WORLD TRADE  
ORGANIZATION   
G/SG/N/8/IDN/11 
G/SG/N/10/IDN/11 
26 January 2012 
 (12-0536) 
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 
 
(Articles of Iron or Steel Wire under HS Code 7326.20.90.00) 
 
 
 The following notification, dated 23 January 2012,  is being circulated at the request of the 
Delegation of Indonesia.  
_______________ 
  
In accordance with Article 12.1(b) of the WTO Agreement on Safeguards, herewith the 
Republic of Indonesia notifies on the findings of in vestigation concerning th e importation of articles 
in the form of boxes, cylinders, or mattress made from iron or steel wire with thickness diameter of 
minimum 2 mm up to maximum 5 mm, in which the ir on or steel wire is double coil one to another 
yielding hexagonal circles with diameter of minimum 50 mm up to maximum 120 mm, and plated 
with zinc or plastic poly vinyl chloride (PVC),  which falls under HS code 7326.20.90.00 claimed by 
the domestic industry concerned to be the cause of a threat of serious injury.   A. GENERAL
 BACKGROUND 
1. As notified in the WTO document G/SG/N /6/IDN/15 circulated on 23 August 2011, the 
Government of Indonesia received an applica tion by PT.  Bevananda Mustika hereinafter 
referred as "Applicant", requesting for the im position of safeguard measures against imports 
of articles of iron or steel wire of single or double coil with a diameter of 2 mm to 5 mm, in the form of hexagon with size of 50 mm to 120 mm, plated with zinc or plastic polyvinyl 
chloride, with the shape of box or cylinder or mesh, which falls under HS 
Code 7326.20.90.00, claimed to be the cause of a threat of serious injury.  
 
 After analyzing the abovementioned appli cation, the Indonesian Safeguards Committee 
(Komite Pengamanan Perdaganga n Indonesia/KPPI) hereinafter referred as "Investigating 
Authority", concluded that there was sufficient evidence to initiate an investigation.  The 
investigation was initiated on 22 August 2011.  
 
 The initiation of the investigation was duly ann ounced in a national daily newspaper ("Bisnis 
Indonesia") on 19 August 2011.  The Republic of  Indonesia had also notified the members of G/SG/N/8/IDN/11 
G/SG/N/10/IDN/11 
Page 2 
  
  the WTO pertaining the investigation on 22 August 2011, which was circulated by the 
WTO Secretariat on 23 August 2011 (G/SG/N/6/IDN/15).   
 
2. Subject Good  
 
 At the outset the investigation was initiated on the Subject Good as mentioned in the first 
paragraph of A.1.  However, during the process of investigation, the Investigating Authority 
found that there was a slight difference betw een the description of good as mentioned in the 
first paragraph of A.1. with the Subject Good verified on-site.  
  Consequently, the Investigating Authority d ecided that the Subject Good under investigation 
is the one produced by the Applicant, i.e. "artic les in the form of boxes, cylinders, or mattress 
made from iron or steel wire with thickness diameter of minimum 2 mm up to maximum 5 mm, in which the iron or steel wire is double coil one to another yielding hexagonal circles 
with diameter of minimum 50 mm up to maximum 120 mm, and plated with zinc or plastic 
poly vinyl chloride (PVC), which falls under HS code 7326.20.90.00".  The Subject Good mainly used for fortification purposes or to support construction works. 
 
3. Period of Investigation  
 The period of investigation basically cove rs the calendar year of 2007 until the calendar 
year 2010.  Nevertheless, with a view to have  a more comprehensive data the Investigating 
Authority decided to include and analyzed information on the volume of imports and the 
Applicant's condition during the period of Janua ry to October 2011.  Hence, reference to 
year 2011 is limited to January until October 2011. 
 
4. Major Proportion  
 On the basis of data available to the Inves tigating Authority the share of the Applicant was 
52% of the total domestic production at the time of the application submitted. 
 
5. Views and Comments by Interested Parties  
  Consistent with Article 3.1 of the WTO Agreement on Safeguards, the Investigating 
Authority has provided opportunities to inter ested parties such as importers, exporting 
country governments or representatives, a nd the Applicant, to submit written views, 
evidences and comments concerning the initiation of the investigation.  The views and 
comments received from the representatives of Chinese Taipei, Thailand, Malaysia, and 
Jordan.  The reply of the Investigating Auth ority had been transmitted to the countries 
concerned, and will be reflected in the final report.  
 
 In addition to written views and comments recei ved by the Investigating Authority, a hearing 
was held to opportune the Applicant and othe r interested parties to exchange views, 
comments, evidence, and defence pertaining the in itiation of the investigation directly to each 
other.  The said hearing was conducted on 8 Nove mber 2011.  Another hearing is planned to 
be conducted in relation to notification under Ar ticle 12.1(b), mainly to provide adequate 
opportunities for interested parties to present views and comments.  
 B. DATA
 OF INCREASED  IMPORTS 
1. Increased Volume of Imports :  Absolute or Relative Terms 
  G/SG/N/8/IDN/11 
 G/SG/N/10/IDN/11 
 Page 3 
  
   As affirmed in Table 1, the volume of imports of the Subject Good in absolute term showed 
an increase, by 191% occurred in 2008 where the volume of import reached 2,118,599 kg, as 
compared to only 726,971 kg in 2007.  Furtherm ore, despite a slight decrease in 2009 by 2% 
compared to 2008, the volume of import of the Subject Good increase again by 17% from 
2,082,417 kg in 2009 to 2,426,131 kg in 2010, and continued to increase significantly by 89% 
in 2011 equal to 4,582,786  kg. 
 
Table 1:  Volume of Import in Absolute Term 
 
Description Unit 2007 2008 2009 2010 2011 
(Jan-Oct) 
Imports Kg 726,971 2,118,599 2,082,417 2,426,131 4,582,786 
 Source:  Badan Pusat Statistik (BPS).   
 
In addition to absolute term of increased volum e of imports as aforementioned, the volume of 
imports of the Subject Good relative to the dom estic production, as referred in Table 2, also 
showed a significant increase during the period of investigation. 
 
The volume of imports of the Subject Good re lative to the domestic production showed an 
increase in trend during the period of investiga tion by 35.80%.  In 2007 the volume of import 
of the Subject Good is 13.46% relative to the domestic production.  In 2008 the volume of import of the Subject Good increased to 35.62% relative to the domestic production compared 
to 2007.  Even though in 2009 the volume of import relative to the domestic production 
slightly decreased by 3.97%, but in 2010 it ro se back to 38.84%.  The volume of imports 
in 2011 showed a substantial increased to 72.17%. 
 
Table 2:  Volume of Imports Relative to the Domestic Production 
 
Description Unit 2007 2008 2009 2010 2011 
(Jan-Oct) 
Volume of Imports Kg 726,971 2,118,599 2,082,417 2,426,131 4,582,786 
National Production Kg 5,399,344 5,948,027 6,578,900 6,247,000 6,350,000 
Imports relative to domestic production % 13.46 35.62 31.65 38.84 72.17 
Source:  Badan Pusat Statistik (BPS).   
 
In conclusion, there was a significant increas ed volume of imports both in absolute and 
relative terms during the period of investigation,  which also continued in 2011, although there 
was a slight decrease in absolute as well as relative to domestic production in 2009. 
 
2. Unforeseen Development   
 As reported and published by the National Ag ency for Disaster Management in 2011, during 
the recent years there were natural disasters or acts of Gods had been happening in Indonesia, 
in terms of frequencies and types, such as tsunamis, landslides, flash floods, vulcanic and 
tectonic earthquakes, and vulcanic eruptions.  This unforeseen situation resulted in a 
significant increased of national consumption of the Subject Good, which is used for G/SG/N/8/IDN/11 
G/SG/N/10/IDN/11 
Page 4 
  
  fortification measures and preventive construction.   The increase of the national consumption, 
in turn boosted the volume of imports of the Subject Good. 
 C. EVIDENCE
 OF INJURY  CAUSED  BY INCREASED  IMPORTS 
1. In order to find evidence of injury as claime d by the Applicant, the Investigating Authority 
examined all data and information available having a bearing on the actual condition of the 
Applicant and non Applicant domestic industry.  In  addition, the Investigating Authority also 
conducted on-site verifications to the Applicant.  
 
2. As the result of the examination and the on-site  verification, the Investigating Authority found 
the following evidences: 
 
Table 3:  The National Consumption, Volume of Imports, Market Share of the  
Applicant, Market Share of Non Applicant Domestic  
Industry, and Market Share of Imports1 
 
Description Unit Year 
2007 2008 2009 2010 2011  
(Jan-Oct) 
National Consumption Indices 100 148 160 143 172 
Volume of Imports Kg 726,971 2,118,599 2,082,417 2,426,131 4,582,786 
Market Share of the 
Applicant Indices 100 91 94 80 56 
Market Share of Non 
Applicant Domestic 
Industry Indices 100 75 77 77 58 
Market Share of 
Imported Subject 
Good Indices 100 196 179 234 367 
 Source:  Badan Pusat Statistik (BPS), and as  verified by the Investigating Authority.   
 
 a. Based on data and information as showed in Ta ble 3, the Investigating Authority came to the 
following conclusion: 
  i. During 2007 to 2009 there was an increase  of national consumption of the Subject 
Good, i.e. from 100 indexed points in 2007 to  148 indexed points in 2008, and to 
160 indexed points in 2009.  However, the national consumption decreased to 
143 indexed points in 2010 compared to 20 09.  In 2011, national consumption has 
increased to 172 indexed points. 
  ii. During the same period the volume of imports of the Subject Good continued to 
increase, with the exception of a slight decreased in 2009.  The increase was very 
substantial in 2011 by 89% compared to 2010. 
 
                                                      
1 The data presented in indices due to their commercial sensitivity.    G/SG/N/8/IDN/11 
 G/SG/N/10/IDN/11 
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   iii. While the volume of imports was si gnificantly increased in 2010 and 2011, the 
market share of the Applicant was s ubstantially decline in 2010 and 2011. 
 
 iv. As shown in the above table, the ma rket share of non Applicant domestic industry 
was also decline in 2010 and 2011.  On th e other hand, the market share of imported 
Subject Good has increase significantly from year to year, started from 2007 
until 2011. 
 
Table 4:  The Applicant's Performance Data
2 
 
Description Unit Year 
2007  2008 2009 2010 2011 
(Jan-Oct) 
Domestic Sales Indices 100 135 150 114 96 
Production Indices 100 116 135 112 91 
Capacity Utilization  Indices 100 116 135 112 91 
Inventories Indices 100 79 69 88 94 
Profit Indices 100 83 119 76 66 
Employment Indices 100 106 104 96 90 
Productivity Indices 100 109 129 117 101 
Source:  As verified by the Investigating Authority.   
 
a. The above Table 4 indicated that: 
 
 i. The Applicant's domestic sales had increased from 100 indexed points in 2007 to 
150 indexed points in 2009, however th e domestic sales had been dropped 
significantly in 2010 to 114 indexed points, and continue to decrease to 96 indexed 
points in 2011. 
 
 ii. In line with the domestic sales, the Applicant's production has increased from 2007 
until 2009, i.e. from 100 indexed points in 2007, 116 indexed points in 2008, and 
135 indexed points in 2009.  The production of the Applicant fell to 112 indexed 
points in 2010 and continued to fall to 91 indexed points in 2011. 
 
 iii. Following the trend of the Applicant's domestic sales and production in 2007 
until 2009, the Applicant's capacity utiliza tion also increased from 100 indexed points 
in 2007 to 116 indexed points in 2008, and to 135 indexed points in 2009.  As the 
domestic sales and producti on had decreased in 2010 and in 2011, the capacity 
utilization decreased to 112 indexed point s and to 91 indexed points respectively. 
 
                                                      
2 The data presented in indices due to their commercial sensitivity.   G/SG/N/8/IDN/11 
G/SG/N/10/IDN/11 
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   iv. As the result of inability of the A pplicant to increase th e domestic sales, the 
Applicant's inventories has increased in 2010 and 2011, although there were 
somewhat decreased in 2008 and in 2009.   
 
 v. The Applicant's profit continued to reduce from 100 indexed points in 2007 to 
66 indexed points in 2011 with the exception of  a slight increase in 2009.  Despite the 
fact that the domestic sales of the App licant have increased in 2008 until 2010 
compared to 2007, its profit reduced during the same period compared to 2007, as the 
result of the reduction of its profit margin in domestic sales. 
  vi. Employment has decreased in 2010 and in 2011 compared to 2007, 2008, and 2009. 
 
 vii. In line with the trend of the dom estic sales and production, the Applicant's 
productivity has also increased in 2008, 2009, and 2010 compared to 2007.  However, 
the productivity of the Applicant drop by 16 indexed points in 2011 compared 
to 2010. 
 
 On the basis of evaluation on information as embedded in Table 3 and Table 4, the 
Investigating Authority came to the following conclusion:  
1. While the national consumption continues to increase from 2007 to 2011, the volume of the 
domestic sales of the Applicant failed to increase especially in the year of 2010 and 2011.  On 
the other hand, the volume of imports of the Subject Good continues to increase significantly 
during the same period, with the excep tion of a slight decrease in 2009.  
 
2. Following the decrease of the domestic sales, the Applicant's production,  capacity utilization, 
employment, and productivity in 2010 and 2011 have also decreased. 
 
3. As stated in paragraph 1 above, the fact th at the national consumption increased during 2007 
to 2011, was not fully utilized by the Applican t.  On the contrary, the Applicant's domestic 
sales had been dropped during the period of 2010 and 2011 while the volume of imports 
increased almost double in the same years.  This condition has indicated that the share of the 
Applicant in the domestic market has been taken by the imported Subject Good. 
 
4. As mentioned in 2.b.v. a bove, the profit of the Applicant continued to lessen due to the 
decision of the Applicant to reduce the profit ma rgin in the effort to compete with imported 
Subject Good. 
 
5. In view of the fact that the Applicant expe rienced continuous decline in profit and domestic 
sales, due to losses of market share against imported good, the Investigating Authority 
concluded that the Applicant has su ffered a threat of serious injury. 
 D. THE
 CAUSAL  LINK 
 As elaborated in C, the Investigating Authorit y found that the decline of domestic sales have 
caused losses of market share of th e Applicant against the increased of the volume of imports of the 
Subject Good.  The continuous decline in domestic  sales, followed by the decline in production, 
capacity utilization, profit, employ ment, and increase in inventories. 
 
 Therefore, it is concluded that there is str ong evidence that the increased of volume of imports 
of the Subject Good have caused threat of serious injury to the Applicant.     G/SG/N/8/IDN/11 
 G/SG/N/10/IDN/11 
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  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: 
 
1. Production Capacity  
 
 From the data available to the Investigati ng Authority, it is confirmed that the production 
capacity of the Applicant adequate to fulf il the national consumption.  However, the 
utilization of the capacity was not maximized due to inability of the Applicant to improve the 
domestic sales.  Hence, the production capacity is  not a factor contributed to the injury 
experienced by the Applicant. 
 
2. Other Domestic Industries  
 Based on the data showed in Table 3, other Domestic Industry produced the Subject Good did 
not contribute to the injury experienced by the Applicant because the share of non Applicant 
domestic industry was also take n by imported Subject Good. 
 
 The aforementioned findings confirm that othe r factors known to the Investigating Authority 
have not contributed to the threat of serious injury of 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 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 th e Agreement on Safeguards.   
  
 
__________