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Indonesia fleshes out plan to strengthen state control over commodity imports

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JAKARTA, June 8 : Indonesia’s Trade Ministry published technical regulations on Monday that give the central government more control over coal, palm oil and ferroalloy exports, part of a controversial plan by President Prabowo Subianto to boost earnings from the country’s plentiful natural resources. 

The new export rules for the three commodities have been in effect since June 1, with exporters now obliged in the first phase to report all their export activities to a state firm appointed by the government. 

During the transition period, existing export licenses will remain valid and companies can still export by themselves either until their permits expire or until December 31, 2026, whichever date comes first.

Starting from January 1, 2027, only the state firm appointed by the government will be allowed to export the commodities. 

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The state secretariat ministry last week issued broader regulations stipulating that all key commodity exports must be channeled through the state firm. 

Here are some key details about the regulation as it relates to palm oil:

• The affected products include crude palm oil, refined, bleached, deodorised palm oil (RBDPO), refined, bleached, and deodorised palm olein (RBDPL), and palm oil residues.

• Palm oil export permits are granted only if exporters comply with a domestic market rule compelling them to supply palm oil to a government-run cheap cooking oil programme.

• Export rights can be transferred to the state firm appointed by the government or to other companies by filling in all the details required on the website of Indonesia National Single Window.

• Exports are subject to export duties, as regulated by relevant ministries.

• When there is a change in export approvals, the appointed state firm will be responsible for the accuracy and compliance of required documents submitted by related companies.

• State firms or exporters that already have permits to export must submit realisation reports every month to the trade ministry, and they must include data about the type, quantity, export value, destination country, and tariff posts of their products.

• If realisation reports are not submitted, the firms will be given a warning. If the reports are still not submitted within 30 days of the warning, their export permits may be frozen until they comply.

• Existing export permits issued prior to this regulation are still valid until they expire.

Here are the details about the regulation of coal exports:

• The regulation affects coal products under eight harmonised system (HS) codes, including coal briquettes and lignite.

• Export permits can be transferred to the state firm ahead of the December 31 deadline.

• Companies must submit export realisation reports to the Trade Minister. Those that fail to comply will face administrative sanctions, the regulation said without providing further details.

Here are some details about the regulation on ferroalloy exports:

• The regulation affect ferroalloy products under 12 HS codes including ferronickel ingots with 8 per cent nickel content or higher.

• Ferroalloys exporters that have a contract or agreement with the government containing provisions related to investment, divestment, domestic processing and/or refining, could be exempted from the regulations.

Source: Reuters

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