CP Prima to Get Government Assist

The dispute between PT Central Proteinaprima Tbk, the world’s biggest shrimp producer, and the US customs authorities over allegations that it transshipped and relabelled shrimp from China has prompted the government to step in, seeking to resolve the dispute through diplomatic channels.

Saut Hutagalung, the Maritime Affairs and Fisheries Ministry’s director of foreign trade, said on Thursday that the Fisheries Ministry, Trade Ministry and Foreign Ministry were in discussions to help resolve the problem.

He said the ministries were drafting a letter, to be signed by Vice President Jusuf Kalla, that would be sent to US customs authorities in a bid to prevent bilateral trade friction.

The vice president’s involvement, Hutagalung said, was “urgently” needed because the problem had been dragged out since US authorities re-exported seven containers of shrimp belonging to CP Prima in October, alleging that the shrimp had been unlawfully transshipped from China.

The allegations were based on tests conducted by a US lab that found that the shrimp exported by CP Prima were similar to shrimp from China. US customs authorities then sent a team to the company’s shrimp farms in Lampung Province in January to conduct further investigations.

“The findings were supposed to have been released in early March, but we still haven’t heard anything,” Hutagalung said.

Since then, he said, the trade ministry had sent two letters to US officials seeking clarification.

Martani Huseini, the fisheries ministry’s director general of marine-product processing and marketing, has also met with US officials. “They only said that the results were not yet available,” Martani said.

The problem was brought to the vice president’s attention because it could not be resolved at the ministerial level, Hutagalung said.

Bambang Suboko, the executive director of the Indonesian Fisheries Industry Association, or Gappindo, said representatives planned to meet with Kalla before the letter was sent.

“We will meet him and ask him to help us find a solution to the problem, because it has created an unpleasant business environment,” Bambang said.

He said that while there was no concrete proof that the CP Prima issue was damaging fisheries exports to the United States, many shrimp producers were nevertheless worried that it had the potential to disrupt their businesses. “

“We have to act quickly before things get worse,” Bambang said.

US embassy officials were not available for comment when contacted by the Jakarta Globe on Thursday.

CP Prima has encountered numerous problems in recent months. In early March, the Capital Market and Financial Institutions Supervisory Agency, or Bapepam-LK, unexpectedly cancelled a company rights issue, while Fitch Ratings on March 26 downgraded the company from “B+” to “B,” on concerns about its high debt levels and falling demand for its shrimp exports.