Enviro News Asia, Jakarta – The Indonesian Pulp and Paper Association (APKI) has called on the government to evaluate the new policy on Export Proceeds (DHE) as stipulated in Government Regulation (PP) No. 36 of 2023. This regulation, which will take effect on March 1, 2025, requires the mining, plantation, forestry, and fisheries sectors to deposit 30% to 100% of their export proceeds in domestic banks for 12 months. The policy is deemed irrelevant for the pulp and paper industry, which has different characteristics from other natural resource-based forestry sectors.
APKI Chairperson Liana Bratasida explained that the raw materials for the pulp and paper industry largely come from sustainably managed Industrial Forest Plantations (HTI) and Recycled Paper (KDU). Unlike other forestry sectors, this industry does not rely on the exploitation of natural forests.
“The pulp and paper industry should not be categorized within the ‘forestry’ sector as defined in PP 36/2023. The characteristics of its raw materials and management are significantly different from the utilization of natural resources in the forestry sector referred to in the regulation,” Liana said in her statement.
Liana also highlighted the impact of this policy on the flexibility of working capital management for companies. The extension of the DHE placement period from three months to 12 months is considered burdensome for businesses in maintaining operational continuity.
“Currently, bank loan interest rates reach 9%-10% per year, while DHE-SDA incentives are only 4%-5%. This disparity increases capital costs by 5%-6%, which heavily burdens the export sector,” she explained.
According to Liana, the policy also fails to consider the complexities of the supply chain in the pulp and paper industry, which requires more flexible working capital management. This could negatively affect the competitiveness of Indonesian export products in the global market.
APKI is urging the government to review Article 5 in PP 36/2023, which directly impacts the pulp and paper industry. The association also proposed that bank loan interest rates guaranteed by DHE be aligned with DHE-SDA deposit interest rates to ease the burden of working capital costs.
Liana emphasized the importance of fair treatment for the pulp and paper industry, which has significantly contributed to the country’s foreign exchange earnings. She argued that HTI represents a sustainable investment and should not be classified under the category of natural forest resource exploitation.
“HTI is a forest-based investment that is sustainable and does not fall under the category of natural forest exploitation. Therefore, the pulp and paper industry should not be treated the same as the forestry sector in PP 36/2023,” Liana asserted.
In closing, Liana expressed hope that the government would carefully consider the impact of this policy to maintain the competitiveness of national exports.
“We support the government’s efforts to maintain economic stability, but this policy needs to be aligned with industry conditions so that it does not become an additional burden for businesses that serve as the driving force for national exports,” Liana concluded.
