“The government of the Republic of Indonesia that I lead will issue a regulation on the governance of natural resource commodity exports. This is a strategic step to strengthen the governance of our natural resource commodity exports,” he said, while delivering a parliamentary speech that was broadcast live on the Presidential Secretariat’s YouTube channel.

“The policy aims to strengthen oversight and monitoring, while combating under-invoicing, transfer pricing, and the flight of export earnings overseas. Export under-invoicing over the 1991-2024 period reached USD 908 billion,” Subianto stated further.

As per the reports, while the full force of the new policy will come into effect after a transition period of three months, the timeline will likely be extended till the end of 2026. During the transition period, commodity exporters and buyers will be allowed to carry on their usual business, but the transactions will be overseen by state firm PT Danantara Sumber Daya, a unit of sovereign wealth fund Danantara Indonesia.

Former director of nickel miner Vale Indonesia, Luke Thomas Mahony, will be the chief executive of Danantara Sumber Daya. As per the Jakarta Globe, once the transition period gets over, Danantara Sumber Daya will buy products from domestic sellers and then sell them to foreign buyers at a price benchmarked against prices set by exchanges.

“The new regulation will be implemented in stages wherein the first stage ‌will ⁠cover exports of palm oil, coal, and ferroalloys. Every three months, there will be a review to add more commodities,” Jakarta Globe reported further.

Under the old industry practices, Indonesian companies used to export coal and palm oil directly to foreign buyers. However, the government controlled how much quantity could be produced and the benchmark price to use.

Justifying the regulatory reform, the Subianto administration has said that it wants to improve the transparency aspect of Indonesia’s commodities sector by putting a stop to under-invoicing practices, optimise the government’s earnings, and help stabilise the rupiah and enlarge foreign currency reserves.

Talking about Indonesia’s commodities trade, the archipelagic state is the world’s largest exporter of thermal ⁠coal and palm oil. It has consolidated its position as the top thermal coal supplier to many of the world’s largest importers, including China, India, Vietnam, and ⁠the Philippines.

Apart from the latest rule, Indonesia has also issued a new export earnings regulation that requires exporters of natural resources to store 100% of their earnings in state banks. The regulation will take effect in June 2026.

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It has called for an investigation by the Roundtable on Sustainable Palm Oil (RSPO), an industry body, into a charge that Noble Plantations, part of the Noble Group, is preparing to clear 18,000 hectares of primary forest for palm oil.

It follows Greenpeace and the Environmental Investigation Agency writing to four banks (HSBC, ABN Amro, ING and Rabobank) which had recently helped set up a new $750m bond issued by Noble Group on March 9, 2017. The NGOs presented the banks with evidence to substantiate their claims about the intentions of Noble Plantations.

The company has been ordered by RSPO to stop work until the investigation is complete.

This is the first time a major bank has requested an RSPO investigation into one of its clients.

All four banks have palm oil policies that prohibit funding of companies destroying primary or High Conservation Value (HCV) forest, with HSBC bowing to Greenpeace and public pressure to produce a stronger ‘no deforestation’ policy in February 2017.

Jamie Woolley from Greenpeace UK said: “After years of turning a blind eye, the financial sector is finally starting to take a tougher line on rogue palm oil companies. HSBC’s decision to do the right thing and trigger an investigation into its own client could save thousands of hectares of pristine rainforest. If other banks are serious about stopping the destruction of rainforests for palm oil, they need follow suit and take responsibility for their clients’ behaviour.”

Audrey Versteegen from the Environmental Investigation Agency said: “The RSPO now has a canvas of 18,000 hectares of primary forest in Papua on which to sketch out the meaning of ‘certified sustainable palm oil’. Noble’s destructive plans must be sent back to the drawing board and the assessors, upon whose flawed environmental audits these plans were based, rooted out of RSPO certification.”

Like many other companies involved in the palm oil sector, banks rely on the RSPO’s standards to reduce their exposure to destructive companies, but countless investigations by civil society organisations have shown that the RSPO’s system is not working. RSPO safeguards are routinely and widely flouted by members, resulting in massive deforestation and conflict with local communities.

NGOs are calling on banks to take responsibility for their clients’ behaviour, and for the RSPO to overhaul its regulations, known as the Principles & Criteria, to bring them into line with the ‘no deforestation, no peat, no exploitation’ standards adopted by most major brands and commodities traders.

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