Wilmar Trading Pte Ltd. v. United States

• Decision Date: 11 August 2020
• Docket Number: Consol. Court No. 18-00006,Slip Op. 20-115
• Citation: 466 F.Supp.3d 1334
• Parties: WILMAR TRADING PTE LTD., PT Wilmar Bioenergi Indonesia, and Wilmar Oleo North America LLC, Plaintiffs, and Government of the Republic of Indonesia and P.T. Musim Mas, Consolidated Plaintiffs, v. UNITED STATES, Defendant, and National Biodiesel Board Fair Trade Coalition, Defendant-Intervenor.
• Court: U.S. Court of International Trade

466 F.Supp.3d 1334

WILMAR TRADING PTE LTD., PT Wilmar Bioenergi Indonesia, and Wilmar Oleo North America LLC, Plaintiffs,andGovernment of the Republic of Indonesia and P.T. Musim Mas, Consolidated Plaintiffs,

v. UNITED STATES, Defendant,andNational Biodiesel Board Fair Trade Coalition, Defendant-Intervenor.

Slip Op. 20-115

Consol. Court No. 18-00006

United States Court of International Trade.

August 11, 2020

Devin S. Sikes, Akin Gump Strauss Hauer & Feld LLP, of Washington, DC, argued for Plaintiffs. With him on the brief was Bernd G. Janzen.

Lynn G. Kamarck, Hughes Hubbard & Reed LLP, of Washington, DC, argued for Consolidated Plaintiff Government of the Republic of Indonesia. With her on the brief were Matthew R. Nicely and Julia K. Eppard.

Kelly A. Slater, Appleton Luff Pte Ltd., of Washington, DC, argued for Consolidated Plaintiff P.T. Musim Mas. With her on the brief were Edmund W. Sim, and Jay Y. Nee.

Joshua E. Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for Defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and L. Misha Preheim, Assistant Director. Of counsel on the brief was Catherine D. Miller, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. Department of Commerce, of Washington, DC.

Myles S. Getlan, Cassidy Levy Kent (USA) LLP, of Washington, DC, argued for Defendant-Intervenor. With him on the brief were Jack A. Levy and Thomas M. Beline.

OPINION and ORDER

Eaton, Judge:

This dispute arises from the imposition of countervailing duties on certain shipments of biodiesel fuel¹ from the Republic of Indonesia following the United States Department of Commerce's ("Commerce" or the "Department") determination that the Government of the Republic of Indonesia (the "Government of Indonesia") had provided subsidies to the plaintiff biodiesel producer-exporters. According to Commerce, these subsidies took the form of (1) monetary grants from Indonesia's Biodiesel Subsidy Fund, and (2) goods supplied for less than adequate remuneration resulting from the imposition of two export taxes on biodiesel's main input—crude palm oil. The period of investigation was January 1, 2016, through December 31, 2016. See Biodiesel From the Rep. of Indonesia , 82 Fed. Reg. 53,471 (Dep't Commerce Nov. 16, 2017) ("Final Determination") and accompanying Issues and Dec. Mem. (Nov. 6, 2017), P.R. 240 ("Final IDM").

Plaintiffs Wilmar Trading Pte Ltd., PT Wilmar Bioenergi Indonesia, and Wilmar Oleo North America LLC (collectively, "Wilmar"); and Consolidated Plaintiffs the Government of Indonesia and P.T. Musim Mas ("Musim Mas") challenge Commerce's final countervailing duty determination.

Defendant the United States on behalf of Commerce ("Defendant"), and Defendant-Intervenor the National Biodiesel Board Fair Trade Coalition ("Petitioner" or "Defendant-Intervenor"), ask the court to uphold Commerce's Final Determination.

Jurisdiction is found under 19 U.S.C. § 1516a(a)(2)(B)(i) (2012) and 28 U.S.C. § 1581(c) (2012).

For the reasons set forth below, the court holds that two of Commerce's three countervailability findings are supported by substantial evidence and otherwise in accordance with law. First, Commerce did not err in finding that the Government of Indonesia provided countervailable financial contributions in the form of monetary grants to Wilmar and Musim Mas through the Biodiesel Subsidy Fund. Second, Commerce did not err in finding that the Government of Indonesia's 2015 export levy² on crude palm oil (the "2015 Export Levy") provided countervailable financial contributions in the form of the provision of goods for less than adequate remuneration.

The court further finds, however, that Commerce's determination that Indonesia's 1994 differential export tariff³ (the "1994 Export Tariff") on crude palm oil resulted in a financial contribution in the form of goods provided for less than adequate remuneration, is neither supported by substantial evidence nor in accordance with law.

BACKGROUND

Over more than two decades, the Government of Indonesia has taken both direct and indirect measures to advance domestic biofuel production. At issue in this case are (1) direct payments from the Government of Indonesia to Plaintiffs, and (2) two separate export taxes that, for Commerce, restrained the export of crude palm oil, thus increasing the domestic supply of this input and driving down its price so that it was more cheaply available to Plaintiffs.

Biodiesel costs more than petrodiesel in an open market. In order to market biodiesel at a price competitive with petrodiesel, Indonesia set up a program to pay biodiesel producers an amount roughly equal to the difference in price between the cheap petrodiesel and the expensive biodiesel. Thus, Indonesia subsidized biodiesel so that it could be sold at a price competitive with the price of petrodiesel. Plaintiffs took advantage of this program.

In addition, Indonesia, over the years, enacted export taxes that, according to Commerce, had the effect of keeping crude palm oil in the country, thus increasing its supply and lowering its domestic price. Commerce determined that the export taxes lowered the domestic price of crude palm oil and consequently provided Plaintiffs with crude palm oil "for less than adequate remuneration." See 19 U.S.C. § 1677(5)(D), (E)(iv).

I. Direct Payments Through the Biodiesel Subsidy Fund

In 2015, the Government of Indonesia implemented a regulatory scheme intended to support its biodiesel industry. One regulation created the "Biodiesel Subsidy Fund." See Government of Indonesia Initial Questionnaire Resp. (June 29, 2017), P.R. 120 ("GOI Initial Quest. Resp.") at 13; GOI Initial Quest. Resp., Ex. Pt. 8 (June 29, 2017), P.R. 128, at Ex. GOI-BSF-1) (Presidential Regulation No. 61/2015). The Biodiesel Subsidy Fund (or the "Fund") directly paid biodiesel producers amounts in addition to the sales price they received from their customers. See GOI Initial Quest. Resp. at 15. The monies for these Fund payments were wholly provided for by the proceeds of the Government of Indonesia's 2015 Export Levy on crude palm oil. See Government of Indonesia Suppl. Questionnaire Resp. (Aug. 7, 2017), P.R. 184 ("GOI Suppl. Quest. Resp.") at 1.

II. Export Restraints on Crude Palm Oil

A. 2015 Export Levy

At the same time the Biodiesel Subsidy Fund was created, the Government of Indonesia enacted the 2015 Export Levy, at $50 per metric ton on all exports of crude palm oil. See GOI Initial Quest. Resp. at 67; GOI Initial Quest. Resp., Ex. Pt. 12 (June 29, 2017), P.R. 132, at Ex. GOI-CPO-5 (Minister of Finance Regulation No. 133/PMK.05/2015). This levy is collected from producers on their export sales of crude palm oil. The levies paid are then deposited into the Fund. Crude palm oil is a major input for biodiesel. See Preliminary Decision Mem. (Aug. 21, 2017), P.R. 199 ("Prelim. Dec. Mem.") at 10 ("[Crude palm oil] is the key feedstock from which biodiesel is manufactured in the Indonesian biodiesel industry."); GOI Initial Quest. Resp. at 65-66 ("[Crude palm oil] can be used for ... non-food industries (fatty acids, fatty alcohol, glycerin, biofuels)."). The Government of Indonesia represented that "[p]roceeds from this export levy are specifically earmarked for the Biodiesel Subsidy Fund ... [and are] the Fund's exclusive source of funding." GOI Initial Quest. Resp. at 67.

B. 1994 Differential Export Tariff

Prior to the 2015 Export Levy, the Government of Indonesia had implemented another tax on crude palm oil: the 1994 Differential Export Tariff. See, e.g. , GOI Initial Quest. Resp., Ex. Pt. 11 (June 29, 2017), P.R. 131, at Ex. GOI-CPO-3 (Minister of Finance Regulation No. 136/PMK.010/2015); GOI Initial Quest. Resp., Ex. Pt. 14 (June 29, 2017), P.R. 134, at Ex. GOI-CPO-23 (Minister of Finance Regulation No. 140/PMK.010/2016 app. I). Under the 1994 Export Tariff's schedules, a tariff is imposed on exports of crude palm oil when the export price of crude palm oil exceeds $750 per metric ton. See GOI Initial Quest. Resp., Ex. Pt. 13 (June 29, 2017), P.R. 133, at Ex. GOI-CPO-15. No tariff is collected unless the threshold of $750 per metric ton is reached. See GOI Initial Quest. Resp. at 66; GOI Initial Quest. Resp., Ex. Pt. 13, at Ex. GOI-CPO-15. The export price of crude palm oil changes from year to year, or even month to month.

III. Commerce's Investigation

On March 23, 2017, Petitioner and Defendant-Intervenor National Biodiesel Board Fair Trade Coalition, a U.S. trade association comprised of domestic producers of biodiesel,⁴ filed a countervailing duty petition with the Department and the United States International Trade Commission ("ITC"), covering imports of biodiesel from Indonesia. See Prelim. Dec. Mem. at 1; Biodiesel From Argentina and Indonesia , 82 Fed. Reg. 22,155 (Int'l Trade Comm'n May 12, 2017) ("ITC Prelim. Determination"); Biodiesel from Argentina and Indonesia , Inv. Nos. 701-TA-571-572, 731-TA-1347-1348, USITC Pub. 4690 (May 2017) (Preliminary). According to Petitioner, some of the cheap, subsidized biodiesel entered the U.S. market, and injured the domestic U.S. renewable fuel industry. See ITC Prelim. Determination, 82 Fed. Reg. at 22,155 ("[Before the ITC, Petitioner alleged] that an industry in the United States [was] materially injured or threatened with material injury by reason of [less than fair value] and subsidized imports of biodiesel from ... Indonesia.").

On March 29, 2017, the ITC commenced its material injury investigation. See Biodiesel From Argentina and Indonesia , 82 Fed. Reg. 15,541 (Int'l Trade Comm'n Mar. 29, 2017).⁵

On April 19, 2017, Commerce published the notice of initiation of its countervailing duty investigation. See Biodiesel From Argentina and Indonesia: Initiation of Countervailing Duty Investigations , 82 Fed. Reg. 18,423 (Dep't Commerce Apr. 19, 2017).

Wilmar and Musim Mas were...