InfoSAWIT, JAKARTA – Every policy, as the old saying goes, should be judged by the intention behind it. That perspective frames the creation of PT Danantara Sumber Daya Indonesia’s Special Export Agency—a government initiative aimed at reshaping Indonesia’s export governance for strategic natural resource commodities.
One argument frequently cited in support of the new institution is the alleged loss of substantial economic value through export practices routed via Singapore. According to a Team of Ten formed by the Ministry of Finance and reported by IDX Channel on May 20, 2026, Indonesian companies allegedly sell commodities to subsidiaries in Singapore, which then resell the same products to destination markets such as the United States at higher prices.
Although shipments depart directly from Indonesia, trade documentation often lists Singapore as the origin. This practice—described as under-invoicing—is claimed to have cost Indonesia up to USD 908 billion, or around Rp15,400 trillion, since 1991.
The article argues that similar patterns also occur in coal exports to India through transfer-pricing arrangements, reducing declared profits and tax liabilities. According to the writer, the issue extends beyond palm oil and coal to other export commodities, creating a complicated situation in which government institutions see economic losses while businesses maintain that such practices still operate within existing legal frameworks.
Concerns Over Impact on Smallholders
The opinion piece argues that policies intended to strengthen state revenue could unintentionally affect parties not involved in such practices—particularly oil palm Smallholders.
According to the writer, palm oil farmers already shoulder significant burdens, including export levies contributing to fuel subsidy support, while having no role in complex trade structures such as under-invoicing or transfer pricing.
The article claims that stronger domestic export processing—where shipments and trade documentation originate directly from Indonesia—could help retain greater economic value at home through shipping services, brokerage activities, tax revenue, and foreign exchange earnings.
Examples cited include fuel imports routed through Singapore refineries and commodity brokerage services that, according to the author, could instead be developed domestically in cities such as Palembang or Medan.
Debate Over Governance and Policy Direction
The writer further argues that ministries responsible for trade governance should play a stronger role in addressing structural weaknesses rather than relying solely on the formation of new institutions.
The article raises broader concerns regarding governance, enforcement, and policy priorities, while questioning whether efforts to strengthen state control over exports will ultimately address the root causes of trade inefficiencies.
Returning to palm oil, the author argues that Smallholders should become central beneficiaries of national commodity policy through productivity intensification programs, subsidized fertilizers, and agronomic improvements capable of increasing Indonesia’s palm oil production from 50 million tons to 100 million tons annually.
The opinion concludes with a warning that without balanced policies, the palm oil sector risks repeating historical patterns experienced by Indonesia’s sugar industry, where policy distortions gradually weakened domestic producers. According to the author, Smallholders should not become collateral damage in efforts to reform export governance. (*)
By Memet Hakim, Social and Plantation Observer, Wanhat APIB
Disclaimer: This article reflects the personal views of the author and is entirely his responsibility. It does not represent the editorial position of InfoSAWIT.
