The $60 billion global palm oil trade has come under fire from environmentalists because of the vast areas of tropical rainforest they say have been cleared to grow the commodity that is consumed by billions of people.
Indonesia and other producers like Malaysia face new European Union (EU) rules dictating that palm oil should be phased out from transport fuel in the bloc after it concluded that it causes deforestation.
"The new agency would be aimed at improving the credibility of the Indonesia Sustainable Palm Oil certification (ISPO) certificates," Deputy Minister Musdhalifah Machmud told a palm oil conference in Bali.
ISPO is supposed to guarantee that land used for palm oil is legally owned, does not encroach on forests and is cleared using good agriculture practices, not slash-and-burn methods.
Some environmental groups, however, view ISPO as weaker than international certification schemes.
The new agency was included in a revised regulation now awaiting President Joko Widodo's approval, said Machmud, adding that she hoped the president would sign it soon. The revision also covered improvements in other standards, she said without elaborating.
"We want to increase the acceptance of ISPO," she said, adding that with the revamping of the standards palm oil buyers should accept the certification.
ISPO certification is currently overseen by a secretariat under Indonesia's agriculture ministry.
Azis Hidayat, chairman of the secretariat, said last month the area covered by ISPO certified plantations will reach 5.5 million hectares (13.6 million acres) by the end of this year.
(Reporting by Fransiska Nangoy; Editing by Ed Davies and Tom Hogue)
