Federation calls on govt to investigate Medan CPO theft

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.

Hearing

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)