TRADE CHAMBER SUSPECTS CARTEL BEHIND SUGAR PROBLEM

By Andi Abdussalam

Jakarta, July 7 (ANTARA) - The Indonesian Chamber of Commerce and Industry (Kadin) has said that the government's inability to uncover the sugar cartel and settle overlapping interests among related government agencies has caused the nation's sugar problems to protract for years.          The chamber also believed that the ministry of industry and the ministry of trade were not firm and transparent while slapping sanctions on parties that leaked refined crystal white sugar to the consumer market.         "The government has not yet been able to manage the country's sugar production, distribution and trade well. In addition, supervision by the House (DPR) and the Business Competition Supervisory Commission (KPPU) is not yet good so they (DPR and KPPU) face difficulties to uncover the sugar cartel," Kadin chairman for trade, distribution and logistics affairs Natsir Mansyur said on Friday.         Local sugar producers have often complained for years about the leakage of refined sugar, imported to bridge the need from food and beverage industries, into the retail market.  So far, the government imports about 50 percent of the country¿s sugar need, particularly those from its industries.         Yet, imported sugar is often leaked into the consumer market, disturbing the sales of local sugar whose price is relatively higher.         The country's sugar need is estimated at 5 million tons annually while its crystal white sugar production is about 2.50 million to 2.57 million tons.         Thus, almost 50 percent of domestic demand, including the demand from food and beverage industries, is imported to cover the balance. But the imported sugar is often leaked into the retail market disrupting local crystal white sugar.         Natsir said Indonesia always had the same sugar problems every year when the supply would often fall short, prices often chalk up and recriminations always take place among related agencies, ministries, state-owned plantation firms (PTPN) and refined sugar producers. "These problems always take place like an annual ritual," he said.          Sugar problems often take place in the country because the supply and demand are not balanced. While sugar supply is declining, demand for the commodity is often rising, worsened by bad sugar management which has lasted for about six years.          The need to meet consumer demand at home by nation's big sugar producers PTPNs is still far from expectation while the Indonesian Sugar Council (DGI), which organizes the nation's sugar business players, is not yet able to carry out its function properly, Natsir argued.           "This is worsened by the fact that the House of Representatives has not yet carried out its supervisory function optimally and the Business Competition Supervisory Board or the KPPU still faces difficulties to uncover the sugar cartel," said Natsir Mansyur.          According to a report by Media Indonesia which quoted a statement by Deputy Minister for Trade Bayu Krisnamukthi on March 3, 2010, there were four groups that had played roles among the country's sugar cartel. One group includes four to five state-owned plantation firms (PTPNs) which produce crystal white sugar for consumption, another group comprises of first distributors from warehouses, yet another consists of a group of industries producing refined sugar and the last comprises of a group of sugar industries in Lampung province (Sumatra).         In the meantime, VIVAnews.com also reported that the Business Competition Supervisory Commission (KPPU) has in the past two years suspected the roles of the sugar cartel that caused problems in the distribution and sugar price hikes of in the country.          KPPU Chairman Tresna P Soemardi once told the House Commission on trade affairs that his commission would do its best to investigate the alleged presence of a cartel in the sugar business affairs. But he also mentioned fund constraints in doing the job.          Its discontent over incompetence in the management of the nation's sugar business was also raised by the Indonesia-Clean Movement (GIB) organization, particularly with regard to appointment of the Indonesian trade firm (PT PPI) as the sole company to import 240 tons of white crystal sugar to meet the need for the commodity in the Indonesian eastern regions last May.       According to GIB, the appointment of PPI as the sole importer of sugar violated the law.          The GIB even suspected that there was a corruption aspect in the affair. So, GIB coordinator Adhie M Massardi reported Trade Minister Gita Wirjawan, Deputy Minister for Trade Affairs Bayu Krisnamurthi, Foreign Trade Director General Deddy Saleh, PPI President Director Heynrich Napitupulu and Dierctor of PT Jawamanis Rafinasi Max Ramajaya to the Corruption Eradication Commission (KPK).         In its lawsuit, the GIB said the issuance of the trade minister's decree for the importation of sugar was categorized as corruption based on Law No.3/1971 in conjunction with Law No. 31/1999 and Law No. 20/2011 of the Elimination of Corruption Crime.         Adhie said PT PPI which was assigned to import the sugar then named eight refined sugar factories to refine the imported raw sugar into crystal white sugar. But the owners of the factories sold white sugar to the consumer market which was refined from their own raw sugar, thus enjoying massive profits.         In this regard, Trade Minister Gita Wirjawan said one should question those behind the GIB's report to the KPK. "Please check who is behind the non-governmental organization," said Gita Wirjawan on Thursday.          "As far as I remember, it was the Indonesian Sugar Council which decided to import sugar. It was not the trade ministry," added the minister.          Apart from that, Natsir of the chamber of commerce called on the government to solve the problem of the imbalance between supply and demand for sugar. "The government should solve the problem soon," Natsir said.          He said that there were several matters that had to become the focus of the government attention such as the distribution of sugar for the need of consumers in the regions. The need for sugar of consumers in the regions should be regulated by the regional governments concerned.         "Different regions have different volumes of sugar need which range between 50,000 tons and 150,000 tons. So far, the regulation on sugar distribution to regions is still centralized in nature. This causes complexities in the management of sugar distribution in the country and has become the source of speculations," Natsir said.         He said that the distribution of sugar to the regions should be regulated by the regional governments, the Kadin and the Indonesian Wheat, Sugar Businesses Association (Apegti).         Besides, the ministry of industry should also issue permits for the establishment of refined sugar factories in the Indonesian eastern region, he added.***2*** (T.A014/A/INE/B003) 07-07-2012 14:00:5