G/TRIMS/W/131  
 
14 October 2013  
(13-5589)  Page: 1/2  
Committee on Trade-Related Investment Measures  Original: English  
 
 CERTAIN MEASURES ADDRESSING LOCAL CONTENT IN INVESTMENT IN THE 
TELECOMMUNICATIONS SECTOR 
REPLIES FROM INDONESIA TO QUESTIONS1  
FROM JAPAN  
The following communication, dated 4 October 2013, is being circulated at the request of the 
Delegation of Indonesia. 
 
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Questions 
 Japan expresses its appreciation for Indonesi a's efforts to provide replies to Japan's 
questions in the document G/TRIMS/W/96. On  the other hand, Japan still has a point to 
clarify on the coverage of the "Government Procurement" under the relevant laws or regulations in Indonesia. 
 
Indonesia explains in its reply to follow-up  questions from Japan (G/TRIMS/W/96) that 
if the funds to finance projects come from  the government, any procurement made by 
service operators who win such projects is  considered "government procurement".  
 
As was mentioned in its previous questi ons in the document G/TRIMS/W/78, Japan 
considers that the sole fact that the projec ts are funded by the government and the 
government selects operator(s) through a bi dding process is not sufficient to regard 
such entities as government institutions or  those under the control of the government.  
 
Japan recognizes that if "service obligatio n operator(s)" carrying out procurement are 
the government itself or entities under the control of the government, such procurement 
would be considered as cases of "governm ent procurement". In other words, if the 
decision regarding the procurement is made  independently from the government, such 
procurement should be regarded as a pr ivate contract and not as governmental 
procurement. Therefore it is still not clear for Japan why Indonesia regards the 
procurement by the service obligation operat ors on telecommunications as government 
procurement. Does Indonesia regard such oper ators as government agencies or entities 
under the control of the government?  Japan wo uld like to know Indonesia's view in this 
regard. 
 
Further, in the context of Article III 8(a)  of GATT 1994, procurement by government 
agencies of products purchased "for go vernmental purposes" is regarded as 
"government procurement". Japan recognizes that "for governmental purposes" does 
not simply mean for the aim of government but means for government use, consumption 
or benefit. In this regard, procurement by a government which is intended for 
commercial activities should not be rega rded as "government procurement". Japan 
would like to know who uses, consumes and benefits from such procurement.  
                                               
1 G/TRIMS/W/104.   G/TRIMS/W/131 
 
- 2 - 
 
  Reply 
 
The Presidential Decree No. 54/2010 defines government procurement as an activity to obtain goods/services by Ministries / Institutions / Regional Government or any procurement of 
goods/services financed by the State budget or government loan or grant constitutes government 
procurement.  
The aim of the Universal Service telecommunication Obligation project is to provide telephone 
services in under-served/un-served areas. It is government‘s project to open isolation. Any people/institution living or general public in the area will benefit from such projects.   
 
 
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