Issue Number 110 - April 2012
Dear AIBC Members and Friends
Lowering of Travel Advisory
AIBC welcomes the Australian Government’s decision to lower the level of the Travel Advice for Indonesia to the second level: Exercise a high degree of caution, down from Reconsider your need to travel. DFAT continues to advise Australians to Reconsider their need to travel to Central Sulawesi, Maluku, Papua and West Papua provinces “due to recent communal and sectarian violence”.
This is in line with AIBC’s requests for a more nuanced Travel Advisory for Indonesia that better reflects the differentiated situation across the archipelago and to allow individuals, companies and institutions, such as schools and universities, to manage risks and to more easily obtain insurance.
AIBC hopes that the lowering of the level of advice will lead to more Australian businesses taking advantage of the extraordinary opportunities that Indonesia offers, both as a business partner and a huge market. We hope that educational institutions will also engage much more strongly in visits to Indonesia and in partnerships with Indonesian schools and universities.
The Smart Traveller website continues to warn Australians about the range of risks associated with travel in Indonesia, including the threat of terrorist attack, civil unrest, crime and transport. This detailed assessment again enables travellers to assess and manage the risks involved, as they should in any foreign country.
Visit by Ambassador Greg Moriarty
Australia’s Ambassador to Indonesia, Greg Moriarty, will visit Australia for mid-term consultations between 14 May and 1 June 2012. There will be opportunities for AIBC members to hear from Ambassador Moriarty and to speak with him in Perth, Darwin, Brisbane, Sydney, Canberra and Melbourne. We will be in contact with Members as details of these opportunities become available
Business Partnership Group
The IA-CEPA Business Partnership Group will start its activities very soon. This bilateral group represents a ground-breaking change in Indonesia-Australia business relations. It is convened by the Indonesian Chamber of Commerce and Industry (KADIN), the Australian Chamber of Commerce and Industry (ACCI), Indonesia Australia Business Council (IABC) and AIBC.
The Business Partnership Group will work to develop joint Indonesia-Australia business positions on the desired outcomes of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) and to provide a detailed report to both Governments. It will examine joint business opportunities, impediments and benefits that could flow if two-way and integrated business is enhanced.
The group will have a small membership but will consult widely across industry sectors in both countries. More information on the Business Partnership Group is included as a separate article in this edition of AIBCnews.
Visit by Hon. Julie Bishop MP to Jakarta
The recent visit to Jakarta by Julie Bishop, Deputy Leader of the Opposition and Shadow Minister for Foreign Affairs and Trade, should lead to improved dialogue between the Government of Indonesia and the Federal Opposition.
Unfortunately, communication from the Opposition Leader in recent times has been mostly one-way, about boats and of the ‘megaphone’ variety. Julie Bishop has been more broad-ranging, nuanced and constructive in her recent statements and speeches and she has supported the AIBC’s positions on business relations (see, for example, her September 2011 speech on the Australia and Indonesia relationship here).
In foreign policy and trade, there is nothing more valuable than a visit to a neighbour and a frank exchange with policy-makers to better understand points of view and to hone positions on both sides to make them workable. Very importantly, face-to-face dialogue can foster personal relationships, which are essential to building constructive, long-term partnerships to address both challenges and opportunities.
AIBC is pleased that Julie Bishop appears to understand the need to build such relationships with Indonesia though personal dialogue and observation. We look forward to continuing to work with both the Opposition and the Government to build the underpinnings of much stronger business relationships.
In this month’s IndoView, we present the following articles:
AIBC ACT – Business Networking Function with Dr Frank Jotzo
On Wednesday 2 May 2012, around 25 AIBC ACT Members and guests attended a business networking function at the National Press Club in Canberra with Dr Frank Jotzo, Deputy Director of the ANU Climate Change Institute. Dr Jotzo is a frequent contributor to the public and policy debate in Australia and internationally and addressed members on the impact of climate change on Indonesia and the ramifications for business.
Indonesia is among the world’s largest greenhouse gas emitters and it has committed to cut its carbon footprint significantly. The target is for a 26 per cent reduction by 2020 relative to business-as-usual by Indonesian efforts, and up to 41 per cent reduction with international assistance. This is a substantial undertaking when compared with other major countries.
Substantial financial incentives for businesses and local governments will be required in order to acheive these targets. Reforms to the tax system, along with intergovernmental fiscal transfers tied to environmental outcomes and properly enforced regulatory measures could achieve this — especially if they are coupled with alternative strategies to promote local economic development. The longer-term challenge is in Indonesia’s energy system. Industrial energy use, electricity use in public buildings and homes, and transport are all growing rapidly as the country moves up the development ladder.
AIBC ACT Chair, Tony Mitchener (right), with AIBC ACT Vice-Chair, Judy Anderson, and new Member Ross Ryan.
AIBC WA – Business Breakfast with PT Pertamina and PT Meratus Line
A full audience of AIBC WA Members and guests attended AIBC WA’s Business Breakfast on Wednesday 11 April 2012 at the University Club of WA in Perth. Members were treated to fascinating presentations by Bapak Iqbal Hasan, Senior Vice President of PT Pertamina, and Bapak Charles Menaro, President Director of PT Meratus Line. Both gentlemen travelled from Jakarta specifically for this AIBC WA event and AIBC extends its warm appreciation to them for this. AIBC Members can access copies of their presentations, as well as a podcast, here.
Bpk Charles Menaro (left) and Bapak Iqbal Hasan (right) answer questions from AIBC WA Members
Both Pertamina and Meratus have recently entered the Western Australian market, with these initiatives demonstrating developing trade between our two countries. AIBC WA wishes both companies every success with these new ventures. The event was kindly sponsored by Pertamina and the WA Department of State Development.
As part of their visit to Perth, AIBC WA also facilitated a high-level visit to Murdoch University for our guests. They were hosted by Vice-Chancellor, Professor Richard Higgott, and Professor David Hill, AIBC WA Member and Chair of Southeast Asian Studies at Murdoch University. This visit has fostered a number of exciting collaborations and on-going goodwill.
AIBC WA’s next event is a Members Sundowner on Thursday 10 May 2012 at the Consulate General of the Republic of Indonesia in Perth. Our guest speaker is Bapak Tamba Hutapea, Deputy Chairman, Investment Planning, Indonesia Investment Coordinating Board (BKPM). Serving with Indonesia’s Trade Minister and BKPM Chairman, Bapak Gita Wirjawan, Bapak Tamba Hutapea is responsible for the formulation of national planning for investment in a range of sectors across the regions, including assurance that investments fall in line with Indonesia’s Investment Guidelines (Rencana Umum Penanaman Modal). Members can register for this event here.
AIBC NSW/Victoria Joint Members' Briefing: Changes to Indonesia's Mining Regulations
On Wednesday 11 April 2012, AIBC’s NSW and Victoria branches presented a Members' Briefing, in cooperation with Norton Rose Australia, on changes to Indonesia’s mining regulations and the impact on Australian investors. This Members’ Briefing was a first for AIBC in that the briefing was presented from Norton Rose Australia’s Sydney office with a live video-broadcast to Norton Rose Australia’s Melbourne office. This meant that AIBC Members in both Sydney and Melbourne were able to attend the Briefing and participate in a Q&A session.
As reported extensively in the Australian press, significant changes have recently been made in the regulation of Indonesia's mining sector. Press coverage has focused on resource nationalisation and divestment requirements for foreign investment companies (PMA Companies) holding an IUP, which have increased from 20 per cent to 51 per cent. Other recent developments include changes to provisions on the transfer of IUPs and on who can issue an IUP to a PMA Company.
The Briefing was presented by Rebecca Mohr who is a Partner of Norton Rose Australia. Rebecca has recently returned from a five year posting in Jakarta. She has extensive experience acting for Australian, Canadian, Indonesian and other Asian investors in the mining sector and has worked on multiple projects under the "old" Mining Law and the Mining Law 2009. Rebecca’s PowerPoint presentation for this Briefing can be accessed by AIBC Members here.
Due to the success of this Briefing, it will be repeated for AIBC QLD and WA Members on Tuesday 15 May 2012. Rebecca will present the Briefing from Norton Rose Australia’s Brisbane offices with a live video-broadcast to Norton Rose Australia’s Perth Offices. AIBC Members can register to attend these Briefings via our Events Calendar.
The Indonesian Chamber of Commerce and Industry (KADIN), the Australian Chamber of Commerce and Industry (ACCI), IABC and AIBC have agreed to form a Business Partnership Group.
Over the coming months, the group will meet to develop joint Indonesia-Australia business positions on the content of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). Specifically, the group will:
The Group’s members have endorsed the position of the two Governments that the IA-CEPA is intended to be a ground-breaking agreement that will aim to bring the economies of Indonesia and Australia much closer together. In doing so, the Group’s members say it will be a facilitator of international trade and foreign investment, leading to enhanced economic growth, with benefits intended to flow deep into the economies of the two countries and their regions.
The IA-CEPA is intended to improve trade and investment policy and decision-making in order to underpin sustainable growth and development. The members have told the two governments that the IA-CEPA should make it easier for the private sector, both SMEs and larger companies, to engage in trade and investment, set up businesses, grow and employ people.
“Poverty alleviation is a key objective”, the Group’s members have said. “It is important to ensure that the benefits of increased trade and investment flow widely through the economies, in particular to small business, to regions and the people within them and to women.”
In enhancing economic linkages through greater business-to-business interaction and economic cooperation though business and government, the Group’s members say the IA-CEPA will help to bring the two largest economies in the region closer together, enabling them not only to enhance each other, but also to work together in ways that become greater than the sums of the parts to jointly become a powerful and stable foundation for prosperity in Asia.
Just as the IA-CEPA will be different from FTAs before it, so too will the process of consultation, discussion and negotiation. The process will involve extensive interaction to provide advice and support and share expertise: government-to-government, business-to-government and business-to-business. Importantly, the consultation and discussion process will help to build stronger relationships between business in both countries, and between business and government, which will assist in maximising the effectiveness of the IA-CEPA.
In addition to the business-to-business discussion process, the Group intends to engage closely with government officials in developing the joint position paper. The members have agreed that the Business Partnership Group will apply the approach of musyawarah mufakat (consensus through discussion) to underpin the way in which they intend to interact.
The AIBC is pleased to announce that during 2012, all AIBC Members are able to access attractive Corporate Rates at the Shangri-La, arguably Jakarta's premier 5-star hotel. In addition to Corporate Rates, AIBC Members can also enjoy:
BKPM are supporting the implementation of MP3EI through a Regional Investment Potential Exhibition and National Seminar on Investment. These annual programs focus on Indonesia’s six economic corridors and associated investment potential.
In 2012, the Exhibition and Seminar will be held from 7 - 8 June at the Grand Inna Hotel in Padang, Sumatra. For further information please click visit the event website; download the event brochure here; or contact BKPM Sydney on 02 9252 0092.
Partnership organisations are sought to become part of the ongoing 'Australia Indonesia Dialogue' project between the Centre for Dialogue, La Trobe University Melbourne and the State Islamic University (UIN) in Jakarta. The first Australia Indonesia Dialogue public forum event will be held in Jakarta on 5 – 6 June 2012 and the second event will be held in Melbourne in June 2013 with support from the Consulate General of the Republic of Indonesia, Melbourne.
The Australia Indonesia dialogue will be an ongoing annual event with an exchange in hosting venues. Invited delegates from both countries will comprise of significant policy makers and opinion-shapers, members of civil society, academics, media (Australian Broadcasting Corporation, The Age Newspaper, Jakarta Post and Metro TV) and community group leaders. Partnership organisations will have their name included as a sponsor in all publicity material and publications generated such as in the internationally refereed academic journal 'Global Change Peace and Security' (Routledge), an edited book collection to be published in Indonesian and English and a policy recommendation booklet for government and media institutions.
This four-day conference and exhibition will be held from 13 – 16 September 2012 at the Jakarta Convention Centre, Hall A and Hall B. There will be 600 booths taken up by local and international exhibitors from the Muslim world with an estimated 35 participating countries and approximately 70,000 visitors expected to attend the event.
For more information, please download the conference brochure here.