Indonesia Urged to Probe CPO Underinvoicing at Transaction Level

RRI.CO.ID, Jakarta - Allegations of underinvoicing in Indonesia’s crude palm oil (CPO) exports must be examined at the transaction level. The government is urged to tighten data verification to determine whether price discrepancies indicate violations or legitimate business factors.

Head of Research at the NEXT Indonesia Center, Ade Holis, said the government needs to implement five priority steps in addressing alleged transfer pricing and underinvoicing in CPO exports.

“First, the government must disclose its proportional data‑matching methodology, including how comparable prices are established and how adjustments are made, without revealing the identities of companies still under investigation,” Ade said in a statement in Jakarta on Tuesday, September 15, 2026, as quoted by Antara.

Second, inspections must be conducted on a shipment‑by‑shipment basis so that every discrepancy in value can be traced. Third, the government must integrate data from Customs and Excise, the Directorate General of Taxes, relevant ministries, banks, ports, shipping companies, and destination countries.

“Fourth, the application of the arm’s‑length principle and comparability analysis must be carried out consistently,” Ade said. He also urged the government to distinguish between weaknesses in the export system and corporate violations.

Ade explained that if weaknesses in the export system are found, the government must address them. If corporate violations are identified, legal proceedings must be initiated.

“Meanwhile, if price discrepancies have a valid business explanation, then the case must be closed objectively,” Ade said.

Comparable prices are crucial because CPO does not have a single universal price. Differences in quality, specifications, origin, volume, transaction timing, shipping location, contract terms, payment methods, logistics, and insurance can all affect pricing.

“Therefore, the government needs to conduct consistency analyses and make justifiable adjustments if there are material differences between the transactions under review and independent comparable transactions,” Ade said.

NEXT also urges that the examination proceed with a transaction‑level audit rather than stopping at price discrepancies.

Documents that need to be reviewed include contracts, invoices, purchase orders, bills of lading, quality certificates, proof of payment, insurance and shipping documents, documents from affiliated companies, and even resale documents for end buyers. ***