The regulation has raised concerns among academics and industry stakeholders over the potential impact of regulatory uncertainty on investment decisions. When rules are open to differing interpretations or applied without sufficient clarity, businesses may become more cautious in committing capital to new projects or expansion. Dean of the Faculty of Economics and Business at Mulawarman University, Dr. Zainal Abidin, said legal certainty is a fundamental prerequisite for sustaining investment. He made the remarks during the Borneo Forum 2026 in Balikpapan on Thursday (Aug. 6, 2026), an event supported by the Palm Oil Plantation Fund Management Agency (BPDP). According to Zainal, investors assess not only the potential returns of a project but also the certainty of the regulations governing their business activities. “If investors become uncertain, investment will be held back. It could even trigger capital flight,” he said in a statement received by on Monday (Aug. 10, 2026). Regulatory uncertainty, he explained, increases the perceived risk of an investment. Companies may consequently become more selective in allocating capital and could consider moving investment to regions where the regulatory environment offers greater certainty.   Palm Oil Remains a Key Economic Driver in East Kalimantan The issue is particularly significant for East Kalimantan, where the palm oil industry has become an important contributor to regional economic growth. Zainal described oil palm plantations as a growth pole that generates economic activity far beyond the plantation sector itself. The industry supports trade, services, transportation, processing industries and micro, small and medium-sized enterprises along its supply chain. He also pointed to a fundamental difference between palm oil and mining. While mining depends on finite and non-renewable resources, oil palm plantations can continue generating economic value through productivity improvements, proper maintenance and replanting programs. For that reason, Zainal said implementation of PP 45/2025 should strike a balance between law enforcement and the continuity of investment. If the regulation creates greater uncertainty or significantly increases administrative burdens, investment risks could rise. That could eventually increase companies’ cost of capital. Higher capital costs could then translate into higher production expenses and weaken the competitiveness of Indonesia’s palm oil industry, particularly as exporters compete in the global market. “Policy must maintain a balance between law enforcement, state revenue, environmental protection and sustainable investment,” Zainal said.   Forestry Regulations Need Better Coordination Separately, forestry law practitioner Dr. Sadino said implementation of PP 45/2025 also needs to address overlapping regulations, particularly those involving forest areas and land rights. According to Sadino, inconsistencies in administrative systems and regulations remain a source of uncertainty for businesses. Administrative sanctions, therefore, should be accompanied by a comprehensive resolution of land legality issues. He stressed the importance of ensuring that land status and legal ownership are clearly established, particularly where land management is transferred to state-owned enterprises. Such clarity is needed not only for businesses currently operating on the land but also for entities that may receive management rights in the future. For the palm oil sector, legal certainty is closely linked to long-term investment decisions. Clear and consistent implementation of forestry regulations could help strengthen governance while reducing uncertainty for businesses planning to invest in plantations and downstream activities. Ultimately, stakeholders expect PP 45/2025 to strengthen forestry governance without creating additional uncertainty that could discourage investment, raise business costs or weaken the competitiveness of Indonesia’s palm oil industry.