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.