Indonesian Halal requirements meeting with LPPOM - MUI

Market Access Team on Agro-Food Products, a team coordinated by European Commission to Indonesia, has conducted a meeting took place on April 15, 2009 with the LPPOM-MUI, Institute for the Indonesian Council of Ulama who is responsible for the Halal Certifications in Indonesia. Summary, by Minna Piekkari, trade officer of the European Commission delegation to Indonesia and Brunei Darussalam, of the meeting's main discussion points are below:

• A new list of accredited Overseas Halal Certification Bodies, which are authorized to give a Halal certificate for ingredients/raw materials and meat products imported to Indonesia has been drafted by the MUI and will enter into force on 1st October 2009. The list is final and will be opened for revision after a period of two years (in 2011)
• The list of accepted Halal bodies in Europe has been reduced from before. The accepted bodies in mainland Europe are however authorised to give Halal certification to establishments from all European countries
• The Draft Halal Law is waiting for the time after Elections to be processed by the Parliament
• International Training on the Halal Assurance System will take place in Bogor, Indonesia on 28 - 29 July 2009, directed to distributors, producers and suppliers involved with Halal products. MS companies / importers / distributors are encouraged to participate.

CSR remains mandatory for firms, court rules

CSR will remain mandatory for companies, after the Constitutional Court upheld a provision obliging such programs, dashing the interests of the business community. The latter, represented by several associations, argued that CSR should be voluntary, depending on the size of the firms and in which sectors they operated, instead of mandatory as stipulated under the 2007 Law on Limited Liability Companies. The judges said it was important to make CSR mandatory as a way of getting companies to take part in rolling back environmental damage.
Source: PA Asia - Public Affairs and CSR from the Jakarta Post, 16 April, p.13

Investors see RI market as 3rd most optimistic

The Indonesian capital market has retained its position as the third most optimistic market in the Asia-Pacific region in the first quarter of this year after India and China, based on a survey released last week by the Dutch financial services giant ING. The ongoing optimism is likely because investors felt that Indonesia’s economy was cushioned to an extent by high commodity prices and fuel prices correction, ING Securities Indonesia president director Robert Scholten said. He added the government’s quick response to the global crisis by managing the country’s economy well had also made investors more confident in Indonesia.
Source: PA Asia - Public Affairs and CSR from the Jakarta Post, 20 April, p.13

Registration Identity Number of Entrepreneur Providing Excisable Goods

Undertakings that run business activities as factory entrepreneur, warehouse entrepreneur, importer, distributor, or retails of excisable goods must hold the Registration Identity Number of Entrepreneur Providing Excisable Goods (NPPBKC-Nomor Pokok Pengusaha Barang Kena Cukai). The obligation of holding NPPBKC for distributor or retails only applies to distributor or retails of excisable goods in form of ethyl alcohol or beverages containing ethyl alcohol. Those undertakings must submit written application to the Head of Customs and Excise Office for the site-inspection. After obtaining the Minutes of Site-Inspection, the undertakings must submit written application to the Ministry of Finance to obtain NPPBKC. NPPBKC for the factory entrepreneur, warehouse entrepreneur and importer of excisable goods will be valid for period of those undertakings conduct their activities. NPPBKC for Distributor or Retails of Excisable Goods will be valid for 5 years and can be extended for the same period. (“Government Regulation No.72 of 2008 regarding Registration Identity Number of Entrepreneur providing Excisable Goods (November 10, 2008)”)

IFC promotes energy-saving projects for industries

The International Finance Corporation (IFC) has offered Indonesia’s palm oil and rice milling industries energy efficiency projects that could enable them to cut energy costs by 30% and reduce CO2 emissions to be cashed under the United Nations Framework Convention on Climate Change (UNFCCC) scheme. The IFC will provide technical expertise on energy efficiency and cooperate with other banks to arrange financing for the projects. The IFC also has targeted to arrange a total financing of $35 million by banks for the development of the energy programs.
Source: The Jakarta Post, 14 April, p.2

Coal industry to slow down

The performance of the coal mining industry in 2009 is predicted to slow down, as signaled by the revisions done by a number of companies for their investment and production. One of them is Berau Coal, who will cut its capital expenditure this year up to 65%. Such consequence has to be taken related with the declining commodity price in the international market – the current price is US$ 63-70/ton, while in July 2008 the price was US$ 190/ton – and the stagnant demand from abroad.
Source: PA Asia - Public Affairs and CSR from Bisnis Indonesia, 15 April, p.4

PLN to set power purchase prices

State power company PT PLN holds the mandate to set power purchase prices to buy electricity produced by its business partners, aiming at flexibility amid the dynamics of economic circumstances, an official said, The Jakarta Post reported.
The Director General for Electricity and Energy Utilization at the Energy and Mineral Resources Ministry, J. Purwono, said that the rights were based on the Energy and Mineral Resources Ministry’s regulation, the Guideline for Power Purchase Prices for Cooperatives or other Independent Power Producers (IPPs), enacted last week.
Purwono said purchase prices were determined by various indicators, including the type of power plants, their locations and their capacities; macro-economic indicators; the level of local content; fuel prices; quality; and foreign exchange rates.
“This is the reason why PLN can set different prices for different business deals,” he said. Purwono added that PLN should first receive the government’s agreement before implementing prices.
He said that the government will play a bigger role in determining the parameters for power purchase prices. Earlier this year the government announced it would set the standard for power purchase prices at $0.58 cents to $0.8 cents per KWH. The IPP winner and the power purchase price could be established through several mechanisms, including open bidding, direct appointment or direct selection. IPPs are expected to generate about 40% of PLN’s second-phase 10,000 MW power program, expected to start adding capacity in 2014. In the first-phase program, launched in 2006 to meet the increasing demand for electricity nationwide, especially for the Java-Bali system, all power plants belong to PLN.
Source: www.ekon.go.id

Domestic economy revival to become the focus in 2010

The government’s work plan for 2010 will be focused in reviving the domestic economy and to maintain the welfare level in order to anticipate the impacts from the global crisis. It was decided during a plenary cabinet meeting led by the President yesterday. During the occasion, Finance Minister Sri Mulyani stated that the government has projected the economic growth in 2010 to be back at the level of 5. This year, the economic growth is forecasted to be at the level 4-4.5%. For 2010, she added, the deficit is expected to reach Rp 77.1 trillion, or 1.3% from the gross domestic product.
Source: PA Asia - Public Affairs and CSR from Bisnis Indonesia, 15 April, p.1

Mutual termination employment agreement

The unilaterally termination of employment agreement shall obtain an approval from the Industrial Relation Court unless the company and the respective employee enter into a Mutual Termination Agreement (MTA). It means that unilaterally termination of employment agreement is not recognized under Indonesia Labor Law. Moreover, in the event that there is MTA signed by the company and the employee, then the said MTA shall be registered to the Industrial Relation Court.

Government to tender $3.5B of projects in Q2: Minister

The government plans to put four infrastructure projects worth nearly $3.5 billion up for tender in the second quarter, including coal-fired power plant in Central Java, the planning ministry said on Wednesday, Reuters reported.
The four projects also include a $700 million railway connecting Soekarno-Hatta airport to Jakarta, a $740 million railway connecting Palaci and Bangkuang in Central Kalimantan, and a $24 million cruise terminal in Bali.Four other projects, worth $1 billion in total, will be put up for tender in the second half of 2009 and early next year.
“Projects, which are ready for tender, have already had feasibility studies and the government support, if needed,” said Planning Minister Paskah Suzetta, adding that the government would provide guarantees for political and natural disaster risk, as well as for land provision to attract investors.
The projects, to be funded by the private sector, are in addition to infrastructure deals covered by a Rp73.3 trillion ($6.35 billion) fiscal stimulus package which is aimed at driving growth and creating jobs in an election year.
Source: www.ekon.go.id

Clarify the institution that manages consultancy services

Indonesian Consultant National Union (Inkindo) said the most crucial problem in the deliberation of the Draft Law on Consultancy Services is the lack of a stipulation regarding a department or government institution that will manage the consultancy companies. Inkindo said that Indonesia has not had regulations that regulate aspects of licensing, standardization, etc, that cause difficulties for consultants to establish working relationship with their service users and to develop their businesses. Inkindo also said consultants need the support from various departments due to the variety of consultancy services.
Source: PA Asia - Public Affairs and CSR from Bisnis Indonesia, 1 April, p.i5

Bantar Gebang to produce 26 MW

Beside the revenue from the rental fee of Bantar Gebang landfill, the Bekasi City Government is certain that they will obtain additional revenue from the 26 MW electricity produced from 6,000 tons of waste/day in 2011. Bekasi Mayor, Mochtar Mohamad, said the application of the technology to process waste into electricity in the landfill has been completed. Previously, PT Navigat Organic Energy, as the landfill manager, has offered to the State Electricity Company (PLN) to buy the generated electricity with the price of Rp. 800 per kWh.
Source: PA Asia - Public Affairs and CSR from Bisnis Indonesia, 1 April, p.m2

Public holiday on the General Election day 9 April

The Indonesian government has decided to make 9 April, the polling day for the upcoming parliamentary elections, as one-off public holiday to encourage all voters to cast their ballot.
For more information (in Indonesian), visit http://www.kpu.go.id/index.php?option=com_content&task=view&id=6177&Itemid=1

Railway to link new Soekarno-Hatta terminal to Jakarta

A new terminal at Jakarta’s main airport will be the first to be linked to the city by a railway system, Transport Minister Jusman Syafei Djamal said on Friday, The Jakarta Globe reported.
The new terminal 3 at Soekarno-Hatta International Airport will be the first of the airport’s three terminals to be linked directly to the center of Jakarta, Djamal said, adding terminals one and two will be connected to the rail line in the future.
The train’s route will pass though Pantai Indah Kapuk to Tanah Abang and return to the airport from the Manggarai Station in South Jakarta.
Djamal said that the railway directorate general at the Ministry of Transportation is currently conducting a tender to choose which consortium would be awarded the construction project.
Sugiadi Waluyo, director of railway transportation at the ministry, said construction of the airport train will likely commence during the third quarter of this year.

Tangerang welcomes Jakarta’s garbage

The Tangerang regency administration has welcomed the Jakarta administration’s plan to process at least 2,000 tons of garbage per day at a processing plant to be built in Ciangir village, Legok district. Herry Heryanto, head of the Tangerang Parks and Sanitation Agency, said Tangerang can also send 1,000 tons of garbage to the site, adding that Tangerang produced 1,200 cubic meters of garbage per day. The Jakarta administration has also agreed to recruit 1,300 local residents to work at the plant that will turn 70 percent of the garbage into bricks and another 30 percent into organic fertilizer.

PGN to prepare a subsidiary for city gas

State Gas Company (PGN) will establish a subsidiary that will work in the engineering and construction of household gas pipes. It was revealed by PGN president director Hendi Prio Santoso during an MOU signing ceremony on city gas cooperation for Palembang and Surabaya cities on Monday. The subsidiary will act as a partner for regional-owned companies involved in city gas projects.

Traditional market controls 79% of retailer’s turnover

Based on a recent survey from AC Nielsen, the traditional market controls 79.8% of the national retailer’s turnover in 2008, which represents a decline if compared with the figure in 2002, i.e. 82.9%. The total turnover in 2008 is Rp 95.3 trillion, or 21.1% higher than the 2007 figure. The same survey also says that the traditional market still recorded a good growth, i.e. 19.6% higher than 2007, although it still needs physical and management revitalization efforts.

Be careful in developing palm in Eastern Indonesia Region

The plan to develop palm oil plantations in the eastern part of Indonesia, such as in Sulawesi, Papua and Maluku, should be studied carefully. The local cultures, the availability of supporting infrastructures and the conversion of forest to plantations are the basic aspects to be considered, according to a national seminar titled People’s Palm and Partnership Scheme in the Eastern Indonesia Region on Tuesday. Currently, the majority of the country’s palm oil plantation is located the western region, almost twice the area in the eastern region.
Source: PA Asia - Public Affairs and CSR from Kompas, 25 March, p.22