WORLD TRADE  
ORGANIZATION   
G/SG/N/8/IDN/13 
G/SG/N/10/IDN/13 
5 March 2012 
 (12-1229) 
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 OF A PROPOSAL TO  
IMPOSE A MEASURE 
 
INDONESIA 
 
(Mackerel) 
 
 
 The following notification, dated 1 March 2012, is being circulated at the request of the 
Delegation of Indonesia.  
_______________ 
 
 
 As required under Article 12.1(b) of the WTO Agreement on Safeguards, herewith the 
Republic of Indonesia submits a notification regardi ng the findings of investigation on the importation 
of "mackerel under HS Codes 0302.64.00.00 and 0303.74 .00.00" claimed to be the cause of a serious 
injury to the domestic producers.   A. GENERAL BACKGROUND  
1. As notified in the WTO document G/SG/N/6 /IDN/18 circulated on 8 February 2012, the 
Ministry of Marine Affairs and Fisheries of th e Republic of Indonesia on behalf of businesses 
related to fisheries hereinafter referred as "t he Applicant", requesting for the imposition of 
safeguard measures against imports of "mackerel under HS Codes 0302.64.00.00 and 
0303.74.00.00", claimed to be the cause of a serious injury to the Applicant.  
 
After examining the abovementioned appli cation, the Indonesian Safeguards Committee 
(Komite Pengamanan Perdagangan Indonesia/KPPI ) hereinafter referred as "the Investigating 
Authority", found that there was sufficient prima facie evidence to initiate an investigation.  
On the basis of the finding the Investigating Au thority decided to initiate the investigation on 
27 January 2012.  
 
On the same date, the Investigating Authority announced the initiation of the investigation in 
the Bisnis Indonesia newspaper and Press re lease of the Ministry of Trade of the 
Republic of Indonesia.  The Government of the Republic of Indonesia also submitted 
notification to the WTO Committee on Safeguards,  which was circulated on 8 February 2012 
(G/SG/N/6/IDN/18). 
 G/SG/N/8/IDN/13 
G/SG/N/10/IDN/13 
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  2. Subject Good 
 
Mackerel, excluding fillets, livers and roes, fr esh or chilled, or frozen under HS Codes 
0302.64.00.00 and 0303.74.00.00. 
  
3. Period of Investigation 
  The period of investigation covers the ca lendar year of 2007 until November 2011.  
 
4. Views and Comments by Interested Parties   
In accordance with Article 3.1 of the WTO Agreement on Safeguards, during the process of 
investigation all interested parties such as importers, exporting country governments or 
representatives, and the Applicant, were gi ven opportunity to express their views and 
comments related to the investigation.  
 
The investigating authority received a question concerning the import share of Malaysia.  In 
this regard, the Investigating Authority has responded to the question.  
 
A Hearing will also be conducted by the Investig ating Authority in order to provide additional 
opportunities to the interested parties to make further comments or arguments related to this 
notification and other issues of the investigation.  
 B. DATA OF INCREASED IMPORTS  
 1. Increased Volume of Imports 
 
As shown in Table 1, the volume of imports of the Subject Good in absolute term has 
increased significantly during the Period of Investigation, by 35.02% from 25,029,686 kg in 
2007 to 86,497,243 kg in 2011.  The imports r eached the highest figures in 2008 where the 
increase was 50,691,304 kg or equal to 102.52% compared to those in 2007.  There were 
further increased in 2009 to 91,137,142 kg or  79.79% compared to 2008.  The imports 
continued to increase by 8.25% or 98,659,561 kg in 2010 compared to 2009.  From January to 
November 2011, the import figures was 86,497,243 kg and it is predicted that until 
December 2011 the number will be approximately same with 2010. 
 
Table 1: Volume of Imports of HS. 0302.64.00.00 and 0303.74.00.00 
 
Description Unit 2007 2008 2009 2010 2011 
(Jan-Nov) 
Imports Kg 25,029,686 50,691,304 91,137,142 98,659,561 86,497,243 
 Source:   Statistic of Indonesia (Badan Pusat Statistik/BPS). 
 
From the above evidence, the Investigating Au thority concluded that the volume of imports 
increased significantly in absolute te rm during the investigation period.  
 
2. Unforeseen Development  
 
During the last 10 (ten) years the Government of  the Republic of Indonesia engaged in several 
Free Trade Agreements with some trading partners, such as  Indonesia-Japan Economic 
Partnership Agreement (IJEPA), ASEAN-FTA, ASEAN-CHINA FTA, ASEAN-KOREA  G/SG/N/8/IDN/13 
 G/SG/N/10/IDN/13 
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  FTA.  The commitments made in the Agreem ents to reduce or eliminate import duties 
resulting in a more open domestic market of  Indonesia to imported products, including the 
Subject Good, from those countries.  This situation creates tougher competition for domestic 
fishermen/fishery businesses including in the area of the Subject Good.  
 
This condition was unforeseen when the Government  of the Republic of Indonesia made the 
commitment to liberalize the fishery sector.  
 C. EVIDENCE OF INJURY CAUSED BY INCREASED IMPORTS  
1. In order to find evidence whether the Applican t experienced a serious injury as it claimed, the 
Investigating Authority examined all data a nd information relevant to the Applicant's 
condition.  In addition, the Investigating Aut hority also conducted on-site verifications to 
specific production sites of the Subject Good, such as Medan, Indramayu, Pekalongan, and 
Banyuwangi.  
 2. As the result of the above mentioned exam ination, the Investigating Authority found the 
followings:  
 
Table 2:  The Applicant's Performance 
 
Description Unit Year 
2007  2008 2009 2010 2011 
(Jan-Nov) 
Production  Indices 100 109 103 91 83 
Domestic Sales Indices 100 109 103 91 83 
Production Capacity  Indices 100 114 129 143 157 
Capacity Utilization  Indices 100 95 80 64 53 
Inventories Indices - - - - - 
Profit and Losses Indices 100 15 18 (84) (184) 
Employment Indices 100 107 99 86 78 
Productivity Indices 100 102 104 106 106 
  Source:   As verified by the Investigating Authority. 
 
 a. Based on data and information in Table 2, it is concluded that: 
 
i. Although there was an increased in 2008 by 9%, the trend of the Applicant's 
domestic sales decreased by 5.36% during the investigation period.  In 2009, 
the Applicant's domestic sales dropped by 5% from 109 indexed points 
in 2008 to 103 indexed points.  The sales continued to decrease to 91 indexed 
points in 2010 or in other words declined by 12% compared to 2009.  The 
decrease was below the Applicant's dom estic sales in 2007.  This negative 
development continued in 2011 wher e the sales further decreased to 
83 indexed points. 
 
ii. Due to the nature of the Subject Good which is perishable, all the production 
is sold.  Therefore, there is no inventory of the Subject Good.  
 G/SG/N/8/IDN/13 
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  iii. As far as the Applicant's production capacity is concerned there was a 
continuous increased in terms of fish ing ground and fishing equipments such 
as fishing boat.  During the period of investigation, the production capacity 
increased approximately by 14% each year. 
 
iv. However, the capacity utilization of the Applicant continued to decrease 
from 100 indexed points in 2007 to 95 i ndexed points in 2008, to 80 indexed 
points in 2009.  The utilization of th e capacity further declined in 2010 and 
2011, i.e. 64 indexed points and 53 indexed points respectively.  
 v. Concerning the Applicant's financial situation, it is found that there was a 
decrease of profit from 100 indexed points in 2007 to 18 indexed points 
in 2009, which is 81.98% drop of profit .  The financial situation was worsen 
due to the fact that the Applicant e xperienced losses of 84 indexed points 
in 2010 and 184 indexed points losses in 2011.  
 vi. Even though the Applicant's employment in the year 2008 had increased 
by 7% compared to 2007 i.e. from 100 indexed points to 107 indexed points, 
the Applicant's employment decreased from 99 indexed points in 2009 to 86 indexed points in 2010, and further decreased to 78 indexed points 
in 2011. 
 vii. Throughout the period of investigation, the productivity of the Applicant 
increased from 100 indexed points in 2007 to 106 indexed points in 2011.  In 
line with the increase of the number of employment in 2008 compared to 
2007, the productivity of the Applicant also increased.  The productivity 
continued to increase in 2009, 2010, and 2011, although there was a decreased in number of employment during the same period.  The increased 
of productivity in the last 3 years of the investigation period was the result of 
extended fishing period of time cove ring the expansion of fishing ground. 
 
Table 3: The National Consumption, Volume of  Imports, Market Share of the Applicant,  
Market Share of Non Applicant Domestic Industry, and Market Share of Imports 
 
Description Unit Year 
2007 2008 2009 2010 2011 
(Jan-Nov) 
National Consumption Indices 100 114 118 109 98 
Volume of Imports Kg 25,029,686 50,691,304 91,137,142 98,659,561  86,497,243 
Market Share of Imported 
Subject Good Indices 100 177 307 359 359 
Market Share of the Applicant  Indices 100 95 87 84 84 
 Source:   Badan Pusat Statistik (BPS), and as verified by the Investigating Authority. 
 
 b. The above Table 3 indicated the following: 
 
 i. The national consumption increased  from 100 indexed points in 2007 to 
114 indexed points in 2008 equal to 14% , and continued to increase to the 
amount of 118 indexed points in 2009 or 4% compare to 2008.  During the 
same years, the volume of imports also increased by 102.52% in 2008  G/SG/N/8/IDN/13 
 G/SG/N/10/IDN/13 
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  compared to 2007, by 79.79% in 2009 compared to 2008.  At the same time, 
the domestic sales of the Applicant also increased by 9% in 2008 compared to 2007, but declined by 5% in 2009 compared to 2008. 
 
ii. When the national consumption declined by 8% in 2010 and further declined 
by 10% in 2011, the volume of imports also increased by 8.25% in 2010 and 
decreased by 12.33% in 2011.  In the same years, the domestic sales of the Applicant declined by 12% in 2010 and further declined by 9% in 2011. 
 
iii. Equal to the increased of the nati onal consumption, the market share of 
imports also increased by 77% in 2008 compared to 2007, by 73% in 2009 
compare to 2008.  While the national consumption decreased by 8% in 2010 
and by 10% in 2011, the market share of imports further increased by 17% in 2010 and 2011.  On the other hand, the market share of the Applicant 
continued to decrease during the whole period of investigation, by 5% in 
2008 compared to 2007, by 8% in 2009, by 4% in 2010 and 2011. 
 
 On the basis of the above mentioned examin ation of information provided in Table 2 and 
Table 3, the Investigating Authority came to the following conclusions:  
 In the event where the national consumpti on has increased during the year of 2007 to 
2009, the volume and the market shares of imports increased significantly beyond the increase of the national consumption.  In contrast, the domestic sales and the market 
share of the Applicant decreased during th e same years.  The national consumption 
decreased in the year 2010 and 2011, but the volume of imports continued to increase 
in 2010 despite slightly decreased in 2011.  However, the market of imports 
significantly increased in 2010 and 2011.  While the volume and market share of 
imports in general continued to boost, the Applicant's domestic sales and market share 
continue to substantially drop. 
 
 The conclusion mentioned in the above paragraph 1 provides evidence that the 
Applicant faced strong competition from an incr ease of volume of imports resulted in 
inability the Applicant to increase its  domestic sales and market share. 
 
D. OTHER FACTORS THAT MAY CONTRIBUTE TO INJURY 
  In order to find whether there are factors other than increased volume of imports that 
contributed to the injury of the Applicant, the fo llowing other known factors has been analyzed by the 
Investigating Authority: 
 1. Changes in Consumer Preference  
 
As provided in Table 3 the consumption of the Subject Good in Indonesia from year to year tend to increase, due to the improvement of awareness of people to consume a healthier 
source of protein.  Fish is considered to be h ealthier source of protein than meats or poultry.  
The very fact proves that there was no changes of consumer's preference to consume fish less 
than the previous years.  Therefore, the cha nges in consumer's preference is not a factor 
contributed to the injury of the Applicant.  
 G/SG/N/8/IDN/13 
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  2. Packaging and Quality 
 
Although, the packaging of the imported Subj ect Good maybe better than the Applicant, 
according to the information gathered by the Inv estigating Authority, the packaging is not an 
issue but the quality is.  In general, the Subj ect Good produced by the Applicant is fresher 
than the imported one, which is normally frozen.  Therefore, the packaging and quality were 
not the cause of the Applicant's inability to compete with the imported Subject Good.  
 
3. Production Capacity  
 
As provided in C.2.a.iii, the production cap acity of the Applicant is large enough and 
continued to increase every year during the period of investigation.  Thus, the production 
capacity of the Applicant was not a factor wh ich caused losses suffered by the Applicant.  
 
 In conclusion, other factors known to the Investigating Authority were not the cause of 
serious injury of the Applicant.  E. THE CAUSAL LINK  
 Examination of information as elaborated in point C and D, provides strong evidence that the 
continued negative performance of the Applican t in production, domestic sales, production capacity, 
capacity utilization, financial, and employment, is not caused by other factors but caused by continued decline in domestic sales, which resulted in loss of ma rket shares of the Applicant.  As mentioned in 
point C.2.b.i, ideally when the national consum ption of the Subject Good increased, the domestic 
sales and the market shares of the Applicant shoul d also increased.  However, due to fierce 
competition from imports of the Subject Good, which significantly increased during the period of 
investigation, the Applicant unable to utilize the opportunity to increase the domestic sales and the 
market shares.  This situation caused substantial loss of the market share of the Applicant to the 
imports of the Subject Good.  In summary, it can be  proved that the increased of volume of imports is 
the only factor that have caused a serious injury to the Applicant. 
 
F. PROPOSED MEASURE  
 
1. In view of the above mentioned findings wher e there was a clear evidence that the Applicant 
is in a serious injury, the Investigating Authority propose to the Government of the 
Republic of Indonesia the imposition of a safeguard measure in the form of a specific safeguard duty on the importation of the Subject Good. 
 
2. The amount of specific duty proposed to be im posed is being calculated and will be included 
in the notification under Article 12.1(c).  
 
3. It is proposed that the measure to be app lied for the period of 3 (three) years, commencing 
from the date of enactment of the releva nt regulation of Minister of Finance. 
 4. It is also recommended that the safeguard  measure to be imposed in accordance with 
Article 2.2 and Article 9 of the Agreement on Safeguards. 
 
 
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