Pelindo II to continue using dollar despite ban
State-owned Pelindo II, also known as the Indonesian Port Corporation (IPC), will continue to use the US dollar in its transaction with customers although it is against the government’s regulation, a senior executive at the country’s largest port operator said.
Pelindo II President Director, Richard Joost Lino, said on Friday that changing the currency to the rupiah would seriously affect
the company’s cash flow because transactions for the port’s services had been conducted in dollars for years.
“We use the [US] dollar at our ports because many of our partners, particularly foreign shipping firms, use the dollar not the rupiah. This makes business easier, Lino told The Jakarta Post from Rotterdam, Netherlands. He said that the use of the dollar had nothing to do with the recent plunge in the rupiah.
“Forcing our partners to use the rupiah is not going to have a good impact on business since the value of the rupiah is constantly changing. It’s relatively unstable compared to the dollar. Besides, it will create more difficulties for our partners because they need to change the currency before they do business with us.”
He said that the choice to use US currency was normal because in the international arena, freight and logistics services were valued in US dollars.
Lino said that international ports such as Tanjung Priok should be exempted from the Currency Law, which prohibits the use of currencies other than the rupiah within the Indonesian territory.“I am afraid international investors will run from us because the rupiah is unstable,” he went on, adding that IPC partners included international terminal operators.
In addition, he said that the use of the dollar was needed to ensure that it would have no problem in paying dollar loans used to finance the new port facilities in Kalibaru, adjacent to the existing Priok.
Previously, members of the House of Representatives and the Indonesian Employers Association (Apindo) questioned the government’s decision to allow some parties — including Pelindo — to use the dollar in their transactions because it is against the 2011 Currency Law.
A source said that the government gave special treatment to Pelindo to prevent the company from encountering financial difficulties.
Finance Minister Chatib Basri denied any special treatment for Pelindo. But Finance Ministry secretary general Ki Agus Badaruddin, said that the law only prohibited the use of foreign currencies in “general’ transactions.
“The use of foreign currencies in business transactions based on contracts is still allowed,” he said. As for Pelindo, the company used the dollar under the government regulation issued before the implementation of the 2011 Currency Law, he said.
“No party is allowed to intervene in order to break the law on the use of the rupiah for transaction in the country,” Sofjan Wanandi, Apindo’s chairman said. Head of the House’s Commission VI overseeing state owned enterprises Airlangga Hartanto said that the law should be fully enforced to ensure fair treatment as no one is allowed to act against the law.
Source: http://www.thejakartapost.com/
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