Manipulated Exports, Broken Oversight

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The alleged manipulation of POME (Palm Oil Mill Effluent) exports, which reportedly caused state losses of up to Rp14 trillion, is not merely another corruption case. It reflects deeper structural weaknesses in Indonesia’s trade governance system—weaknesses that allow regulatory loopholes, collusion, and administrative manipulation to persist. If such practices were carried out over a significant period and involved multiple actors, then the issue goes beyond individual misconduct. It points to systemic failure.

 

POME is essentially liquid waste generated from palm oil processing. When products that should have been classified as crude palm oil (CPO) or its derivatives were allegedly mislabeled as POME to avoid export duties and regulatory obligations, this indicates deliberate administrative manipulation. Such a scheme could not have succeeded without serious lapses in oversight—or worse, internal complicity. This suggests that Indonesia’s export monitoring system still relies too heavily on individual integrity rather than robust institutional controls.

 

The government cannot position itself solely as a victim of dishonest business actors. The state possesses regulatory authority, enforcement agencies, and technological capacity. If manipulation of Harmonized System (HS) codes and export documentation could occur at a scale large enough to cause losses in the trillions of rupiah, then there has been a structural breakdown in cross-ministerial verification—whether within the Ministry of Trade, Customs and Excise, or other relevant agencies.

 

One fundamental issue lies in fragmented data and poor inter-agency integration. Indonesia’s export system still allows discrepancies between technical documentation, customs declarations, and production reports. Without an integrated digital system capable of tracking goods from origin to export in real time, opportunities for manipulation will always exist. Digital reform is no longer optional—it is essential.

 

In addition, the government must critically evaluate its palm oil export policies, which have often been revised and layered with complex requirements. When regulations are frequently changed or overly complicated, they create uncertainty. In such an environment, opportunistic actors can exploit ambiguity for personal gain. Regulatory inconsistency not only undermines compliance but also weakens enforcement.

 

Nevertheless, firm law enforcement remains the key to restoring public trust. This case must be investigated thoroughly and transparently, regardless of whether it implicates high-ranking officials or major corporations. The public has the right to know how the scheme operated, who benefited from it, and how the state intends to recover the losses. Selective enforcement would only deepen skepticism toward the government’s anti-corruption commitment.

 

Beyond prosecution, preventive measures are equally important. The government should implement at least three concrete reforms. First, it must establish an integrated digital verification system connecting all export-related institutions, minimizing opportunities for data manipulation. Second, it should conduct routine and random audits of companies exporting strategic commodities such as palm oil. Third, it must impose stricter administrative and criminal sanctions, including license revocation for companies proven to have engaged in fraudulent practices.

 

The palm oil sector is one of Indonesia’s largest sources of foreign exchange. Its strategic importance demands governance grounded in transparency, accountability, and integrity. Without good governance, the sector’s enormous potential can easily turn into a channel for revenue leakage.

 

Rp14 trillion is not an abstract number. It represents public funds that could have financed infrastructure, education, healthcare, or social protection for millions of Indonesians. When such a sum disappears due to manipulation and collusion, it is not merely the state that suffers—it is the public at large.

 

If the government is serious about strengthening anti-corruption efforts, this case must serve as a catalyst for systemic reform in export governance. Without structural improvements, similar scandals will inevitably reappear—perhaps under different schemes, but with the same consequence: public loss and eroded trust.

By : K&Co - February 11, 2026