WORLD TRADE  
ORGANIZATION  G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 
G/SG/N/11/IDN/2 
9 October 2009 
 (09-4884) 
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 PURSUANT TO ARTICLE 12.1(C) 
OF THE AGREEMENT ON SAFEGUARDS 
 
NOTIFICATION PURSUANT TO ARTICLE 9, FOOTNOTE 2  
OF THE AGREEMENT ON SAFEGUARDS  
 
INDONESIA 
 
(Dextrose Monohydrate- DMH)
 
   The following communication, dated 18 September 2009, is being circulated at the request of 
the Delegation of Indonesia. 
 
______________  
 
 
 Pursuant to article 12.1 (c) of the WTO Ag reement on Safeguards, Indonesia notifies that 
Ministerial of Finance decree No. 133/PMK. 0.11/2009 dated 24 August 2009 was published on 
7 September 2009 in the Indonesian news paper (Bis nis Indonesia) enacting the adoption of definitive 
safeguard measures on import of Dextrose Monohydrate – DMH for a period of (3) years.    
 Annexed hereto a copy of Ministerial of  Finance decree number No. 133/PMK.0.11/2009 
dated 24 August 2009 and Indonesian news paper (Bisnis Indonesia dated 7 September 2009).   
  It is requested that this notification under Ar ticle 12.1 (C) of the Agreement on Safeguards be 
brought to the notice of Members.    G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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  A. B
ACKGROUND  
1. On 9 April 2008 the Dextrose Monohydrate pr oducer PT Sorini Agro Asia Corp filed a 
petition to Indonesian Safeguard Committee (KPPI) re questing for a safeguard measure from various 
countries for 3 years.   
 2. The petitioner claimed that the domestic indus try has been facing the serious injury caused 
from imports.    
 This claim is based on information covering the period 2004-2007 which shows that imports 
increased significantly at price cond itions that resulted in serious injury to the domestic industry.   
 
3. Date of the initiation 
  After examining the request made by the petitioner the KPPI decided to initiate an 
investigation on 14 Mei 2008 (Bisnis Indonesia News  Paper) and individual notices were sent to all 
known interested parties and concerned government agencies and private entities.    
4. Product subject to Investigation 
  "Dextrose Monohydrate or Glucose", under HS code 1702.30.10.00;  and 1702.40.00.00.   
 
5. Period of investigation 
 
 The period of investigation covers 4 years from 2004 to 2007.   
 
6. Standing of the petitioner 
 
 There were 3 producers of Dextrose Monohydrate in Indonesia in 2006. When the petition was filed the petitioner was the only active produc er which accounts for 100% of Total National 
Production in 2008.   7. Hearing 
 
 Pursuant to Article 3 of the Agreement on Safeguards, interested parties were given the 
opportunity to submit their views on the factual findings.  The hearing was held on 23 July 2008 at the 
Office of the Ministry of Trade, Indonesia, and in attendance were representatives from the petitioner, 
China Chamber of Commerce of Medicines & Hea lth Products Importers & Exporters (CCCMHPIE), 
Delegation of European Commission to Indon esia, Ministry of International Trade and 
Industry (MITI), Malaysia and Department  of Foreign Trade (DFT), Thailand.   G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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  B. E
VIDENCE THAT THE SAFEGUARD MEASURE TO BE NECESSARY TO PREVENT OR REMEDY 
SERIOUS INJURY OR THREAT OF SERIOUS INJU RY CAUSED BY INCREASED IMPORTS AND THAT 
THE INDUSTRY CONCERNED IS ADJUSTING  
Development of Imports 
 
 Imports (Volume)  
Import (Volume) 
 
Year Kg 
2004 13.355.420 
2005 12.953.945 
2006 12.249.411 
2007 21.278.372 
 Sources:   Central Agency for Statistics of Indonesia 
 
 The table above shows a sudden-sharp incr ease of imports in 2007 which represents a 
significant market share of the subject goods in Indonesia.   
 
Import by Major Supplying Country 
 
Year China France Korea, 
Rep. Of Italy Others Total 
2004 1.990.752 3.530.048 1.387.905 811.269 6.884.646 13.355.420 
2005 2.249.730 3.724.324 856.702 1.107.517 5.015.672 12.953.945 
2006 5.580.867 4.307.343 750.943 536.925 1.073.333 12.249.411 
2007 12.860.872 5.404.285 819.148 1.422.367 771.700 21.278.372 
 Source:  Central Agency for Statistics of Indonesia 
 
 As can be seen, China is the main supplie r of DMH with 12,860.872 MT in 2007 which 
accounts for 60.44 per cent share of total imports.  France is the second main supplier of DMH with 
5,404.285 MT in 2007 or 25.40 per cent share of to tal imports, followed by Italy with 1,422.367 MT 
or 6.68 per cent share of total imports and then followed by Republic of Korea with 819.148 MT or 
3.85 per cent share of total imports.    
Situation of Domestic Industry (indices unless otherwise stated) 
 
No Parameter Unit 2004 2005 2006 2007 
1 Productions ton 
(index) 100 103 148 174 
2 Utilization 
capacity % 100 89 96 90 
3 Domestic sales:      
 Volume ton 
(index) 100 113 117 146 
4 Inventory ton 
(index) 100 145 303 370 G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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  No Parameter Unit 2004 2005 2006 2007 
5 Loss Mil IDR 
(index) 100 (135) (142) (294) 
6 Employment worker 100 112 137 133 
7 Productivity ton/ 
worker 100 108 49 71 
8 Wages Mil IDR 
(index) 100 114 142  
9 Market Share  100 111 118 94 
10 Total import ton 13.355.420 12.953.945 12.249.411 21.278.372 
 Sources:   Petitioner and Central Agency for Statistics of Indonesia 
 
 As can be seen, the surge of import IP has resulted in a significant increase in stock.   
  The rise in stock in 2007 is due to the in crease in production as it w as reasonable for domestic 
industry to expect an increase in domestic sales as consumption rose over 2006-2007.   
  Losses in 2005 to 2007 were mainly due to surge of imports and domestic prices were 
undercut throughout the same periods examined by between 11 per cent and 22 per cent.   
 
Causation analysis 
 
 Imports has increased in the period under investigation from 13,355.42 tons in the year 2004 to 21,278.37 tons in the year 2007 which means 59.32 per cent increase in the level of imports.  On the other hand in the period 2006-2007 the market sh are of imports grew from 68 per cent to 75 per 
cent, whilst the market share of the domestic i ndustry fell from 32 per cent to 25 per cent.   
 
 Based on a comparison of average ex-works prices charged by the domestic producer and by exporting producers to the Indonesian importers (sum  of CIF price, customs duty and other costs), 
domestic prices were undercut 22 per cent.  The fa ll in prices caused profitability fell 52 per cent 
in 2007. 
 
Other Factors  
 
 Other factors have been examined such as the technology used by the domestic industry.  The 
technology applied is standard for the Industry in ge neral and the use of raw materials in the period 
concerned.  It is therefore concluded that the ser ious injury results from the surge in imports.   
 
Unforeseen Development 
 
 The investigation was conducted in accordan ce with the requirements of Indonesian 
Legislation on Safeguard Measures and the procedures prescribed by the WTO Agreement on 
Safeguards and Article XIX of GATT 1994, i.e.  determination of existence of unforeseen 
developments and effect of obligations, includi ng tariff concessions which led to the increased 
imports and resulting injury to the domestic producers.     In the past, the domestic industry in Indonesia was protected by a bound tariff of 40 per cent covering HS 1702.30.10.00 and 1702.30.91.00 (based on tariff classi fication 2007 HS code have been 
changed to 1702.30.10.00;  and 1702.40.00.00) whic h was then reduced to a 5 per cent rate at the G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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  beginning of 2007.  This sharp decline in tariff coul d not have been anticipated and it has resulted in 
sharp competition between domestic producers and thir d country suppliers.  This situation could not 
have been predicted by the petiti oner who had geared capacity to m eet increases in domestic demand 
which was instead taken by the surge in imports.   
 
Adjustment Plan 
 
 The domestic industry has submitted the following adjustment program for the purpose of improving the competitiveness in the global market conditions.  The program includes:   
 
• Reducing of the production costs 
• Developing cassava cultivation in order to gain maximum output 
• Increased of production utilization 
• Improvement of  chain distribution   
• Focus on increasing energy efficien cy and labor productivity  
 
Expected timetable for progressive liberalization of the measure 
 
 In order to induce adjustment, the tariff level will be subject to liberalization on a regular 
basis following its imposition, thereby ensuring that  there is a strong incentive for domestic producer 
to progressively undertake the necessary restructurin g and adjustment.  The timetable for progressive 
liberalization of the proposed measure is shown below.      The measure is applied for 3 years from 24 August 2009 to 23 August 2012.   
 
 The measure will be subject to liberalization.  The timetable for progressive liberalization is 
shown below:    
Period Fixed Duty 
1st Year IDR 2,700/kg 
2nd Year IDR 2,400/kg 
3rd Year IDR 2,100/kg 
 
 Below is the list of Developing Countries ex cluded from the measures as they exported less 
than 3 per cent of total imports to Indonesia (A rticle 9.1 of the Agreement on Safeguards).   
  G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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Afghanistan 
Albania 
Algeria 
American Samoa Angola  Anguilla Antigua and Barbuda 
Antilles (Netherlands) 
Argentina Armenia Aruba Ascension 
Austral Islands 
Azerbaijan Bahamas Bahrain Bangladesh Barbados 
Belarus 
Belize Benin Bermuda Bhutan 
Bolivia 
Bosnia and Herzegovina Botswana Bouvet Islands Brazil 
British Antarctic Territories 
British Indian Ocean Territory British Virgin Islands Brunei Darussalam Burkina Faso 
Burundi 
Cambodia Cameroon Canary Islands Cape Verde  Caroline Islands 
Cayman Islands 
Central African Republic Ceuta and Mellia Chad Heard Island and McDonald Island 
Honduras 
Hong Kong Hungary India Iran, Islamic Republic of Chile  
Chinese Taipei 
Christmas Islands 
Cocos Islands Colombia Comoros Congo, Democratic Republic of the 
Congo, Republic of 
Cook Islands Costa Rica Cote d’Ivoire Croatia 
Cuba 
Curacao Cyprus Djibouti Dominica Dominican Republic 
Ecuador 
Egypt El Salvador Equatorial Guinea Eritrea 
Estonia 
Ethiopia Falkland Islands and Dependencies Fiji French Polynesia 
French Southern and Antarctic 
Territories Gabon Gambia Georgia 
Ghana 
Gibraltar Gilbert and Ellice Islands Greenland Grenada Guam 
Guatemala 
Guinea Guinea-Bissau Guyana Haiti 
New Caledonia and Dependencies 
Nicaragua Niger Nigeria Niue G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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  Iraq 
Israel Jamaica 
Jordan 
Kazakhstan Kenya Kiribati Korea, Democratic People’s  Republic of 
Korea, Republic of 
Kuwait Kyrgyzstan Lao People’s Democratic Republic of Latvia 
Lebanon 
Lesotho Liberia Libyan Arab Jamaririya Lithuania 
Macao 
Macedonia (The Former Yugoslav Republic of) Madagascar Malawi Maldives 
Mali 
Malta Marianas Islands (North) Marshall Islands Mauritania 
Mauritius 
Mayotte Mexico Micronesia, Federated States of Moldova, Republic of 
Mongolia 
Montserrat Morocco Mozambique Myanmar Namibia 
Nauru 
Nepal Tonga Trinidad and Tobago Tristan de Cuhna 
Tunisia 
Turkey Turkmenistan Turks and Caicos Islands Tuvalu Norfolk Island 
Oman Pakistan 
Palau 
Panama Papua New Guinea Paraguay Peru 
Philippines 
Pitcairn Islands Qatar Romania Russian Federation and Dependencies 
Rwanda 
Saint  Helena and Dependencies Saint Kitts and Nevis Saint Lucia Saint Martin 
Saint Pierre and Miquelon 
Saint Vincent and Grenadines Samoa Sao  Tome and Principe Saudi Arabia Senegal 
Seychelles 
Sierra Leone Singapore Slovenia Solomon Islands  
Somalia 
South Africa Southern Sandwich Islands and Dependencies Sri Lanka 
Sudan 
Suriname Swaziland Syrian Arab Republic Tajikistan Tanzania, United Republic of 
Timor-Leste 
Togo Tokelau Islands Uruguay Uzbekistan 
Vanuatu 
Venezuela  Vietnam Virgin Islands (United Kingdom) Virgin Islands (United States) G/SG/N/8/IDN/2 
G/SG/N/10/IDN/2 G/SG/N/11/IDN/2 
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  Uganda 
Ukraine United Arab Emirates 
United States Minor Outlying Islands 
 Wallis and Futuna Islands 
Western Sahara Yemen 
Zambia 
Zimbabwe 
   
__________