JAKARTA, InfoSAWIT – The Indonesian Palm Oil Farmers Organization (POPSI) has urged the government to publicly disclose the methodology, data sources, and calculation process behind claims that Indonesia loses up to Rp600 trillion (approximately US$37 billion) annually due to alleged under-invoicing in palm oil exports, arguing that major policy reforms should be based on verifiable evidence rather than untested assumptions.
The statement follows renewed public debate after Agriculture Minister Andi Amran Sulaiman said Indonesia could be losing between Rp500 trillion and Rp600 trillion in state revenue each year because of under-invoicing practices in the palm oil trade.
POPSI Chairman Mansuetus Darto said the organization fully supports government efforts to improve state revenue, strengthen export governance, and enforce the law against proven violations. However, he stressed that any policy overhaul affecting Indonesia's palm oil export system must be supported by transparent and scientifically accountable evidence.
"We support stronger law enforcement and efforts to increase state revenue. However, if such claims are to become the basis for significant changes in export governance, the methodology, data sources, and verification process should be made publicly available," Darto said in a statement received by InfoSAWIT.
According to POPSI, the public deserves access to the assumptions, economic models, validation process, and legal basis used in estimating the alleged losses. The organization warned that transparency is essential to ensure public confidence and allow stakeholders to objectively assess the necessity of any proposed regulatory changes, including discussions surrounding a more centralized export governance mechanism through Danantara Sumberdaya Indonesia.
POPSI also emphasized that concepts such as transfer pricing, transfer mispricing, and trade misinvoicing are fundamentally different and should not be treated as interchangeable. Legitimate transfer pricing between affiliated companies is internationally recognized provided it complies with the arm's length principle, while allegations of mispricing or trade misinvoicing require documentary evidence, economic analysis, and formal audits.
The farmers' organization further noted that international palm oil transactions are influenced by numerous commercial factors, including long-term contracts, pricing formulas, product quality, shipment volumes, logistics costs, hedging strategies, and delivery terms. As such, differences between transaction prices and benchmark market prices should not automatically be interpreted as evidence of under-invoicing.
POPSI added that Indonesia already operates multiple export monitoring systems—including the Indonesia National Single Window (INSW), the CEISA customs platform, mandatory Natural Resources Export Proceeds (DHE SDA) reporting, tax supervision, and transfer pricing documentation requirements under Finance Ministry Regulation No. 172/2023—which should serve as the primary instruments for verifying any alleged violations before new export policies are introduced.
The organization concluded that transparent evidence-based policymaking is critical to protecting both state revenue and business certainty for Indonesia's palm oil sector, one of the country's largest foreign exchange earners. (T2)
