Booming business at tourism school

The Jakarta Post

DENPASAR: The struggling tourism industry in Bali has not discouraged the island's newest high school graduates from enrolling in vocational schools of tourism.

The Kertayasa vocational school of tourism in Singakerta, Ubud, Gianyar regency, has received applications from 230 new graduates.

The applicants come not only from Gianyar, but also from Badung, Bangli, Klungkung and Karangasem.

The school's head, A.A. Gede Sugiantara, said the number of applicants had increased from last year. He plans to add one more class to the current four.

"Each class will have 48 students. An increase like this happened two years ago," he said.

Indonesia`s PLN says Mitsubishi wins power plant expansion

Jakarta (ANTARA News) - Indonesia's biggest power producer PT Perusahaan Listrik Negara (PLN) said Wednesday it has selected Mitsubishi Corp. as the winner of a project to double power generating capacity at its Muara Karang gas-fired power plant.

The project will see generating capacity increase to 720 megawatts.

PLN deputy director Tonny Agus Mulyantono told Thomson Financial the project may cost around 430 million US dollars.

He said Mitsubishi Corp beat out other bidders such as Siemens AG and Mitsui & Co, adding that the Japanese company will co-operate with other businesses for the project including Mitsubishi Heavy Industries, Sumitomo Corp. and Truba Jurong.

Indonesia and Vietnam to join forces to market pepper

Jakarta (ANTARA News) - Indonesia and Vietnam, two of the world's main producers of pepper, are to cooperate in marketing it, an executive of the Indonesian pepper industry said Wednesday.

Mustakim Wijaya, vice-chairman of the Indonesian Pepper Exporters' Association, said producers here and in Vietnam planned to establish a joint committee to focus on marketing, improving quality standards and compiling statistics.

"The Vietnamese side wants the joint committee to be formed before the end of the year, and we are working on this," he was quoted by Thomson Financial as saying.

Together, the two countries produce more than 45 percent of the world's pepper.

Wijaya said the committee would meet annually to discuss the international market.

China and Brazil, two other big producers, have expressed interest in joining the committee and have sent observers to meetings between Indonesian and Vietnamese representatives, including a two-day meeting which finished here Tuesday.

Vietnam has about 33 percent of the world market, Brazil has 15 percent and Indonesia 13 percent.

Mustakim said that world pepper supply remained well below demand, with a shortfall of about 47,500 tonnes estimated for 2007.

PT PAL begins building four escort tug boats for JGC corporation

Surabaya, East Java (ANTARA News) - National shipyard industry PT PAL Indonesia has received an order to build four escort tug boats for JGC Corporation - a project described by a PT PAL executive as the company`s biggest since 1997.

A function marking the keel-laying of the first of CGJ`s escort tug boats took place PT PAL Indonesia`s dockyard in Surabaya, on Tuesday.

Present on the occasion were representatives of the Tangguh LNG, BP Migas (oil and gas regulating body), the PT PAL Indonesia president director and other people to be involved the vessels` construction.

PT PAL`s managing director on the occasion expressed appreciation to CGJ Corporation for having entrusted PT PAL with the task of building the tug boats.

Therefore, he asked PT PAL personnel to ensure that the vessels would be of high quality and be delivered to CGJ Corporation according to the agreed schedule.

He noted PT PAL Indonesia already had experience in building various kinds of vessels, including off-shore and on-shore equipment.

PT PAL`s project director Husein Soleh on the occasion said CGJ Corporation`s order was PT PAL`s biggest project since the economic crisis in 1997.

A representative of BP Migas, Robert T, said the need for the escort tug boats was a consequence of a deal on the construction of an oil refinery.

Each of CGJ Corporation`s escort tug boats would be 32 meters long and have a maximum operational draft of 5,23 meters.

The first tug boat ordered by the CGJ Corporation would according to plan be delivered in March 2008 or earlier than the original schedule in May 2008 because the first vessel`s keel laying was also done earlier than initially planned.

Airline bans a temporary setback, says official

The Jakarta Post, Jakarta

The ban on all Indonesian airlines by the European Commission is a temporary setback for the country's aviation sector, but a necessary one should Indonesia wish to improve its air safety record, an official says.

On July 6, the European Commission (EC) banned all Indonesian airlines from flying to Europe due to distrust caused by the country's poor aviation safety record.

"The international public will appreciate our efforts to be open about our airline safety problems," director general for air transportation at the Transportation Ministry, Budhi M. Suyitno, told reporters during a break in a meeting with the House of Representatives Commission V for transportation affairs on Monday.

The EC declared the ban after the government announced the results of an audit of 20 domestic airlines in March. The audit showed that not one domestic airline was in full compliance with safety regulations at that time.

However, a second audit in June found Garuda Indonesia to be fully compliant with international aviation safety regulations.

The Indonesian government said it regretted the EC's decision and that the ban was unfair because the commission did not send a team to clarify the findings or give the Indonesian government a chance to explain its position.

"We are disappointed with this decision. Actually, if the commission had given us a chance to talk about this matter, they would not have banned the Indonesian airlines," Transportation Minister Jusman Syafii Djamal told reporters after the meeting.

He added that his ministry had designed several programs to improve the quality of air transportation, which would include upgrading airport facilities.

The ministry is proposing a Rp 15.5 trillion (US$1.72 billion) budget for 2008, a 50 percent increase from Rp 10.5 trillion, to build better facilities for airports, including air and land infrastructure, flight surveillance radars and flight communication, navigational and landing assistance tools.

Most House members have blamed the ban on the government's decision to announce the results of the airlines' audit to the public, insisting it has "boomeranged" on the Indonesian government.

"It's the government itself who caused this problem," Enggartiasto Lukita from the Golkar Party said.

He said that when it comes to aviation, there can be no compromise on safety standards, and reiterated the House's stance that the government should not have announced the airlines' audit results.

"It is the routine inspection which matters the most," he said.

Sumaryoto from the Indonesian Democratic Party of Struggle said it was the right move for the government to audit the nation's airlines, but not to announce the results.

"The results of the audit should have been used as input for the airlines, the result should not have been made public," he said.

He said the European ban could have both political and economic impacts on Indonesia.

The ban will likely also have an impact on Indonesia's tourism sector, despite there having been no flights linking Indonesia with European Union cities since Garuda canceled services to Amsterdam in 2004.

Between 600,000 and 800,000 European tourists visit the country every year.

Indonesia`s first semester investment up to Rp65.27 trillion

Surabaya, E Java (ANTARA News) - The Indonesian government licenced foreign and domestic investment projects worth Rp65.27 trillion in the first semester of 2007, up 52.60 percent from the same period last year, an official said.

"Of the total, Rp36.9 trillion (US$4.1 billion) came from foreign investment and the rest from domestic investment," Head of the Investment Coordinating Board (BKPM) Mohammad Lutfi said in an investment seminar here Tuesday.

The investment in the second semester of 2007 far exceeded the BKPM-set target of Rp41.54 trillion for the period, he said.

The BKPM had set itself the target of attracting domestic investment worth Rp11.58 trillion and foreign investment worth Rp29.96 for the first half of 2007.

Data from the BKPM show paper, paper-related and printing industries topped the list of domestic investment projects with Rp14.16 trillion, followed by metal, machinery and electronic industries, food industries, plantation and construction sectors.

Meanwhile, basic chemical, chemical goods and pharmaceutical industries were listed as the biggest source of foreign investment with US$1.526 billion, followed by paper, paper-related and printing industries, food industries, mining and trade sectors.

West Java remained the biggest recipient of domestic investment with Rp10.353 trillion, while East Java was the most-preferred foreign investment destination with US$1.567 billion.

"The foreign investment mostly came from Britain, Taiwan, Singapore, Japan and South Korea," Lutfi said.

He said the government continued to encourage investment inflows by easing investment policies.

"The government is committed to overcoming unemployment and poverty. One of the efforts is encouraging investment to creare more jobs," he said.

He said the government aimed to attract US$426 billion in investment in 2009 to achieve an economic growth rate of 6.6 percent.

Antam to look for new partner to build alumina smelter in Bintan

Jakarta (ANTARA News/Asia Pulse) - State-owned mining company PT Aneka Tambang (Antam) has indicated it will seek a new partner to build an alumina smelter on the Bintan island in Riau Island.

Xinfa Alumina from China, which has offered to build the US$250 million project, has put forward conditions not acceptable to Antam, company director Syahriri Ika said Monday. Syahrir said he did not rule out other Chinese investors as a replacement as China represents a big market.

The smelter is scheduled to be operational in 2010 with an annual capacity of 400,000 tons of alumina.

Reaffirming the ten commandments for businesses

Vincent Lingga, The Jakarta Post, Geneva

Business leaders from developing and developed countries have reaffirmed their strong commitments to conducting responsible business practices based on the UN Global Compact's ten principles in human rights, labor, environment and anti-corruption.

The leaders stated in a declaration at the end of the Global Compact Leaders Summit here Friday, that only through responsible business practices can a more sustainable and inclusive global economy be realized.

The ten principles, which have been promoted by the UN Global Compact initiative since 2000, are in essence the core values of what is now well-known as the "corporate social responsibility" (CSR) concept.

But the basic question is: Are the codes of conduct worth more than the paper they are written on? Will voluntary initiatives such as the Global Compact lead to the types of changes needed to contribute to a cleaner environment, better working conditions, more humanitarian development and the curbing of corruption?

This was one of the toughest questions raised during the summit by the representatives of civil society organizations and business leaders who questioned the reputation of several companies attending the meeting.

However, the Global Compact is not a regulatory instrument. There is no enforcement mechanism beyond public scrutiny and the requirement for participants to report annually on progress in meeting commitments to the ten principles.

Rather, the Global Compact relies on public accountability, transparency and the enlightened self-interest of companies, labor and civil society to initiate and share substantive action in pursuing the ten principles.

Some stakeholders are skeptical.

Whatever goals a company pledges to reach, or standards to obey, such as fair working conditions and the protection of human rights, there must be a specific, practical application. Without this, codes will set only the overall ground rules for corporate conduct.

Critics attack the notion that voluntary codes can serve as a method of corporate accountability because corporations can simply use their participation as a substitute for real progress, distracting the public from the continuing violation of human rights, labor rights or environmental standards.

UN Secretary General Ban Ki-Moon, who opened the summit, acknowledged these weaknesses, stressing that companies which fail to meet their commitments within two years will be delisted from the UN Global Compact.

In fact, according to Global Compact Executive Director Georg Kell, 335 companies were delisted from the network last year for failing to report significant progress in implementing the ten principles.

Business executives, however, who have been observing the impact of the CSR campaign as the concerted effort, have kept a spotlight on undesirable practices. At various times, companies have stopped doing business with overseas contractors who disregarded standards.

Often companies lead the way to improvement. For example, a decision by Reebok not to sell soccer balls made through child labor practices was swiftly followed by similar commitments from other companies. This happened despite the (short-term) costs such commitments entailed.

"Our foreign buyers have always scrutinized our operations to ascertain whether our pulp and paper are derived from sustainable plantations," said A. J. Devanesan, president of Asia Pacific Resources International Holdings (APRIL), which operates a two-million ton capacity pulp industry in Riau.

In fact, pulp which is certified as sourced from sustainable managed forests or plantations commands higher prices than uncertified product, added Devanesan, who attended the summit meeting.

The summit urged the Global Compact's 4,000 members to encourage their supply-chain partners and other organizations they do business with to integrate the core values of human rights, environment, labor and anti-corruption into their operations.

Good corporate practices bring commercial benefits too. They help firms achieve a variety of goals: Protect their corporate reputation, improve employee morale, enhance consumer and client loyalty, and avoid costly criminal and civil proceedings.

Even mainstream investors are now paying more attention.

Recent studies by McKinsey & Company consultants conclude that while the capital markets have not yet mainstreamed environmental, social and good governance norms, there have been many investor initiatives which encourage socially responsible, ethically right and environmentally friendly investment.

The consulting company estimated there are now more than US$8 trillion investment funds managed by firms which factor environmental, social and governance issues into their investment analyses and decision-making processes.

So, while some stakeholders feel many companies just pay lip service to standards, these codes do in fact have bite. Companies who do not practice what they pledge risk adverse publicity and customer loss, even black-listing.

Related Article : China executes the former head of its food and drug agency

Charities bring free education to Bogor village

Theresia Sufa, The Jakarta Post, Bogor

Three philanthropic groups have set up a free school in a village on the outskirts of Bogor, making it easier for village children to remain in school.

The three groups -- Soekarseno Peduli Foundation, High Desert International Foundation (HDI) and Jakarta Menteng Rotary Club -- officially opened junior high school SMP Pangerasan in Cijeruk on Saturday.

The school has already enrolled 60 new elementary school graduates.

Previously, the nearest junior high school was located about five kilometers from the village.

Because there is no public transportation in the area, children had to walk through rice fields and a bamboo forest to reach the school.

"I was going to enroll in SMP PGRI 17, in the center of Cijeruk district, but my elementary school teacher enrolled me here, so it won't cost so much for my parents (for school fees and transportation cost)," said 13-year-old Herni Mariani.

The three organizations spent Rp 425 million in setting up the school.

Rotary Club Bogor will also help provide textbooks for students.

"I know how difficult it is for the government to set up a good school and provide quality teachers. It cannot work alone, that is why we will help build some 1,000 schools nationwide," HDI chairman Peter Chia said.

HDI is already working with Soekarseno Peduli Foundation on plans to build a vocational high school in the village.

The vocational school would be located in the same complex as the junior high school, helping students complete secondary school.

Soekarseno Peduli Foundation previously helped renovate nine elementary schools in Cijeruk district.

"Only 10 students from those nine schools were able to attend the junior high school located in the middle of the district," foundation chairwoman Herdiana Kiehl said.

"That's why we felt it necessary to bring education closer to them," she said.

The foundation has selected 10 top students from neighboring elementary schools and will cover all of their education expenses to attend the new junior high school.

Jakarta Menteng Rotary Club president Peter Fanning said his organization also would help provide electricity for villagers.

SIS students to plant 1,000 trees

The Jakarta Post, Jakarta

The Singapore International School in Jakarta is preparing for an environmental project for its students as part of the school's co-curricular activities (CCA).

The program is designed to broaden the knowledge and expertise of the students, especially in environment conservation.

"The preparation is still in progress. We will complete the project, hopefully in September," project advisor John Christian Torr told The Jakarta Post.

His team, he says, is now working on preparation through a series of meetings and discussion with parties involved including French nongovernmental organization Action Contre La Famme.

The project, called A Thousand Trees, was inspired by the well known story of Sadako Sasaki, a young Japanese girl who, while lying sick and dying in hospital, folded a thousand paper cranes (birds) with a hope she could get well.

She continued to fold cranes in her hospital bed until the day she died in a hope that she might also heal the whole world, according to a release from Singapore International School.

School principal Chris Lasdauskas said the children participating in the A Thousand Trees project plan to planting 1,000 trees and other plants in Penjaringan, North Jakarta.

The area was chosen because it represents urban and industrial areas that are in need of greening, especially after flooding and subsequent land erosion.

The children plan to work hand in hand with the French NGO, which will provide the necessary support and expertise, as well as with Penjaringan residents.

"With this synergy, this coming together of different communities with a common purpose, we all hope that this project is a successful one," Lasdauskas said in a press release.

French to help with city database

The Jakarta Post

JAKARTA: The French government has recently confirmed it would help Jakarta set up a public service database for the city's crisis center, a city official said.

The database is planned to be an online system collating recorded data from all city public service agencies in one place.

"With this system... all public service data (in Jakarta) will be connected to our crisis center," Jakarta public order agency head Harianto Badjoeri said Friday.

The online system would allow the city to better manage evacuation and rescue efforts during emergencies, he said.

"For example, if a flood occurs, we will be able to quickly identify how many beds are available in hospitals or whether there will be enough food stockpiled for the victims," he said.

Aside from providing the hardware, the French government would also provide training for system operators.

"The new system would require some 25 operators at the center, while currently we only have 10 people," he said.

The French government has already installed a similar system in Aceh.

371,142 gas stove will be distributed to poor families

Jakarta (ANTARA News) - As of July 9, 2007, at least 371,142 gas stoves along with their gas containers will be distributed free of charge to poor families, the launching of which will be opened by Cooperatives, Small and Medium Entrepreneurs Minister Suryadharma Ali.

Speaking in a press conference here on Friday, Production Dputy of the Cooperatives, Small and Medium Entrepreneurs (SMEs) Ministry Muzni HA Djalil said the launching of the gas stoves to poor families would be held in Cibodar village, Cibodas sub-district, Tangerang City, Banten Province.

The launching was part of the distribution program which will be followed in other regions of Jakarta, West Java and Banten.

PT. Bimadaya Inti Dinamika won the tender for gas stoves and gas containers distribution, including a census of poor families living in North and East Jakarta, Depok, Tangerang and Bekasi.

The government has entrusted the supply of around 371,142 gas stoves to poor families to the Cooperative and SMEs Ministy which is expeced to help prevent poor families from depending on kerosene.

PT. Bimadaya Inti Dinamika was given 90 days to distribute the stoves to the eligible poor families.

If based on the result of the census of prospective recipients, the allocation could not yet be met, it will be rearranged so that the recipients really deserved the gas stoves.

According to Muzni, the poor families however had to meet some requirements, firstly the prospective families should be kerosene consumers, and do not have gas stoves. The second requirement is that they have an ID card and family card issued by their neighborhood auhorities.

The third, they should be ready to switch from kerosene to gas, and the fourth is that they must also be ready to maintain the gas stoves, and not transfer them to other people, and the last requirement is that one poor family is entitled to only one gas stove.

Moreover, Muzni further explained that the success of the program depends on the assistance and active role of the local government up to village level in determining prospective recipients.

It was reported that the tender for the supply of 371.142 gas stoves was worth Rp38,784,339,000, while the cost the government has to bear for the census and distribution of gas stoves and gas containers was estimated at Rp6,976,126,000.

Carbon credit boom in the offing for Indonesian firms

Andi Haswidi, The Jakarta Post, Jakarta

Companies in developing countries engaging in carbon credit sales are likely to increase their earnings significantly this year as the global value of the market, which reached about US$30 billion in 2006, is expected to double, an analyst says.

"The market value of carbon credits is likely to again increase in very, very significant percentages. It could be double again," Jotdeep Singh, Rabo India Finance's head for renewable energy and carbon credits in Asia Pacific, told The Jakarta Post.

Rabo India Finance is a subsidiary of Rabobank International.

Singh said that as carbon credit trading itself only commenced in October 2005 following the ratification of the Kyoto Protocol, more countries had been entering the market recently.

"You have a few countries that have taken the lead in terms of volumes and projects, such as China and India. Therefore, Indonesia does not want to be left behind. More and more companies need to find this out, what the opportunities are for them."

What is of concern to developing countries, like Indonesia, Jotdeep said, is how to promote the Clean Development Mechanism (CDM).

The CDM is an arrangement under the Kyoto Protocol allowing industrialized countries, also called the Annex 1 countries who signed quantitative limits to their gas emissions, to buy carbon credits from other countries -- mostly developing countries -- who did not sign up to poverty reduction goals under the Protocol.

Last year, CDM projects contributed about $5 billion to the total world market value, and is also expected to double this year.

"These non-Annex 1 countries still have the challenge of addressing poverty. That is why they were exempted from taking on emission reduction targets, because it was seen that the targets could harm their economic growth and therefore their poverty reduction efforts."

With that advantage in hand, companies in developing countries can reduce their gas emissions and obtain carbon credit certificates, called Certified Emission Rights (CERs), from the United Nations, which can later be traded.

A one-ton carbon dioxide reduction is estimated to be worth $13.

So far, Indonesia has only registered nine CDM projects, which delivered over one million tons of CO2 reductions. Another nine are still in the pipeline, Jotdeep said.

Indonesian Chamber of Commerce and Industry (Kadin) chairman Muhammad Hidayat admitted that the participation of local companies in mechanism was still as most businesses still had little idea of what it was all about.

"Indonesia has a big potential. I have received offers from Northern European countries that want to trade carbon credits with Indonesian companies. I've also met the Norwegian prime minister, who wanted to discuss a couple of projects, with one of them located in Bali," Hidayat said.

Companies planning to reduce their greenhouse gas emissions should prepare a document outlining their plans and hire a consultant to prepare a carbon credit proposal for submission to the UN. These proposals are known as Project Design Documents (PDD), which must be validated by UN Designated Operating Entities (DOEs).

Consultation and validation combined can cost from $30,000 to $50,000, Jotdeep said.

Those firms that cannot afford consultancy or validation can avail of the Verified Emission Reduction (VER) mechanism, which also involves a form of tradable credits, but which entails a lower cost compared to the CER.

Yudhoyono wants private sector in railway business

M. Taufiqurrahman, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono has called on the private sector to invest in the rail industry as part of efforts to rejuvenate the country's shabby railway network.

"Following the passage of the rail transportation law, I call on the private sector to take part in revitalizing the national rail industry," Yudhoyono said in a speech to open the double-track railway linking Tanah Abang in Central Jakarta and Serpong in Banten.

Yudhoyono also asked the private sector to make the maximum use of the homegrown technology.

The House of Representatives endorsed in March a controversial rail transportation bill which allowed the private sector to take part in the rail industry.

The law stipulated the private sector, including multinational corporations, was allowed to participate, along with the state-owned PT Kereta Api Indonesia (KAI), in providing rail transportation and the manufacture of supporting facilities.

The law required the government to issue a regulation on the detailed participation of the private sector in the rail industry.

Yudhoyono said given rail transportation's massive appeal, the Transportation Ministry should improve its overall safety standards.

He called on PT KAI to maintain and refurbish old carriages as part of efforts to reach a target of zero-accidents.

The newly-inaugurated double track has been under construction since August last year and cost the central government Rp 320 billion (US$35.3 million).

The project included the construction of a 24-kilometer double-track; rebuilding five stations, two substations and 12 bridges; and compensating the owners of semi-permanent houses demolished along the route.

The double track would see up to 178 trips and would carry more than 55,000 passengers a day. Previously the track carried 89 trips.

The Transportation Ministry put the Serpong double-track project on a priority list of infrastructure projects in 2006, along with the Pasoso-Tanjung Priok route and the Manggarai-Bekasi double-track.

The Serpong-Tanah Abang route would become the pilot project for a modern railway network in the country.

All stations along the route, also known as the green line, would use an electronic ticketing system.

After the inauguration ceremony, Yudhoyono took part in the maiden trip of the economy class electric train, Ciujung.

Tickets for the economy class train, which has air conditioning, are more expensive than tickets for regular economy class services.

PT KAI said it planned to import 160 electric train cars this year from Japan and would build more tracks to serve commuters in Greater Jakarta and surrounding areas.

Currently, 65 trains serve nearly 500,000 commuters in the city every day.

New negative investment list 'treading water'

Urip Hudiono, The Jakarta Post, Jakarta

The government has issued its latest so-called negative investment list, which sets out a more comprehensive description of which business sectors are closed to foreign investors.

The new list, required under the recently enacted Investment Law, governs a total of 338 business sectors, of which Trade Minister Mari Elka Pangestu said 69 sectors would now be more open than before, with 11 becoming more restrictive.

The previous 2000 and 2001 negative investment lists covered 83 sectors.

The list increases the number of closed sectors to 25 from 11 previously so as to protect the national interest in such areas as public health, the environment, culture and natural biodiversity. It also prioritizes 43 sectors for small and medium enterprises (SMEs).

Other sectors will, however, be more open to foreign investors than before. Under the new rules, non-national investors will be allowed to take controlling stakes in banks (up to 99 percent), the power sector, oil and gas industry, tollway operators, water companies, agriculture and plantation firms (95 percent), insurance firms (80 percent), the pharmaceutical industry (75 percent), health services (65 percent) and construction (55 percent).

In the telecommunications sector, foreign investors will be allowed to own up to 65 percent of cellular operators, but only 49 percent of fixed-line phone companies.

Other sectors that will also be opened up to overseas investment include transportation and education, although these are limited to 49 percent. Foreign investors can also join up with local firms in the tourism and recreational sector in designated parts of the country.

Mari said the list would not be applied retroactively.

Coordinating Minister for the Economy Boediono said he expected the new negative investment list to provide more clarity and transparency as it summarized the prevailing rules governing investment in each sector.

He also said that the government would set up a team to regularly review the list.

The list comes into effect three years from the date of its issuance, that is, in 2010, and applies throughout the country, including special economic zones.

The business community cautiously welcomed the new list.

However, Indonesian Chamber of Trade and Industry (Kadin) chairman M.S. Hidayat criticized the use of the unusual formula, "50 percent foreign ownership", in a number of sectors, saying that this was uncommon in normal business practice.

"There's no such thing as a 50:50 business. It's either a majority stake or a minority one. It has to do with decision making," he said.

Hidayat said Kadin would evaluate the list with representatives of the overseas chambers of commerce and others from the business community so as to elicit suggestions and comments about it, including the question of incentives for investments in pioneering sectors.

International Business Chamber chairman Peter G. Fanning questioned how the list would be applied, although he admitted it offered more clarity and transparency, while the restrictions it imposed would be unlikely to have adverse consequences for investment in Indonesia.

"It's not a step back. But it's not a leap forward either," he said.

RI, Aussie forge cooperation in improving performance of flight regulators

Jakarta (ANTARA News) - Indonesia and Australia forged a cooperation on a Rp178 billion transportation safety assistance program to improve flight safety.

"The program will be focused on efforts to improve the performance of regulators, managers, safety investigators and flight operators in Indonesia," Susan Page, chairwoman of a visiting Australian delegation to a strategic summit on flight safety in Indonesia, said here on Wednesday.

In a press release issued by the Australian embassy here on Wednesday, Page said the Rp178 billion aid package will in three years be prioritized on efforts to overcome heavy safety challenges of air and sea transporation in Indonesia.

A change in supervision and transportation safety services in Indonesia is part of practical steps to be taken, said Page who is in Indonesia to attend the flight safety meeting this week.

"The outcome of an assessment on transportation safety by the Indonesian government and the International Civil Aviation Organization will be used in a working program we are trying to develop and this information will be followed by a joint workshop in Indonesia in next few months," Page said.

On the sidelines of a meeting in Bali this week, officials of the two countries` transporation services discussed how the aid package could be used.

In the meantime, Australian Ambassador to Indonesia Bill Farmer warmly welcomed the news on the progress reached in the Bali meeting in identifying objects that could be the subject of the aid target.

"The Australian transporation institution has cooperated closely with Indonesia as its partner in the past few years including a program funded by Australia, valued at A$1.1 million (Rp7 billion) in the 2006-2007 period. At least 340 Indonesian flight safety officials have been trained in international standards," he said.

Earlier, Chairman of the Indonesian National Air Carriers Association (INACA) Rusdi Kirana said the focus of his side`s recommendation was on improvement in quality and quantity of flight personnel in anticipation of the ASEAN aviation liberalization (Open Sky) in 2008.

U.S. offers RI debt-for-nature swap

Abdul Khalik, The Jakarta Post, Jakarta

The United States has agreed to include Indonesia in a debt-for-nature swap that will involve US$19.6 million of the country's debt to the U.S. being used to finance tropical forest conservation programs.

The U.S. Embassy here said in a statement that under the Tropical Forest Conservation Act (TFCA), a portion of Indonesia's debt could be reduced and re-directed to finance conservation of the country's tropical forest, considered as one of the world's largest and most diverse.

"The U.S. Treasury Department will provide a provisional allocation of $19.6 million for the treatment of eligible debt. Initial discussions toward an agreement are expected to begin in the coming weeks," the embassy said.

It added that once concluded, the swap package for Indonesia would be one of the largest under the TFCA.

Indonesian Forestry Minister M.S. Kaban welcomed the U.S. announcement as a beginning of a bold measure to conserve the country's forest.

"This is good news," he said during a meeting with representatives from the U.S. Embassy.

The embassy said the U.S. government welcomed Indonesia's participation in the program as it recognized the country's forests as some of the most significant and biologically diverse in the world.

Foreign Ministry director for American affairs Harry Purwanto also hailed the announcement, saying Indonesia's proposal for the debt swap had paid off.

"We submitted proposals for debt swaps to several countries, and the proposal to the U.S. was one them. We hope more countries agree to our proposals," he told The Jakarta Post.

With outstanding sovereign foreign debt of $74.1 billion, Indonesia must pay around $7.8 billion a year on the interest and principal.

The embassy said that to date, 11 countries in Africa, Asia, and Latin America had entered into debt-for-nature agreements under the TFCA.

"These agreements will generate more than $135 million to conserve important tropical forest in these countries over the course of 10 to 25 years," it said.

The embassy said the program might be expanded to include coral reefs, often referred to as the rain forest of the sea.

This year, the Indonesian government has earmarked Rp 4.1 trillion ($454 million) from the Forestry Ministry's rehabilitation fund and the state budget to rehabilitate damaged forest throughout the country.

Many have warned of the rapid destruction of Indonesia's forests. Greenpeace recently applied to the Guinness Book of World Records to have Indonesia included in its 2008 edition for having had the fastest rate of deforestation in the world between 2000 and 2005.

Indonesia is estimated to have lost 72 percent of its approximately 123.35 million hectares of ancient rain forest, and half of what remains is threatened by commercial logging, frequent forest fires and land clearance for palm oil plantations.

PLN launches tender for Muara Bekasi-Meara Tawar gas pipeline

Jakarta (ANTARA News) - Indonesia's state-owned electricity company PT Perusahaan Listrik Negara (PLN) said it has launched a tender for the construction of a 7.2-kilometer gas pipeline from Muara Bekasi to its Muara Tawar power plant in West Java.

Tony Agus Mulyantono, PLN's deputy director for primary energy and power plants, said 10 companies have expressed interest to participate in the bidding process.

He gave no further details.

He was quoted by Thomson Financial as saying construction of the gas pipeline is expected to start in September..

Madinah chamber of commerce interested joint with Indonesia

Sana`a (ANTARA News) - The Madinah Chamber of Commerce and Industry in Saudi Arabia, expressed interest in joint investment in projects both in Madinah and in several places in Indonesia.

``Therefore it would be necessary to introduce investment opportunities both in Madinah and in Indonesia with a view to establishing a partnership between the businessmen of the two countries,`` Chairman of the Madinah chamber, Saleh Al-Suhaimi, said here on Tuesday.

The Madinah chamber`s wish was conveyed in a meeting with an Kadin delegation led by Fachruddin Lamhuddin here on Monday. The Madihan chamber also wished for the participation of Indonesian businesspeople in building the Madinah-Mekkah railway track project.

The Indonesian chief delegate said that their visit to Madinah was part of Indonesia`s efforts to bolster trade relations with Saudi Arabia.

Nacorp to invest US$266.4 mln in SE Sulawesi`s plantation sector

Kendari (ANTARA News/Asia Pulse) - Plantation firm PT Narya Corporindo (Nacorp) says it is planning to invest Rp2.4 trillion (US$266.4 million) in the plantation sector in Southeast Sulawesi province.

Of the total amount, Rp1.3 trillion will be used to buy a sugar mill from Brazil and Rp1.1 trillion to develop 45,000 hectares of sugarcane plantation in South Konawe district, Nacorp President Director Maxi Gunawan said here Tuesday.

"It is expected the sugar mill and bio-ethanol plant will start production in 2010," he added.

Adaro May Seek $600 Million in Record Indonesia IPO

By Leony Aurora and Wahyudi Soeriaatmadja

July 2 (Bloomberg) -- PT Adaro Indonesia, the nation's second-largest coal producer, plans to sell shares in what would be the country's biggest initial public offering.

Adaro may raise as much as $600 million selling between 20 percent and 30 percent of existing and new shares this year, said three people with knowledge of the plan. The proceeds will be used to pay debt, said the people, who declined to be identified because an announcement on the sale is pending.

Coal prices have surged after China, the biggest consumer of the fuel, cut exports and India sought more shipments to fire power stations. The Jakarta Mining Index, which tracks Indonesia's 10 mining companies, has surged 77 percent this year, more than four times the 18 percent gain of the broader Jakarta Composite index.

The IPO would help Adaro ``expand their volume aggressively and take advantage of the coal price increase,'' said Sebastian Tobing, an analyst at PT Trimegah Securities in Jakarta. ``Coal is a booming sector. The IPO would be attractive.''

BI launches programs to support SMEs

The Jakarta Post, Jakarta

Coinciding with its 54th anniversary, Bank Indonesia officially launched four programs Monday focusing on the strengthening of micro, small and medium enterprises (SMEs) in the provinces to help accelerate the growth of the real sector.

The programs comprise the establishment of a task force to facilitate the acceleration of regional economies, a pilot project to cluster SMEs based on commodity and geographical groupings, an on-line service providing business data and information, and a visitor center at BI's headquarters, BI governor Burhanuddin Abdullah said.

They are all part of BI's commitment to improving the real sector in the regions, especially the role of SMEs, added Burhanuddin.

The task force is tasked with finding solutions to the problems hampering the strengthening of the real sector in different regions.

It's membership will consist of representatives from BI, provincial leaderships, commercial banks, private companies and academic institutions, and it is expected to function as a mediator and guarantor for SMEs in securing loans from banks.

The task force has already established pilot projects in eight regions, including Medan (revitalization of oil palm and rubber plantations), Bandung (vanilla, corn and rice cultivation), Manado (corn cultivation), Cirebon (cassava cultivation), Pontianak (orange groves), Jambi (palm and rubber plantations), Kupang (seaweed farming), and Purwokerto (goat raising).

As for the pilot projects to cluster SMEs based on commodity and geographical groupings, Burhanuddin said that these were intended to improve the bargaining positions of SMEs.

"SME clusters have been established in six provinces comprising Banten for the promotion of emping mlinjo (rice crackers), West Java for paprika, West Nusa Tenggara for seaweed, Central Java for rattan furniture, East Java for shoes and North Sumatra for cassava."

Burhanuddin further explained that the on-line service would provide up-to-the-minute information on business in Indonesia via the BI website at www.bi.go.id.

The information service, which would provide both micro and macro information, was expected to help improve the intermediation role of the banks in channeling loans to SMEs.

Lack of capital is one of the many problems facing SMEs, the economic mainstays in most of the country's provinces, as they attempt to grow their businesses.

BRI to acquire 100 pct stake in Bank Jasa Arta

Jakarta (ANTARA News) - Indonesia's PT Bank Rakyat Indonesia (BRI), the country's fourth largest bank by assets, said it has signed an agreement to acquire a 100 pct stake in PT Bank Jasa Arta.

In a statement to the Jakarta Stock Exchange, BRI was quoted by Thomson Financial as saying the signing of the deal took place last Friday but it gave no financial or other details of the acquisition.

Indonesia`s Medco buys 40 pct interest in Tunisia`s Anaguid block for $10 mln

Jakarta (ANTARA News) - Indonesian oil and gas firm PT Medco Energi Internasional said it has purchased a 40 pct participating interest in the Anaguid exploration block from Anadarko Tunisia Anaguid Company for 10 mln usd.

Anadarko Tunisia is an affiliate of US-listed Anardako Petroleum Corp.

In a letter to the Jakarta stock exchange, Medco was quoted by Thomson Financial as saying it purchased the stake through its wholly-owned Tunisian unit Medco Tunisia Anaguid Ltd.

It said Anadarko will also sell a 15 pct participating interest in the block to Pioneer Natural Resources Anaguid Ltd, raising Pioneer's interest to 60 pct.

In addition, Anadarko will hand over operating control of the block to Pioneer Natural Resources.

Malaysia`a Borneo Oil unit to acquire Indonesian oil company for 30.87 mln rgt

Kuala Lumpur (ANTARA News) - Malaysian oil and gas company Borneo Oil Bhd said its unit Borneo Oil (Indonesia) Ltd will pay 30.87 million ringgit to acquire Indonesian company PT Pelangi Haurgeulis Resources.

Pelangi Haurgeulis holds a 20-year technical assistance contract (TAC) for oil and gas field development of the Haurgeulis field in Indonesia.

Borneo Oil (Indonesia) will acquire the entire issued shares of Pelangi Haurgeulis from PT Bumi Hastamukti and PT Pancuran Rizki Semesta, the company was quoted by Thomson Financial as telling the Malaysian exchange Tuesday.

Borneo Oil said the acquisition will enable it to develop "a balanced portfolio of oil and gas assets."

The 20-year TAC was awarded to Pelangi Haurgeulis by Indonesia's state oil company Pertamina in 1995. The Haurgeulis field, which has a daily output of about 1.5 million standard cubic feet of gas, is located in an onshore region in West Java, east of Jakarta.

Indonesia appoints France`s Thales to build new satellite

Jakarta (ANTARA News) - Indonesia's Indosat on Tuesday said it had appointed Thales Alenia Space France (TASF) to build and launch its latest telecommunications satellite, Palapa D.

In a statement, the company said the satellite will be launched in 2009 and have a service life of 15 years. It will replace its existing Palapa-C2 satellite which is set to end its service life in 2011.

Indosat president Johnny Swandi Sjam was quoted by AFP as saying in the statement that the satellite will be provided to TV broadcasters, VSAT providers and other corporate customers.

Indosat will also use the new satellite as a backbone to support other services, such as cellular, fixed voice telecommunications and fixed data services.

The new satellite will have a larger capacity than its predecessor, with coverage extending to Indonesia, other Asian countries, the Middle East and Australia.

Indosat is 41.9 percent owned by Singapore's ST Telemedia.

Indonesia, an archipelagic nation heavily dependent on satellites for its telecommunications, has in the past mostly had its satellites built in the United States.

Aston Int`l to build more hotels, resorts in Indonesia

Jakarta (ANTARA News/Asia Pulse) - Aston International is planning to increase the number of hotels, resorts and residence it runs in Indonesia to 30 by the end of next year, its president and CEO Charles Brookfield said.

The increasing number of hotels in many cities and towns in Indonesia was undeniable as many Indonesian people were conducting their working or business meetings in and touristic visits from hotels, he said here Monday.

US-owned Aston International was currently managing 12 hotels in Jakarta, Palembang and Bandung as well as in Bali island, he said. Aston International, which had moved its headquarters from Hawaii to Jakarta, was now developing 18 other properties across Indonesia, he said.

Netherlands to buy carbon credits from Pontianak landfill gas flaring

On 14 June Ambassador Dr N. van Dam, together with the mayor of Pontianak, Dr H. Buchary Abdurrachman, witnessed the signing of the Emission Reduction Purchase Agreement for the Pontianak Landfill Gas Flaring Project, executed by project developer PT Gikoko Kogyo and the International Bank for Reconstruction and Development, in its capacity as a trustee of the Netherlands CDM Facility.

The Netherlands are buying an amount of 350.000 Certified Emissions Reductions from the Pontianak Landfill Gas Flaring Project. These reductions will help the Netherlands to meet part of its ambitious greenhouse gas reduction obligation under the Kyoto Protocol and reduce the global emissions of greenhouse gases.

The Pontianak Landfill Gas Flaring Project is the first project under the bilateral Clean Development Mechanism (CDM) cooperation between the Netherlands and Indonesia. The Netherlands and Indonesia entered into a bilateral CDM cooperation 2 years ago, with the signing of the Memorandum of Understanding on Cooperation under the CDM between the Ministry of the Environment of Indonesia Kementerian Lingkunan Hidup and the Ministry of Housing, Spatial Planning and the Environment (VROM) on 22 February 2005.

The implementation of this project for Landfill Gas Flaring on the landfill of the Municipality of Pontianak, TPA Batu Layang, will abate approximately 1.5 mln tonnes of CO2 equivalent during the proposed project life. This contributes to the greenhouse gas abatement goal of the United Nations Convention on Climate Change.

In addition to this global benefit, the project will contribute locally to sustainable landfilling and municipal solid waste management. Furthermore, this private sector investment in solid waste management demonstrates the commercial opportunities for sustainable municipal solid waste management as well as environmental and social improvements.

Mobile-8 seeks greater market share, expands network coverage

Apriadi Gunawan, The Jakarta Post, Medan

Cellular operator PT Mobile-8 Telecom has gone nationwide to take on its competitors in Indonesia's growing mobile phone market, rolling out its "Fren" brand service outside Java in Medan, Makassar and Denpasar.

The company expects the expansion of its CDMA-based network coverage to the capital cities of North Sumatra, South Sulawesi and Bali will contribute up to one million of four million new subscribers it is aiming to sign up this year, the company's head of corporate affairs, Merza Fachys, said at the opening of the company's new office in Medan on Saturday.

The expansion is also expected to help the company reach 80 percent coverage of Indonesia by 2010 from its current 42 percent coverage through 407 signal-transmitting base stations.

Mobile-8's new network in Medan, Indonesia's third largest city, will for the meantime only use 100 new base stations and only cover the three surrounding regencies of Labuhan Batu, Karo and Langkat, the company's vice president for the Sumatra region Winetou Lubis said.

It will later be expanded to be able to provide at least two million new numbers each year, Winetou said.

Merza said after Medan, Makassar and Denpasar, Mobile-8 will expand its network throughout Sumatra -- including Riau, West Sumatra, South Sumatra and Lampung -- and in Sulawesi to the North Sulawesi province.

Kalimantan is also on the company's network coverage expansion list, including the provinces of West Kalimantan, South Kalimantan and East Kalimantan.

"We plan to invest US$125 million alone this year for expanding our network coverage throughout the country," Merza said.

Mobile-8 Chief Operating Officer Chee Pok Jin said investment for the network expansion -- which will include adding 1,408 new base stations by the end of this year -- will come from funds raised in an initial public offering last year, as well as from loans.

The publicly listed company, which first rolled out its service in December 2003, has been aggressively trying to increase its share of Indonesia's mobile phone market, which looks set to grow to 42 percent of the population or 100 million customers by 2009.

The company wants to double its customer base to 7.9 million subscribers next year, Pok Jin said.

There are at present more than 45 million GSM-based cellular users, and some seven million CDMA-based subscribers.

Mobile-8's competitors include GSM networks Telkomsel, Indosat and Excelcom, and Bakrie Telecom and Telkom Flexi from the CDMA camp.

Amway Indonesia shows how philanthropy works in business

Andi Haswidi, The Jakarta Post, Jakarta

On June 26, Indonesia's biggest multilevel marketing company, Amway Indonesia, celebrated its 15th year of operation in the country.

Last year the company booked 30 percent growth in total sales, which surpassed the 25 percent growth in 2005, and lifted the number of its distributors to more than 300,000.

To mark its anniversary, Amway Indonesia held the two-day Amway Product Expo and National Convention at the Jakarta Convention Center last week. The event was attended by Amway Corporate chairman Steve Van Andel, the son of Amway founder Jay Van Andel.

Talking to The Jakarta Post, Andel shared his hopes for the Indonesian market and for philanthropy.

Question: The government may impose a new regulation that demands foreign multilevel marketing companies (MLMs) establish a production line in the country. Your comments?

Answer: Our investment is not really determined by regulations but more by the demand from our consumers, what their needs are and what their interests are. If they are interested in us selling rice, which they are, then we do it just like in our partnership program with Indonesian small and medium enterprises.

If there is a need to do something in order to help our consumers here, would we invest in Indonesia? We certainly would look at it. It is not something we would say no to.

However, investment does not always means building factories. It can come in various forms such as in human capital.

Manufacturing is one of the aspects, but it doesn't mean we have to invest in it. We do a lot of other investment, opening this new office is also investment.

What we invest in depends on what is needed in the market, at this moment, and in the future.

Can you talk more about the partnership with Indonesian SMEs?

It's just an opportunity that we had in Indonesia, working together with PT Usaha Kita Makmur Indonesia, who came to Amway to seek potential to develop SMEs in Indonesia.

Most of the products are food-related products. The target market that we are trying to help is the farmers and their families. We made sure that the farmers get the certainty of market, price and crop. And we make sure they get development in techniques and skill so they will be able to farm better.

We purchase rice, for example, and we purchase at a higher price than the market price. The same is true for corn. We guarantee that they will buy the crop and at a higher market price too. The SME products take up about 1 percent of our total sales.

Considering it's such a small portion of sales, what's the main reason behind the partnership?

We see that the concept is very closely related to the vision and mission of Amway, globally, because we want to help people to lead a better life.

For us, it really goes back to the foundation of our business. Because when our business was started by my father 50 years ago, his aim was to help people to lead a better life.

I consider him as a philanthropist. He was somebody who was very interested in helping out people.

He said that wherever we do business, we would like to share with the communities that we live in. We actually started doing social responsibility projects before we actually started the business. Because it is a part of who we are and it is the right thing to do.

Is that the secret of Amway's success in Indonesia?

It's not much of a secret really. Our success had to do with two things, the people and the products. The people are easy to see, all you have to do is see our employee base and you can see the expertise there.

And you can look at our distributor base and see the talent that we have in sales. I think the people is half of the equation, the other half is the products themselves.

What can you say about Indonesian distributors, in the sense of how they compare to their counterparts in other countries?

The Indonesian distributors are fantastic distributors. I have had the chance to go around different markets in the world and see all different sorts of people, but you can tell even by the growth numbers that the perspective of Indonesian distributors on what it takes to be an entrepreneur, the standard is right up there with the rest of the world.

Where does the Indonesian market sit among the regional countries?

In the world Indonesia ranked as number 14 out of 55 countries. So, that's not a bad ranking. When it comes to new people entering the business, Indonesia is number seven in the world. Out of the top 10, seven are Asian countries.

We see the growth of Amway globally everywhere is the same.

Well, we have a target of 20 percent this year, and that comes after the 30 percent growth last year. Amway Indonesia has been growing very steadily. It's not something that takes off like a rocket and then comes down like a rocket.

Globally, we gathered total sales value of US$6.3 billion last year.

SK Corp to invest US$200 mln in Indonesian lube-based project

Jakarta (ANTARA News/Asia Pulse) - South Korean chemical company Sun Kiong Corp will invest US$200 million in a lube-based oil plant being built in Dumai, Riau, in cooperation with PT Pertamina.

A Pertamina spokesman Toharso said the state-owned oil and gas company, which contributes only land to the joint venture project, will own 40% of the project and the Korean partner will hold the majority stake of 60%.

Construction of the project, which will produce third generation lube-based oil with a capacity of 7,000 tons a day, had already been underway since February and was to be completed in 2008, Toharso said.