G/SG/N/8/IDN/14  
G/SG/N/10/IDN/14  
 
25 March 2013  
(13-1635)  Page: 1/6  
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  
(Seamless Pipe Casing and Tubing) 
The following communication, dated 19 March 2013, is being circulated at the request of the 
Delegation of Indonesia.  
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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 investigation concerning the importation of the Subject Good. 
 
A. GENERAL BACKGROUND 
1. On 30 December 2011, the KPPI hereinafter referred as the "Investigating Authority", 
received an application from Asosiasi Produsen Pipa Pemboran Minyak dan Gas Bumi Indonesia 
(APROPIPE), hereinafter referred as the "Applicant" , requesting for the imposition of a safeguard 
measure on importation of "Subject Good" that is claimed to be the cause of injury as incurred by the Applicant. 
 
Based on the examination of the above mentioned application, the Investigating Authority initiated an investigation on 20 January 2012 and announced it in the national daily newspaper ("Bisnis 
Indonesia"), and notified the WTO on 27 January 2012 through G/SG/N/6/IDN/17. 
 2. Subject Good  
The description of the Subject Good as notified under Article 12.1(a) of WTO Agreement on 
Safeguards was for guidance purposes only, and the scope has been adjusted and narrowed down, based on the production and sales of the domestic industry, as follows: 
 
Seamless pipe casing and tubing made from iron or steel, with diameter width from minimum of 2 
3/8" to maximum of 14", and with yield strength of equal or more than 
75,000 Psi, worked or un-worked pipe-end, under HS Code 7304.29.00.90. 
3. Period of Investigation 
 The period of investigation covers 2008 to 2011. 
 
4. Major Proportion   
Based on the information verified, it is confirmed that the Applicant represents the major 
proportion of the domestic industry.  G/SG/N/8/IDN/14 • G/SG/N/10/IDN/14 
 
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  5. Views and Comments by Interested Parties 
 In accordance to Article 3.1 WTO Agreement on Safeguards, during the process of investigation, the Investigating Authority has provided opportunities to the Applicant, other interest parties, and 
representative of exporting countries to submit th eir views, evidences, and responses. In addition, 
the Investigating Authority also held 2 (two) public hearings. The first hearing was held on 8 February 2012, and the second hearing was held on 12 December 2012. 
 
B. DATA OF INCREASED IMPORTS 
As the Subject Good enter under a basket classi fication, the Investigating Authority has sought 
information from major exporting countries as well as the major user in Indonesia which is the 
Upstream Oil And Gas Business Supervisory Agency (BP MIGAS), and imports have developed as 
follows:  
1. Increased Volume of Imports 
 
Table 1: Volume of Imports 
HS Unit 2008 2009 2010 2011 
7304.29.00.90 Kg 30,057,527 29,940,716 32,284,689 64,146,323 
 Source: Upstream Oil and Gas Business Supervisory Agency (BP MIGAS) 
 
As shown in table 1, during the period of investigation, there was a significant increase of the 
volume of imports of the Subject Good in absolu te terms. There was a decline of the volume of 
imports by 0.39% from 2008 to 2009, however it was temporary and was followed immediately by 7.83% increase volume of imports in 2010. It is further increased significantly by 98.69% in 2011.   
2. Unforeseen Development  
 According to World Steel Association-Statistical Ye ar Book 2011, global pr oduction of the Subject 
Good has increased in line with demand underpi nned by oil and gas exploration. However, trade 
measures taken in several major markets, that could not have been foreseen, has resulted in trade deflection accounting for the significant increase in imports to Indonesia. 
 
Diagram 1: 
Exploration and Expl oitation Statistic 
 
 Source: The Ministry of En ergy and Mineral Resources G/SG/N/8/IDN/14 • G/SG/N/10/IDN/14 
 
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Table 2: Statistic of Trade Remedies Measures by Developed Countries 
Trade 
Remedies 
Instruments Imposing 
Countries Affected Countries Duties 
Anti-Dumping US China (7 companies) 48.99% - 98.74% 
Subsidies US China (12 companies) 13.66% - 53.65% 
  All others 33.66% 
Anti-Dumping Canada China (13 companies) 39.00% - 166.9% 
USA (1 companies) 13.85% 
Subsidies Canada China (12 companies) 91.26 - 4,070.00 
Renminbi/Metric Ton 
Anti-Dumping EU China 48.3%-71.9% 
Anti-Dumping Mexico China 56% 
 Source: US-ITC report year 2010, Certain Seamless Carbon and Alloy Steel Standard, Line, and 
Pressure Pipe from China 
 
C. EVIDENCE OF INJURY CAUSED BY INCREASED IMPORTS 
a. Data of Injury 
 
The Investigating Authority examined and verified all data made available by 
interested parties.  
 
b. As the result of  this examination and the on-site verification, the Investigating 
Authority found the following evidences as  stipulated in Table 3 and Table 4. 
 
Table 3: National Consumption and Market Shares 
No. Description Unit Year 
2008 2009 2010 2011 
1 National 
Consumption Index 100  84 84 137  
2 Market Share of 
the Applicant Index 100  90 85 70  
3 Market Share of 
Imports Index 100  119 128 155  
 Source: Indonesia’s Upstream Oil and Gas Business Supervisory Agency (BP Migas), and the 
Investigating Authority. 
 
i. Based on Table 3, the Investigating Authority discovered the following facts: 
 
1. The national consumption has shown an increasing trend in 2009 - 2011. 
Even though the national consumption in 2009 and 2010 was lower than 
in 2008, the national consumption in 2011 has jumped to 137 indexed points, which was much larger than  the national consumption in 2008. 
 
2. The Applicant’s market share has been suffering a decreasing trend 
during the investigation period. Meanwhile, the market share of imported like products has enjoyed an increasing trend of relatively bigger 
percentage during the investigation period. In other words, during the 
investigation period, the Applicant was losing its market shares. G/SG/N/8/IDN/14 • G/SG/N/10/IDN/14 
 
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Table 4: The Applicant’s Data of Injury 
No. Description Unit Year 
2008 2009 2010 2011 
1. Domestic Sales Index 100  75 71 96  
2. Production Index 100  90 88 95  
3. Capacity 
Utilization Index 100  90 88 95  
4. Profit/Loss Index 100  35 (3) 15  
5. Employment  Index 100  89 87 89  
6. Inventories Index 100  102 101 106  
7. Productivity Index 100  127 221 69  
 Source: As verified by the Investigating Authority. 
 
ii. Based on Table 4, KPPI al so find the following facts: 
 
1. During the investigation period, the Applicant’s domestic sales have 
suffered a decreasing trend. The domestic sales dropped to 75 indexed 
points in 2009 and to 71 indexed points in 2010. Although in 2011 the 
domestic sales increased to 96 indexed points, but it was still below the level of domestic sales in 2008 and below the trend in the increase in 
consumption. 
 
2. The Applicant’s production dropped to 90 indexed points in 2009, and 
further declined to 88 indexed points in 2010. Even though the domestic 
production in 2011 has increased to 95 indexed points, it was also below the level of production in 2008. 
 
3. In line with the declining trend of the production, the Applicant’s capacity 
utilization also dropped to 90 indexed points in 2009, and further dropped 
to 88 indexed points in 2010. While the Applicant’s capacity utilization 
increased to 95 indexed points in 2011, it was lower than the level of 
capacity utilization in 2008. 
 
4. During the period of investigation, the Applicant has suffered severely 
reduced profits leading to financial losses. 
 
5. During the period of 2008 to 2010, the Applicant was forced to lay off 
numbers of employees which that made the level of employment dropped 
to 89 indexed points in 2009, and further dropped to 87 indexed points in 2010. Despite an increase in the Applicant’s total employment to 89 
indexed points in 2011, it was still lower than the level of employment in 
2008. 
 
iii. Based on the aforementioned point i and ii, the Investigating Authority has 
come to the following conclusion: 
 
1. During the period of investigation, there was clear evidence that the 
Applicant has lost its market share even though there was an increase in 
national consumption during the same period. On the contrary, the market shares of the imported product increasing significantly. In other 
words, the Applicant unable to take advantage of the increase in the 
national consumption, mainly as the result of fierce competition from imported like products. 
 G/SG/N/8/IDN/14 • G/SG/N/10/IDN/14 
 
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  2. As the result of the decrease in domestic sales, the Applicant has also 
suffered a decreasing trend of profits during the period of investigation, which was culminated in 2010 when the Applicant suffered a financial loss. In other words, the Applicant’s revenue tends to be decreasing 
overtime during the investigation period, whilst the cost of production as 
incurred was fixed or has shown an increasing trend. 
 
3. The direct impact of the losses in  the Applicant’s market share and the 
declining financial performance has forced the Applicant unavoidably to lay off numbers of employees in 2009 and 2010. This certainly contributes to the number of unemployment, which in turn often leads to 
various social problems. 
 
Based on the above mentioned evidence, the Investigating Authority concluded that 
the Applicant has suffered a threat of serious injury. 
 D. OTHER FACTORS THAT MAY CONTRIBUTE TO INJURY 
In order to find whether there are other factors that, beside the increased volume of imports of the 
Subject Good, threaten to cause serious injury to the Applicant, the Investigating Authority has also analyzed the following known factors:  
1. Production Capacity 
 The Investigating Authority has examined the production capacity and in particular whether it is 
sufficient to cover demand, and it is confirmed that domestic capacity is in line and can meet the 
demand.  
2. Technology 
 Based on the results of investigation, it is verified that technology is not a factor contributing to the Applicant’s inability to compete with the impo rted like products. The technology as utilize by 
the Applicant has been compatible with the accepted international standards. 
 Based on the aforesaid findings, the Investigating Authority is of the opinion that there are no 
other factors contributing to the threat of serious injury as suffered by the Applicant, beside the 
increased volume of imports of the Subject Good.  
E. THE CAUSAL LINK 
In accordance to the findings as duly elaborated in Sections C and D, the Investigating Authority 
concluded that there is a strong evidence of a ca usal link between the increased volume of imports 
of the Subject Good and threat of seriou s injury as suffered by the Applicant. 
 
F. PROPOSED 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 Good for a period of four years.  
2. The proposed Safeguard Measure to be imposed is now being circulated for inputs from 
relevant government agencies, which form and amount will be elaborated in the notification under the Article 12.1(c) of the WTO Agreement on Safeguards.  
3. 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.  G/SG/N/8/IDN/14 • G/SG/N/10/IDN/14 
 
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  G. CONSULTATIONS 
In light of the Article 12.3 of the WTO Agreement on  Safeguards, it is hereby informed that prior 
consultation as may be required by those Members having a substantial interest as exporters of the product concerned is scheduled to be carried out on 1 April 2013, with a view to, inter alia, 
review the information upon which it is proposed to apply measure on the Subject Good, to 
exchange views on the nature of the measures, an d to reach an understanding on ways to achieve 
the objective set out in paragraph 1 of Arti cle 8 of the WTO Agreement on Safeguards. 
 
Members with a substantial interest as such are required to register with the Indonesian Safeguards Committee as to their intention to undertake consultation at no later than 7 (seven) days after the date of the relevant WTO communication regarding this notification being circulated, 
to the following address: 
  
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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