WORLD TRADE  
ORGANIZATION   
G/SG/N/8/IDN/10 
11 July 2011 
 (11-3396) 
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 
 
 
INDONESIA 
 
(Tarpaulins made from Synthetic Fibres apart from Awning and Sunblinds) 
   The following notification, dated 7 July 2011, is being circulated at the request of the 
Delegation of Indonesia. 
 
_______________ 
 
 
 In accordance with Article 12.1(b) of th e WTO Agreement on Safeguards, herewith the 
Republic of Indonesia notifies on the findings of  investigation concerning the importation of 
Tarpaulins made from Synthetic Fibres under HS code 6306.12.00.00, apart from Awning and 
Sunblinds, claimed by the domestic industry to be the cause of a serious injury.  
  The Republic of Indonesia invites Members having a substantial interest as exporters to the 
subject good to submit views as provided under Artic le 12.3 of the WTO Agreement on Safeguards.  
  A. BACKGROUND 
 On 16 March 2011, the Indonesian Olefin, Aromatic & Plastic Industry Association 
(INAplas) on behalf of the domestic industry filed an application requesting for the imposition of 
safeguards measure against imports of Ta rpaulins made from Synthetic Fibres under 
HS code 6306.12.00.00, apart from Awning and Sunblinds , claimed to be the cause of a serious injury 
experienced by the domestic industry. Based on the aforementioned application, the Indonesian 
Safeguards Committee (Komite Pengamanan Perdaga ngan Indonesia/KPPI) he reinafter referred as 
"the Investigating Authority", initiated an i nvestigation on 22 March 2011, after examining the 
application.  
 
 The initiation of the investigation was announ ced in Bisnis Indonesia daily newspaper on 
22 March 2011. The Republic of Indonesia also notified members of the WTO on 24 March 2011, and 
circulated by the WTO Secretariat on the 28 March 2011 (G/SG/N/6/IDN/13).   G/SG/N/8/IDN/10 
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  1. Subject Good  
 
 The coverage of product examined by the I nvestigating Authority is Tarpaulins made from 
Synthetic Fibres under HS code 6306.12.00.00, apar t from Awning and Sunblinds.  The general uses 
of the subject good are, covering and protection from na tures (wind, sunlight, rain, and soil), also for 
building a tent, covering goods carry by trucks, basic occupancy structure, covering building 
renovation, water tank protection, tarpaulins fence, c ontainer of rain, market stall, storage and foods 
drying, aquaculture fish, and other low cost advertising purposes (adve rtisement and banner). 
 2. Period of Investigation 
 
 The investigating period covers the calen dar year of 2007 until the calendar year 2010. 
 
3. The Applicant 
 (a) During the course of investigation, PT. Murn i Mapan Mandiri has withdrawn from being the 
Applicant. Meanwhile, PT. Politama Pakindo has extended support of the Application 
claiming that it has been experiencing a serious injury caused by increased volume of imports 
of the subject good.  
(b) Against the background of the above mentione d situation, the Investigating Authority 
regarded PT Unggul Karya Semesta as the "Applicant" and PT. Politama Pakindo as 
"Supporter of the Application". Consequently , the Investigating Authority focused its 
investigation not only on PT. Unggul Karya Semesta but also on PT. Politama Pakindo.  
4. Hearing 
 
 With a view to provide opportunities to importers, exporting country governments or 
representatives, and the Applicant to submit ev idence and comments, a hearing was held on 
13 June 2011. The Investigating Authority recei ved written comments and arguments from Importers 
Association of Indonesia (GINSI), Secretariat Ge neral of Indonesia Woven Polyolefin Manufactures 
Association (GIATPI), and Indonesian Olefin, Arom atic & Plastic Industry Association (INAplas). 
 
B. INFORMATION ON WHETHER THERE IS AN ABSOLUTE INCREASE IN 
IMPORTS OR AN INCREASE IN IMPORTS RELATIVE TO DOMESTIC 
PRODUCTION 
1. Increased Level of Imports 
 
 As provided in Table 1, the figures of the volume of imports of the subject good indicated a significant increase from year 2007 until 2010. In the y ear of 2008 there was a substantial increase of 
1,193% from 2007, i.e. 66,477 Kg in 2007 to 859,803 Kg in 2008. The import volume of the subject 
good further increased significantly by 95% in 2009 compared to 2008, and continued to increase by 168% in 2010.  
 
 In addition, the Investigating Authority also found that the import figures of the subject good 
during the period of January 2011 to March 2011 w as 2,226,746 Kg, an increase of 230% compared 
to the level of volume of imports in the same period of 2010.   G/SG/N/8/IDN/10 
 Page 3 
 
 
  Table 1:  Volume of Imports of the Subject Good 
 
Description Unit 2007 2008 2009 2010 
Imports Kg 66,477 859,803 1,674,670 4,494,583 
 Source:  Badan Pusat Statistik (BPS)  
 
2. Unforeseen Development  
  Prior to the period of investigation, the prospect of domestic industry of the product 
concerned was, in general, good.  During the peri od, the growth and demand of the product concerned 
was 10% in average every year, mirroring the growth in those industries using plastic materials such 
as food and beverages, and agricultural industries.   The growth was anticipated by the domestic 
industry of the subject good by increasing the cap acity and regenerating the industry concerned.  
However, the good prospect was hampered by a si gnificant increased volume of imports which have 
caused the domestic industry losing its market share in the domestic market.  The significant increase 
was mainly caused by the alteration of consumer’s  preference from domestic produced product to 
imported one, due to cheap price of imported subject good.  The shift of the preference has induced 
increase volume of imports. This situation w as not anticipated by the domestic industry.  
 C. EVIDENCE OF SERIOUS INJURY OR THREAT THEREOF CAUSED BY 
INCREASED IMPORTS 
 In order to investigate the claim of serious in jury by the Applicant and the Supporter of the 
Application, the Investigating Authority evaluated all data and information having a bearing on their 
situation.  The evaluation was made from the data an d information gathered fro m the results of on-site 
verification as well as from other related sources.  More over, in order to complete evidence of serious 
injury, the Investigating Authority also conducte d the same investigation and evaluation to the 
Supporter of the Application.   
 The following Table 2, contained data and info rmation of the situation of the Applicant and 
the Supporter of the Application, which is provided in indices due to confidentiality of the information concerned. G/SG/N/8/IDN/10 
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Table 2: Performance and Indicators of Serious Injury of The Applicant and The Supporter 
of the Application caused by the Increased Volume of Imports 
 
Description Unit Year 
2007 2008 2009 2010 
National 
Consumption  Index 100 94 90 95 
Volume of Imports Kg 66,477 859,803 1,674,670 4,494,583 
Market Share of 
the Applicant and 
the Supporter* % 51.43 49.30 41.31 34.81 
Market Share of 
other Domestic 
Industry** % 48.29 46.79 50.74 44.97 
Shares of Imports % 0.28 3.91 7.95 20.22 
Domestic Sales of 
Applicant and The 
Supporter Index 100 90 72 64 
Production of The 
Applicant and The 
Supporter Index 100 88 87,6 89,9 
Utilization 
Capacity of The 
Applicant and The 
Supporter* % 66.62 58.92 58.35 59.89 
Inventories of The 
Applicant and The 
Supporter Index 100 99 165 273 
Profit/Loss of The 
Applicant and The 
Supporter Index 100 27 (117) (194) 
Employment of 
The Applicant and 
The Supporter Index 100 94 94 94 
Productivity of 
The Applicant and 
The Supporter Index 100 93 93 93 
*  not an indexed figure 
**non-Applicant and non-Supporter of the Application 
  G/SG/N/8/IDN/10 
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   Based on data and information in Table 2, the Investigating Authority came to the following 
conclusion:  
 (a) There was a decreased of national consumpti on of the subject good in the year of 2008 
compared to 2007.  The national consumption continued to decrease in 2009 by 4 indexed 
points compared to 2008.  Despite the fact that  there was an increase of 5 indexed points in 
2010 compared to 2009, the total national consumption in 2010 was below of 2007.  
(b) From year 2007 until 2010, domestic sales of the Applicant and the Supporter of the 
Application continued to decrease from year to year.  The domestic sales of the Applicant and 
the Supporter of the Application was 100 indexe d points in 2007, declined to 90 indexed 
point in 2008, and continued to fall to 72 indexed point in 2009, and further reduced to 64 indexed point in 2010.   
(c) In the period of investigation, the market sh ares of the Applicant and the Supporter of the 
Application have decreased significantly from 51.43% in the year of 2007 to 49.30% in 2008, and continued to decrease to 41.31% in 2009 and to 34.81% in 2010. On the other hand, the 
market share of imports has increased conti nuously in the same period, with a significant 
increase of 20.22% in 2010 compared to 2007.  The market shares of other domestic industry 
also decreased from 50.74% in 2009 to 44.97% in 2010. 
(d) There was a decreased of production of the Appli cant and the Supporter of the Application in 
2008, 2009, and 2010 compared to 2007.  Alth ough there was a slight increase of production 
in 2010 compared to 2009 and 2008, the production in 2010 still below of 2007.  According 
to the investigation in this specific factor, th e Investigating Authority found that the small 
increase of production in 2010 was the result of  their efforts to improve efficiency.   
(e) Parallel to the decrease in domestic sales, market  shares, and production of the Applicant and 
Supporter of the Application, their utilization capacity was also decreased continuously from 
the year 2007 until 2009, which were 66.62% in year 2007 to 58.92% in year 2008 and 
reached a level of 58.35% in year 2009.  However, in year 2010 the utilization capacity 
increased to 59.89% in line with th e increased of production in year 2010. 
(f) The attempt of the Applicant and the Supporte r of the Application to increase production, 
while domestic sales continue to decrease and th e market shares continue to shrink, resulted 
in increase of inventories from 100 indexed poi nts in year 2007 to 273 indexed points in year 
2010.  
(g) As the result of a combination of declined in sales, market shares, production, and increase in 
inventories, there was a decreased of profits of the Applicant and the Supporter of the Application in 2007 to 2008 from 100 indexed poin ts to 27 indexed points respectively.  In 
the year of 2009 the financial situation of th e Applicant and the Supporter of the Application 
has worsen with a big financial losses of 117 indexed points, and of 194 indexed points in 
2010.  A significant increase in inventories especially in the year of 2009 and 2010, 
contributed to financial burden to the Applican t and the Supporter of the Application because 
of the expenses related to the mainte nance of inventories concerned.  
(h) Although, the Applicant and the Supporter of th e Application had suffered from big financial 
losses in year 2009 to 2010, they made a serious effort to prevent layoffs.  Consequently, the 
number of employees in 2009 and 2010 were the same level of 2008, which is smaller by 
6 indexed points compared to the number of employees in 2007.  G/SG/N/8/IDN/10 
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  (i) Despite the fact that the Applicant and the Supporter of the Application experienced a 
reduction of profits in 2008, and significan t financial losses in 2009 and 2010, the 
productivity remain stable because the employees we re kept at the same number in year 2008, 
2009, and 2010.  
 Based on the information in Table 2, the Inves tigating Authority conclude d that in addition to 
increase of inventories, the Applicant and the Sup porter of the Application have been experiencing 
significant negative trends in domestic sales, market shares, production, utilization capacity, 
productivity, and the employment, during the peri od investigation, which has caused significant 
financial losses in the year of 2009 and 2010.  
 
D. CAUSAL LINK 
 Based on the findings as elaborated in Point C,  the Investigating Authority concluded that 
there was strong linkage between the loss of market shares of the Applicant and the Supporter of the 
Application, and the increased of market shares of imports, because increased of market shares of imports equal to the total decrease of market sh ares of the Applicant and the Supporter of the 
Application, as well as of other domestic industry.  In  other words, the serious injury of the domestic 
industry caused by increase of volume of imports of the subject good, where the market shares of the 
Applicant and the Supporter of the Application was taken by imports. 
 
E. OTHER FACTORS THAT MAY CONTRIBUTE TO INJURY 
 The Investigating Authority has also analy sed for the known factors other than increased 
volume of imports that may cause injury to the Applicant and the Supporter of the Application.  The 
Investigating Authority findings are as follows:  1. The Capacity of Production  
  The Investigating Authority examined the production capacity of the Applicant and the 
Supporter of the Application, basically sufficient to supply the national consumption of the subject 
good.  However, the Investigating Authority found that their production capacity was not fully 
utilized due to continuous reductio n in domestic sales.  Thus, it is concluded that the production 
capacity is not a factor that contribute to the injury of the Applicant and the Supporter of the Application, but the volume of imports which c ontribute to their inability to utilize the production 
capacity fully. 
 
2. Competition with other domestic industries 
 
 The Investigating Authority came to a conclusion that during the period of investigation there was no changes in the condition of the competition between the Applicant and the Supporter of the 
Application and other domestic industries.  It was based on the data of market shares of the entire 
domestic industries which tend to decline, while the market shares of imports increasing.  Thus, the 
competition between the Applicant and the Suppor ter of the Application with other domestic 
industries did not cause a serious injury.   
 
 The above mentioned findings proved that othe r factors known to the Investigating Authority 
have not contributed to the serious injury of the Applicant and the Supporter of the Application.   
  G/SG/N/8/IDN/10 
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  F. CONCLUSION AND RECOMMENDATION 
1. In view of the findings cont ained in Point C, and D, the I nvestigating Authority reached the 
following conclusion:   
(a) There was a significant increase of volume of imports of the subject good during the period 
investigated i.e. the calendar year of 2007 until 2010.  
(b) The Applicant and the Supporter of the Applicati on suffered a serious injury as indicated in a 
decline of domestic sales, market shares, production, capacity utilization, productivity, 
employment, increase in inventories, and financial losses.  
(c) There is a causal link between serious injury of the domestic industry as pointed out in 
paragraph b. caused by increased volume of im ports of the subject good as pointed out in 
paragraph a.  
2. On the basis of the findings that there was a causal link between the serious injury of the 
Applicant and the Supporter of the Application and increased volume of imports of the subject good, 
the Investigating Authority will recommend to the Government of the Republic of Indonesia to 
impose a safeguards measure in order to provide re medy to the serious injury and room for the 
Applicant and the Supporter of the Application to make adjustments.     
3. It is recommended that the application of the safeguards measure on the importation of 
Tarpaulins made from Synthetic Fibres under HS code 6306.12.00.00, apart from Awning and Sunblinds, will be in the form of specific import duty. It is also recommended that the safeguards 
measure to be imposed for the period of 3 (three) years and gradually liberalized, with the following 
timetable:  
Table 3: Recommended Timetable of th e imposition of the Safeguards duty 
 
Period Specific Duty 
Year 1 Rp. 13,643 per Kilogram 
Year 2 Rp. 12,643 per Kilogram 
Year 3 Rp. 11,643 per Kilogram 
 
4. Consistent with Article 9.1 WTO Agreement on Safeguards, the safeguards measure shall not 
be applied against the subject good originating from developing countries with a market share of less 
than 3 per cent of total volume imports or that de veloping country Members with less than 3 per cent 
import share collectively account for not more than 9 per cent of the total volume imports 
4,494,583 Kg.  G/SG/N/8/IDN/10 
Page 8 
 
 
  5. The developing countries to be excluded from th e measure are as shown in the following list: 
 
List of Developing Countries Excluded from the Measure 
 
No COUNTRY No COUNTRY 
1 Albania 40 The Gambia 
2 Angola 41 Georgia 
3 Antigua, and Barbuda 42 Ghana 
4 Argentina 43 Grenada 
5 Armenia 44 Guatemala 
6 Bahrain, Kingdom of 45 Guinea 
7 Bangladesh 46 Guinea Bissau 
8 Barbados 47 Guyana 
9 Belize 48 Haiti 
10 Benin 49 Honduras 
11 Bolivia, Plurinational State of  50 Hong Kong, China 
12 Botswana 51 India 
13 Brazil 52 Jamaica 
14 Brunei Darussalam 53 Jordan 
15 Burkina Faso 54 Kenya 
16 Burundi 55 Kuwait 
17 Cambodia 56 Kyrgyz Republic 
18 Cameroon 57 Lesotho 
19 Cape Verde 58 Macao, China 
20 Central African Republic 59 Madagascar 
21 Chad 60 Malawi 
22 Chile 61 Malaysia 
23 Chinese Taipei 62 Mali 
24 Colombia 63 Mauritania 
25 Congo 64 Maldives 
26 Costa Rica 65 Mauritius 
27 Côte d'Ivoire 66 Mexico 
28 Croatia 67 Moldova 
29 Cuba 68 Mongolia 
30 Democratic Republic of the Congo 69 Morocco 
31 Djibouti 70 Mozambique 
32 Dominica 71 Myanmar 
33 Dominican Republic 72 Namibia 
34 Ecuador 73 Nepal 
35 Egypt 74 Nicaragua 
36 El Salvador 75 Niger 
37 Fiji 76 Nigeria 
38 Former Yugoslav Republic of 
Macedonia (FYROM) 77 Oman 
39 Gabon 78 Pakistan  G/SG/N/8/IDN/10 
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  No COUNTRY No COUNTRY 
79 Panama 91 Sierra Leone 
80 Papua New Guinea 92 Singapore 
81 Paraguay 93 Solomon Islands 
82 Peru 94 South Africa 
83 Philippines 95 Sri Lanka 
84 Qatar 96 Suriname 
85 Rwanda 97 Swaziland 
86 Saint Kitts and Nevis 98 Tanzania 
87 Saint Lucia 99 Thailand 
88 Saint Vincent & the Grenadines 100 Togo 
89 Saudi Arabia, Kingdom of 101 Tonga 
90 Senegal 102 Trinidad and Tobago 
81 Sierra Leone 103 Tunisia 
82 Peru 104 Uganda 
83 Philippines 105 Ukraine 
84 Qatar 106 United Arab Emirates 
85 Rwanda 107 Uruguay 
86 Saint Kitts and Nevis 108 Ven ezuela, Bolivarian Republic of  
87 Saint Lucia 109 Zambia 
88 Saint Vincent & the Grenadines 110 Zimbabwe 
89 Saudi Arabia, Kingdom of   
90 Senegal   
 
 
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