TEMPO.CO, Jakarta - A senior economist with the University of Indonesia (UI), Faisal Basri, in a webinar held with Paramadina Policy Institute on Tuesday said nickel ore export ‘leakages’ to China continue to happen in 2021. He believes there are 447,000 exports on the commodity from January to August despite a ban set in place against nickel ore exports.

“The leak is quite significant even though it is not as large as in 2020. If factors like these are added, the state losses can grow even larger to the trillions,” said the senior economist on November 2.

Citing the same data, Faisal said the ‘export leakage’ of the commodity code ‘HS 2604’ is quite high as the General Customs Administration of China and International Trade Center recorded the export value to reach US$193.6 million or roughly Rp2.8 trillion based on current exchange.

He believes the financial losses are in the export taxes that have failed to be collected from the export companies as these activities are not logged by Statistics Indonesia (BPS). The export ban was set in place in January 2020 but was initially met with resistance from domestic businesses and international trade partners, including the European Union.

CORE Indonesia executive director Mohammad Faisal previously said in 2016, China logged nickel ore imports valued up to US$4 million that were not recorded by Indonesian authorities after the ban was introduced.

The poor governance over the domestic nickel industry, he added, contributed to the undocumented exports. The losses are also caused by the differences in nickel ore grade measurements between upstream miners and downstream buyers.

Read: EU Nickel Ore Row, Minister Luhut: No One Dictates Our Policies

FRANCISCA CHRISTY ROSANA | FAJAR PEBRIANTO