APSN Banner

Analysis: Palm oil graft case enters new phase with minister Airlangga interrogation

Jakarta Post - August 2, 2023

Tenggara Strategics, Jakarta – Recent developments in the investigation of a corruption case that has been blamed for contributing to a domestic cooking oil shortage last year has led to Coordinating Economic Minister Airlangga Hartarto being questioned by the Attorney General's Office (AGO). Prior to Airlangga's interrogation, three palm oil companies had been named new suspects in the case.

The three companies, Wilmar Group, Permata Hijau Group and Musim Mas Group were named suspects by the Supreme Court for alleged misconduct in obtaining crude palm oil (CPO) export permits at a time when shipments of the commodity were being restricted during the cooking oil scarcity period. The Supreme Court also increased the prison sentence of the companies' executives earlier this year for conspiring to secure the export permits, namely Master Parulian Tumanggor of PT Wilmar Nabati Indonesia, Stanley Ma of Permata Hijau Group and Pierre Togar Sitanggang of PT Musim Mas, plus an assistant to Airlangga, Lin Che Wei for helping the three companies get export permits.

Though the court found these individuals guilty, the court's justices also view the executives' actions as belonging to their respective companies. According to the justices, the companies were the ones who benefit from the illegal gains; therefore, they must also be held accountable and take responsibility for restoring the state losses caused by their alleged criminal acts. The AGO estimates the country's loss to reach up to Rp 6.47 trillion (US$431.38 million).

Seeking further examination into the three companies' involvement in the case, the AGO subsequently turned to CPO export-related policies implemented from January 2021 to March 2022, the period when the corruption took place. The AGO mentioned that it would dig for information on the case from an evaluation and implementation standpoint, given how the CPO export-related policies had enabled the large financial losses to happen to the country.

Consequently, as the Coordinating Economic Minister and respective policymaker, Airlangga was called in for questioning on Jul. 25. Airlangga reportedly underwent a 12-hour interrogation, where investigators sought information on the minister's policies in handling the cooking oil storage, which led President Joko "Jokowi" Widodo to temporarily ban exports of CPO and its derivates. The policies introduced to address the issue included a domestic market obligation (DMO) policy, which required CPO exporters to allocate at least 20 percent of their produce for the domestic market.

To this end, AGO director of investigation for special crimes Kuntadi emphasized that Airlangga's recent interrogation was only to confirm his position and duty. Deciding Airlangga's involvement in the case at this time, according to Kuntadi, would be considered too premature as investigators are still observing the development of the investigation and need time to examine the legal facts.

Jokowi has since responded to Airlangga's questioning, simply mentioning that the legal process must be respected anywhere, whether "at the Corruption Eradication Commission (KPK), the National Police or at the AGO, everyone has to respect it [the legal process]". However, the investigation into Airlangga's role in the cooking oil graft case has seemingly exacerbated the minister's faltering political position as chairman of the Golkar Party.

What's more

Aside from Airlangga, the AGO revealed that two other witnesses were questioned this month. One witness, with the initials SH, is said to hold the position of legal bureau head at the Trade Ministry, while the other witness (AS) is a civil servant at the ministry.

The two witnesses were summoned for questioning on Jul. 17. Though no details have emerged surrounding their interrogation, AGO legal information center (Kapuspenkum) head Ketut Sumedana mentioned that the two witnesses were questioned to strengthen evidence as well as to complete the case's filing.

Following Airlangga's examination, the AGO is reportedly set to investigate the minister's connection to Lin Che Wei, a convicted individual in the case and former member of Airlangga's assistance team. The AGO had stated that as long as there is evidence that truly needs to be investigated, investigators will look into the ties between the minister and Lin.

Airlangga's name had previously been mentioned in Lin's indictment letter that was read out at the Central Jakarta District Court in August 2022. The letter stated that in January 2022, there had been communication between Airlangga and former Trade Minister Muhammad Lutfi, who questioned Lin's position as a member of Airlangga's assistance team. Airlangga explained that Lin's position was supported by his knowledge and experience as an analyst of the palm oil industry. Additionally, it was also revealed that Lin was once a discussion partner to the Trade Ministry.

What we've heard

According to several sources, the arrest of Minister Airlangga Hartarto in the cooking oil graft case is only a matter of time. Plans to arrest Airlangga have been prepared since the first examination, during which the AGO was said to have brought along a detainee vehicle. However, the arrest could not take place.

Sources within the AGO mentioned that Airlangga was extensively questioned about his role in issuing the palm oil Domestic Market Obligation (DMO) policy. Airlangga was frequently in communication with Lin Che Wei, the former special staff of the Coordinating Economic Affairs Ministry who has already been sentenced, in determining the DMO policy that failed to address the scarcity of cooking oil.

At the time, President Joko Widodo was also reportedly angry with Airlangga for his failure to address the scarcity and control the price of cooking oil. Airlangga was seen as excessively protecting the interests of palm oil companies when the government banned CPO exports. Some time passed before Airlangga made corrections to that policy.

Not only cooking oil, Airlangga is also being targeted in other cases, namely the management of BPDPKS funds. Airlangga's role in the alleged misuse of BPDPKS funds also emerged in the testimonies and examinations of other suspects.

Another suspect in the investigation into the cooking oil graft case was former trade minister M. Lutfi. Investigators frequently questioned his role and involvement in this case. However, the AGO ultimately chose to prioritize Airlangga over Lutfi.

In the BPDPKS case, the investigators started from the verdicts of several cases in which companies have been found guilty by the court. Some companies, such as Wilmar, were not willing to be sacrificed in the BPDPKS case, which was why they started talking about Airlangga's role.

The heated political situation ahead of the registration of presidential and vice-presidential candidates has also made Airlangga a target. This is because Airlangga and the Golkar party have not decided on supporting one of the presidential candidates that Jokowi is likely to endorse. Meanwhile, Jokowi has been rumored to be withdrawing his support for Prabowo. If the AGO's case into Airlangga's involvement progresses, then he could potentially be removed from the position of Golkar's chairman even if he is not arrested.

[This content is provided by Tenggara Strategics in collaboration with The Jakarta Post to serve the latest comprehensive and reliable analysis on Indonesia's political and business landscape.]

Source: https://www.thejakartapost.com/opinion/2023/08/02/analysis-palm-oil-graft-case-enters-new-phase-with-minister-airlangga-interrogation.htm