WORLD TRADE  
ORGANIZATION   
G/SG/N/8/IDN/12 
G/SG/N/10/IDN/12 
8 February 2012 
 (12-0761) 
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 
 
(Conveyor belts or belting reinforced only  
with metal of a width exceeding 20 cm) 
  
 The following notification, dated 5 February 2012,  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 i nvestigation concerning the importation of conveyor 
belts or belting reinforced only with metal of a width exceeding 20 cm up to 230 cm under HS code 
ex 4010.11.10.00, claimed by the domestic industry concerned to be the cause of a threat of serious 
injury. 
 
A. GENERAL 
 
1. As notified in the WTO document G/SG/N /6/IDN/16 circulated on 4 November 2011, the 
Republic of Indonesia received an application by PT. Karet Ngagel Surabaya Wira Jatim 
hereinafter referred as the "Applicant", requ esting for the imposition of safeguard measures 
against imports of conveyor belts or belting re inforced only with metal of a width exceeding 
20 cm under HS code 4010.11.10.00, claimed to be the cause of a threat of serious injury. 
 
After analyzing the abovementioned applica tion, the Indonesian Safeguards Committee 
(Komite Pengamanan Perdagangan Indonesia/KPPI ) hereinafter referred as the "Investigating 
Authority", concluded that there was sufficient evidence to initiate an investigation.  The 
investigation was initiated on 3 November 2011. 
 
The initiation of the investigation was duly ann ounced in a national daily newspaper ("Bisnis 
Indonesia") on 1 November 2011.  The Republic of Indonesia had also notified the members 
of the WTO on 3 November 2011, which was circulated by the WTO Secretariat on 
4 November 2011 (G/SG/N/6/IDN/16). 
 G/SG/N/8/IDN/12 
G/SG/N/10/IDN/12 
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  2. Subject Good 
 
On the basis of the application, initially th e subject good under investigation was "conveyor 
belts or belting reinforced onl y with metal of a width exceeding 20 cm under HS code 
4010.11.10.00".  However, during the on-site verification conducted by the Investigating 
Authority, it was found that there was a slight  difference between the description of good as 
mentioned in the Application with the subject good verified on-site. 
 
Based on the result of the on-site verification, the Investigating Authority decided that the 
subject good under investigation is the one produced  by the Applicant, i.e. "conveyor belts or 
belting reinforced only with metal of a width exceeding 20 cm up to 230 cm", which falls 
under HS code ex 4010.11.10.00. 
 3. Period of Investigation 
 
Although it was decided that the period of inv estigation was the calendar year of 2007 until 
the calendar year 2010, the Investigating Authority also examined the volume of import and 
the condition of the industry concerned during th e period of January-October 2011, in order to 
have a more comprehensive analysis of the latest development. 
 
4. Proportion of Production of the Applicant  
 
The Proportion of Production of the Applicant is 100% of the national production, due to the 
fact that the Applicant is the only producer of the Subject Good in Indonesia.  
 
5. Views and Comments by Interested Parties 
 
In accordance with Article 3.1 of the WTO Ag reement on Safeguards, all interested parties 
such as importers, exporting country governments or representatives, and the Applicant, were 
given opportunities to submit written views, ev idence and comments on the initiation.  The 
Investigating Authority had received view s and comments from Japan and Indonesian 
Importers Assosiation (GINSI).  The reply of the Investigating Authority had been transmitted 
to the countries concerned, and will be reflected in the final report. 
 
Besides giving the opportunity to submit written views and comments, the interested parties 
were also given opportunity to participate in a hearing that was held on 10 November 2011.  The purpose of the hearing was to provide interested parties the opportunity to comment on 
the initiation.  
 
In order to provide adequate opportunities fo r interested parties to present views and 
comments in relation to notification under Artic le 12.1(b), the Investigating Authority will 
hold another hearing in the near future. 
 
B. DATA OF INCREASED IMPORTS 
 1. Increased Volume of Imports 
 
As aforementioned the KPPI examined the volum e of import not only during the period of the 
calendar year of 2007 until 2010 but also the period of January-October 2011. 
 
As provided in Table 1, the volum e of imports of the subject good in absolute term showed an 
increase during the period of investigation by  58.33%.  A significant increase of imports  G/SG/N/8/IDN/12 
 G/SG/N/10/IDN/12 
 Page 3 
  
  occurred from 76,196 kg in 2007 to 200,655 kg in 2008.  Despite the slight decreased by 
9.37% to 181,861 kg in 2009, the volume of import of the subject good rose significantly by 100.29% compared with 2009 to 364,242 kg in 2010.  The volume of import was further 
sharply increase by 182.24% from 364,242 kg in the year 2010 to 1,028,021 kg in the period 
January to October 2011. 
 
Table 1:  Volume of Import in Absolute Term 
 
Description Unit 2007 2008 2009 2010 2011 
(Jan-Oct) 
Imports Kg 76,196 200,655 181,861 364,242 1,028,021 
 Source:  Badan Pusat Statistik (BPS) 
 
From the information shown in Table 1, it is clear  that there has been surged in the volume of 
import of the subject good during the period of investigation. 
 2. Unforeseen Development  
 
Steel cord conveyor belt is a mechanical devi ce to carry/transport material or goods which 
heavy laden and coarse from one place to anot her.  In general, steel cord conveyor belt 
products are used among other by industries such  as cement, fertilizer, chemical, processed 
rubber goods, as well as the mining sector (coal industry). 
 
 a. Cement Industrial Sector.  
Increased activity of the construction sector  resulted in an increase in consumption 
and production of cement as one of the cons truction material.  This development led 
to increased consumption of the conveyor belt that is commonly used as a 
conveyance for the cement material.  Increased consumption of conveyor belt was 
also caused by an increase in cement produc tion as the result of diversion focus from 
infrastructure development from Java to outsi de of Java.  In addition, growth in 
infrastructure and property development in Indonesia also increased, thus 
contributing greatly to the increase of cement sales.  This situation has contributed to 
the increase of import of the good under investigation which was not foreseen. 
 
 b. Other Industry Sectors 
 
Other industrial sectors also experienced growth in processing industrial products 
such as fertilizers, chemicals and rubb er processed goods, which generally use a 
conveyor belt as a means of supporting pro duction activities.  Fertilizer, chemical, 
and rubber industries contribute as the th ird largest of Indonesia's manufacturing 
industry during the year 2000-2010 after the f ood, beverages, and tobacco industries, 
and transport equipment and machinery industr ies.  The increase of fertilizer industry 
mainly due to the increase use of fertilizer  in the production of agricultural products 
such as rice, maize, sweet potatoes, cassava, and soybeans.  The growth of 
production, harvested area, and productivity continues to increase from 2007 to 2010.  
The unpredicted situation has resulted in an  increase of import of the Subject Good. 
 G/SG/N/8/IDN/12 
G/SG/N/10/IDN/12 
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   c. Mining Sector 
 
Since the last few years the activities in mining sectors such as coal, reaching a 
relatively high growth which is beyond pred ictability.  This development causing the 
increase use of conveyor belt as a mean of supporting the activities.  
 
Coal is an alternative raw materials and en ergy as a substitute for oil and gas.  These 
circumstances became one of the factor s that lead to increase production in the 
mining sector which experiencing growth, especially from 2008 to 2010. 
 
In addition, increase foreign investment in  Indonesia in mining projects has increased 
the importation of conveyor belt, becau se the project owners, contractors and 
consultants for the projects were genera lly tended to use imported Subject Good. 
 
 In summary, the above conditions we re not foreseen by the Applicant. 
 
C. EVIDENCE OF INJURY CAUSED BY INCREASED IMPORTS 
 
1. In order to verify and to prove the claim of a threat of serious injury, the Investigating 
Authority examined all data and information havi ng a bearing on the Applicant's situation.  In 
addition to the examination of all available rele vant data and information, the Investigating 
Authority had also conducted on-site verification. 
 
2. On the basis of data and information gath ered, the Investigating Authority came to the 
conclusion of the Applicant's situation as shown in the following Table 2 and Table 3. 
 
Table 2:  The Applicant's Performance Data
1 
 
Description Unit Year 
2007  2008 2009 2010 2011 
(Jan-Oct) 
Market Share of 
the Applicant Indices 100 73 95 42 23 
Domestic Sales Indices 100 58 156 33 40 
Production Indices 100 58 156 33 40 
Capacity 
Utilization Indices 100 58 156 33 40 
Inventories Indices - - - - - 
Profit Indices 100 41 918 94 42 
Employment Indices 100 99 88 81 75 
Productivity Indices 100 58 176 41 54 
 Source:  The Investigating Authority Verification. 
                                                      
1 The data presented in indices due to their commercial sensitivity.  G/SG/N/8/IDN/12 
 G/SG/N/10/IDN/12 
 Page 5 
  
   a. From the data shown in Table 2, the Investigating Authority found: 
 
 i. During the recent years.  the domestic  sales of the Applicant fell significantly 
by 79% from 156 indexed points in 2009 to 33 indexed points 2010.  Despite 
an increase in 2009 and 2011, the Applicant's domestic sales experienced 
substantial decrease by 42% from 58 i ndexed points in 2008 compared to 
2007.  The increase in 2009 was parallel  to the increase of demand from a 
specific consumer resulting in increased sales of the Applicant to 156 indexed 
points.  However, the increase was only temporary because the sales fell 
significantly by 79% in 2010. 
 
  In 2011
2 sales of the Applicant experienced a slight increase by 21% to 
40 indexed points, due to the efforts of the Applicant to maintain its market 
share by reducing the profit margin.  S till, the increase in 2011 was far below 
the sales in 2008. 
  ii. The production of the Applicant, during the investigation period was in line 
with domestic sales.  The production fell to 58 indexed points in 2008 by 
42% compared to 2007, and dropped by 79% in 2010 to 33 indexed points compared to 2009, although there was a momentary increase in the year 
2009.  The examination on the production of the Applicant in 2011 showed a 
slight increase i.e. 40 indexed points. 
 
 iii. The productivity of the Applicant w as also decrease in line with sales and 
production.  The decrease was 58 indexed points in 2008 compared to 100 
indexed points in 2007 equal to 42%.  There was an increase of productivity 
in 2009 compared to 2008, but it dropped s ubstantially in 2010.  As the sales 
and production slightly increase in 2011, the productivity of the Applicant 
also somewhat increase. 
  iv. The performance of the Applicant concerning capacity utilization also 
decrease during the period of investigation with the exception of 2009.  In 
line with the decrease in domestic sales and production, the capacity utilization decreased from 100 indexed points in 2007 to 58 indexed points in 
2008 and it further decreased in 2010.  Although there was a temporary 
increase in 2009.  The capacity utilization of the Applicant in  2011 was a small increase compared to 2010 but far below the performance 2007 
and 2008.  
  v. The profit of the Applicant drastically declined in 2008 from 100 indexed 
points in 2007 to 41 indexed points.  Although there was an increase of profit 
in 2009 but the profit of the Applicant continue to decrease in 2010 reaching 
94 indexed points.  The Profit of the A pplicant continued to fall to 42 indexed 
points in 2011.  Based on the inform ation provided to the Investigating 
Authority, the continued decline of the profit caused by the situation where 
the Applicant's profit margin became sm aller because of the decision to only 
raise the selling price slightly despite the fact that the cost of production in 2011 increased compared to 2010.  This is  an effort by the Applicant to 
enable to compete with the imported pr oducts.  The average price of imported 
goods was Rp. 41,872 per Kg, and the price of one of the main suppliers of 
                                                      
2 All data in this notification that refer to the year  2011, the period is from January to October 2011. G/SG/N/8/IDN/12 
G/SG/N/10/IDN/12 
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  imports was Rp. 31,064 per Kg in 2010.  On the other hand the price of the 
Applicant is higher than both prices as aforementioned. 
 
 vi. Due to the continued decline in prof it, the Applicant was forced to lay off 
some of its employees but attempted to do it as minimum as possible. 
 
Table 3:  National Consump tion, Volume of Imports, 
Market Share of the Applicant, and Shares of Imports
3 
 
Description Unit Year 
2007  2008 2009 2010 2011 
(Jan-Oct) 
National 
Consumption Indices 100 79 165 80 178 
Volume of Imports Kg 76,196 200,655 181,861 364,242 1,028,012 
Market Share of 
the Applicant Indices 100 73 95 42 23 
Shares of Imported 
Subject Good Indices 100 333 145 597 758 
 Source:   Badan Pusat Statistik (BPS) and The Investigating Authority Verification. 
 
 b. Based on data and inform ation in Table 3, the Inves tigating Authority came to the 
following conclusion: 
 
i. The national consumption of the Subject Good decreased from 100 indexed 
points in 2007 to 79 indexed points in 2008, but increase to 165 indexed 
points in 2009.  However the national c onsumption decreased substantially to 
80 indexed points in 2010 compared to 2009, but jumped up to 178 indexed 
points in 2011. 
  ii. In line with the decrease in national consumption, the market share of the 
Applicant also decreased from 100 indexed points in 2007 to 73 indexed 
points in 2008.  The market share of the Applicant temporary increased to 
95 indexed points in 2009, but it fell to 42 indexed points in 2010.  A sharp 
decrease of market share to 23 indexed points in 2011 experienced by the 
Applicant. 
 
 iii. While the national consumption ex perienced a decrease from 2007 to 2008, 
the market share of imports has increased from 100 indexed points to 
333 indexed points.  Although the market share of imported Subject Good 
was slightly decline in 2009, but it c ontinued to increase significantly in 2010 
and 2011. 
 
3. The Investigating Authority made the follo wing conclusion on the basis of evaluation on 
information included in Table 2 and Table 3: 
                                                      
3 The data presented in indices due to their commercial sensitivity.  G/SG/N/8/IDN/12 
 G/SG/N/10/IDN/12 
 Page 7 
  
  a. While the national consumption decreased  from 2007 to 2008, the domestic sales of 
the Applicant also decreased during the same  period.  On the other hand, the volume 
of imports of the subject good increased significantly from 2007 to 2008.  Although 
the national consumption decreased consid erably in 2010 compared to 2009, the 
volume and market share of imported product have increased in 2010.  On the other 
hand, the volume of domestic sales of the A pplicant had greatly decreased in the year 
of 2010.  Compared to 2009, the national consumption in 2010 decreased substantially but increased in 2011.  In 2010, the volume of imports increased almost 
double while the domestic sales of the Appli cant decreased approximately five times 
compared to 2009, although its slightly  increased in  2011 to 263,035 Kg from 
217,379 Kg in 2010.  The market share of the Applicant decreased continuously in 
2008, 2009, 2010 and 2011 compared to 2007. 
 
b. As the consequence of the decline of the domestic sales during the period of the 
investigation, the Applicant's production, capacity utilization, profit, employment, 
and productivity have also decrea sed, with the exception of 2009. 
 
 c. As stated in point (a) above: 
 
 i. The national consumption decreased in 2008 and 2010 compared to 2007 and 
increased 2009 and 2011; 
  ii. the volume and market share of imports continued to increase during the 
period of the investigation with the exception of the year 2009;   
 
 iii. the volume of sales and market share of the Applicant continued to decrease 
during the same period with the exception of 2009; 
 
 The Investigating Authority concluded that  the abovementioned data showed in c.ii 
and iii indicated a clear correlation between th e loss of market share of the Applicant 
and the increase of market share of imported subject good.  Based on the data, it is 
concluded that the market share of the Applicant was taken by imports especially in 
the year of 2010 and 2011. 
 
 d. The Applicant experienced a significant d ecrease in profit but has not yet suffered a 
financial loss.  To this end the Investigating Authority confirmed the claim that the Applicant experienced a threat of serious injury, due to the f act that there was a 
continuous decline of the Applicant's perfo rmance in production, capacity utilization, 
profit, employment, and productivity. 
 D. THE CAUSAL LINK 
  As described in Letter B and Letter C, especially  the conclusion described in C.3.c.ii and iii, 
there was a clear evidence that the market share of  the Applicant was taken by imported Subject Good 
which caused a serious threat of  injury to the Applicant.  
 
E. OTHER FACTORS THAT MAY CONTRIBUTE TO INJURY 
  In order to find whether there was other factor s that may cause injury to the Applicant, the 
Investigating Authority has also an alyzed the following known factors: 
 G/SG/N/8/IDN/12 
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  1. Production Capacity 
 
From the data available to the Investigating Au thority, it is confirmed that the Applicant has 
the capacity to produce more than the existing national consumption.  However, the Applicant 
was not able to fully utilize the production capacity due to fierce competition from imported 
Subject Good.  Therefore, it is concluded that the production capacity was not a factor that 
contributed to the injury e xperienced by the Applicant. 
 
2. Competition with Other Domestic Industries 
 
Although there are other domestic industries that  produce multi-ply conveyor belt, but they do 
not produce steel cord conveyor belt.  In a ddition to that, the usability of multi-ply conveyor 
belt which produced by other domestic industries differ from the product produced by the Applicant.  Therefore, other domestic industri es were not a factor that caused injury to the 
Applicant.  
 3. Export 
 
As the result of the investigation, it was f ound that the only market of the Applicant is 
domestic.  Therefore, foreign market or export w as not a factor that contributed to the injury 
experienced by the Applicant. 
  The aforementioned findings confirmed that no other factors than imported Subject Good that 
had caused threat of injury to the Applicant. 
 F. PROPOSED MEASURE 
 
1. In view of the situation in which the Applican t is in a critical condition of threat of serious 
injury, the Investigating Authority propose to the Government of the Republic of Indonesia 
the imposition of a safeguard measure on  the importation of the Subject Good. 
 
2. The form of a safeguard measure proposed to be imposed is under cons ideration and will be 
included in the final report of the investigation.  
 
3. It will be proposed that the measure to be applied for the period of 3 (three) years, 
commencing from the date of enactment of the re levant regulation of Minister of Finance. 
 
4. In accordance with Article 2.2 jo. Article  9 of the Agreement on Safeguards, it is 
recommended that the safeguard measures to be imposed to the product concerned being 
imported irrespective of its sources, except those imported from developing country Members 
with less than 3 per cent import share or coll ectively account for not more than 9 per cent of 
the total imports. 
 
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