Learn from Indonesia, tighten export monitoring to stop under-invoicing, say industry players

Stricter monitoring of commodity exports is necessary to curb under-invoicing, according to maritime industry players. Indonesia's establishment of a centralized agency to oversee major commodity exports, known as Danantara Sumberdaya Indonesia (DSI), should encourage Malaysia to review its own export monitoring systems, according to Datuk Seri R. Jeyenderan, CEO of Maritime Network Sdn Bhd.

It was reported that DSI will initially oversee exports worth approximately US$60 billion involving coal, palm oil, and ferroalloys, with plans to introduce a service fee per tonne and commence full operations in January 2027. The initiative aims to address under-invoicing, a practice that allows exporters to declare lower cargo values or quantities than shipped, potentially resulting in losses for government revenue.

Jeyenderan emphasized that while Malaysia already has various electronic systems and government agencies responsible for monitoring export declarations, permits, and supporting documents, the challenge lies in ensuring information from different agencies can be properly shared and cross-checked against actual cargo shipments. Discrepancies between declared values or quantities and actual cargo shipments can affect government revenue, create unfair competition, and undermine confidence in Malaysia's commodity trade.

Jeyenderan suggested integrating existing systems so authorities can track export information from the time goods are declared and loaded onto vessels until shipments reach their destinations, particularly for commodities like palm oil and petroleum. Maritime analyst Nazery Khalid also stressed the importance of breaking down institutional silos among agencies involved in the process, including customs departments, port authorities, commodity regulators, and shipping operators.

He emphasized the need for digital technology to facilitate data sharing, coordination, and improved visibility across supply chains to strengthen oversight, prevent revenue leakages, and mitigate public health risks arising from misdeclaration of commingled cargo.