Mahfud MD: DSI Formation Crucial for Natural Resource Protection

The formation of PT Danantara Sumberdaya Indonesia (DSI) to oversee the management and strategic national export process is deemed crucial for safeguarding natural resources. Not only that, DSI will also help resolve decades-long issues of export revenue leakage (DHE). For years, there have been widespread findings of manipulated export data causing massive losses to state finances. ‘Such problems have persisted for a long time, yet why has there been no action despite the growing evidence? That’s why a president must take charge,’ said legal expert Mahfud MD in a recent podcast. Mahfud stated that DSI will address long-standing DHE leaks, evident from stark discrepancies between domestic export reports and official foreign receipts. These gaps indicate smuggling at borders involving customs, tax officials, and law enforcement. ‘Taking control of the export process for certain mines and natural resources is necessary. The data discrepancies show theft in exports. This must be clarified to know exactly what is exported and its true value,’ he added. Prabowo previously mentioned establishing an export state-owned enterprise (BUMN) to close revenue leaks such as under-invoicing, transfer pricing, and DHE flight, costing $34.3 billion over 22 years. The new body aims to plug these leaks and recover up to $15 billion annually, equivalent to Rp2.65 trillion at a rate of Rp17,692 per dollar. Mahfud noted previous governments failed to address DHE leaks despite detailed reports from figures like Faisal Basri and Rizal Ramli listing suspects and implicated ministers. Legal action often stalled without follow-up. DSI’s integrated oversight is expected to break the cycle of impunity. He explained Prabowo likely recognised the severity of revenue losses, hence the strategic move to take over export mechanisms. Currently, DSI manages only coal, crude palm oil (CPO), and ferroalloys, with transparent monitoring of export volumes, funds, and actual revenue entering state coffers. Mahfud sees the three sectors as a starting point for cleaning up export reports, hoping to include timber, nickel, and tin in future monitoring to maximise foreign exchange from illegal practices. Previously, Danantara’s Chief Investment Officer Pandu Sjahrir said DSI would welcome industry and regulator input. Transparency is key to building market trust, with international finance and banking experts being recruited to ensure professional management of Indonesia’s natural assets. He added the export BUMN would operate with good governance, professionalism, and market confidence. ‘The openness must start from the beginning. We exist, we’re ready to face concerns—our job is to listen,’ Pandu said.