Indonesian task force to probe illegal imports and dumping

Jakarta, Indonesia — Indonesia's Ministry of Trade is set to spearhead a new task force this week to crack down on illegal imports and dumping practices, officials announced.

The effort to protect certain sectors of domestic industries comes as Indonesia is considering increasing import duties for seven imported goods by up to 200%. Initially announced as an import tariff on Chinese goods, the ministry said earlier this month the duties will apply to all countries.

Trade Minister Zulkifli Hasan pointed out on July 16 that illegal imports are a huge problem in Indonesia, citing findings by Indonesia’s statistics agency showing a huge discrepancy between official figures on imported goods and those leaving other countries destined for the country. 

“For example, the exporting country records $360 million worth of exports, while our data shows only $116 million of imports,” Hasan said in a press conference at the attorney general’s office. 

The Trade Ministry can expect the attorney general’s support in its effort to crack down on the illegal import of the seven items, identified as textiles, ready-made garments, accessories, ceramics, electronics, footwear and cosmetics. 

Zulkifli admits that illegally imported products have flooded the domestic market for years. He said they enter through illegal unsupervised seaports, and that information about the country of origin is changed to avoid suspicion from authorities.

The illegal imports are often sold at predatory prices, leading to factory closures, a drop in state revenues and widespread layoffs, he said.

Although Indonesia is struggling to curb the onslaught of cheap imported products, it has attempted to better safeguard the domestic market over the years, Franciska Simanjuntak, head of the Indonesian Trade Security Committee, said at a press conference July 15 in Jakarta.

Indonesia has more anti-dumping measures of any country in the Association of Southeast Asian Nations, or ASEAN, according to data presented at the conference by the Trade Ministry.  

Danang Prasta Danial, chairman of the Indonesian Anti-Dumping Committee who also attended the press conference, revealed that on July 2, he proposed increasing anti-dumping duties on ceramic tiles manufactured in China.

The committee gathered evidence of unfair trade practices by Chinese manufacturers, which he said resulted in the collapse of local industries and the layoffs of 3,000 workers.

According to statistical bureau data, imported products from China dominated Indonesia's non-oil and gas imports in June 2024, led by machinery, electrical equipment and plastic goods.

Mohammad Faisal, executive director of the Center for Reform on Economics, said import duties are a temporary solution and are more curative than preventive because they don’t address the root cause of the problem. 

“The government should focus on how it can help the industry increase its competitiveness, as well as identify and track down imported products coming in through various illegal seaports across the country which are not monitored by the Customs and Excise office,” Faisal said.

“A permanent task force comprising of various institutions, including Customs, police, and military, should be set up to better monitor these illegal seaports,” he said.

According to the Customs and Excise office, more than 1,000 illegal seaports in Indonesia are used to smuggle goods. About 500 ports are in eastern Sumatra. 

The new task force will include Trade Ministry officials, prosecutors, police officers and associations under the Indonesian Chamber of Commerce and Industry.