Thu, 18 Aug 1994

DPR wants govt to consult before imposing protection

JAKARTA (JP): Members of the House of Representatives (DPR) have urged the government to consult the legislative body before imposing any tariff protection policy for industrial ventures to avoid irregularities or collusion with businesses.

"The parliament has thus far not received any consultation on protectionist measures from the related ministries," Hamzah Haz, chairman of the United Development Party's (PPP) faction at DPR, told reporters after the annual state address of President Soeharto before the parliament here on Tuesday.

Hamzah said that the House, as a legislative and consultative forum, has a strategic position not only to weigh up any policy of the government but also to help provide more legal basis on policies.

"It is not only a matter of business but also the legality of policies," he said.

He was optimistic that consultation will create a far-reaching insight and help clean up policies from irregularities.

Tadjuddin Noer Said, a member of the House's Commission VI, said that some DPR members, for example, wanted the government to hold discussions before deciding to protect the olefins to be produced by PT Chandra Asri's petrochemical project in Serang, West Java, to avoid any misinterpretation on the policy.

State Minister of Investment/Chairman of the Investment Coordinating Board Sanyoto Sastrowardoyo said recently that the government will protect Chandra Asri's products against imports due to its strategic role in generating foreign exchange.

Coordinating Minister for Economy and Finance Saleh Afiff and State Minister of National Development Planning/Chairman of the National Development Planning Board Ginandjar Kartasasmita defended the tariff protection of Chandra Asri's products on the grounds that the policy will have a good impact on the operating of the downstream industries.

Tadjuddin assured that the proposed consultation will help protect the government from irregularities and collusion with business people.


"I am of strong opinion that the protection policy is so restricted to the extent of the advancement of conglomerate owners," he cautioned.

"And you can see that there are so many companies enjoining tariff protection without limitation of time because their executives or owners have strong support from government officials," he said.

"Such protection will not encourage industrial companies to improve efficiency," he said, adding that such protection will also make Indonesian products less competitive on the world market.

Tadjuddin, therefore, suggested that the government establish a ruling on the protection of industries.

Yahya Nasution, House member of the Indonesian Democratic Party's (PDI) faction, concurred that deliberating such a ruling should be a top priority of DPR's agenda in the second long-term (25-year) development plan. "We hope before the end of the Sixth Five Year Development Plan (Repelita VI) period in 1999, such a ruling will have been established," he told The Jakarta Post.

"With such a ruling, the public will be informed on objectives and effectiveness of tariff protection," he said.

A.A. Baramuli, a member of the House's Budgetary Commission, said that the proposed ruling should be able to stress the importance of both upstream and downstream industries.

He was citing the statement of the President before the parliament, urging all parties to boost the growth of both downstream and upstream industries in efforts to develop self- supporting industries in the country.

"We have to strengthen the downstream industries, which so far have been the mainstay of our exports and they must also be linked with the intermediate and upstream industries," Soeharto said in his speech.


According to Baramuli, the proposed ruling on protection is momentous for Indonesia in anticipation of the new era of trade liberalization to be introduced by the ASEAN Free Trade Agreement (AFTA) and the General Agreement on Tariffs and Trade (GATT).

"I would say that protection should be imposed only on `quite strategic' industrial sectors, like the sea transportation service industry," he said.

He said the government should review its protection given to the automotive industry.

Unlike Hamzah, Tadjuddin and Baramuli, a member of the Budgetary Commission, Markus Mangisara Lubis, told the Post that the proposed ruling on protection is not necessary because protection is temporary in nature.

"But I would suggest that the government take strict measures against industrial companies which fail to improve efficiency after being protected by the government for a certain period of time," he said.

Lubis said the government should also extend protection not only to large-scale companies but also to small and medium-scale businesses, particularly those operating in agriculture and infrastructure. (fhp/hdj/rid)