The Association of Indonesian Lubricants Distributors, Importers and Producers (Perdippi) is taking legal actions to try to nullify a mandatory national lubricant standard, SNI, scheduled to take effect Sept. 11.
Perdippi – which has 125 members including ExxonMobil, Chevron, BM1, STP, Total and others -submitted an application to the countrys Supreme Court on Feb. 8, requesting judicial review of the validity of the ministerial decree for SNI.
The organization claims the SNI requirement is unnecessary because the existing Registered Lubricant Number, or NPT, regulation already controls the quality of lubricants sold in the country. The NPT rules regarding the quality standards of lubricants used are regulated by the government through the Decree of the Minister of Mining and Energy 019K/ 34/ MPE/ 1998 by an obligation to register lubricants circulating in the country, said Paul Toar, chairman of Perdippi.
We support the Government of Indonesia in providing high-quality and affordable lubricants to better serve and protect Indonesian consumers while maintaining the countrys investment climate. The two similar standardizations will need inter-ministerial coordination for a more integrated and efficient process, Tezhart Elvandiar, issues management and media relations manager for public and government affairs of ExxonMobil Cepu Ltd. in Indonesia, told Lube Report when asked about the government’s standardization efforts.
Cost is the main reason for our rejection [of SNI]. The SNI stipulates many specifications to be met by a lubricant before being given the SNI code, Toar said.
One part is the physical and chemical properties that need to be fulfilled, which is already more costly than NPT. But, when the cost for performance level testing is considered, the former cost is miniscule. One performance level test in the United States is around U.S. $1 million per sample. And this kind of testing facility is at this time not yet available in Indonesia, and the testing time needed for one sample is around one month, Toar explained.
The cost of NPT testing per stock keeping unit is about 5 million rupiah (U.S. $350) and remains validfor five years. By contrast, SNI tests and certification per SKU cost 200 million rupiah and is valid for four years. Separate tests are required for lubricants manufactured outside Indonesia.
In addition, Perdippi says several government-accredited institutions for SNI testing (known as LSPros) were questionable. There are LSPros who get accreditation but do not have the equipment and ability to test lubricant products for all requirements of SNI Lubricants, added Toar.
The SNI regulation, number 25/2018, also requires lubricant blenders to meet certain administrative requirements such as designation of an in-country brand representative for foreign players. Upon approval, they will also be required to include the SNI logo on their products. The standards requirements apply to lubricants for 2- and 4-stroke gasoline engines, high-speed diesel engines, wheels, axles and manual gearboxes, as well as automatic transmissions.
Lubricants that are not required to comply with SNI include lubricants used as test samples for research and development, samples for SNI applications, samples for exhibition and not for distribution, lubricants meeting special requirements for motorized racing sports and those designated for export.
But, proponents of SNI like Andria Nusa, director of sales and marketing of Pertamina Lubricants said, NPT had no strong legal force, so it is different from SNI, which is protected by law and supervised by the National Standardization Agency.
Toar warned, If implemented, we expect chaos in the lubricants supply for the manufacturing and transportation industry. Not only will importers be hurt and may leave the business, but also local blenders and even part of the major international players may see the Indonesian lubricant market as losing its appeal. The normal way is for the additive supplier to have performance tests and attest [to] the quality of the lubricant blender in accordance with the recipe.
[Otherwise] most local blenders will stop or focus only on exports, he added.
The SNI standard for lubricants was first proposed in 2005. A technical committee was set up to develop the standard with advice from the Ministry of Energy and Mineral Resources and the Ministry of Industry. The Product Certification Institute will be responsible for issuing SPPT-SNI certifications and compliance will be enforced by the National Standardization Agency of Indonesia.