Lawmakers Demand Clear Legal Framework for Tobacco Industry
Lawmakers are calling on the government to take concrete steps to provide clear legal protection for the tobacco industry (IHT). This move is deemed urgent as the sector is a labour-intensive industry and a national strategic commodity.
Firman Subagyo, a member of the Golkar Party faction in the House of Representatives’ Commission IV, noted that current regulations and policies in the tobacco sector do not adequately address the direct interests of tobacco farmers. The lack of legal framework leaves farmers vulnerable amid market uncertainties and policy changes.
He stressed that the situation must be resolved promptly to ensure farmers receive protection commensurate with their contributions. ‘There is no protection, neither legally nor otherwise. I insist that the government should not merely exploit farmers but must ensure they become more productive and have clear legal safeguards,’ he said in a statement on Thursday (28 May).
The tobacco industry supports millions of people across the supply chain, including farmers, roll workers, and logistics personnel. According to Ministry of Agriculture (Kementan) data, tobacco cultivation sustains nearly 500,000 households, equivalent to 1.8 to 2 million individuals directly involved.
Data from the Coordinating Ministry for Economic Affairs (Kemenko Perekonomian) shows around 1,700 active tobacco industry businesses employing over 140,000 workers directly. The Ministry of Finance (Kemenkeu) reported that tobacco excise revenue exceeds Rp200 trillion annually.
‘All policies must be implemented with caution to avoid negative impacts on the national economy,’ Firman said.
He added that weak regulations have raised concerns among businesses about investment certainty in Indonesia. Without legal certainty, investors may withhold commitments or relocate capital to countries with more stable business environments.
This situation threatens employment for many, particularly in labour-intensive sectors. Other countries have long implemented strong protective regulations for key commodities.
He cited Turkey, which has specific regulations to protect its national tobacco industry. This contrasts with Indonesia, which lacks specific laws to safeguard strategic commodities like palm oil and tobacco, despite their annual revenue contributions of hundreds of trillions of rupiah.
‘The government must ensure regulations are implemented proportionally while considering food security and the sustainability of national commodities,’ he added.
Firman pledged his commitment to revising existing regulations to restore support for the public. National tobacco stakeholders are increasingly concerned about regulations threatening the industry’s survival, including plain packaging proposals, maximum nicotine and tar limits, and bans on additives.
This effort aligns with reducing complex bureaucratic procedures that have long hindered business operations. Boosting domestic product usage is also being promoted to revive national economic independence. (H-2)
Sarmidi Husna, Director of the Pesantren and Community Development Association (P3M), called for prudent and comprehensive approaches in setting maximum nicotine limits.
HRM Khalilur R Abdullah Sahlawiy, owner of Bandar Rokok Nusantara Global Group (BARONG Group), also known as Gus Lilur, spoke on crackdowns on illegal cigarettes and the cigarette stamp tax controversy.
Farmers are urging the government to prioritise protecting local commodities and national economic sovereignty in policy-making.
The Ministry of Finance’s decision by Purbaya Yudhi Sadewa not to increase tobacco excise rates and retail prices in 2026 has been welcomed positively.
Tobacco farmers have rejected the Health Ministry’s proposal to regulate cigarette packaging. Opposition to Government Regulation No. 28 of 2024 and its derivatives has been ongoing since August 2024.