DPR demands action on tainted CPO

DPR demands action on tainted CPO

JAKARTA (JP): The House of Representatives criticized the
government on Tuesday for its handling of the contamination of
crude palm oil exports from North Sumatra.

Angered by the government's inaction, House Commission V for
industry and trade established a fact-finding team to investigate
the contamination, which has prompted Europe to virtually halt
all crude palm oil (CPO) imports from Indonesia.

The commission took the decision after meeting with executives
of state and private CPO producers and storage companies,
including the Salim Oil, Musim Mas, Smart and Prima Palm
plantation groups.

The executives confirmed that European buyers had virtually
stopped importing CPO from Indonesia after 19,000 metric tons of
CPO shipped from North Sumatra's port of Belawan was found to be
contaminated with diesel oil upon arrival in Rotterdam in
October.

Several other shipments totaling 66,000 tons of CPO which
arrived in Rotterdam in November were also found to be tainted
with diesel oil.

The director of the joint marketing agency of state-owned
plantation companies, Asep T. Tojib, told legislators that
Indonesia must address the problem more seriously or risk losing
the European market, which accounts for more than 25 percent of
Indonesia's annual total CPO exports of around three million
tons.

"If Europe shifts to other suppliers, it would be very
difficult to regain that market," he said.

Asep said Europe had not officially imposed a ban on
Indonesian CPO, but European buyers were placing very few new
orders.

He also said Europe was awaiting concrete measures by the
Indonesian government to prevent further contamination of CPO
shipments, as well as demanding that those responsible for the
tainted shipments be dealt with firmly.

The Ministry of Industry and Trade confirmed that the
contaminated CPO originated from the Deli Tama Indonesia storage
tanks at Belawan Port.

However, no action has been taken against those responsible
for the contamination.

The Deli Tama Indonesia storage tanks, owned and managed by
state plantation company PTPN III, are used by all state
plantation companies in the province.

Members of the commission for industry and trade lambasted
PTPN III for its mishandling of CPO in its storage tanks at the
port.

"The government should deal firmly with the management of PTPN
III and president Djoharuddin for the fiasco which has destroyed
Indonesia's reputation in the European market," Ade Komarudin of
Golkar Party said.

Indonesian Democratic Party of Struggle (PDI Perjuangan)
legislator Suparlan agreed, demanding that PTPPN III president
Djoharuddin, who has led the company for more than 11 years, be
held responsible for the debacle.

Another legislator, Mindo Sianipar, said the government should
make it clear to buyers in Europe that only CPO from the Deli
Tama Indonesia tanks had been tainted with diesel oil.

"CPO from other suppliers who do not use the Deli Tama
Indonesia storage tanks is all right," Sianipar said after the
hearing.

Deli Tama director Megananda Daryono confirmed all of the
contaminated CPO came from his company's storage tanks.

"We have tightened the tests on the CPO both before it is put
into the tanks and before the CPO is pumped into ships,"
Megananda said.

He said most of Deli Tama's tanks had been cleaned and a
laboratory would be set up within several weeks to enable the
company to test for diesel oil contamination, a process which
presently is performed by state-owned surveyor company PT
Sucofindo Indonesia.

"The laboratory is part of the conditions imposed by buyers in
the Netherlands to ensure that shipments from Belawan are not
tainted," he said.

Separately, Tengku Azwar Aziz of the trade office in Medan,
North Sumatra, said on Tuesday CPO exports from the province fell
to 25,809 tons worth US$8.3 million in November. This was down
from the 69,425 tons valued at $20.01 million exported in
October.

Aziz said in addition to Europe, CPO exports from North
Sumatra went to the Middle East, Africa, India and several other
countries. (03)