Local companies in Batam accused of faking goods

Fadli, The Jakarta Post, Batam | Archipelago | Mon, July 16 2012, 

Paper Edition | Page: 5

European companies have accused three Batam manufacturers of falsifying their products, claiming that the exported goods were made in China, a Batam Indonesia Free Zone Authority (BIFZA) official has said.

The accusation centers on the Certificates of Origin (CoO) issued by BIFZA, which confirm that the goods are made in Batam and produced by the local manufacturers.

In Batam, a CoO can be issued by three parties: BIFZA, the Batam administration and the Indonesian Chamber of Commerce and Industry (Kadin). But since May, Kadin has no longer had the right to issue such certificates.
BIFZA management agency commodity traffic chief Fatullah told The Jakarta Post that the allegation turned out to be incorrect. “We, together with the Trade Ministry, have taken the necessary measures. We have checked the reports and the allegation has been proven as incorrect,” said Fatullah.

“We have made some clarifications over the first complaint, while we are still collecting some reports to respond to the second one,” said Fatullah. The first complaint was filed by the countries’ customs offices in April, followed by the second one in early July.

Under the complaints, there had been a suspicion that the Batam companies only put some labels on their products, while the items were not originally made in Indonesia, before exporting them to three European countries: Germany, Spain and Sweden.

The European companies, which had filed complaints to the Trade Ministry, claimed that the three local manufacturers transported empty containers to Singapore before loading the containers with made-in-China products, said Fatullah.

A CoO denotes the country where the goods were made, not where the goods were shipped from.

“We have asked local Customs offices to check all containers, owned by the three Batam companies, before they were transported overseas,” he said.

The three companies allegedly involved are PT I and PT F, both steel screw producers, and PT EO, a chemical elements manufacture.

“If they doubt our certificates, the representatives of the three European companies are all invited to come and see the production process of the three manufacturers here in Batam,” said Fatullah.

BIFZA issues around 800 certificates per month. Some 40 percent of the certificates are for goods transported to European countries, while the remaining letters are designated for products sent to countries in Asia and the Middle East.

Following the reports, Fatullah said that BIFZA had checked some components, including the number of workers deployed by the local manufacturers, as well as taking a closer look at the production process with officials from the Trade Ministry.

BIFZA will impose sanctions if any manufacturer is proven to have manipulated the data.

“European countries are very strict in checking goods from China. But for our apart, the accusations directed at Batam are way too harsh,” said Fatullah, adding that this situation might decrease the amount of exports to European countries.

A similar case occurred in 2008, when French and Spanish companies filed complaints. It turned out that the CoO was forged by the local companies.

Riau Islands Kadin head Johannes Kennedy Aritonang admitted that the accusation directed at Batam hurt, and said that the Trade Ministry should prove the allegation wrong.

“Things like this should not happen if we make gradual checks on exported goods as well on containers.”

Johannes added that it would be better if Kadin was involved in issuing CoOs in the future because businessmen knew whether the goods were made in Indonesia or not.