Deregulation Becomes Momentum to Clean Up Fraudulent Import Practices

JAKARTA, KOMPAS – Measured import deregulation is expected to not only be Indonesia's response to the United States' reciprocal tariffs. The deregulation could also be a momentum to clean up fraudulent import practices.

Garlic importer Jaya Sartika, Friday (11/4/2025), supports President Prabowo Subianto's instructions to open the import tap for anyone and remove import quotas for commodities that concern the lives of many people. However, the deregulation must still be measured and selective both from the importer and the commodity side.

Anyone can indeed be an importer. However, the requirements are to have capital, logistics facilities, and understand market mapping or the main supplier sources and distribution networks of imported commodities.

"Imported commodities must also be selective, especially those that cannot be produced domestically, whose production is still limited, or have experienced crop failure," he said when contacted from Jakarta.

He gave examples of several commodities whose import policies need to be deregulated, namely soybeans, frozen buffalo meat, wheat, garlic, onions, and certain fruits. Several of these commodities can also be imported without quotas.

Leave it entirely to the importers and the market. They can measure and maintain the balance of market needs/demands with supply.

"The more importers, the more goods. The market becomes more competitive, so that it is not monopolized by importers or groups of importers ordered/deposited by certain individuals in the government," he said.

Measured and selective import deregulation can be a momentum to clean up fraudulent import practices.

Jaya also argued that measured and selective import deregulation could be a momentum to clean up fraudulent importer practices. This starts from the appointment and granting of quotas for certain importers, the sale and purchase of import approval letters (PI), to the provision of fees or service rewards.

In the past year, for example, the sale and purchase of PI letters for garlic has been rampant. This happened because there was a determination of the import quota for the commodity. The import quota was given to 87 importers, most of whom were new importers through the horticultural product import recommendation (RIPH).

"We, the old importers, have not even received RIPH and PI so we are forced to buy garlic from importers who have those documents," said Jaya.

Meanwhile, the Indonesian Sugarcane Farmers Association (APTRI) has asked the government not to open the import tap and remove the sugar import quota. APTRI instead hopes to deregulate the sugar import policy that has the potential to benefit certain parties.

APTRI Chairman Soemitro Samadikoen stated that the Indonesian government does not need to rush to respond to the US reciprocal tariffs. This is considering that US President Donald Trump has postponed the implementation of the tariffs for the next 90 days.

Use the time wisely, especially to clarify President Prabowo's instructions on deregulating strategic commodity import policies. Map out the commodities and their impacts on the domestic upstream-downstream industry.

However, Soemitro continued, if it is related to the elimination of the import quota for raw sugar as raw material for refined sugar, APTRI will reject it. The elimination of the quota will harm sugar cane farmers and the national consumption sugar industry.

"If production is excessive, refined sugar will seep into the white crystal sugar or consumption sugar market," he said.

If it is related to the elimination of the import quota for raw sugar as raw material for refined sugar, APTRI will reject it. The elimination of the quota will harm sugarcane farmers and the national consumer sugar industry.

He also asked the government to learn from the experience of opening the tap for sugar imports as freely as possible in 1998. As a result of this policy, in 1999, the price of consumer sugar fell sharply from IDR 3,500 per kilogram (kg) to IDR 1,800 per kg.

"Farmers suffered losses because the basic cost of producing sugar for farmers at that time was Rp 2,500 per kg. Farmers demanded compensation. Finally, the government provided a subsidy of Rp 700 per kg for farmers' sugar through state-owned sugar factories," he said.

Soemitro also said that APTRI would not question the government importing raw sugar or consumption sugar for the government's sugar reserves (CGP). However, the import must still be measured based on the commodity balance and carried out by state-owned enterprises.

However, the practices that often occur, the government imports raw sugar for CGP, but mills it in private sugar factories. The language is indeed milling, but the practice has the potential to benefit certain parties.

"If necessary, bring in sugar factory investors from the United States. Give them incentives to help develop people's sugarcane and the sugar industry in Indonesia," he said.

Kompas noted that a number of import policies for a number of food commodities have often been highlighted by law enforcement agencies and public service supervisors. In 2024, for example, the Indonesian Ombudsman found a case of alleged maladministration in the issuance of recommendations for importing horticultural products and mandatory planting of garlic.

One of the Ombudsman's findings was that there were alleged extortions in the granting of RIPH for garlic. The Ombudsman also found that there were fictitious members in the farmer groups implementing the obligation to plant garlic (Kompas, 17/1/2024).

In the sugar sector, former Minister of Trade Thomas Trikasih Lembong or Tom Lembong became a defendant in an alleged corruption case of sugar imports in the 2015-2016 period. He is suspected of enriching others, resulting in the state suffering a loss of Rp 515.4 billion.

Tom is said to have issued 21 import approval letters for raw sugar processed into white crystal sugar to unauthorized companies, namely private companies producing refined sugar. He allegedly did this together with the Director of Business Development of PT Perusahaan Perdagangan Indonesia Charles Sitorus (Kompas, 6/3/2025).