High-ranking Indonesian trade official named suspect in alleged cooking oil corruption scheme

Indonesia’s Attorney General ST Burhanuddin. Photo: Kejaksaan Agung RI
Indonesia’s Attorney General ST Burhanuddin. Photo: Kejaksaan Agung RI

Indonesia’s Attorney General’s Office (Kejagung) has named the director general of foreign trade at the Trade Ministry a criminal suspect for corruptly granting export permits for crude palm oil (CPO) or cooking oil. He was apprehended along with three other suspects who work in the private sector.

“The acts committed by the suspects resulted in state economic losses and an increase in prices as well as a scarcity of cooking oil, causing a decrease in household consumption and small industries that use cooking oil making people’s lives difficult,” Attorney General ST Burhanuddin said while announcing the charges today

The three suspects from the private sector have been identified by their initials as MPT, a commissioner at PT Wilmar Nabati Indonesia; SMA, senior manager of corporate affairs at Permata Hijau Group; and PT, a general manager in PT Musim Mas’ general affairs department.

While Burhanuddin did not identify the suspects, their full names were included in a press release by Kejagung. 

According to Burhanuddin, the scarcity and increase in the price of cooking oil that affected markets in early 2021, which prompted the government through the Trade Ministry to make a policy to establish a domestic market obligation (DMO) and domestic price obligation (DPO) for companies wishing to export cooking oil and its derivative products. In addition, the ministry had set limits on the highest retail price for palm cooking oil.

“In practice, the exporting companies did not meet the DPO but they still got export approval from the government,” Burhanuddin said.

Based on their investigation, Kejagung found that the suspects committed a number of illegal acts, including making an agreement between the applicants and the licensee for the process of issuing export approvals. 

There was also the issuance of export approvals to exporters whose permits should have been refused because they did not meet the requirements, namely distributing cooking oil not in accordance with the DPO and not distributing the products domestically as required in the DMO, or 20 percent of the total exports.

The four suspects will be detained for the next 20 days separately at Salemba Prison in Central Jakarta. IWW and MPT will be housed in the prison’s Kejagung section and SMA and PT being placed in the South Jakarta District Attorney section.

They are suspected of violating a number of articles under Indonesia’s Trade Law including restrictions on the export and import of certain commodities, as well as the Trade Ministry’s Decree concerning the the amount of oil distributed for domestic needs and the domestic price obligation, among others.

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