Ministers deny restrictions on clove trade
JAKARTA (JP): The government has denied any knowledge of a new restriction on the trading of cloves, stressing it will no longer interfere with the distribution and sale of the commodity.
Industry and Trade Minister Mohamad 'Bob' Hasan reiterated Monday that the government was committed to freeing up the clove trade and any other monopolistic arrangements, as it was a mandate of the International Monetary Funds (IMF).
"No one in the ministry has approved any special arrangement and we have no intention of doing so," Hasan said in a joint statement with the ministers of finance and cooperatives.
"We are committed to enforcing the new rules and that means free trade for farmers, traders and factories alike."
The statement was issued in response to reports that PT Kembang Cengkeh Nasional (KCN), controlled by President Soeharto's son Hutomo Mandala Putra, had allegedly continued the monopolistic practices of the dissolved Clove Marketing and Buffer Stock Agency (BPPC).
Under the IMF-brokered reform program, the government was required to end the monopoly over cloves which BPPC had held since early 1991.
The government has stated that it has ended the monopoly in February, as required by the Jan. 15 reform package agreed with the IMF, and has dissolved BPPC ahead of the June deadline.
Cloves are the main ingredients in locally produced cigarettes which consume more than 100,000 tons of the spice annually.
Finance Minister Fuad Bawazier said in the joint statement that he had assigned his staff to painstakingly review its practices, especially on the sale of excise tax stamps used on cigarettes packets.
"I don't know what the practice was in the past, but I guarantee there will be no requirement from now on for cigarette factories to buy clove from KCN as a condition to purchase excise tax stamps," Fuad added in the statement.
The chairman of the Association of Indonesian Cigarette Companies, Ismanoe Soemiran, told The Jakarta Post last week that the association's members remained unofficially required to buy cloves from KCN as a prerequisite for buying excise stamps from the Directorate General of Customs and Excise.
Cigarette producers cannot sell their cigarettes without the excise stamps.
The newsweekly tabloid Kontan said in its latest issue on Friday that the trading arrangement was designed to keep KCN -- which currently holds 167,000 tons of BPPC's clove stock -- in business.
The now defunct BPPC was also controlled by Hutomo.
Minister of cooperatives and Small Enterprises Subiakto Tjakrawerdaja also asserted in the statement that his ministry had met with farmer cooperatives last week to discuss the issue.
Subiakto said the ministry would help cooperatives by providing the best ways for handling the sale of their cloves.
"But they have to manage any relationships with buyers on their own and we won't interfere in any way," Subiakto added.
The ministers said they were committed to fully implementing the new (free) clove trading system under the economic reform package.
"People should feel free to bring problems like this to our attention so we can correct them as quickly as possible," Fuad added. (das)