Police blame state firm in sugar debacle

Police blame state firm in sugar debacle

Abdul Khalik, The Jakarta Post, Jakarta

The National Police said on Thursday that state-owned PT
Perusahaan Perdagangan Indonesia (PPI) may have violated a
government regulation in the import of sugar.

National Police Chief of Detective Coms. Gen. Suyitno Landung
said that PPI's top officials would be interrogated within the
next few days.

"The import documents stated clearly that the sugar must not
be shipped out of the destination area. As the importer of the
sugar, PPI has the responsibility to keep the commodity in North
Sumatera," said Suyitno.

PPI imported the sugar into Medan, in North Sumatera, from
neighboring Malaysia. It later turned out that the sugar was
shipped to Jakarta, but was confiscated by the customs office at
the Tanjung Priok Port.

According to Ministry of Industry and Trade Decree No.
643/MPP/Kep/9/2002, imported sugar must have a specific
destination area and must not be transferred to another area
after going through customs.

PPI together with state plantation firms PTPN IX, PTPN X, PTPN
XI, and state trading company PT Rajawali Nusantara Indonesia are
the only companies in the country allowed by the government to
import sugar.

The import limitation is aimed at protecting the interests of
the domestic sugar agribusiness conglomerates.

The customs office at the country's main port in Tanjung Priok
has recently confiscated 179 containers with 3,674 tons of
imported sugar, suspected by many to be smuggled sugar.

On Thursday, the government destroyed 162 of the containers,
while the remaining 17 were claimed by state-owned plantation
firm PTPN II (the owner) as local sugar, not imported.

Speaking to reporters after the sugar destruction ceremony at
North Jakarta's Marine Base, Suyitno said based on the ongoing
investigation, 100 of the destroyed containers were owned by PPI
as evidenced by the shipping documents.

Suyitno said that the police would also interrogate officials
of PPI's five partner companies, including PT Inti Rimba Alam and
PT Raja Tawon, which allegedly distributed the sugar to Jakarta.

Minister of Industry and Trade Rini Soewandi agreed with
Suyitno that all parties involved in the violation of sugar
import procedures and in smuggling of the commodity must be
punished.

"Only two parties can be blamed for this illegal sugar trade.
The first is PPI and the second is the distributor. If the police
prove that PPI has violated the regulation, its permit as
importer will be terminated and its officials will be punished.
This, however, depends on what the police recommend," said Rini.

The steps to punish the smugglers and to destroy the sugar are
part of the government's effort to stop rampant sugar smuggling
into the country. So far, the government has failed to stop the
widespread smuggling of cheap sugar into the country which has
flooded the local market and hurt domestic sugar producers who
cannot compete with neighboring country's in terms of price.

Indonesia is the world's second largest sugar importer after
Russia. Sugar production here has declined rapidly since 1993,
while consumption has been increasing. Indonesian sugar
production stood at 1.8 million tons in 2002, while domestic
demand reached 3.2 million tons.