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)