. /.  WORLD TRADE  
ORGANIZATION   
G/TRIMS/W/108 
20 September 2012 
 (12-5059) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
INDONESIA  CERTAIN LOCAL CONTENT PROVISIONS IN  
THE ENERGY SECTOR (MINING, OIL AND GAS) 
 
Follow-Up Questions from the UNITED STATES 
   The following communication, dated 18 September 2012, is being circulated at the request of the Delegation of the United States.  
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 The United States appreciates the res ponses Indonesia has provides in document 
G/TRIMS/W/100 (6 July 2012) in answer to questions posed by the United States and 
the European Union in document G/TRIMS/W/88 (22 September 2011).  We note that this exchange 
followed responses Indonesia provided in doc uments G/TRIMS/W/74 (6 August 2010) and 
G/TRIMS/W/79 (22 December 2010) in answer to questions posed by the United States and the 
European Union in document G/TRIMS/W/70 (9 October 2009).   This exchange of information notwithstanding,  the United States continues to have a number 
of questions about policies applicable to the mining and to the oil and gas sectors. 
  In response to a question from the United States about the meaning of the term "prioritize" in 
the 2009 Mining Law and Government Regulation No. 23 Year 2010, Indonesia explained that the term "encourages companies to give preference to  domestic goods and services provided that they are 
available in the Indonesia market and meet the qua lity and post-sales service standards, as well as 
having their sustainability of supply and timely di stribution warranted" and that "[i]nvestors are 
considered to have prioritized the use of those goods  and services when they have given preference to 
domestic goods, equipments, services, raw material s and/or components as well as imported products 
sold in Indonesia."  
QUESTION 1:   In determining the availability of the product, are investors permitted to 
consider the price at which such products may be available? 
 
QUESTION 2:   Indonesia did not respond to our qu estion about "who determines whether 
local goods and services are available, and whether a foreign investor has "prioritized" use of 
those goods and service."  Please describe the process for making the availability 
determination.  
  In response to a question from the United States concerning law No. 4/2009, Indonesia explained that the implementing regul ations of this law, specifically Minister of Energy and Mineral 
Resources Decree No. 34/2009 "require a minimum percentage of mining and coal production be 
prioritized for domestic needs at a benchmark price in accordance with the generally effective price in 
the international market." G/TRIMS/W/108 
Page 2  
 
  QUESTION 3:   How does Indonesia define the term "p rioritize" in decree No. 34/2009?  Are 
there any circumstances in which an investor may allocate less than the minimum percentage 
for domestic use in Indonesia? 
 
QUESTION 4:   Indonesia explained that the Minister for Energy and Mineral Resources 
establishes an annual decision on the domestic need and the minimum sale requirement 
percentage for mineral and coal.  Please describ e the process for reaching this decision?  Will 
investors be given an opportunity to provide in formation relevant to this decision?  Will a 
draft of the decision be made available for comment? 
 
QUESTION 5:   Please describe the process for calcula ting the "benchmark price."  What 
does Indonesia mean by the "generally effective price in the international market?"  How does 
Indonesia identify such a price? 
  In response to question from the United Stat es regarding Presidential Regulation No. 35/2004, 
which regulates contractor activities in the upstrea m oil and gas sector, regarding requirements to 
"prioritize" the use of local goods and services I ndonesia explained that the regulation "does not 
differentiate between the implementation of prefer ence to domestic goods/services in the mineral and 
coal mining sector and that in the oil and gas sector." 
 
QUESTION 6:   Does Indonesia's answer mean that the requirements to provide preferences 
to domestic goods and services and the process fo r determining whether that requirement is 
fulfilled are the same for the mineral and co al mining sector and the oil and gas sector?  
Please describe any differences. 
 
QUESTION 7:   What is the APDN Book?  Who writes and published this book?  Are there 
similar books cataloging domestically available goods for sectors other than oil and gas?  
How frequently is the book updated?  
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