Draft Government Regulation on the Governance of Exports of Strategic Natural Resource Commodities Through State-Owned Enterprises

Introduction

The Government is currently preparing a draft Government Regulation on the Governance of Exports of Strategic Natural Resource Commodities Through State-Owned Enterprises (“Draft GR”). This regulation will restructure Indonesia’s international trade framework by granting exclusive rights to Export SOEs to take over overseas sales channels for strategic commodities. The Government intends to consolidate natural resource export activities under direct state control so that the management of natural resources may provide the greatest possible benefit for the prosperity of the people.

The Government is formulating this regulation to maintain the stability of raw material supply in the domestic market and strengthen national economic resilience. In addition, the Government considers that the state needs to intervene in the governance of exports of strategic natural resource commodities in order to ensure domestic supply availability, increase added value, and ensure the sustainability of national development.

 

Key Provisions

Strategic Natural Resource Commodities

According to Article 2 of the Draft GR, the Government regulates several commodities that fall within the strategic category and are required to comply with the SOE governance framework. Article 2 paragraph (1) specifies that the Government applies this export governance framework to the following commodities:

1. Coal; 
2. Palm oil; and 
3. Other strategic natural resource commodities. 

In addition, the Government has the flexibility to amend or expand the list of strategic commodities through an inter-ministerial coordination meeting mechanism. Pursuant to Article 2 paragraphs (2) and (3), the Coordinating-Minister for Economic Affairs or the Coordinating-Minister for Food Affairs will lead the determination meeting, and any amendments will subsequently be stipulated in a ministerial regulation in the trade sector.

Monopoly by Export SOEs

According to Article 3 paragraph (1), strategic natural resource commodities may only be sold or exported from the customs territory of Indonesia by Export SOEs. These Export SOEs are state-owned enterprises that receive a special assignment from the Government to exclusively carry out export activities for such commodities, as regulated under the laws and regulations concerning state-owned enterprises.

Governance and Supervision Mechanism

Pursuant to Article 4 paragraph (1), the Government administers the governance of exports of strategic commodities through export controls and/or other mechanisms in accordance with the prevailing laws and regulations. Furthermore, Article 4 paragraph (2) and Article 5 delegate authority to the relevant ministers or heads of government agencies to formulate more detailed technical regulations, while also assigning them to supervise and monitor the implementation of this new export governance framework within their respective areas of authority.

 

Transitional Provisions

According to Article 6 of the Draft GR, exporters are required to channel exports of their strategic commodities through Export SOEs no later than 31 December 2026. However, after 31 December 2026, export activities for strategic commodities may only be conducted by Export SOEs as the sole exporting entity. 

Pursuant to Article 6 letter c, if the Government successfully transfers full export implementation capacity to Export SOEs before 31 December 2026, then all export activities for strategic commodities will become the exclusive right of Export SOEs without having to wait until the initial deadline in early 2027.

 

Closing

This Draft GR restructures the export framework by granting an exclusive monopoly right to Export SOEs over the sale of strategic natural resource commodities, such as coal and palm oil, in order to consolidate state control, secure domestic supply, and strengthen the national economy. The technical governance framework and adjustments to the commodity list will be supervised flexibly by the relevant ministries. During the transition period, all exporters are required to channel their exports through Export SOEs no later than 31 December 2026, after which, or earlier if the Government’s capacity is deemed sufficient, Export SOEs will officially operate in full as the sole exporting entity.