Govt drops hotly anticipated emergency decree on smuggling

Zakki P. Hakim, The Jakarta Post, Jakarta

In a surprise move, the government has scrapped plans to issue an emergency decree in lieu of law on smuggling, dashing hopes of an immediate campaign against the rampant practice.

Minister of Trade Mari Elka Pangestu said the government backtracked on the plan because of the absence of reliable ground to justify the claim that smuggling was a national emergency. She said the government would instead amend the existing law on smuggling.

"In a meeting attended by the Ministry of Finance, Ministry of Trade and some experts, we found that it was hard for us to defend the argument that smuggling had reached a state of emergency," she told The Jakarta Post on Wednesday evening.

A decree in lieu of law, or Perpu, is often issued in cases of emergency, although there is no clear definition of what constitutes a state of emergency. A Perpu does not need the approval of the House of Representatives.

The meeting also concluded that it would be better for the government to amend a number of articles related to smuggling in Law No. 10/1995 on customs, she said.

Mari added that a special technical team led by the Ministry of Finance promised to finish a proposal on the law's amendment within two months, before its submission to the House for deliberation.

She hoped the House would support the government's efforts and deliberate the amendments as soon as possible.

The plan to issue a Perpu emerged late last year amid public complaints that smuggling had become so bad it was damaging local industries, whose products could not compete with smuggled products due to the huge price disparities.

President Susilo Bambang Yudhoyono included the enactment of a Perpu on smuggling on his agenda for his first 100 days in office.

Aside from harming local industries, smuggling also has hurt investment in the country.

The electronics industry has repeatedly claimed that at least 50 percent of electronics products in the domestic market were smuggled.

The final draft of the Perpu included harsher punishments for smugglers, a witness protection program, special incentives for investigators and a clause that classified customs officials' "ignorance" as a punishable crime.

Under the draft Perpu, the Ministry of Trade would have played a leading role in the war against smuggling, instead of officials from the Customs and Excise Office, as stipulated under existing regulations.

Mari said she would fight to include key points from the draft of the Perpu in the amended law, notably the definition of smuggling and the harsher punishments.

"We may not finish the law within our first 100 days in office, but rest assured that curbing smuggling is still a top priority of this Cabinet," she said.