AmCham Update Vol. 4 #3

Jokowi Signs Controversial Criminal Code, Copper Export Ban, Palm Oil Export Restrictions, Rp 4.1t in Indonesia-Malaysia Trade Deals

Jan 11, 2023

Jokowi Signs Controversial Criminal Code into Law

President Joko Widodo signed the controversial Criminal Code Bill on Jan 2 following its passing by the House of Representatives (DPR) in December last year. Law 1/2023 is now officially the new Criminal Code in Indonesia, with 624 articles and 345 pages.

With the official promulgation of the law, there will be a three-year transition period for the government to socialize the new Code. Minister of Law and Human Rights Yasonna Laoly said the government will actively socialize the Code to law enforcement, educational institutions, and other related stakeholders, to minimize misunderstandings.

However, concerns regarding the new Code have been left largely unaddressed, such as provisions that critics say undermine freedom of speech, democracy, and people’s personal rights. Legal challenges to the new law are expected.

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Jokowi to Ban Copper Exports

President Joko Widodo has announced a plan to ban copper exports starting in June this year. The ban is the latest move in the government’s industrial downstreaming strategy to increase the value of Indonesia’s exports. President Widodo said the regulation is being finalized while the government is preparing a copper smelter plant in Gresik, East Java.

President Widodo previously announced bans on ore bauxite and nickel. Although the nickel export ban has encountered opposition internationally and from the World Trade Organization, the President insisted Indonesia should not back down on measures that will further the development of its economy.

To prevent disruption, the government will need to ensure the smelter plant is completed and has the capacity to accommodate all domestic copper production and storage, Indonesian Mining Professionals (PERHAPI) Chair Rizal Kasli said.

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AmCham Cares: Asian Tigers

Asian Tigers, in collaboration with Bule Bolang, organized a humanitarian trip to Cianjur following the earthquake there on Nov 21, to ease the burden of the suffering of the quake victims.

On Nov 30, Asian Tigers took delivery of 150 blankets, 36 large tarpaulins to be used mostly as ground sheets, 120 mats to sit on top of the tarps, and also clothes, rice, noodles, eggs, sugar, salt, cooking oil and hygiene and sanitary products.

On Dec 8, Asian Tigers delivered 110 large heavy-duty tarps, 100 3m x 2m padded floor mats, and pre-ordered large quantities of essential supplies at Cipanas market. On arrival it also purchased 1,000 kg of rice, 300 kg of eggs and 200 blankets.

Watch the full journey here: https://www.youtube.com/watch?v=5DQ_VW36tGY

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Palm Oil Exports Tightened

The government will tighten restrictions on the export of palm oil starting this month to secure domestic supply of cooking oil ahead of Ramadan, when the price of basic public necessities usually increases. Exporters will be permitted to ship six times the amount of their domestic sales volume, less than the current ratio of eight times.

The government has implemented measures to prevent palm oil price increases in recent months. The domestic market obligation (DMO), which Indonesia currently enforces, obliges companies to sell a portion of their output domestically in exchange for export licenses.

Indonesia is also planning to increase the mandatory palm oil component in biodiesel to 35 percent by Feb 1, 2023. The availability and cost of cooking oil will be taken into consideration as the government continues to periodically examine the export ratio.

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Rp 4.1t in Indonesia-Malaysia Economic Cooperation

Memorandums of understanding (MoU) worth Rp 4.1 trillion were signed during Malaysia Prime Minister Anwar Ibrahim’s first official visit to Indonesia. The two countries agreed on eight private sector MoUs and eight other MoUs in areas such as shipping, export-import financing, sustainable energy, and developments in the battery industry.

A bilateral meeting between President Joko Widodo and the Malaysian Prime Minister was held on Jan 9 to discuss a number of cooperation efforts, including further protection for Indonesian migrant workers through integration of the one channel system (OCS), finalizing regional borders and territorial sea segments, and intercountry cooperation in strengthening the palm oil industry.

The two countries also explored Malaysia’s potential investment in Indonesia's new capital city, Nusantara, when Malaysian Minister of International Trade and Industry Tenku Zafrul Abdul Aziz submitted 11 letters of intent to Nusantara Capital City Authority Head Bambang Susanto.

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Trade Ministry Revokes Regulations on Prices of Basic Necessities

The Ministry of Trade has revoked four Minister of Trade regulations (Permendag) on the price of basic necessities to ensure no overlap with the National Food Agency (Bapanas).

With the issuance of Presidential Regulation (Perpres) 66/2021 concerning Bapanas and Perpres 125/2022 concerning Government Food Reserves, adjustments need to be made to ensure that duties between the Ministry of Trade and Bapanas do not intersect, said Acting Director General of Domestic Trade Kasan. With these changes, the Ministry of Trade will focus on securing stock and ensuring the price stability of basic goods outside the scope of the presidential regulations.

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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor.

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