InfoSAWIT, JAKARTA – Indonesia’s proposed requirement for palm oil and coal exports to be routed through state-owned enterprises (BUMN) is generating growing debate among industry players and business associations.

While the policy is viewed by some as a way to strengthen state control over strategic natural resources and increase government revenues, industry representatives also warn that poor implementation could create significant risks.

Chairman of APKARINDO South Sumatra, Supartijo, said the policy introduced under President Prabowo Subianto is fundamentally aimed at shifting greater control of strategic commodity trading from private hands to the state.

“The objective is clear—to ensure Indonesia’s natural wealth is managed more for the benefit of the people and not overly dominated by large corporations or foreign interests,” Supartijo said in an official statement cited by InfoSAWIT on Sunday (24/5/2026).

According to him, placing export governance under BUMN management could allow a larger share of commodity trading margins to flow into state revenues.

Those resources, he argued, could support public programs ranging from free education and nutrition initiatives to regional development without relying excessively on higher taxation.

Supartijo also believes the government would gain stronger oversight of export volumes and domestic supply stability.

“The state would have greater flexibility in managing exports to maintain domestic price stability, including preventing cooking oil price spikes caused by CPO shortages,” he said.

He added that the policy could help reduce capital flight, noting that a significant portion of commodity trading profits has historically flowed overseas through multinational trading structures.

A centralized BUMN-led system, he said, could also improve Indonesia’s negotiating leverage in international commodity markets.

“If the state sells through major BUMN entities, bargaining power with international buyers could become stronger than fragmented sales by numerous smaller companies,” he said.

However, Supartijo cautioned that the proposed policy carries substantial risks if not executed professionally and transparently.

He identified efficiency and professionalism within state-owned enterprises as among the most significant challenges.

“We know many BUMNs often move slower and less efficiently than private companies. If bureaucracy becomes too lengthy or political intervention occurs, operational costs could rise and trading margins disappear,” he warned.

Supartijo also warned that overly restrictive export arrangements could weaken investor confidence, both domestically and internationally.

“If investment slows, long-term production growth could stagnate. This is something the government must anticipate,” he said.

He stressed that global commodity trading involves far more than simple export transactions, encompassing international buyer networks, logistics systems, trade finance, and complex hedging mechanisms.

For that reason, any BUMN appointed to oversee strategic commodity exports must possess strong commercial capabilities and global trading networks to maintain Indonesia’s competitiveness.

Supartijo further highlighted potential conflicts of interest should state enterprises function simultaneously as market participants and policy actors.

“If regulators also become market players, supervision must be fully transparent. Otherwise, the system becomes vulnerable to misuse,” he said.

According to Supartijo, the policy’s success will ultimately depend on implementation quality.

He identified three essential requirements: professionally managed BUMNs with credible track records, rigorous audit and transparency systems, and continued participation by private-sector partners to preserve technological capacity, market access, and industrial efficiency.

“If we merely replace foreign corporate dominance with inefficient state enterprises, the end result could still harm the public,” he stressed.

Supartijo urged the government to implement the policy carefully while balancing state interests, industrial sustainability, and stability in Indonesia’s palm oil sector. (T2)