As reported by ISRI last week, the Government of Indonesia has finalized import regulations for all scrap commodity imports. The rule is available only in the local language, but our contacts have provided an initial analysis that describes a policy that is so restrictive as to potentially halt trade.
The policy is counter to what ISRI was told would be policy during our visit to Indonesia in September. ISRI expects to receive an English translation soon, but our contacts inform us of the following requirements:
- Only direct shipments will be allowed, defined as direct from the United States to Indonesia, i.e., no transshipment via Singapore, for example.
- The exporter must be listed on documentation so that the exporter can occasionally be verified.And the exporter can only send from their own country.
- The government may be considering prohibiting shipments from brokers and traders – that material can be sourced/exported only from processors.
- The impurity threshold may still be at zero.
The last point contradicts what ISRI learned during a visit to Indonesia in September: that the impurities threshold would be 2% at the outset and transition to 0.5% in two years. Additionally, the regulation appears to already be in effect, but KSO-Sucofindo – the government agency responsible for overseeing its implementation, including pre-shipment inspections – is unprepared. Thus, the agency has ordered a temporary moratorium on imports, and the pre-shipment inspection agencies, including Cotecna in the United States, has informed its customers that “all shipments with inspection date after Nov. 22 need to be stopped…That means last inspection date will be Nov. 22.”
We spoke to our contacts at Cotecna, but they have very little information about the regulation, implementation or when they will resume inspections. Our contacts within the Indonesian Government have not responded to several inquiries. We have also asked U.S. Government officials in Washington and Jakarta to help us obtain information as well as to help communicate our concerns with the new rules. For more information please contact Adina Renee Adler.