Indonesia suspends scrap imports amid new policy

Indonesia has placed a temporary moratorium on all scrap imports with an inspection date after 22 November as the government begins the implementation of new import regulations.

The government agency responsible for overseeing the implementation, including pre-shipment inspections, has halted all inspections until further notice, with all inspections planned beyond 22 November cancelled, according to a government notice obtained by Argus.

The new policy establishes provisions on the import of hazardous and toxic materials as industrial raw materials.

Scrap items under the regulation are classified into separate groups, with various scrap metal items like ferrous, aluminum and copper scrap categorized as waste and subject to comply with the new import regulations, effective tomorrow.

The policy is so far viewed as being so restrictive as to potentially halt trade, according to US trade group Institute of Scrap Recycling Industries (ISRI).

Transshipments of scrap will be banned under the policy, with only direct shipments allowed. A direct shipment is defined as being from one country to Indonesia without any stops in between.

The policy also tightens rules on the eligibility of exporters, requiring the exporter to be listed on documentation for occasional verification, as well as shipping locations for exporters, limiting an exporter to ship material from their own country.

Scrap imports in the country will be limited to arrive at eight ports: Tanjung Priok in Jakarta, Tanjung Emas in Semarang, Tanjung Perak in Surabaya, Soekarno Hatta in Makassar, Belawan in Medan, Batu Ampar in Batam, Teluk Lamong in Surabaya and Peacock in Cilegon.

Brokers and traders are also in the crosshairs. The material can be sourced or exported only from processors, which suggests that the government may be considering prohibiting shipments from these groups, according to ISRI.

The policy also outlines new impurities thresholds with initial industry interpretation suggesting that it will be set at 0pc, according to ISRI. But the trade group said this level contradicts earlier discussions which suggested the impurities threshold would be 2pc at the outset and transition to 0.5pc in two years.

By Brad MacAulay