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ISRI Meets with Indonesian Government on Scrap Import Regs

ISRI Meets with Indonesian Government on Scrap Import Regs

If finalized, Indonesia would impose a 2 percent maximum allowable impurity level on imports of scrap paper, decreasing to 0.5 percent over several years.

The Institute of Scrap Recycling Industries’ (ISRI) staff and ISRI’s Paper Stock Industries (PSI) chapter members met with Indonesian government representatives and U.S. Embassy officials in Jakarta, Indonesia, earlier this month to further address Indonesia’s pending import restrictions on scrap paper.

If finalized—reportedly within the next two months—a new ruling from the Indonesian government would then impose a maximum allowable impurity level of 2 percent on imports of scrap paper, decreasing over several years to a targeted 0.5 percent. This change should stop the current disruption of paper recyclers’ access to the Indonesian paper market, according to ISRI. In 2018, U.S. recyclers shipped 1.16 million tons of scrap paper to Indonesia, valued at $148.6 million.

ISRI President Robin Wiener led the ISRI delegation, which included three ISRI members—PSI Chapter President Leonard Zeid of Midland Davis Corp., Peter Kong of Genesis Resource Enterprise and Janet Goh of SIHU (Singapore) Pte. Ltd., part of Genesis Resource. Simon Ellin of The Recycling Association also participated in the trip, representing the U.K. recycling industry.

The ISRI delegation’s goals included gaining a deeper understanding of the underlying issues behind the new rules, attempting to make the final impurity level in Indonesia’s new rules consistent with the prohibitive levels in ISRI specifications and discussing this trade issue with U.S. Embassy leaders and staff to enlist their help on the matter as well as future issues.

Over the two-day visit, the ISRI group met with representatives from the Indonesian Ministry of Environment, Indonesian Pulp & Paper Association, KSO Sucofindo (which oversees the implementation of pre-shipment inspections for commodities, including scrap), U.S. Ambassador Joseph R. Donovan Jr. and staff at the U.S. and UK embassies.

The meetings prompted ISRI to consider taking several steps, including:

  • Modifying the ISRI specifications to provide clear definitions of the terms “outthrows” and “prohibitives” so they’re more meaningful and useful to policymakers and other stakeholders. The terms might need to be changed for export transactions in particular.
  • Developing a forward-looking proposal of what defines “responsible recycling” in scrap exports, including a mechanism for differentiating “good” players from “bad” such as certification or licensing of suppliers, brokers and consumers.
  • Asking the PSI Chapter to develop a recommended procedure for measuring “impurities” that ISRI could provide to the Indonesian Ministry of Environment and Ministry of Trade as well as KSO Sucofindo for them to adopt.
  • Sharing with ISRI paper recycling members photos of opened containers and bales inspected by Indonesian authorities that have been rejected.
  • Continuing to work with the U.S. Commercial Service at the U.S. Embassy in Jakarta on the current proposed import restrictions, ISRI’s upcoming trade mission to Indonesia focused on metals and other issues.

“There are legitimate concerns that have driven the Indonesian government to their current position, but after meeting with them, it is clear that there will likely be a workable solution for the global recycling industry,” said Wiener in a statement after the trip.

“We’re optimistic that the decisions by the Indonesian government will allow the continued movement of quality material into Indonesia,” said Zeid in a statement. “And it will be incumbent upon us to maintain a high quality in our shipments to Indonesia and other countries to ensure this market and our other markets around the globe remain strong.”

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