G/SG/N/13/IDN/2  
G/L/1120  
 
8 September 2015  
(15-4611)  Page: 1/6  
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER ARTICL E 12.5 OF THE AGREEMENT 
ON SAFEGUARDS OF THE RESULTS OF A MID-TERM 
REVIEW REFERRED TO IN ARTICLE 7.4 
INDONESIA  
(Seamless Pipe Casing and Tubing) 
The following communication, dated 7 September 2015,  is being circulated at the request of the 
Delegation of Indonesia. 
 
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This notification is made pursuant to paragrap h 5 of Article 12 of the Agreement on Safeguards, 
which sets forth that mid-term reviews, under para graph 4 of Article 7, shall be notified to the 
Council for Trade in Goods, in conformity with the format established in document G/SG/1/Rev.1, 
dated 5 November 2009.  
1  SPECIFY THE MEASURE AND THE PRODUCT SUBJECT TO THE MEASURE FOR WHICH 
THE MID-TERM REVIEW WAS CONDUCTED,  AND PROVIDE REFERENCE TO THE WTO 
DOCUMENT THAT NOTIFIED THE SAFEGU ARD MEASURE SUBJECT TO THE REVIEW 
The measure is a tariff on imports of Seamless Pi pe Casing and Tubing. The duty payable was set 
with the aim of preventing a threat of serious inju ry to the Applicant. Further details regarding the 
measure are set out in the notification on definitive measures: G/SG/N/8/IDN/14/Suppl.1-G/SG/N/10/IDN/14/Suppl.1-G/SG/N/11/IDN/12 dated 26 August 2013. The Subject Good under 
investigation is seamless pipe casing and tubing made from iron or steel, with diameter width from 
minimum of 2 3/8 inch to maximum of 14 inch, an d with yield strength of equal or more than 
75,000 Psi, worked or un-worked pipe-end, under HS code Ex. 7304.29.00.90. 
 
2  PROVIDE THE DATES OF INITIATION AND CONCLUSION OF THE REVIEW 
On 14 January 2015, the Indonesian Safeguards Committee ( Komite Pengamanan Perdagangan 
Indonesia /KPPI) hereinafter referred as "Investigating Authority" initiated an investigatory process 
relating to the definitive safeguard measure on imports of Seamless Pipe Casing and Tubing which 
had been imposed on 6 August 2013. The review was concluded on 31 August 2015.  
3  DESCRIBE THE RESULTS OF THE REVIEW, PROVIDING SOME DETAIL ON THE BASIS 
FOR REACHING THOSE RESULTS 
In order to review the situation of the domestic  industry after the imposition of the safeguard 
measure, the analysis conducted by the Investigating Authority focused on data related to the 
period between the calendar year of 2012 until 2014, considering that safeguard measure has been in force as of 6 August 2013.   
For the purpose of the review, KPPI has sent questionnaires to interested parties i.e. Asosiasi 
Produsen Pipa Pemboran Minyak dan Gas Bumi Indonesia  (APROPIPE), and association of importer 
producers of the Subject Good (Asosiasi Produsen OCTG & Accessories/PROA). 
 G/SG/N/13/IDN/2 • G/L/1120 
 
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  3.1  Restructuring 
The restructuring efforts made by the domestic industry were examined in the review: 
 1. Improving the Heat Treatment facility, Renewed the certification of API-5CT in order to fulfill 
specification and market demand. 
2. Conduct certification training to all employees in the various areas of work such as 
production, quality control, technical sales and administration to increase efficiency. 
3. Improving Safety, Health, and Environment to comply with: Certification to Occupational 
Health & Safety Advisory Services 18000 for Health and Safety, International Organization for Standardization 14000 certification for envi ronmental, Coolant Management Filtration 
System for the machine in order to have a lo nger lifetime, achieved performance appraisal 
environmental company management from ministry of environment. 
4. Adding the production facilities such as research laboratory for materials, Non-Destructive 
Test machine, and Sand Blasting facili ties that are environmentally friendly. 
 
3.2  Imports 
3.2.1  Volume of Imports 
TABLE 1: ABSOLUTE IMPORTS 
Description Years 
2012 2013 2014 
Volume (Ton) 119.095 92.972 18.914 
Change (%)  (22) (80) 
Trend (%) (60) 
Source: Indonesian Statistics (BPS) 
 
From the Table 1 above, it is shown that from 20 12 to 2014 the volume of imports decreased with 
the trend of 60%. Since the enforcement of the sa feguard measure of 6 August 2013, the volume 
of imports in 2013 was decreased by 22% and in 2014 was decreased again by 80%.  
 
3.2.2   Changes on Share of Imports by Main Countries 
TABLE 2: CHANGES ON SHARE OF IMPORTS BY MAIN COUNTRIES 
Unit: % 
Countries Years Trend 
(12-14) 2012 2013 2014 
People's Republic of China (PRC) 57,2 43,8 78,4 17 
Japan 22,5 38,0 15,5 (17) 
Singapore 13,8 12,3 3,6 (49) 
Other Countries 6,6 5,9 2,5 (23) 
Total 100 100 100  
Source: Indonesian Statistic/ Badan Pusat Statistik (BPS) 
 
During the period of 2012-2014, share of imports from PRC increased with the trend of 17%, while 
share of imports from Japan decreased with the trend of -17%, share of imports from Singapore 
decreased with the trend of -49%, and share of imports from Other Countries decreased with the 
trend of -23%. 
 G/SG/N/13/IDN/2 • G/L/1120 
 
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  3.3  Applicant's Performance 
The Investigating Authority examined data and information available having a bearing on the 
actual condition of the Applicant. As the result of the examination, the Investigating Authority found the following evidences. 
TABLE 3: APPLICANT'S PE RFORMANCE INDICATORS 
Unit: Index 
Source: Applicant 
TABLE 4: DOMESTIC SALES, PRODUCTION, PROFIT, COST OF PRODUCTION, 
AND PROFIT MARGINS 
Unit: Index 
Source: Applicant 
 
During the period of 2012 to 2014, costs of production continues to increase with the trend of 
about 20%. The increasing cost of production made  the applicant continues to reduce its volume of 
production every year with the trend 4%. In 2013 compared to 2014, domestic sales decreased by 3% followed by the decrease of production volume by 1%. 
 
During 2012 to 2013, increase in domestic sales led to the increasing of profit by 83 indexed points, on the contrary of that in 2013 to 2014, profit decreased by 118 indexed points because of 
the decline of profit margins, while production costs continue to increase with decreasing volume 
of sales. No. Description  Years Change 
13-14 (%) Trend 
12-14 (%) 2012  2013 2014 
1. Domestic Sales 100 105 101 (3) 1 
2. Production 100 93 91 (1) (4) 
3. Profit 100 183 65 (64) (19) 
4. Productivity 100 69 74 7 (14) 
5. Production 
Capacity 100 100 100 - - 
6. Utilization Capacity 14% 13% 13% (1) (4) 
7. Employee 100 135 124 (8) 11 
No. Description  Years Change 
13-14 (%) Trend 
12-14 (%) 2012  2013 2014 
1. Domestic Sales 100 105 101 (3) 1 
2. Production 100 93 91 (1) (4) 
3. Profit 100 183 65 (64) (19) 
4. Cost of Production 100 121 146 20 21 
5. Profit Margins 17 23 8 (64) (30) G/SG/N/13/IDN/2 • G/L/1120 
 
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  TABLE 5: PRODUCTION, PRODUCTION CA PACITY, AND UTILIZATION CAPACITY  
Unit: Index 
Source: Applicant 
 
During the period of 2012 to 2014, production experienced a decreased with the trend of 4% and 
the utilization capacity shown a decreased with th e trend of 3%. The Utilization Capacity during 
the period of review is only in the range of 13%- 14%, so the utilization capacity of the Applicant 
during the period of review is not optimal, considering there is no increase in production capacity 
on the period of 2012 to 2014. 
TABLE 6: PRODUCTION, PRODUCTIVITY, AND EMPLOYEE 
Unit: Index 
Source: Applicant 
 
Productivity experienced a decrease in 2013 and a slight increase in 2014, yet this increase is still lower if compared in 2012. This condition occurred because of the decline in employee was greater 
than the decline of production. The productivity during the period of review experienced a fall 
by 14%.  
An increasing of employee in 2012 to 2013 by 35 points due to the expectation of increasing the 
production as an impact from the imposition of  the safeguard duty. Further in 2014, the domestic 
industry is forced to reduce its employee by 11% due to the decrease of the domestic sales. 
TABLE 7: INVENTORIES, DOMESTIC SALES, AND PRODUCTION 
Unit: Index 
Source: Applicant 
 
Inventory was declined in 2012 to 2014 with the tr end of 20%. This decrease was mainly due to 
the decrease in production meanwhile the domestic sales were relatively stable.  
 
 No. Description  Years Change 
13-14 (%) Trend 
12-14 (%) 2012  2013 2014 
1. Production 100 93 91 (1) (4) 
2. Production Capacity 100 100 100 - - 
3. Utilization Capacity 14% 13% 13% (1) (4) 
No. Description  Years Change 
13-14 (%) Trend 
11-13 (%) 2012  2013 2014 
1. Production 100 93 91 (1) (4) 
2. Productivity 100 69 74 7 (14) 
3. Employee 100 135 124 (8) 11 
No. Description  Years Change 
12-13 (%) Trend  
11-13 
(%) 2012  2013 2014 
1. Inventories 100 68 63 (7) (20) 
2. Domestic Sales 100 105 101 (3) 1 
3. Production 100 93 91 (1) (4) G/SG/N/13/IDN/2 • G/L/1120 
 
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  3.4  Other Factors that Contribute to the Applicant's Injury 
Investigating Authority seen that in 2013-2014 the imposition of safeguard measure was effective 
in lowering volume of imports by 80%. However, the performance of Applicant still indicates a threat of serious injury, with the indication of decreasing profit by 64% along with a decline in 
sales, production, capacity utilization, and employee. Therefore, it is necessary to investigate other 
factors which caused the domestic industry still experienced threat of serious injury, while import volumes have decreased significantly. The other factors analyzed were as follows: 
FIGURE 1: NATIONAL CONSUMPTION 
Unit: Index 
 
Source: Indonesian Statistic/ Badan Pusat Statistik (BPS), Applicant, processed 
 
Based on the Figure 1 above, volume of im ports during 2012 to 2014 decreased due to the 
decreasing of national demand of the Subject G ood, which is caused by decreasing of world oil 
prices. 
 As can be seen from the figure, the decreasing of national consumption from 100 indexed points 
in 2012 to 44 indexed points in 2014 affected in decreased of import of the Subject Good from 68 
indexed points to 11 indexed points at the same period. The demand of the Subject Good is 
expected to recover in the future and should the safeguard measure is removed if may trigger the increase of import of the Subject Good. 
TABLE 8: INDONESIA'S OIL AND GAS PRODUCTION 
Unit: Thousand barrels per day 
Source: The Ministry of Energy and Mi neral Resources Republic of Indonesia 
 
Based on the data from the Ministry of Energy  and Mineral Resources Republic of Indonesia  
(Table 8 above), the decline in the oil and gas production from 2012 to 2014 gives direct impact to 
a decline in the national consumption of the Subject Good. 
 No. Description  Years 
2012  2013 2014 
1. National Oil Production 861 825 818 
2. National Gas Production 1.260 1.214 1.224 G/SG/N/13/IDN/2 • G/L/1120 
 
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  3.5  Analysis of the Findings 
During the period of midterm review, the biggest decline in import volume occurred in 2013-2014, 
particularly in the period after the imposition of safeguard measure which was in the second semester of 2014 where the volume of imports decreased by 80% compared to the second 
semester of 2013. The decrease volume of import s was due to the imposition of safeguard duty 
and influenced by a temporary declining in demand (national consumption) due to the falling of oil prices. According to the result of the review, the Applicant's performance is still experiencing 
threat of serious injury which is indicated by the de crease of sales, production, capacity utilization, 
employment, and profits.  KPPI analyze that imports would potentially increase if safeguard duty is removed, with the 
following reasons: 
 
a. During 2012-2014, decline in national consum ption of the Subject Good is due to the 
decreasing of national oil and gas production. This decrease has an impact on the 
imports of the Subject Good which also showed the same pattern. 
b. The decreasing in national consumption greatly affected imports, while the domestic 
sales remain stable during the period of the review. 
c. The demand of the Subject Good is expected  to recover in the future, and should the 
safeguard measure is removed, it may trigger increase of import to fulfill the domestic 
demand. 
3.5.1  Assesment of the effect of the measures 
Based on the analysis above, it can be concluded that the safeguard duty was effective to decrease 
the volume of imports, even though there was a declining in the national consumption of the 
Subject Good. The safeguard duty expected to be  continued so that the Applicant could recover 
from the threat of serious injury and could continue their structural adjustment's programs.  
3.5.2  Assesment of the necessity to co ntinue the application of the measure 
Based on 3.5.1 above, the Investigating Authority recommend that the imposition of the safeguard 
duty is still necessary to allow further recovery of the domestic industry.  
4  CONCLUSION 
Based on the result of the Midterm Review, the investigating authority recommend that the 
imposition of safeguard duty is still necessary and the pace of liberalization remains unchanged. 
 
 
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: mailto:kppi@kemendag.go.id  
 
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