Prabowo Moves to Tighten Indonesia’s Commodity Export Grip Through State Firms in Sweeping New Resource Rules

JAKARTA, Investortrust.id — President Prabowo Subianto is preparing one of the most aggressive resource-governance overhauls in modern Indonesian history, forcing exports of key commodities including palm oil and coal to flow through designated state-owned enterprises under a new draft regulation unveiled this week.

The proposal marks a dramatic escalation of Jakarta’s push toward tighter control over the country’s vast natural-resource wealth, echoing broader resource-nationalist policies already seen in Indonesia’s nickel and mining sectors.

Under the draft regulation, exports of strategic commodities — initially including coal and crude palm oil — would only be allowed through specially appointed state-owned enterprises, known locally as BUMN. The transition would begin in June 2026 before moving into full implementation in September.

The government said the move aims to clamp down on chronic underreporting of export values, transfer pricing practices and offshore diversion of export earnings that officials believe have drained billions of dollars from Southeast Asia’s largest economy.

Indonesia is the world’s largest palm oil exporter and one of the biggest suppliers of thermal coal globally. Any structural change to its export system has immediate implications for commodity traders, refiners, utilities, shipping firms and emerging-market investors.

The proposal also signals that Prabowo’s administration is willing to deepen state intervention in strategic industries to maximize fiscal revenue and foreign-exchange reserves at a time when global commodity competition is intensifying.

If fully implemented, the policy could fundamentally alter how international buyers negotiate contracts with Indonesian exporters, shifting bargaining power toward government-linked entities.

“This regulation is a strategic step to bring order to the governance of our natural resources,” Prabowo said while discussing the planned policy framework, according to government materials reviewed by Investortrust.id.

“Sales of our natural resources — starting with palm oil, coal and iron alloys — must go through state-owned enterprises appointed by the government,” he said.

Prabowo argued the main purpose of the policy was to strengthen oversight and eradicate “underpayment practices, underinvoicing, transfer pricing and the flight of export foreign-exchange earnings.”

“This policy will optimize tax revenue and state income from natural-resource management,” he added.

The draft regulation states that “strategic natural-resource commodities” can only be exported by designated state-owned export firms. The initial commodities listed include coal and palm oil, although the government retains authority to expand the list later.

The regulation would give the government broad powers to determine which state-owned enterprises can handle exports and how the export-control mechanism would operate.

.

A Two-Stage Transition

Government presentation materials show the transition will happen in two phases. From June through August 2026, private exporters would gradually transfer export transactions and buyer relationships to state-owned enterprises. During this phase, companies would still participate in pre-clearance and post-clearance processes while BUMN entities increasingly took over customs clearance and trade execution.

Beginning Sept. 1, 2026, the system would shift into full implementation, with export transactions, buyer contracts and export-management authority fully controlled by the appointed state firms.

The proposal covers the entire export chain, from sales contracts and shipping arrangements to customs documentation, cargo loading and export-payment settlement.

Officials believe the centralized system will allow authorities to monitor export pricing more closely and reduce opportunities for companies to manipulate invoices or move profits offshore.

“We do not want our revenues to remain among the lowest simply because we are not brave enough to manage our own assets,” Prabowo said.

“We want to know exactly how much is being sold. We do not want to be deceived anymore.”

Growing Resource Nationalism

The proposed regulation fits into a broader economic strategy pursued by Prabowo’s administration, which has emphasized downstream industrialization, state-led development and tighter control over Indonesia’s resource sector.

Over the past several years, Indonesia has already banned exports of raw nickel ore and pushed miners to process commodities domestically before shipment abroad.

Now the government appears ready to apply a similar philosophy to export governance itself. Prabowo framed the issue as both an economic and nationalist imperative.

“We must believe that all natural resources belong to all Indonesian people,” he said.

“I believe every leader with healthy judgment, conscience and love for the country would never allow natural resources to continue being managed without oversight and without control.”

Market participants are expected to closely monitor how aggressively the government enforces the rules and whether exemptions emerge for existing exporters or multinational trading houses.