PTPN officials to be grilled over alleged sugar smuggling

Abdul Khalik, Jakarta

The National Police announced on Monday they were investigating several officials from state sugar importer PT Perkebunan Nusantara (PTPN) X, following allegations they were involved in sugar smuggling.

Responding to a police report filed by the Indonesian Sugarcane Farmers Association (APTR) earlier that day, National Police Chief of Detectives Comr. Gen. Suyitno Landung Sudjono said his officers had been working on the case since the beginning of the year.

"We had already arranged to question these officials today. We have not declared them suspects yet but we may once we have gathered sufficient evidence," Suyitno said.

Police were aware PTPN X's license to import sugar had expired in April but the company had kept on importing the commodity, a practice clearly in violation of the regulations, he said.

PTPN IX, PTPN XI, PPI, and PT RNI are the only four firms currently licensed to import sugar.

Speaking after he filed the report, APTR chairman Arum Sabil said he had found 56,000 tons of smuggled sugar inside a warehouse in Tanjung Priok port, Jakarta.

He said the sugar was owned by PTPN X, PT Phoenix Commodities Indonesia and Jakarta's Association of Cooperatives (Inkud).

"We have demanded all of these entities be investigated to find out which are responsible for the smuggling. We have documents proving there was a conspiracy to bring the sugar illegally into the country," Arum said.

He said while PTPN X at one time had the right to import sugar, he had evidence the company had done so without the proper documents. The other two entities were clearly smuggling the sugar because they had no authority at all to import the commodity, he said.

Arum said Jakarta customs and excise officials should also be questioned because it was impossible the smuggling could occur without their cooperation.

Suyitno said he would follow up the report but said police had not yet found any evidence linking officials from entities other than PTPN to the smuggling. However, the ongoing investigation could be expanded, he said.

Arum said the smuggled sugar had hurt thousands of sugarcane farmers across the country as the imported sugarcane had lowered the market price to below local production costs.

"Sugar production costs us between Rp 3,200 to Rp 3,500 a kilogram while the smuggled sugar is sold at Rp 2,100 a kilogram. How can we survive in this kind of situation?" Arum said.

A huge gap between local production and domestic demand has led to widespread sugar smuggling in the country. Indonesian sugar production stood at 1.8 million tons in 2002, while demand that year reached 3.2 million tons.

The government has been unable to stop the widespread smuggling.

The customs office at the country's main port of Tanjung Priok recently confiscated 3,674 tons of smuggled sugar, while reports estimate about 24,000 tons of illegal sugar enters the country via West Kalimantan every year.