Observer: DSI to become instrument for strengthening natural resource export governance

Director of the Centre for Energy and Mining Law Studies (PUSHEP) Bisman Bhaktiar has stated that PT Danantara Sumber Daya Indonesia (DSI) can become a state instrument to strengthen governance and the added value of natural resource (SDA) exports. Bisman, in a written statement in Jakarta on Thursday, opined that the legitimacy of DSI’s mandate is quite strong as long as the government provides a clear regulatory basis and assignment. He explained that the state-owned export enterprise needs to position itself as a business operator. DSI is said to need to avoid functioning as a new regulator so as not to trigger overlapping authority. Bisman also projected that DSI would be able to overcome industry challenges in the commodity export sector, particularly efforts to address under-invoicing practices that often harm state finances. Through data transparency and the integration of trade information, there will be a significant opportunity to suppress loopholes for manipulation. “As long as the mechanism is good, transparent and does not add to the bureaucratic burden, it will not have a negative impact on investment,” he said. Bisman assessed that the implementation of an integrated transaction tracking system would have a positive impact on the effectiveness of monitoring the volume and price of export commodities in the field. As long as transparency is carried out consistently and supported by law enforcement, this initiative is considered to be very good. Bisman also appreciated the decision for a transition period that provides adequate adaptation space for business actors, so that all operational risks related to disruptions to trade contracts can be anticipated and minimised as early as possible. Moreover, there is a discussion process during the transition period in an effort to formulate operational regulations that consider real field conditions. Active participation from business actors needs to be well received. “The voices and aspirations of business actors must be truly heard, so that the quality of policy considers field conditions. Although the final decision must still be the best for the national interest,” he added. Furthermore, Bisman highlighted that free competition in the global market will demand that DSI immediately prepare itself with high credibility, strong corporate governance, and a wide market access network. International buyers generally emphasise aspects of certainty of goods supply, consistent commodity quality, contract compliance, and solid financing support capabilities. DSI’s commitment to maintaining operational integrity and professionalism across all lines must be implemented to build a strong reputation in the eyes of the world. Oversight is needed to close all loopholes for irregularities in the trading system of the state’s valuable export commodities. “DSI needs to focus on increasing transparency and the added value of national exports. Professional and fair governance must be a priority in order to gain the trust of the global market. Governance must be clean and avoid rent-seeking,” said Bisman.