis and will also secure the lives and livelihoods of countless communities," Tillack remarked.
Besides, the Indonesian palm oil industry has the opportunity to secure its place as a major global supplier of palm oil by improving the practices of all actors in the palm oil sector and protecting its globally important ecological treasures, including the Leuser Ecosystem, according to RAN.
Leading environmental NGO Greenpeace has lauded the moratorium plan and hoped that the policy will be urgently implemented via a legally binding presidential regulation.
The move to end the expansion of palm oil plantations should protect all remaining forests, including those within concession areas, Greenpeaces Global Head of Indonesia Forest Campaign, Kiki Taufik, noted in a statement.
"The president said yesterday that the increase in productivity implied that no new land would be needed for palm oil plantations. He is absolutely correct. Instead of expanding into forests, palm oil companies and their customers must share their expertise and provide assistance to small farmers to increase their palm oil yield and ensure a sustainable livelihood for the Indonesian farming communities," Kiki explained.
Greenpeace Indonesia country director Longgena Ginting said Indonesias rapidly vanishing forests are in dire need of urgent protection, a fact that the President recognized with his very welcome moratorium announcement.
Improving transparency in forest data including mining, palm oil and pulpwood concessions, is a crucial prerequisite for implementing and monitoring the presidents plan, he said in a statement on April 15.
Greenpeace looks forward to the publication of this data which has been kept secret from the public for too long, he said.
"A ban on further mining and oil palm plantation concessions is a welcome pledge. However, Greenpeace calculates there are 10 million of hectares of forests currently facing clearance in existing oil palm, pulp and mining concessions. The president needs to urgently take measures to permanently protect forests and peatlands, wherever they are," he said.
From among the business circles, response came from the Indonesian Palm Oil Pledge (IPOP) Management and IPOP signatories which applauded President Jokowis moratorium plan.
"We hope this moratorium will be an initial step to synergies efforts to empower all stakeholders to achieve sustainable palm oil production in Indonesia. We should indeed be focused on intensifying our palm oil production and maintain competitiveness of this sector," Nurdiana Darus, Executive Director IPOP Management, stated in the press release dated April 15.
The Indonesia Palm Oil Pledge (IPOP) was signed at the UN Climate Summit by Wilmar, GAR, Cargill and Asian Agri. Musim Mas Mas also made its commitment to the Pledge in March 2015.
The moratorium is expected to come into effect this year.(*)