Bukit Kapur denies charges of CPO smuggling

Bukit Kapur denies charges of CPO smuggling

JAKARTA (JP): Palm oil producer PT Bukit Kapur Reksa (BKR) has
denied charges that it had smuggled thousands of tons of crude
palm oil (CPO) and its derivatives out of the country over the
last two years.

Company president Martua Sitorus and his lawyer Luhut
Pangaribuan were quoted by Antara as saying yesterday that the
charges leveled by legislator Priyo Budi Santoso, who sits on
House of Representatives Commission V for trade and manpower,
were misleading and could damage the company's reputation.

Sitorus said he was ready to defend the company's innocence in
a hearing at the House of Representatives.

Priyo said earlier that he had received reports which
indicated that BKR and its subsidiaries may have smuggled
thousands of tons of olein out of the country in 1997 and 1998
and urged the government to investigate the company. Olein is the
refined form of CPO.

"Other companies may also be guilty of smuggling the commodity
but the government can start its investigations with BKR," the
Golkar legislator said.

Sitorus said BKR and its affiliates PT Karya Prajona Nelayan,
PT Sinar Alam Permai and PT Multimas Nabati Asahan produce olein
at refineries in Dumai, Riau; Kuala Tanjung, North Sumatra; and
Palembang, South Sumatra, with a combined capacity of 5,600 tons
per day.

He said the group had sold 75 percent of its olein output on
the domestic market this year. The remainder was exported.

This year the company had only exported olein in May, June and
July because of the government export ban which lasted from
January to April, he claimed. Exports so far in 1998 total
150,000 tons.

In 1997, BKR and its affiliates exported 650,000 tons of
olein, or 65 percent of their total output, he added.

He insisted the company had never smuggled olein and said he
had legal documents to prove this.

However, Priyo said that import data from overseas ports
recorded a much higher volume of BKR olein shipped through Dumai
in Riau than the port authority's own export figures.

The Dumai port authority recorded 2,417 tons of BKR olein
leaving the country in the first half of the year, but data
collected by Malaysian survey company Inchcape Testing Services
in foreign ports put the company's total exports out of Dumai at
48,346 tons over the same period.

That means almost 46,000 tons of olein were shipped illegally
through Dumai to overseas destinations, he said.

Inchcape was commissioned to undertake the survey by
international buyers who wanted data on the CPO and olein trade
for market analysis.

"If the export shipments were legal then they should have been
recorded at the Dumai trade office," the legislator said.

He said BKR's export figures for 1997 were also questionable
because the company's official olein exports through Dumai were
only 3,199 tons.

Inchcape data gathered at ports in Asia and Europe put the
company's 1997 exports through Dumai at a total of 310,900 tons.

Priyo believed BKR may have been working in collusion with
Dumai port officials, local tax and excise officials and
officials in the local office of the Ministry of Industry and
Trade.

"The government should investigate these people," he said.

Priyo also did not rule out the possibility of smuggling
taking place through the transshipment of loads ostensibly bound
for the domestic market to boats bound for foreign ports once the
two vessels were safely out to see and beyond the reach of the
port authorities.

Minister of Industry and Trade Rahardi Ramelan has promised to
investigate the smuggling of palm oil and its derivatives in a
bid to secure a sufficient domestic supply of cooking oil. (jsk)