Apkindo opposed over 'rent-seeking mechanism'
JAKARTA (JP): The Indonesian Wood Panel Association (Apkindo) has set up what many plywood companies here detest as a new rent- seeking mechanism to replace its export cartel which was abolished early this month under the Jan. 15 reform package agreed with the IMF.
All plywood companies are obliged by Apkindo to transfer to its bank account Rp 50,000 (US$5) for every cubic meter of plywood exported from early this month.
The association's executive director, Tjipto Wignjoprajitno, said in a Jan. 29 directive to its more than 100 company members that the fund was needed to facilitate the operations of Apkindo's center of statistics.
Apkindo set up the center of statistics late last month to handle export data it requires plywood companies to submit every time they make an export shipment.
"All plywood companies must send to the Apkindo center of statistics a copy of every sales and export contract concluded by its members," Tjipto instructed.
The export data submitted to the center should include copies of the export notification form, bills of loading and other basic fact sheets after each export shipment, he added.
"To ensure that all members fulfill the reporting obligation, plywood companies are obliged to transfer to Apkindo's bank account Rp 50,000 for every cubic meter of plywood they export as a deposit," Tjipto said.
The deposit, he added, would be reimbursed to plywood companies after they submitted all the export data, as required by Apkindo, to its center of statistics.
"To ensure prompt payment of the deposit, all plywood companies are required to make a power of attorney to authorize their respective banks to collect the Rp 50,000 per cubic meter by the time the letter of credit is opened. And the banks should immediately transfer the deposit to the Apkindo bank account," Tjipto's directive said.
Minister of Industry and Trade Tunky Ariwibowo issued four rulings late last month dismantling Apkindo's joint marketing boards and revoking the plywood quota system run by the association.
The rulings followed the Jan. 15 reform package agreed with the International Monetary Fund which, among other things, banned formal and informal marketing arrangements and all other cartel- like practices in plywood, cement and paper.
"We have so far been required to pay a membership fee of Rp 2 million per month to Apkindo and compulsory dues amounting to Rp 200 per cubic meter exported. And now we are again subject to a new costly bureaucratic procedure," the executive of a plywood group said.
He said thanks to the reform package, plywood companies were no longer required to export through Apkindo and to pay commission fees of between US$10 and $20 per cubic meter to its trading firms. They were now free to deal directly with buyers overseas.
"But we are now hit by this costly reporting requirement. You can imagine how much funds will be collected through the deposit since our plywood exports range from six to seven million cubic meters a year," contended the plywood executive who insisted on anonymity.
He said there was no guarantee the deposit would promptly be refunded after the submission of the required export data.
"Apkindo could simply hold up the refund of our deposit by saying that our data is not complete," said another plywood company executive.
He suggested that the Ministry of Industry and Trade and the President's Economic and Monetary Resilience Council intervene to stop the Apkindo directive.
"It's nothing but a new way of collecting rents. Moreover, if such data is needed for monitoring it should be handled by the industry and trade ministry," he argued.
Tjipto yesterday refused to comment on his directive on the deposit but he reiterated that Apkindo had dissolved its joint marketing boards in line with the government rulings.
"Apkindo now functions mostly as a communication forum for plywood companies and a liaison agency between plywood producers and the related ministries," Tjipto told The Jakarta Post . (team)