By Ying Xian Wong
Indonesia's sovereign wealth fund sought to address market concerns regarding a government plan to centralize commodity exports, saying the initiative would be implemented in an accountable manner.
Danantara Indonesia said its unit, PT Danantara Sumberdaya Indonesia, would implement its mandate to strengthen oversight of strategic natural-resource commodity exports in a "measured, professional and accountable manner."
Indonesia plans to tighten oversight of strategic commodity exports by creating a state-backed entity to centralize exports of products including palm oil, coal and ferroalloys.
During the transition period, which began on June 1, DSI will focus on bolstering reporting and monitoring systems through digitalization, the fund said Friday. The unit is developing a digital platform to analyze export transaction data and identify instances of potential under-invoicing.
DSI will maintain the confidentiality of commercial information and contractual terms it obtains. Existing export contracts for strategic natural resource commodities will remain valid as long as no under-invoicing is detected. Exporters that follow good business practices will face no operational disruptions, helping to ensure legal certainty and a conducive business environment, it said.
After the transition period, DSI will function as an intermediary, facilitating and supervising export flows while ensuring commercial relationships between producers and trading partners.
Pricing of strategic commodities would be based on fair, transparent and accountable methodologies, taking into account differences in quality, specifications, logistics costs and contract structures, which would eliminate loopholes for market manipulation, it said.
Danantara and DSI will continue engaging with stakeholders to ensure the reforms are implemented consistently and without disrupting export activities.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
06-05-26 0115ET
