JAKARTA, June 2 : Business groups in Indonesia called on the government to issue technical guidance for its plan to centralise exports and retain export proceeds in state banks, they said in a joint statement Reuters received on Tuesday.The Indonesian Employers Association, together with associations of miners, coal miners, nickel smelters and palm oil producers, said they supported the new rules, but hoped the government would work with the private sector on their implementation."The government needs to issue transparent technical guidelines to eliminate negative speculation and maintain international market confidence in Indonesia as a global commodity supplier," they said.President Prabowo Subianto on May 20 announced resource-rich Indonesia would centralise exports of strategic commodities through a new company, Danantara Sumberdaya Indonesia (DSI), starting with coal, palm oil and ferroalloys.
The transition period for the policy, which is aimed at improving tax revenue and preventing export under-invoicing, started on June 1, with its full implementation planned at the start of next year, at the latest.Rules requiring natural resource exporters to keep earnings in state banks and limit their conversion into rupiah also took effect on June 1.The business groups said legal certainty was needed, particularly on ongoing contracts, long-term contracts, payments, as well as shipping and insurance provisions. Clarity on export earnings rules and the treatment of trade agreements was also urgently needed, as well as a credible digital platform to monitor trade.Danantara has said it would honour long-term contracts, but might renegotiate prices if it suspects under-invoicing and that it was developing monitoring technology.Representatives for Danantara, and the ministries of economic affairs and finance did not immediately respond to requests for comment. A trade ministry spokesperson deferred questions to the economic affairs ministry.
