Govt to conduct full probe into clove trade irregularities

JAKARTA (JP): Minister of Cooperatives and Small Enterprises Adi Sasono said yesterday that the government would conduct a comprehensive investigation into irregularities in the country's clove trade.

Adi acknowledged that some officials of the former administration had benefited from clove trading practices under the defunct Clove Marketing and Buffer Stock Agency (BPPC), chaired by former president Soeharto's youngest son Hutomo Mandala Putra.

"The trade will be investigated. Any anomalies will be rectified," Adi told journalists after meeting International Monetary Fund Asia-Pacific Director Hubert Neiss.

The investigation will be carried out "thoroughly and cautiously" because of the complexity of the trading system, Adi said.

The government abolished BPPCs clove-trading monopoly under an agreement reached with the IMF in exchange for a US$43 billion bailout package to salvage the country's ailing economy.

BPPC was granted the clove-trading monopoly in early 1991. Under the system, farmers were required to sell cloves to the agency through cooperatives. The agency then sold the cloves to producers of kretek cigarettes under a compulsory purchase arrangement.

BPPC collected Rp 1.1 trillion (about US$100 million) in revenue from clove farmers during the time that it held a stranglehold on the trade. None of that money has yet been returned to farmers or primary cooperatives.

On May 4, Hutomo symbolically transferred the Rp 1.1 trillion fund to the Confederation of Primary Cooperative Associations (Inkud). However, sources have said that no transfer of funds actually took place.

On the same day, Hutomo sold all his PT Humpuss stake in wholesaler Goro to Inkud.

Adi promised to investigate the sale of Goro shares to Inkud and to take action if any wrongdoing came to light.

Adi said he would help clove farmers to get their money back. (gis)