Required Report - public distribution

**Date:** 7/17/2007

**GAIN Report Number:** ID7026

ID7026

**Indonesia**

**Biotechnology**

**Annual**

**2007**

**Approved by:**

![](media/image1.wmf)Fred Kessel

U.S. Embassy, Jakarta

**Prepared by:**

Titi Rahayu

**Report Highlights:**

Section Updated: II. Biotechnology Trade and Production; IV. Marketing
Issues; V. Capacity Building and Outreach. There has been no progress to
date on implementation of the GOI Regulation on Biosafety of Transgenic
Products that was enacted in 2005.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Jakarta \[ID1\]

\[ID\]

Table of Contents

[I. Executive Summary 3](#i.-executive-summary)

[II. Biotechnology Trade and Production
3](#ii.-biotechnology-trade-and-production)

[III. Biotechnology Policy 4](#iii.-biotechnology-policy)

[IV. Marketing Issues 4](#iv.-marketing-issues)

[V. Capacity Building and Outreach
5](#v.-capacity-building-and-outreach)

[Cochran Fellowships from Indonesia Related to Biotechnology:
5](#cochran-fellowships-from-indonesia-related-to-biotechnology)

[Additional Biotechnology "Capacity Building" Events Sponsored by USDA
5](#additional-biotechnology-capacity-building-events-sponsored-by-usda)

[Additional Biotechnology "Capacity Building" Events Sponsored by FAS
Jakarta
6](#additional-biotechnology-capacity-building-events-sponsored-by-fas-jakarta)

[APPENDIX A 7](#appendix-a)

# I. Executive Summary 

Advances in Indonesian approval, use or regulation of transgenic
products are not a high priority for the GOI. Indicators include
ratification of the Cartagena Protocol in October 2004, with little
progress toward promulgation of implementing regulation; approval on the
environmental side for planting of Bt cotton, but none for food safety;
issuance of food labeling requirements, but no enforcement. The
Government issued a regulation for Biosafety of Transgenic Products (No.
21/2005), but implementation is a relatively low priority for the GOI.
The committee that will set the guidelines for transgenic products has
not been formalized. There is no compelling evidence that this situation
will change in the intermediate term.

The U.S. exports of transgenic products to Indonesia in 2006 were valued
total at approximately \$700 million. Among these are Bt cotton,
herbicide tolerant soybeans and meal, Bt corn and a variety of food
products derived from transgenic crops. With the exception of certain
soybean products, i.e., soy flour, no trade constraint based on
transgenic origin has been introduced or enforced.

# II. Biotechnology Trade and Production

Indonesia does not produce any crops that involve transgenic processes,
but does produce some using tissue culture techniques. These are tree
seedlings (eucalyptus, acacia, mangrove) designed for domestic
reforestation and certain flower species for export, primarily to the
EU. The details are proprietary, as only one company is currently known
to be undertaking this business. It is unlikely that Indonesia will be
able to multiply transgenic seed or commercialize any transgenic crop in
the coming year.

The government of Indonesia is confined field-testing transgenic rice,
sugar cane, cassava, and potato. However according to the Government
Regulation on Biosafety of Transgenic Products, commercialization of
transgenic rice, a GOI priority, is still a distant event. Transgenic
rice has been tested in 22 locations throughout Indonesia but must be
tested in another 16 locations before receiving a license from The
National Seed Agency.

Additional GOI research projects on transgenic plants such as virus
resistance for tomatoes and potatoes, delayed ripening for papaya, sweet
potato pest resistance, drought tolerant rice, and pest resistant
soybeans, are still ongoing, albeit at a relatively modest pace.

Bt corn, Bt Cotton, RR Corn, and RR soybeans have passed the biosafety
assessment process. In addition, Ronozyme-P and Finase L and P (as
protein enrichment for feed) are reported to be in the pipeline. However
these products cannot be released into the market until after a food
safety assessment is completed under the direction of a new biosafety
committee. At this time, two companies requested approval to import
avian influenza vaccines that were produced using biotechnology. The
biosafety and food safety technical team is in the first stage of
assessing the request.

The United States exported about \$700 million of transgenic products to
Indonesia in 2006, including Bt cotton, herbicide tolerant soybeans and
meal, Bt corn and a variety of food products derived from transgenic
crops. Indonesia also imported significant volumes of presumptive
transgenic soybeans and meal from other origins. With the exception of
certain soybean products, i.e., soy flour, no trade constraint based on
transgenic origin has been introduced or enforced. The restrictions on
soy flour do not seem to be a major to constraint to current trade.

At present Indonesia is not a receipt of USDA-funded food aid.

# III. Biotechnology Policy

To implement the GOI Regulation on Biosafety of Transgenic Products the
President must sign the Government Regulation on Establishing The
Committee of Biosafety on Transgenic Products. A committee had been in
place since 1999, but became inactive when the Regulation on Biosafety
of Transgenic Products was issued in 2005. The new committee will have
15 members from a variety of stakeholders, including government
ministries, NGOs, universities, and professional associations. The
expected time frame for establishing the committee has been pushed back
several times, and is subject to change.

As soon as the new committee is established, it is expected to focus on
the Guidelines for Food Safety. In addition, the committee will
reportedly revise the regulations for labeling of food packaged for
retail sale that contain transgenic products. These guidelines are
needed to bring Indonesia into compliance with the Cartagena Protocol on
Biosafety.

At present, there are no imported or locally developed commercial
transgenic seed varieties approved for planting in Indonesia. Approvals
for planting and full commercialization are hindered because guidelines
for food safety assessment have not yet been approved. Nevertheless,
research activity at a relatively low level (e.g., second replication of
containment trials) continues. Also continuing is GOI research and
development at the agricultural institute in Bogor.

Notwithstanding some confusion in the existing Indonesian regulatory
framework for biotechnology, the general impact is relatively benign,
especially with respect to imports of living modified organisms and
processed food products. Indonesia imports hundreds of millions of
dollars of transgenic products from the United States annually,
significant quantities of which are for direct consumption. This trade
is currently not regulated with respect to transgenic content. Although
current regulation provides for labeling of food products containing
more than 5 percent content derived from transgenic processes, it is not
enforced; a multitude of products over this threshold are currently on
retail shelves with no labeling. Local development, multiplication and
use of transgenic seed continue to be hampered by the current regulatory
system. This, plus additional confusion in the IPR sector, are major
impediments to increased investment in Indonesian biotechnology
activities.

Given the current situation, forecasting likely outcomes for the
Indonesian biotech sector is problematic. The immediate risk with
respect to U.S. agricultural trade interests is that GOI regulatory
functions could intrude negatively on trade. This could be especially
damaging for the hundreds of millions of dollars of U.S. soybean exports
to Indonesia. Certain sections of the GOI are actively pursuing
non-tariff barriers to trade to protect Indonesian agriculture
producers. Should this approach be applied more general throughout the
GOI, transgenic products are potential targets.

# IV. Marketing Issues

To date, Indonesian importers, retailers, and consumers have not
expressed serious concerns about importation, sale, or use of transgenic
products. For example, Indonesia imports hundreds of millions of dollars
annually of soybeans, most with transgenic content. These soybeans are
for direct human consumption in the form of tofu and tempe, and there is
very little said in the local press or otherwise about the production
process bringing this important protein source to Indonesians.

In 2006 there was a survey to determine public acceptance of transgenic
products. The survey targeted students at a well-known agriculture
university in Indonesia. The research showed that the students lack
knowledge of transgenic foods, even if they had a class in biology. The
study also found that students are somewhat willing to consume
transgenic foods if transgenic products reduce the amount of pesticides
applied to crops; are very willing to consume transgenic foods if the
foods were more nutritious than non-transgenic foods; will avoid
consuming transgenic foods if the foods posed a risk of causing allergic
reactions for some people; ethical and religious concerns are very
important to purchasing decisions; had mixed reactions on the importance
of price when making the decision to purchase transgenic foods; feel
labeling of transgenic foods should be mandatory even though it will
affect the price and that the government regulation on food safety
remains poor.

# V. Capacity Building and Outreach

FAS Jakarta has actively recruited Cochran Fellows and participants for
other USDA-sponsored events since 1998. Following is a list detailing
participants from Indonesia.

## Cochran Fellowships from Indonesia Related to Biotechnology:

\- GMO Biotech 1998

2 Cochran Fellows

\- Regional Program for Decision Makers and Journalists 2000

4 Cochran Fellows

\- MSU - Food Safety Program 2000

4 Cochran Fellows

\- MSU - Food Safety Program 2001

3 Cochran Fellows

\- Biotechnology Training 2002

3 Cochran Fellows

\- MSU - Food Safety Program 2003

2 Cochran Fellows

\- MSU -- Biotechnology Training 2003

2 Cochran Fellows

\- MSU -- Biotechnology Training 2004

1 Cochran Fellow

## 

## 

## Additional Biotechnology "Capacity Building" Events Sponsored by USDA

### 

\- APEC BIOTECH SEMINAR -- CHIANG RAI, THAILAND

February 14-15, 2003

2 Indonesian attendees

\- FARMERS WORKSHOP IN AGRICULTURAL BIOTECHNOLOGY -- MANILA,

PHILIPPINES

2-6 December 2003

1 Indonesian attendee

\- APEC HIGH LEVEL POLICY DIALOG ON AGRICULTURAL BIOTECH - SANTIAGO,

CHILE

February 29 -- March 1, 2004

3 Indonesian attendees

**-** APEC BIOTECH INVESTMENT SEMINAR - KUALA LUMPUR, MALAYSIA

December 7-9, 2004

2 Indonesian attendees

\- 4^TH^ APEC HIGH LEVEL POLICY DIALOGUE - SEOUL, KOREA

March 1-3, 2005

2 Indonesian attendees, 1 speaker

\- BIOSAFETY POLICY OPTIONS IN APEC -- MANILA, THE PHILIPPINES

January 16-18, 2006

1 Indonesian attendee, 1 speaker

\- 5^TH^ APEC HIGH LEVEL POLICY DIALOGUE -- HANOI, VIETNAM

February 25-27, 2006

2 Indonesian attendees

\- ASEAN -- U.S. ROUNDTABLE ON AGRICULTURAL BIOTECHNOLOGY POLICY AND
STRATEGY -- BANGKOK, THAILAND

April 4-5, 2006

5 Indonesian attendees, 2 speakers

\- 6^th^ APEC HIGH LEVEL POLICY DIALOGUE -- CANBERRA, AUSTRALIA

January 19 -- 21, 2007

2 Indonesian attendees

## Additional Biotechnology "Capacity Building" Events Sponsored by FAS Jakarta

###### 

\- 2^nd^ Meeting of the ASEAN Task Force on The Harmonization of
Regulations for Agricultural Products Derived from Biotechnology, 2000

\- Round Table Discussion with GOI, industries, scientists, NGOs and
ASEAN officials, September 21-22, 2000

\- ASFARNET Workshop on Biotechnology Promotion and Exchange on
Agricultural Technology, November 28 -- December 1, 2004

Indonesia has significant capacity to promulgate but limited capability
to enforce regulations with respect to food safety and biosafety of
transgenic-origin products. GOI regulation of such products is not
expected to advance expeditiously.

# APPENDIX A

There are no transgenic seed products approved for release in Indonesia
at this time.

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