Transition to a Single-Window Export System: Mandatory Export of Palm Oil Products Through State-Owned Export Enterprises

Background

To curb the practice of underpayment, under-invoicing, transfer pricing, and capital outflow from export proceeds of strategic natural resources, the Indonesian Government has enforced a new policy requiring the export of strategic natural resources to be conducted through a mandated export state-owned enterprise (Badan Usaha Milik Negara Ekspor or “Export BUMN”). The enactment of Government Regulation Number 24 of 2026 on Governance of Exports of Strategic Natural Resources (“GR 24/2026”), followed by Ministry of Regulation Number 16 of 2026 on Policies and Regulations Governing Exports of Palm Oil as a Strategic Natural Resource (“MoT Reg. 16/2026”), states that the export of palm oil shall be through Export BUMN. In this article, we will specifically discuss the framework of mandatory export of palm oil products as strategic natural resources through Export BUMN.

Palm Oil as Strategic Natural Resources Commodity

Palm oil has been classified as strategic natural resources under GR 24/2026. However, MoT Reg. 16/2026 elaborates more specifically on the kind of palm oil products that are considered as strategic natural resources. Article 2 paragraph (2) and (3) of MoT Reg. 16/2026 stipulates that palm oil that is classified as strategic natural resources are palm oil derivatives, which consist of Crude Palm Oil (“CPO”), Refined, Bleached, and Deodorized Palm Oil (“RBDPO”), Refined, Bleached, and Deodorized Palm Olein (“RBDPL”), Used Cooking Oil (“UCO”), and Residue. Further, the complete list of goods description of the palm oil derivatives with its tariff heading/harmonized system are elaborated under the Attachment of MoT Reg. 16/2026. Those palm oil derivatives shall be exported through Export BUMN, subject to the provisions under the said regulations.

Role of Export BUMN in Export of Palm Oil Derivatives

Export BUMN plays the main role in the export of palm oil derivates as strategic natural resources. According to Article 3 paragraph (1) and (2) of GR 24/2026, Export BUMN will act as the sole exporter of strategic natural resources, either merely as owner or as sole intermediaries, with the authority to determine the price of strategic natural resources. In addition, Article 5 paragraph (1) of MoT Reg. 16/2026 further emphasize the role of Export BUMN as the sole exporter of palm oil derivatives as strategic natural resources.

The specific role of Export BUMN in each process of export of palm oil derivatives has not been stipulated under either GR 24/2025 or MoT Reg. 16/2026. However, presentation at the 19th Plenary Session of the Indonesian House of Representatives, 5th Session, 2025–2026 Legislative Year reveals that Export BUMN will play a role since pre-clearance until post-clearance of export process. The role of Export BUMN within the export process is determined as follows:

• During the pre-clearance stage, Export BUMN will handle the sales and purchase contract and terms of payment, including the drafting of a sales contract that specifies the type of goods, volume, specifications, payment terms, and delivery schedule.
• During the clearance stage, Export BUMN will process export documentation by electronically submitting the Export Goods Notification (Pemberitahuan Pabean Ekspor) electronically to the Customs system until the export service notice is issued.
• During post-clearance stage, Export BUMN will also accommodate the payment process, where export payments will be made through shipping documents processed by banks.

Based on the above elaboration, it can be concluded that Export BUMN does not only act as sole exporter of palm oil derivatives as strategic natural resources, but is also given wide range of authorities, from determining the price of the commodity, negotiating the contract, to settling the export payment. 

Export Scheme before MoT 16/2026

Export Scheme after MoT 16/2026*

*Currently, there are no provisions within the existing regulations that explicitly states the export process by Export BUMN. Therefore, this diagram is created based on presentation of Indonesian House of Representatives (DPR). Any further update on the export process by Export BUMN will be accommodated in separate newsletter.

Export Approval and Export Right

The possession of Export Approval and Export Right is pertinent in conducting export of palm oil derivatives. Under Article 5 paragraph (2) of MoT Reg. 16/2026, it is stipulated that Export BUMN must possess Export Approval to conduct export of palm oil derivatives. The Export Approval is consisted of several type, as follows:

a) CPO Export Approval for Public’s Cooking Oil Program (“PCO Program”);
b) RBDPO Export Approval for PCO Program;
c) RBDPL Export Approval for PCO Program;
d) UCO Export Approval for PCO Program;
e) Residue Export Approval for PCO Program; and
f) Palm Oil Derivatives Export Approval for Acceleration Program.

Further, according to Article 6 paragraph (1) of MoT Reg. 16/2026, Export Approval is issued based on Export Right. Further, Article 6 paragraph (3) of MoT Reg. 16/2026 stipulates that Export Right may be obtained by business actor and/or Export BUMN based on:

• recognition of the implementation of the fulfilment of domestic market obligation for MINYAKITA-branded packaged cooking oil as reported through SIMIRAH in accordance with the provisions of laws and regulations; and/or
• recognition of the implementation of the fulfilment of domestic market obligation for MINYAKITA-branded packaged cooking oil as reported through SIMIRAH in accordance with the provisions of laws and regulations, preceded by cooperation between a Cooking Oil Producer and an Export BUMN and/or a business actor.

SIMIRAH is a digital platform developed by the Ministry of Industry to monitor and manage the distribution of Bulk Cooking Oil for the Public from upstream to downstream. 

Based on the elaboration above, the Export BUMN and business actors must possess Export Approval to conduct export of palm oil derivatives. The Export Approval itself will be issued based on their Export Right, which is given upon the recognition of the fulfilment of their domestic market obligation reported through SIMIRAH.

Transitional Period

Both GR 24/2026 and MoT Reg. 16/2026 are declared to be effective on 1 June 2026. However, the Indonesian Government provides transitional period for business actor to adjust their current export arrangement with Export BUMN. Within Article 43 of MoT Reg. 16/2026. According to the provision, Export Approval that has been issued prior to the enactment of the regulation will remain valid until their respective expiry date. Additionally, business actor who still possesses Export Right may also continue to apply for Export Approval, provided that any Export Approval issued pursuant to such applications may remain valid only until 31 December 2026. Regarding export of palm oil derivatives that has obtained Export Customs Declaration number and date before the enactment of MoT Reg. 16/2026, the relevant export can still be processed through export services provided by Directorate General of Customs and Excise, Ministry of Finance. Lastly, any export of palm oil derivatives conducted after 31 December must be carried out by Export BUMN.

Conclusion

The enactment of GR 24/2026 and MoT Reg. 16/2026 mark a significant change in Indonesia’s export regime, mandating Export BUMN as the sole exporter for strategic natural resources, including palm oil derivatives. Export BUMN will then play a significant role in the export process, from pre-clearance phase to post-clearance phase. While Export Approval that was issued prior to the enactment of MoT Reg. 16/2026 can still be used by business actors. However, business actors must start coordinating with Export BUMN to adjust their export arrangement, since all export of palm oil derivatives after 31 December 2026 must be conducted through Export BUMN. 

We note that several aspects are still subject to further regulation, particularly the technical mechanisms relating to of export of strategic natural resources by Export BUMN, among others:

a. the status of existing international sale and purchase agreements of palm oil derivatives;
b. role of business actor in the commercial negotiation with international buyer;
c. pricing mechanisms;
d. additional fee or margins that may be imposed by Export BUMN; and
e. allocation of customs.

Those issues currently remain unresolved and continue to raise concerns among business actors. Therefore, further guidance on the above matters through subsequent legal instruments is necessary to ensure the smooth implementation of the new export regime through the Export BUMN.

Note: The content of this article does not constitute legal advice and should not be relied upon since there will be implemented regulations to be further issued. If you need specific advice related to this topic, please contact us by email at info@yangandco.com.