Indonesia probes Wilmar staff, trade ministry in palm oil corruption case

The case involves the approval of export permits that did not meet requirements and a lack of local palm oil distribution. PHOTO: REUTERS

JAKARTA (BLOOMBERG) - Indonesia has detained suspects including the commissioner of a Wilmar International unit and a senior trade ministry official as part of a corruption case involving palm oil exports.

The commissioner of Wilmar Nabati Indonesia with initials MPT and the Trade Ministry's director-general of foreign trade with initials IWW have been detained after being named suspects in the case along with two other people, said Attorney-General S. T. Burhanuddin.

The case involves the approval of export permits that did not meet requirements and a lack of local palm oil distribution as required by the domestic market obligation (DMO) rule, he added.

The DMO policy has since been scrapped.

"We have found strong indication of criminal corrupt action related to the approval of cooking oil exports, which has led to difficulties for the public, especially for the poor," said Mr Burhanuddin in a press briefing on Tuesday (April 19).

High cooking oil prices have become a key political issue for President Joko Widodo as the cost pushes other food prices higher ahead of the Eid al-Fitr celebration.

The government has deployed police surveillance for edible oil distribution, rolled out cash subsidies and raised export levies for palm oil to safeguard local supply.

Wilmar is the world's biggest trader of palm oil, used in about 70 per cent of cosmetics and prepared foods globally.

A media representative for Wilmar in Singapore did not immediately respond to an email seeking comment.

On the Trade Ministry's website, Indrasari Wisnu Wardhana is shown as the director-general for foreign trade.

The ministry commits to upholding the legal process and will cooperate in providing any information needed for the investigation, Trade Minister Muhammad Lutfi said in a statement.

Wilmar shares were trading down three cents, or 0.7 per cent, at $4.50 at 11.18am on Wednesday. The Straits Times Index was up 0.8 per cent.

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