DPR Calls for Regulatory Protection of National Strategic Commodities

National strategic commodities such as palm oil, crude oil, natural gas, and tobacco products require regulatory protection and business certainty to sustain the national economy and maintain a conducive investment climate. DPR Commission IV member Firman Soebagyo stated that an unfavourable business environment could deter investor confidence in Indonesia. He added that businesses need certainty to feel secure in investing and expanding domestically. “I fear businesses will be sidelined. If investing in Indonesia becomes uncomfortable, why not move elsewhere?” he said. Firman cited the tobacco industry, which has significantly contributed to state revenue and employment. He noted that cigarette excise revenue reached approximately Rp216 trillion in 2024, demonstrating the sector’s substantial contribution. “What is the labour absorption of this sector? How much state revenue comes from cigarette excise annually? Even in 2024, excise revenue reached around Rp216 trillion. Yet, agricultural programmes have barely addressed the interests of tobacco farmers,” he said. Firman said protection for farmers and national strategic sectors remains suboptimal in terms of regulation and legal certainty. He stressed that the government must ensure sectors contributing significantly to the state receive adequate protection. “There is no protection, whether legal or otherwise. I stress that the government should not merely exploit farmers. It must also ensure our farmers are more productive and have clear legal safeguards,” he added. Firman also emphasised the need to review regulations that do not fully serve the people and national strategic sectors. He stated Indonesia still lacks robust protections for key commodities underpinning the national economy. “These strategic commodities are a national asset. But we lack specific laws to protect them properly—such as palm oil and tobacco,” he said. He compared this to other countries with strong protective policies for strategic sectors. “Take Japan, a small nation, which has strong protections for rice. Turkey also has specific safeguards for the tobacco sector,” he said. “So why does Indonesia, with strategic commodities that significantly contribute to state revenue and operations, have such weak regulations?” Meanwhile, the tobacco sector faces pressure from regulations under Government Regulation No. 28 of 2024, which implements Law No. 17 of 2023 on Health. Various tobacco stakeholders, especially tobacco and clove farmers, have raised concerns about declining local tobacco absorption due to proposed plain packaging regulations and bans on additives in tobacco and e-cigarette products pushed by the Ministry of Health. Additionally, regulations on maximum nicotine and tar levels, initiated by the Coordinating Ministry for Human Development and Culture, are being considered. The tobacco industry currently absorbs all national tobacco harvests and most clove crops. Governor Mirza stated that the Lampung Provincial Government is strengthening cross-sector collaboration, particularly with the Lampung Police. Deputy Minister of Agriculture Sudaryono affirmed that the government will not open import channels for strategic commodities such as rice, maize, consumable sugar, and salt. Several Indonesian strategic commodities are being pushed for tariffs below 19%, or even approaching 0%—effectively duty-free.