Mon, 17 Jan 2000

Federation calls on govt to investigate Medan CPO theft

JAKARTA (JP): The Federation of Palm Oil Producers and the House of Representatives have called on the government to resolve rampant crude palm oil (CPO) theft in Medan, North Sumatra, to regain importers' confidence in the local product.

The federation's chairman, Derom Bangun, said several executives of local CPO producers had met with government officials in the Netherlands, where tainted Indonesian CPO was found, to resolve the problem.

"We've met with officials from the Dutch Health Department and they want the Indonesian government to promptly solve the incident," Derom said.

Derom also called on President Abdurrahman Wahid to address this issue during his planned visit to several European countries early next month.

Also, legislator Ade Komaruddin of the Golkar faction has called on the National Police to intervene in investigating the incident in Medan, in which Europe-bound CPO was found to be contaminated with diesel oil.

He said local police in Medan were seen as incapable of solving the case, after the House Commission V's special team to investigate the contamination -- of which he is a member -- had found strong indications of the police's own involvement in the incident.

"The House will send a letter to the National Police chief (Lt. Gen. Rusdihardjo), and hopefully, Jakarta would send its police officers to North Sumatra," Ade said.

He said the involvement of several local police officers in the CPO contamination incident was already publicly known in Medan, adding that the national police should take this fact into consideration.

"Local police must prove that they are not part of this incident," he said.

Investigations by local police have been very slow, and, according to Ade, they kept blaming this on the absence of adequate equipment to detect tainted CPO.

The case received strong attention from House Commission V, which deals with industry and trade affairs, following the discovery of 85,000 metric tons of tainted CPO in Rotterdam last October, which originated from the Belawan port in North Sumatra.

Media reports said that the Dutch government decided to return 21,000 tons of the tainted CPO to Indonesia, accusing the Indonesian government of failing to pin down the ones responsible for the contamination.

Ade assured that the House was very committed to bringing this case to a conclusion.

CPO thieves mix CPO with diesel oil in order to avoid detection of lowering volumes.

A Commission V team investigated the case in Medan last month and collected data on police officers involvement in illegal activities, with several CPO producers buying the stolen CPO, Ade said.

He accused retired Lt. Col. Marpaung of trading in stolen CPO, and also named Bejo and Sumedi, two former truck drives, as being illegal traders of CPO.

According to Ade, the stolen CPO's distribution center was located in front of the North Sumatra's police head office.

Ade accused several companies of buying stolen CPO.

"These companies have only small CPO plantations compared to their production level," he said.

Ade said Indonesia depended on the police's investigation to regain European buyers' confidence, "Don't count on the local police anymore," he added.


Ade said that his commission would ask House speaker Akbar Tandjung to allow a hearing with the National Police on this case, which would normally fall under the supervision of Commission I which overseas foreign, defense and political affairs.

Derom said he was confident that a quick resolution of the tainted CPO case would return Indonesian CPO exports bound for Europe to a normal level.

Over the past five years, the European market absorbed about 25 percent of Indonesia's total CPO export volume, he said.

"Now, foreign CPO demands, especially from Europe, have almost come to a complete halt," Derom said.

With European importers finding alternative CPO suppliers, CPO stocks in the last three months have piled up in several production centers, he said.

He said domestic CPO stocks had reached 400,000 tons to 500,000 tons, adding that the volume would increase because the market was already oversupplied.

He said this condition caused CPO prices on the local market to drop, including those of palm kernels.

Derom said that before the discovery of contaminated CPO in Rotterdam, local CPO sold at Rp 2,600 per kilogram (28 U.S. cents), whereas now it sold at Rp 2,000 per kg.

Palm fruit once cost Rp 500 per kg and has plunged to Rp 360, he said. (03)