Jakarta/Sydney | A leaked email to outraged Australian grape growers has highlighted delays, informal fee structures and possible political interference that sabotaged Australia’s table grape exports to Indonesia earlier this year.
The hit to export volumes highlights long standing inefficiencies in the bilateral economic relationship that should be addressed by the free trade deal that came into force in July.
A joint investigation by Tempo Magazine in Jakarta and The Australian Financial Review has confirmed the Australian government took growers’ concerns to the Indonesian ambassador. The problem was that not enough permits and quotas were issued in Jakarta in order to get Australian fruit into the country.
“Through our post in Jakarta, we have been working to make sure Australian exports won’t face similar challenges in the year ahead, particularly with the Indonesia-Australia Closer Economic Partnership coming into force in July this year,” Agricultural Minister David Littleproud said.
Earlier this year those challenges cost Australian exporters about $33 million, when the complex system of permits and quotas that’s controlled by two different government departments in Jakarta went awry.
After Canberra complained, the Indonesian government moved to address these concerns in May by issuing a new quota, but it came too late to save the season. Table grape exports in the year ending June 30 were down 42 per cent on the year before. The trade that was worth $78.3 million in 2018-19 fell to $45.25 million.
"I had a lot of conversations [about the Indonesian market] during our last export season," said Australian Table Grape Association chief executive Jeff Scott.
"Import licences and quotas were very difficult for get for the Indonesian importers who applied for them except for, we understand, one or two companies.” he said.
This hit export volumes hard, Mr Scott said. “Trade was stifled.”
There are unhealthy practices in the two ministries.
— Anton Muslim Arbi, chairman of Indonesia's National Horticultural Association
An email sent by Mr Scott to some growers in March suggested the ATGA was doing all it could. It opens by saying "Indonesia has proven to be a big headache this year," and goes on to state "We have engaged the Australian ambassador in Indonesia and the minister has summonsed the Indonesian ambassador in Australia to discuss that issue."
A leaked copy of that email found its way into the Indonesian parliament, where concerns were mounting about a shortage of various fresh produce including grapes, oranges and garlic. This was traced to the labyrinthine processes required to secure import paperwork.
It emerged importers who had worked with Australian table grape exporters in previous years had had their requests for permits and quotas knocked back while a new venture scooped up all the capacity.
How this was allowed to happen, if money changed hands, and the extent to which prominent Indonesian politicians were involved is still being unravelled.
Mr Scott's email notes that four quotas for table grapes were issued on March 6 all to the one company – Helbeth. Helbeth Sakti is an entrepreneur who did not have established relationships with suppliers.
This email caused quite a stir among Indonesian fruit importers. It appears the difficulties in getting import permits and quotas for table grapes was not an isolated incident. Mr Scott’s email was raised by a parliamentary committee, the Agricultural Commission, during a meeting with Indonesian Minister of Agriculture Syahrul Yasin Limpo.
Anton Muslim Arbi, chairman of Indonesia's National Horticultural Association, said many importers had been asked to make payments above and beyond official fees to obtain a horticultural import quota permit at the Ministry of Agriculture and import approval at the Ministry of Trade.
“There are unhealthy practices in the two ministries," he said.
One fruit importer in Jakarta said the extra payments oiled the wheels of bureaucracy. "It’s like going through a toll road," he said. "Those who want to pay toll rates can run smoothly; those who don't want to pay will be stuck."
It seems that plenty got stuck this year with the number of companies that secured a right to import various commodities falling from 81 to 21. Old importers fell by the wayside, replaced by the likes of Mr Helbeth.
The dramatic fall in import licences prompted the Indonesian Fresh Fruit and Vegetable Exporters-Importers Association to take the Ministry of Agriculture and the Ministry of Trade to the state administrative court.
"There were 23 importers whose quota applications were rejected even though they met the requirements," said Ayub Adonia Fina, a lawyer for the Association.
The director-general of horticulture at the Ministry of Agriculture, Prihasto Setyanto, admitted there was a delay in issuing quotas. However, he denied any entrepreneur had been granted a monopoly.
Other importers have recounted meetings they had with politicians, including Deputy Minister of Trade Jerry Sambuaga, where additional fees were discussed.
Indrasari Wisnu Wardhana was director-general of foreign trade at the time when importers were struggling to get the necessary approvals. A number of importers have reported Mr Wisnu acted as the intermediary in the process.
Mr Wisnu acknowledged several importers had approached him and asked to meet. "But I refused and asked them to follow the procedure," he said. He said it would have been impossible for additional fees to have been charged because of department systems that prevented direct meetings between importers and ministry officials.
He said delays this year were largely because importers had failed to meet departmental requirements in their initial applications.
Mr Jerry has denied being at the meeting and said import licensing was not part of his duties and responsibilities as deputy trade minister.
Another meeting at Pacific Place in Jakarta on March 5 allegedly involved two officials from the National Democrats (Nasdem) party and Mr Helbeth, at which the quota for Australian table grapes that was referred to in Mr Scott’s email was handed over. It was was issued by Mr Prihasto, from the Ministry of Agriculture.
The two Nasdem party officials involved – Rusdi Masse and Ahmad Ali – did not respond to requests for comment. Mr Prihasto confirmed he had met with the two in March, but not at Pacific Place, and said additional payments had not been discussed. He also said he had never met Mr Helbeth.
Mr Helbeth initially indicated he would respond to requests for comment but has failed to do so.
Back in Canberra, the Australian government is keeping a close eye on proceedings. In September Mr Littleproud spoke to his Indonesian counterpart. “I expressed my optimism that trade would continue with little disruption [now] that the IA-CEPA is in place,” he said.