G/SG/N/8/IDN/19  
G/SG/N/10/IDN/19  
 
11 June 2015  
(15-3020)  Page: 1/9  
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON  
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT  
THEREOF CAUSED BY INCREASED IMPORTS 
 
NOTIFICATION OF A PROPOSAL TO IMPOSE A MEASURE 
INDONESIA  
(Coated Paper and Paperboard, not including Cast Coated Paper and 
Banknotes Paper)  
The following communication, dated 9 June 2015, is being circulated at the request of the 
Delegation of Indonesia. 
 
_______________ 
 
 
Pursuant to Article 12.1(b) of the WTO Agreement on Safeguards, the Government of the Republic 
of Indonesia, hereinafter referred as "GOI", hereby notifies to the Committee on Safeguards on its 
findings of serious injury or threat thereof caused by the increased imports. 
 1  GENERAL BACKGROUND 
a. Initiation of Investigation 
On 26 May 2014, the KPPI hereinafter referred as the "Investigating Authority", received an 
application from PT. Pabrik Kertas Tjiwi Kimia, Tbk. and PT. Pindo Deli Pulp & Paper Mills hereinafter referred as the "Applic ant", requested for the imposition of a safeguard measure on the 
importations of "Coated Paper and Paperboard, not including Banknotes Paper" under HS Codes 
4810.13.11.00, 4810.13.19.00, 4810.13.91.90, 4810.13.99.90, 4810.14.11.00, 4810.14.19.00, 4810.14.91.90, 4810.14.99.90, 4810.19.11.00, 4810.19.19.90, 4810.19.91.90 and 
4810.19.99.90. 
 Based on the examination of the above-mentioned application, the KPPI ( Komite Pengamanan 
Perdagangan Indonesia /Indonesian Safeguards Committee) initiated a safeguard investigation on 
20 June 2014. The initiation of the investigation was published in the national daily newspaper 
("Bisnis Indonesia"), and Ministry of Trade website. The said initiation was also notified in the WTO document G/SG/N/6/IDN/26, circulated on 24 June 2014. 
 
b. Period of Investigation 
The period of investigation covers 2010 to 2013. 
 
c. Major Proportion 
The total production of the Applicant is 96.4% from  total domestic production of the Subject Good, 
therefore it represents a major proportion as requ ired by Article 4.1(c) of the WTO Agreement on 
Safeguards. 
 G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  d. Views and Comments of the Interested Parties 
In accordance with Article 3.1 of the WTO Ag reement on Safeguards, during the process of 
investigation, the Investigating Authority has provided opportunities to all interested parties, to 
submit their views, evidences, comments, and resp onses concerning the investigation. In light of 
the aforementioned, the Investigating Authority has held public hearing two times, the first public 
hearing held on 25 July 2014, and the second public hearing held on 12 March 2015.  
INFORMATION ON WHETHER THERE IS AN AB SOLUTE INCREASE IN IMPORTS OR AN 
INCREASE IN IMPORTS RELATIVE TO DOMESTIC PRODUCTION  In the light to provide evidence whether there is an absolute increase in imports or an increase in 
imports relative to domestic production, the Investigating Authority has analyzed import data 
during the period of investigation.  
a. Absolute increase in imports 
Table 1: Data of Imports 
Description Unit Year 
2010 2011  2012 2013 
Volume Ton 6.500 14.065 22.780 43.778 
Growth %  116,4 62 92,2 
Trend  % 86 
 Source: Indonesian Statistic/ Badan Pusat Statistik (BPS).  
 
Based on the data shown in Table 1, there is an  increased volume of imports in absolute terms 
during the period of investigation, with a trend of 86%. Imports of the product concerned increased significantly every year, with the biggest increased happened in 2013, which was almost 
double (92,2%) compared to 2012. 
 
b. Relative to domestic production 
Table 2: Data of Imports and Total Production 
Description Unit Year 
2010 2011 2012 2013 
Volume  Ton 6.500 14.065 22.780 43.778 
Total Domestic 
Production Index 100 94 90 92 
Imports to Total 
Domestic Production  Index 100 225 383 717 
Trend of Imports 
Relative to Domestic 
Production % 91,6 
 Source: Indonesian Statistic/ Badan Pusat Statistik (BPS), Applicant, processed.  
 
As shown in the Table 2, imports relative to domestic production have also increased significantly. 
It increased sharply by 125 index points in 2011 compared to 2010, and in 2012 increased by 158 index points compared to 2011, and  in 2013 it increased significantly by 325 index points. There has been a constant increase in imports relative to domestic production during the period of 
investigation. 
 G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  c. Imports from Main Countries 
Table 3: Imports Shares (%) 
Country Import Share 2010  Import Share 2013 
People's Republic of 
China (PRC) 42,6 36,7 
South Korea 7,8  28  
Sweden  -  12 
Japan 16,8  9,7 
Germany 3,7  5,3 
Finland 11,8  4,7 
Total 82,9 96,5 
 
Table 3 indicates that the biggest shares of impo rt in 2013 are PRC, South Korea, Sweden, Japan, 
Germany and Finland with total shares of 96,5%.  
2  EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY INCREASED 
IMPORTS 
In a view to determine the existence of serious injury or threat thereof caused by increased 
imports, the Investigating Authority has made an evaluation and analyzed all relevant factors of an 
objective and quantifiable nature having a bearing on the situation of the Applicant. The following 
evaluation was based on data provided by the Domestic Industry (Applicant) that has been verified by the Investigating Authority. 
 
a. Evidence of serious injury or threat of serious injury 
Table 4: Financial Performanc e of the Applicants 2010-2013 
No Description  Unit Year Trend 
(%) 2010  2011 2012 2013 
1. Applicant's Market 
Share Index 100 97 93 83 (5,88) 
2. Applicant's Domestic 
Sales  Index 100 111 116 102 1,14 
3. Production Index 100 94 90 92 (2,90) 
4. Productivity  Index 100 98 98 103 0,79 
5. Capacity Utilization Index 100 94 90 92 (2,90) 
6. Profit/Loses Index 100 62 76 56 (14,07) 
7. Employment Index 100 96 92 90 (3,66) 
 
The figures as shown in Table 4 are the performance of the applicant data from a 
questionnaire that has been verified. 
 
Table 5: National Consumption, Imports, and Market Shares  
No. Description  Unit Year Trend 
10-13 
(%) 2010  2011 2012 2013 
1. National Consumption  Index 100 115 124 124 7,45 
2. Volume of Imports Ton  6.500 14.065 22.780 43.778 85,97 
3. Applicant's Domestic Sales  Index 100 111 116 102 1,14 
4. Shares of Imports Index 100 188 281 544 73,07 
5. Applicant's Market Share Index 100 97 93 83 (5,88) 
Source: CBS (Central Bureau Statistic) and as verified by Investigating Authority. 
1) Based on Table 5 above, it could be seen that national consumption increased during the 
investigation period (2010-2013) with a trend of 7,45%. However, the increased of consumption in that period could not be enjoyed by the Applicant, since it was fulfilled by import goods, where the volume of imports continued to increase with the trend of 85,97%. During the same period, the 
volume of Applicant's domestic sales was relatively stable, with positive trend amounted 1,14%. G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  During the investigation period, shares of import increased significantly with a trend of 73,07%, on 
the other hand the Applicant's market share contin ued to decrease, with a trend of -5,88%. It can 
be inferred that the domestic industries could not take the benefit optimally from the increase of national consumption. 
 
Table 6: Production, Employment, and Productivity 
No. Description  Unit Year Trend 
10-13 (%) 2010  2011 2012 2013 
1. Production Index 100 94 90 92 (2,9) 
2. Employment Index 100 96 92 90 (3,66) 
3. Productivity Index 100 98 98 103 0,79 
Source: as been verified by The Investigating Authority. 
2) Based on Table 6 above, production of the do mestic industries decreased with the trend of -
2,9%, during the investigation period. However, th e Applicant tried to increase their productivity 
by cutting back their employment during that peri od, which could be seen in the above table that 
the employment decreased with a trend of -3,66% . The decrease of employment has impacted on 
the increase on Applicant's productivity with a trend of 0,79%, during the same period.   
Table 7: Applied Capacity, Production, and Used Capacity 
No. Description  Unit Year Trend 
10-13 
(%) 2010  2011 2012 2013 
1. Installedd Capacity Index 100 100 100 100 - 
2. Production Index 100 94 90 92 (2,9) 
3. Capacity Utilization Index 100 94 90 92 (2,9 
 Source: As been verified by  the Investigating Authority.  
3) As shown in Table 7, the capacity utiliz ation decline with a trend of -2,9% from 2010 
to 2013, due to the decline in the level of production with a trend of -2,9% in the same period.  
 
Table 8: Profit/Loses 
No. Description  Unit Year Trend 
10-13 (%) 2010  2011 2012 2013 
1. Profit/Loses Index 100 62 76 56 (14,07)  
 Source: As been verified by  the Investigating Authority.  
4) The figures shown in Table 8 are profit/losse s for the domestic sales performance. From the 
table above, it could be seen that profit of the Applicant declined with a trend of -14,07%. Even 
though the Applicant's domestic sales increased as shown in Table 4, such increase are not 
significant and the Applicant could not increase their profit since they have to decrease their selling 
price to maintain their share in the domestic market.  
Table 9: The Applicant's Sales Price, Cost of Production, and Margin 
No. Description Unit Year Trend  
11-13 
(%) 2010 2011 2012 2013 
1. The Applicant's Sales 
Price Index 100 105 98 99 (0,95) 
2. The Applicant's Cost of 
Production  Index 85 95 86 90 0,97 
3. Import Price Index 99 96 95  91  (2,84) 
 Source: As been verified by  The Investigating Authority. 
5) Based on Table 9 above, the Applicant's sale s price decline with a trend of -0,95%, during 
investigation period. The Applicants decreased thei r price to compete with the price of imports of 
the product concerned. During investigation period, the price of imports are below the Applicant's selling price, this condition makes the Applicant's decreased their selling price, even though the 
cost of production was increasing with a trend of 0,97%. G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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Table 10: The Price Effect 
No. Description Unit Year 
2010 2011 2012 2013 
1. The Applicant's Sales Price Index 100 105 98 99 
2. Import Price Index 99 96 95 91 
3. Price Undercutting Index (1) (9) (3) (9) 
 Source: As been verified by The Investigating Authority. 
6) As shown in Table 10, it could be seen that there are price undercutting during investigation 
period, since the import price are always below the Applicant selling price.  
7) Based on point 1) to 6), it can be concluded that the Applicant suffered threat of serious 
injury due to the following facts:  
 The Applicant's domestic market share decreased with a trend of -5,88%. At the same time, 
the share of imports keep increa sing with the trend of 73,07%. 
 The profit of the Applicant declined with a tr end of -14,07% as the impact of the decreased 
of domestic price in order to maintain their market share. 
 The employment decreased with a trend of -3 ,66%. However, the App licant's productivity 
increased from 98 index points in 2012 to 103 index points in 2013. 
 The volume of production decreased by -2,90%, which could be seen from the decrease on 
the capacity utilization during investigation period.  
b. Other Factors That May Contribute to Injury 
In order to ensure that the serious injury or threat of serious injury is only caused by increased 
imports, the Investigating Authority also examined the following other known factors: 
 
1) Export performance  
Table 11: Export Performance 
Indicators Unit 2010 2011 2012 2013 
Export Sales 
(Percentage) Index 100 90 87 91 
Average Index 92 
Trend % (3,01) 
 Source: As been verified by  the Investigating Authority.  
Based on Table 11, it can be seen that export sales are relatively stable during the investigation 
period. In average, the export sales of the Applic ant are 92 index points of the total sales. It can 
be concluded that the Applicant's export sales are not effecting their financial performance. 
2) Technology and machineries 
 
The investigation authority has verified that the Applicant has advanced technology and 
machineries to produce the subject goods. It is supported by the fact that the Applicants have 
standardization in the manufacturing process and the production output, which is in accordance 
with ISO 9001: 2008. The capability of the Applican t's technology and machineries are proven that 
they are not factors which caused the Applicant suffered injury due to uncompetitiveness. 
3) Installed capacity 
Table12: Installed Capacity and National Consumption 
No. Description Unit Year 
2010 2011 2012 2013 
1. Installed Capacity Index 100 100 100 100 
2. National Consumption Index 32 36 39 38 
Source: As been verified by The Investigating Authority. G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  As shown in Table 12, the installed capacity of th e applicant is adequate to meet national demand. 
It can be concluded that the injury which suffered by the applicant is not caused by the inability of the Applicant to fulfill the national demand, but due to the increased of the imports effecting the 
applicant's financial performance.  
4) Quality 
 Product quality of coated paper and paperboard of  the Applicant has met the Indonesian National 
Standard (SNI), Timber Legality Assurance System ( Sistem Verifikasi Legalitas Kayu / SVLK), 
ISO (International Standard for Organization),  and PEFC (Programme for the Endorsement of 
Forest Certification schemes). In terms of qualit y, coated paper and paperboard produced by the 
Applicant has met national and international standard. Therefore, it can be concluded that quality 
is not a factor that has impacted to the injury. 
5) Captive or internal uses  
From the investigation, there is captive use from th e production of the Applicant, that is used for 
internal usage with sales volume amounted 4-5% from the total of domestic sales of the subject goods, during the investigation period. The amo unt of the subject goods being used internally 
(captive) are relatively stable. It can be concluded that the captive is not effecting the applicant's 
financial performance.   According to the facts above, it can be concluded that there are no other factors that cause serious 
injury to the Applicant apart from increase d volume of imports of the Subject Goods. 
c. Conclusion on Causal Link  
Based on the explanation on section 2 until 4 above, it can be concluded that: 
1) There is an increased of imports of the subject goods in absolute and in relative to 
national production, as shown in Table 1 and Table 2. 
 
2) As the increased of the national consum ption with a trend of 7,45%, the volume of 
imports increased significantly with a trend of 85,97% during the investigation period. The applicant domestic sales decreased in in 2013, though the trend of the applicant domestic sales has a positive performance by  1,14%. This condition is not comparable 
with the increased on national demand with  a trend of 7,45% during the same period. 
 3) The applicant domestic market shares decr eased with a trend of -5,88%, on the other 
hand the share of imports increased significantly by 73,07% during the same period. 
 4) As the effect of the decreased on the applicant domestic market shares, causing 
negative impact to the applicant's performance, i.e. the decreased on volume of 
production, capacity utilization, and suffering  the decreased on profit with a trend of -
14,07%, during the investigation period. 
 
5) As shown in Table 9 and Table 10 it can be inferred that the import price is lower than 
the domestic price. This condition makes negative effect to the applicant's financial performance where the applicants are forced to lower their domestic price not in line 
with the production cost which was increased during the same period. 
 6) Based on analysis on section b above, the Investigating Authority has concluded that 
there were no factors other than increased imports, which are causing the decrease 
on the Applicant financial performance.  
 From the above conditions, the Investigating Authority has examined all relevant factors in 
accordance with the Agreement on Safeguards, Arti cle 4.1 and 4.2, and it can be concluded that 
the increased of imports have caused a threat of serious injury on the domestic industries. No factors other than increased imports, which has caused injury to the domestic industries. 
 
3  UNFORESEEN DEVELOPMENT 
The increased imports of coated paper and paperboard from exporting countries, could not be 
predicted (unforeseen/ unexpected), based on analysis below: G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  a. During 2010 until 2012, exporting countries like PRC, South Korea, and Sweden 
produced the product concerned bigger than their national consumption. This difference led to oversupply of coated paper and paperb oard in those countries. Table 4 shows the 
production and consumption in PRC, South Korea, and Sweden. 
Table 13: The Subject Good Production an d Consumption in the Exporting Countries 
Exporting 
Countries Production ('000 Ton) Consumption('000 Ton) 
2010 2011 2012 Trend 2010 2011 2012 Trend 
People's 
Republic of China (PRC) 100 114 123 10,97 83 92 100 9,32 
South Korea 100 110 155 24,54 58 57 52 (5,05) 
Sweden 100 98 122 10,23 47 43 25 (26,35) 
Source: Resource Information System Incorporation (RISI), 2013.   
As seen on Table 10 above, during 2010-2012 the production of PRC, South Korea, and Sweden is 
bigger than their consumption. The trend of increasing production in those countries, are 10,97%, 
24,54% and 10,23% consecutively, while their consumption decreased in South Korea for -5,05% 
and in Sweden for -26,35%. Although the consumption of the PRC was increasing, however there was a considerable margin when it compared to its production. 
 
b. At the same period (2010-2012), there were significant decline of coated paper and 
paperboard consumption in several regions like Western Europe and North America, 
while the consumption of the same products in Asia increased during the same period, 
as shown in Table 14 and Graph 1 below: 
Table 14. Consumption of the Subject Good in Some Regions 
Kawasan Konsumsi ('000 Ton) 
2010 2011 2012 
North America  100 97 92 
Western Europe  100 94 90 
Asia 100 104 107 
 Source: Resource Information System Incorporation (RISI), 2013.  
Graph 1. 
 
 Source: Resource Information System Incorporation (RISI), 2013. 
 
Based on Graphic 1 above, during 2010-2012 the trend of consumption in North America and 
Western Europe decreased, amounted to -4.12% and -4.87%. Whereas at the same period, its consumption in Asia (including Indonesia) increased significantly. 
 
c. This situation as has been explained in point a and b, were exacerbated by the 
imposition of Anti Dumping and Countervai ling measures by the United States of Asia 
West 
Europe North 
America G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  America and European Union to PRC. Therefore, PRC has to find another market to 
balance its production. Asia who experiences good economic condition with growing market (including Indonesia) become the export target of the producing countries. 
Based on the above points, it could be conclu ded that over capacity had occurred in some 
exporting countries during 2010-2012. While na tional consumption of some countries, was 
declining. Both of these things exacerbated by the imposition of Anti Dumping and Countervailing 
Duties, which made the exporting countries divert their market destination among other to 
Indonesia. These situations were could not be predicted and anticipated before (unforeseen/ 
unexpected).  4  DESCRIPTION OF THE SUBJECT GOODS 
The description of Subject Good under Article 12.1 (a), has been modified and narrowed 
down based on the capability of the Applicant production and considering all inputs from the 
interested parties. The scope of the Subject Good are as follows: 
 
"Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or without a binder , and with no other coating, whether or not 
surface-colored, surface-decorated or printed, of a kind used for writing, printing or other 
graphic purposes, or printed, of kind used for self recording apparatus, not including thermo-sensitive paper, in rolls or in rectangular (including square) sheets of any size, in unfolded condition, with grammage of 80 gs m (g/m²) to 400 gsm (g/m²), not containing 
fibres obtained by a mechanical or chemi-mech anical process or of which not more than 10% 
by weight of the total fibres content consists of such fibres, not including cast coated paper and banknotes paper, under Harmonized System (HS) Codes: Ex. 4810.13.11.00, 
Ex. 4810.13.19.00, Ex. 4810.13.91.90, Ex. 4810.13.99.90, Ex. 4810.14.11.00, 
Ex. 4810.14.19.00, Ex. 4810.14.91.90, Ex. 4810.14.99.90, Ex. 4810.19.11.00, Ex. 4810.19.19.90, Ex. 4810.19.91.90 and Ex. 4810.19.99.90. 
 
5  DESCRIPTION OF THE PROPOSED MEASURE 
In view of the aforementioned findings, a safeguar d measure has been proposed in form of tariff 
duty: 
Table 15. The Proposed on Safeguards Measure 
Periode BMTP (%) 
1st year  9 
2nd year  8 
3rd year 7 
 
6  PROPOSED DATE OF INTRODUCTION OF THE MEASURE 
Not applicable. 
 7  PROPOSED DURATION OF THE MEASURE 
1. In view of the aforementioned conclusion of the causal link, the Investigating Authority has 
proposed to the Government of the Republic of Indonesia a safeguard measure to be imposed on the importation of the Subject Goods for a period of three years.   
2. The imposition of the safeguard measure will be carried out in accordance with the 
Article 2.2 and Article 9 of the WTO Agreement on Safeguards.  
3. The non-confidential version of the Final Report of this investigation, can be found in the 
website of the Indonesian Safeguard Committee: www.kppi.kemendag.go.id 
 G/SG/N/8/IDN/19 • G/SG/N/10/IDN/19 
 
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  8  CONSULTATIONS 
In light of Article 12.3 of the WTO Agreement on Safeguards, hereby the GOI will give an 
opportunity for consultation for those Members having a substantial interest as the exporters of the Subject Good. The consultation scheduled to be carried out in the period of 14 working days 
started from the date of circulation of this notification. 
 Members, with a substantial interest, requesting a consultation should notify to the 
Indonesian Safeguards Committee/Komite Pengamanan Perdagangan Indonesia not later than 
7 (seven) working days from the date of the ci rculation of this notification addressed to: 
 
THE INDONESIAN SAFEGUARDS COMMITTEE 
(Komite Pengamanan Perdagangan Indonesia /KPPI) 
Jl. M.I. Ridwan Rais No.5, Building I, 5
th floor, Jakarta 10110 
Telephone / Facsimile: (62-21) 385 7758 
E-mail: kppi@kemendag.go.id  
 
 
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