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)