Government backs investigation of tainted CPO
JAKARTA (JP): The government said on Tuesday it would support calls by the House of Representatives for an inquiry by the National Police into Europe-bound crude palm oil (CPO) which was tainted with diesel oil.
Minister of Industry and Trade Yusuf Kalla said he had sent a letter to National Police chief Lt. Gen. Rusdihardjo asking greater attention be focused on the case, because the investigation by local police was moving too slow.
The investigation, which is currently being handled by the Medan Police, was opened following the discovery of 85,000 metric tons of tainted CPO in Rotterdam. The CPO was shipped from Belawan Port, North Sumatra's main gateway for CPO exports.
"Involving the National Police is a good idea," Yusuf said before the opening of a business luncheon sponsored by the Indonesian-Argentinean Chamber of Commerce and Industry.
Yusuf said he was aware the local police were investigating the tainted CPO, but would encourage the National Police to open its own investigation.
The tainted CPO is believed to be the result of thieves mixing diesel oil with the crude palm oil, thereby preventing authorities from detecting the theft of the CPO by the reduced volume.
Resolving the CPO thefts is instrumental to resuming CPO exports to Europe at their normal levels, Yusuf said.
Soon after the discovery of the tainted crude palm oil in Rotterdam, the Dutch government demanded Indonesia take action against the responsible parties and are now pressing for a resolution of the case.
Yusuf said he was still awaiting a report from the General Attorney's Office on the matter, adding that the attorney general had to wait for the police to conclude its investigation.
"It's all of our responsibility to find a quick resolution," he said.
The Federation of Palm Oil Producers and the House of Representatives called on the government last week to resolve the CPO thefts in order to regain the confidence of importers.
Federation chairman Derom Bangun called on President Abdurrahman Wahid to address the issue during his planned visit to several European countries early next month.
Legislator Ade Komaruddin of House Commission V for industry and trade said his commission, which is in recess until Jan. 20, would recommend the government order the National Police to investigate the case.
The suggestion came after the commission sent a team, including Ade, to Medan for four days to investigate the matter. The team discovered what Ade called a vicious cycle of cooperation among CPO thieves, police and military personnel and a number of CPO companies that purchased the stolen crude palm oil.
The team discovered the practice of CPO thieves mixing diesel oil with the crude palm oil to cover their crime.
Yusuf said that of the 85,000 tons of contaminated CPO shipped to Rotterdam, European importers were willing to purchase around 60,000 tons at discounted prices.
"Of course they will sell the tainted CPO for nonconsumption products like soap," he said.
Yusuf declined to quote the prices paid for the contaminated CPO, but according to media reports importers agreed to purchase the tainted CPO at between US$50 and $120 per ton.
According to the Dutch Department of Health, the contamination level of the CPO was negligible and would be safe for use in food products.
However, 21,000 tons of the tainted CPO have already been shipped back to Belawan, for which Indonesian exporters must pay about $415 per ton in charges.
As a result of this case, Indonesia's CPO exports to Europe dropped drastically, causing stocks of the product to pile up in several production centers, according to the palm oil federation.
Indonesia's CPO stocks have reached between 400,000 and 500,000 tons, and the stocks will continue to increase because the market is already oversupplied, the federation said. (03)