Indonesia Must Heed the Golden Rule for Attracting Investors

Jakarta Globe, James Van Zorge, March 24, 2010

In comparison to other emerging economies, Indonesia should qualify as a prime investment destination for multinational corporations. Inflation rates are low and the currency is stable. Tax and wage policies are reasonable and competitive. Public debt is not excessive. The domestic market for most consumer products is huge and growing. There is political stability.

Yet, there is also a gnawing feeling that something is not right. Indonesia should be attracting more foreign direct investment. Gita Wirjawan, the head of the Investment Coordinating Board, has been trying to promote Indonesia as a place to do business. He is attempting to open up more sectors to foreign investors with the hope that additional opportunities will translate into more dollars flowing into the economy.

To a certain extent, Gita’s thinking is right. Business thrives on opportunity. And when the right opportunity presents itself, you can be sure that business will follow.

The problem is, not everybody in the Indonesian government shares Gita’s attitude. Many politicians say they want more investment but they fail to act accordingly. They don’t always admit it, but in their heart-of-hearts they view foreign investment as a necessary evil to be accepted grudgingly if at all. They think if a foreign company invests in the country it means one less opportunity for a local businessman. In their minds, if a multinational corporation has a profitable business in Indonesia, then something is wrong and it should be punished somehow.

Unfortunately, a double standard is being applied here. Indonesian politicians complain that the wages being paid by multinational corporations to local employees are too low yet they say nothing when domestic companies pay the same or even lower salaries to their own workers. They become rabid environmentalists when talking about foreign natural resource companies but fall silent when locals pollute or cut down huge swathes of precious rain forest.

Multinationals are constantly being lectured by Indonesian politicians that they must exercise corporate social responsibility — which means putting some of their profits back into a local community for much-needed public services such as education and health care. A noble undertaking, indeed, and many foreign executives are keen to have their companies make meaningful social contributions. One could only wish that more local conglomerates would be expected to do the same.

Treating local companies with kid gloves and bludgeoning multinationals with a hammer is, of course, nothing new in developing countries. As a matter of fact, it used to be a lot worse. In the 20th century, during the post-colonial era, it was not unusual to have leaders of newly-independent countries berating and punishing foreign investors for their capitalist ways. State-run economies and protectionist policies were fashionable. With memories of colonial masters still strong, expropriation as an act of delayed revenge was a convenient — and popular — policy weapon.

Today’s leaders of developing countries are not completely convinced about the professed benefits of globalization but they are more likely to seek market-friendly policies than before, if for no other reason than the fear that their economies will be punished for doing otherwise. They might offer some polite applause for Venezuela’s Hugo Chavez or even the generals of Burma for their chuztpah and machismo in facing down the West. But they also know that testosterone-charged behavior doesn’t help to pay the bills.

Still, old habits die hard. Some of the world’s largest emerging economies — Russia, China and India — often make the news for their shoddy treatment of investors. Indonesia is no exception. President Yudhoyono claims that his country is open for business but he should not forget that foreign investors have an elephant’s memory. Every time a multinational gets a raw deal and is treated badly by the government, boardrooms take notice.

If Indonesia’s leaders are serious about beating the competition, attracting more foreign direct investment and reaping the rewards of higher growth rates, then they have to realize that just whispering sweet nothings into the ears of executives will not win the day. When asking a company to risk its hard-earned capital, government officials should remember that actions speak louder than words.

What actions, then, might win over investors? There are many, but perhaps the best way to proceed is to follow the golden rule and “do unto others as you would have them do unto you.”

How would the Indonesian government react, for example, if one of its state-owned enterprises had invested a billion dollars in the US only to wake up one day and find out that a powerful senator had forced himself upon the company to become a shareholder?

As another example, how would an Indonesian executive feel if his company set up shop in a foreign country and suddenly faced demands by government officials to pay millions of dollars in return for an operating license that was normally given out for free to others?

Indonesians know how they would feel and react to such rude and unethical behavior. They should therefore find it easy to apply this golden rule when dealing with foreign investors in their own country.

Fortunately, there are people like Gita inside the government who can pass the word around that multinational corporations are not much different from their Indonesian counterparts: they just want to be treated fairly.

James Van Zorge is a manager of Van Zorge, Heffernan & Associates, a business consultancy based in Jakarta. He can be reached at jamesvanzorge@yahoo.com.

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25 Thai firms eye producing auto spare parts in Indonesia

The Jakarta Post, Jakarta | Wed, 03/24/2010 3:09 PM

As many as 25 firms from Thailand have expressed their interest in producing auto spare parts in Indonesia.

"That is good news," the Investment Coordinating Board (BKPM) head Gita Wirjawan said Wednesday as quoted by kompas.com.

However, Gita declined to elaborate on any planned investment numbers.

Indonesia Trust Fund to Tackle Rampant Deforestation

Jakarta Globe, Fidelis E Satriastanti, March 23, 2010

A man walking across a destroyed forest in Pelalawan, Riau. (Antara Photo)

Indonesia is set to establish a new trust fund to reduce the rapid rate of deforestation in the country.

The National Forest Trust Fund will collect money from donor countries, especially developed ones, to finance conservation projects and promote sustainable forest management.

Indonesia has one of the highest rates of deforestation in the world, losing almost two million hectares of forest every year.

Hadi Daryanto, director general of forest production at the Ministry of Forestry, said on Tuesday that the details of the fund were still being worked out between the government and potential donors.

He said officials were still considering whether to set up an endowment, where the money would be invested and the earnings spent, to spend the money directly or to establish a revolving fund.

The money, he added, would be managed by an independent organization, with the members of the board of trustees coming from local governments, academics, civil society and businesspeople.

Hadi said the government had already set up a trust fund in 2009 as a part of a debt-swap program with the US government under the Tropical Forest Conservation Act to save Sumatran forests.

“It’s basically a debt-swap program and only for Sumatra, but it’s going very well and has managed to collect around $3 million so far,” he said. “Now we want to establish one for all forest areas based on that experience.”

He said the move was also triggered by donors’ lack of faith in the climate change trust fund established by the National Development Planning Board (Bappenas).

On Sept. 14, 2009, the Indonesian Climate Change Trust Fund was launched to attract donor support for efforts to tackle climate change issues.

Basah Hernowo, the director of forestry and water resources conservation at Bappenas, said the ICCTF had a forest component so the two funds could possibly be merged.

“Basically, the forestry sector is much more ready [than other sectors], but it could confuse donors if there are too many trust funds,” Basah said.

In response to the reported lack of faith in the ICCTF, he said: “We only deal with the programs. The money will be managed by an independent organization and audited internationally, so don’t worry, we’re not taking the money for ourselves.”

Basah said the British government had committed 10 million pounds ($15 million) to the ICCTF and some of the money had already been allocated for climate change projects, which he predicted could get under way sometime in April.

Hungarian ambassador praises Bali as organic province

The Jakarta Post, Jakarta | Tue, 03/23/2010 6:01 PM

Hungarian Ambassador to Indonesia Szilveszter Bus, has praised a breakthrough made by Governor Made Mangku Pastika who highlighted Bali as an organic-oriented province.

“We really appreciate all activities that are aimed at preserving and protecting the environment. Organic farming and industry are real actions to such an aim,” Bus told Antara state news agency during a meeting with Pastika in Denpasar.

Bus said that organic farming was a suitable system to be developed in Bali because it could help the province promote its tourism sites to international public, he added.

Bus further said that Hungary had deployed Gabriela Chrisofoli as an honorary consul to Bali in support of a plan to start a partnership with the province in macro economy, culture, education and tourism fields.

Finance Department Issues New Regulation on Government Projects

Tempo Interactive, Tuesday, 23 March, 2010 | 15:18 WIB

TEMPO Interactive, Jakarta: Finance Department have introduced a new regulation earlier this month on projects in government institutions which requires new project reporting rules.

The Finance Minister Regulation No.56/PMK.02 of 2010 took effect on March 2nd 2010, requires all procurement projects funded by the state budget with over one-year term be reported to the Finance Ministry.

The Finance Department said only projects funded completely in rupiah will obtain approval from the ministry, but consulting works related to the projects are exempted from the rupiah funding regulation, enabling partial or full foreign financing on the type of service.

Projects covered in the regulation include bridge construction, dam, airport, seaport, or buildings, including consulting services.

AGOENG WIJAYA

Ambon to host coastal resources management conference

Antara News, Tuesday, March 23, 2010 16:00 WIB

Ambon (ANTARA News) - The 7th National Conference on marine, small islands, and coastal resources management will be organized in the eastern Indonesian city of Ambon on August 3-7, 2010.

Maluku Maritime Affairs and Fisheries Office chief Poli Kayhattu said over his cellular phone from Jakarta on Tuesday that at least two international experts on coastal resources management have confirmed to be the keynote speakers at the conference.

"Two small islands and coastal management experts, respectively from China and Maldives have confirmed to be the keynote speakers at the 7th National Conference on marine, small islands, and coastal resources management in Ambon," Kayhattu said.

He said the conference would be conducted as part of the upcoming international marine event of Sail Banda 2010, scheduled to last from July to August this year.

Kayhattu said that besides the international experts from China and Maldives, Coordinating Minister for Economy Hatta Rajasa and Maritime Affairs and Fisheries Minister Fadel Muhammad would also act as speakers in the conference.

The coastal resources management conference is part of Maritime Affairs and Fisheries Ministry`s biennial activity, and the one this year in Ambon is themed, "To Knit the Integration of Marine, Small Islands, and Coastal Resources Management for Food Resilience and People`s Welfare."

According to Kayhattu, the objective of the national conference in Ambon was to increase communication and information exchange in relation with marine, small islands, and coastal resources management for people`s welfare and food resilience.

"The conference will be attended by around 500 people who are expected to optimally formulate a new coastal resources management strategy to improve the local people`s welfare," Kayhattu said.

He expressed optimism that the 7th National Congress which had been conducted since 1998 would run well and successfully because various preparations were currently being made for the event.

Some 62 yachts register for Sail Banda 2010

Antara News, Tuesday, March 23, 2010 16:03 WIB

Ambon (ANTARA News) - At least 62 yachts from abroad have been registered to join the upcoming international marine event of Sail Banda 2010 from July to August this year.

"Our target is that at least 200 boats and yachts will participate in the event, and some 62 of them have been registered. We still have three months left to have our target met," Sail Banda local committee spokesman Cak Saimima said here on Tuesday.

He said the event was intended to introduce Maluku`s marine tourism potentials to international community, and to convince them that the province was really safe for tourists.

Sail Indonesia 2010 will depart from Darwin on Saturday July 24 at 11 am local time and during the following 3 months the participants are invited to participate in a series of Cultural Festivals at the different stopovers across Indonesia on the islands of Timor, Banda, Ambon, Buton, Lembata, Wakatobi, Flores, Sulawesi, Bali, Java, Borneo, Belitung and finally on to Batam or Bintan just south of Singapore.

"Therefore we are making every effort to be good host and organizer of Sail Indonesia 2010," Saimima said, adding that President Susilo Bambang Yudhoyono on December 14, 2009 appointed Banda, Ambon, and Southwest Maluku (MBD) district town of Wonreli in Kisar island to be the location of the international marine event.

Indonesia Gets $100 Million to Improve Java-Bali Power Distribution Systems

Asia Development Bank, 23 March 2010

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and Agence Française de Développement are providing $100 million in loans to help Indonesia overhaul a key power distribution network in a bid to save energy and cut greenhouse gas emissions.

The ADB Board of Directors today approved a loan of $50 million for the Java-Bali Electricity Distribution Performance Improvement Project. The state-owned French development agency is providing a cofinancing loan of the same amount, which will be administered by ADB.

The project will rehabilitate the overburdened distribution network of the two islands, as well as supporting the introduction of energy efficient compact fluorescent lamps and light emitting diodes. The measures will help reduce peak power load demand and system losses, and contribute to sizeable cuts in greenhouse gas emissions. It will support PT Perusahaan Listrik Negara’s (State Electricity Corporation [PLN]) plan to invest about $1.2 billion in efficiency investments in the distribution sector between 2010 and 2014.

“The project will reduce the power sector’s carbon dioxide emissions by 330,000 tons per year, while the substantial energy savings and freeing up of 200 megawatts of equivalent distribution system capacity will allow the state electricity corporation to connect about 1.2 million additional customers to the Java-Bali network,” said Sohail Hasnie, Principal Energy Specialist in ADB’s Southeast Asia Department.

To make energy savings of 400 gigawatt-hours worth an estimated $60 million a year, the project will reconfigure electrical equipment, reconductor or replace old overhead distribution lines and voltage transformers, and introduce new switching stations and capacitors. The distribution of up to 500,000 quality compact fluorescent lamps and light emitting diodes in remote areas will help demonstrate the energy savings and greenhouse gas reduction benefits of efficient lights, which last far longer and consume much less energy than commonly used incandescent bulbs.

The project is expected to be eligible for carbon credits under the Clean Development Mechanism of the Kyoto Protocol, and carbon dioxide cuts could generate close to $200,000 a year in credits for the next 5-7 years, paving the way for potential nationwide distribution of the fluorescent lamps. The value of avoided carbon dioxide emissions as a result of the project is estimated to be around $3.5 million a year.

"Indonesia recently announced that it plans to reduce CO2 emissions by 26% by the year 2020 so PLN and ADB, together with the Government of Indonesia, view this project as a step towards meeting this goal," said Mr. Hasnie.

Indonesia’s energy demand has risen sharply in recent years, but investment in new capacity has not kept pace, resulting in regular power outages in Bali and Java, and up to 90 million people - or 38% of the population - still lack access to electricity. The economy relies on costly fuel oils for over 30% of its generation needs, limiting the government’s ability to fund new infrastructure, and putting Indonesia among the top 20 polluters in the world.

PLN is now planning to sharply expand the use of coal for power generation to reduce reliance on imported oil in the short term, and the project will help offset some of the new emissions. Once the conservation and efficiency benefits of the project are proven, it will be scaled up into a sector-wide initiative, funded by a multitranche financing facility.

ADB’s loan, from its ordinary capital resources, has a 25-year term, including a five-year grace period, with interest determined in accordance with its LIBOR-based lending facility. The Agence Française de Développement loan has a 15-year term, including a five-year grace period, with interest set in accordance with the Euro Interbank Offered Rate. A $1 million grant from the multidonor Clean Energy Fund under the ADB-administered Clean Energy Financing Partnership will finance the distribution of the fluorescent lamps and light emitting diodes, while the state electricity corporation will provide $19 million equivalent, for a total project cost of $120 million.

PLN is the executing agency for the project, which is due for completion by May 2012.

About ADB

Pusri set to build two new fertilizer plants

Nani Afrida, The Jakarta Post, Jakarta, Tue, 03/23/2010 10:46 AM

PT Pupuk Sriwijaya (Pusri), the holding company of state fertilizer producers, will spend about US$1 billion to finance the construction of two new fertilizer plants in Sulawesi and Papua, a top executive has said.

Pusri’s president director Dadang S. Kodri said on Monday that the Sulawesi plant would be built near the Donggi-Senoro gas field, while the Papua would be constructed near the Tangguh gas field.

“We will spend up to $1 billion for the construction of the two plants,” he said during a visit to the Kujang fertilizer plant in Cikampek, West Java. Dadang said that the Sulawesi plants would produce urea fertilizer and the Papua plant would produce both urea and ammonia fertilizers.

He said that the construction of each plant take about 33 months to complete. “But we cannot not begin the construction until we receive a gas supply commitment from the government,” he added.

The country’s industrial sector has been hard hit by the acute shortage of natural gas. Indonesia is one of the world’s largest gas producers but most of its gas is exported in the form of LNG. Pertamina and its partners had planned to produce LNG from the Donggi-Senoro gas production for export markets. But the plan has been cancelled because the government wants the gas to be sold in the domestic market.

Pusri oversees four state fertilizer companies including PT Petrokimia Gresik in East Java, PT Pupuk Kujang in West Java; PT Pupuk Kaltim in East Kalimantan and PT Pupuk Iskandar Muda in Aceh. Pusri and its subsidiaries need at least 739 million standard cubic feet of gas per day (mmscfd) this year.

Pusri booked Rp 2.1 trillion in consolidated net profits last year. The company expected to increase net profits this year to Rp 2.5 trillion. This year, it plans to slightly increase urea production to 7 million tons from 6.8 million tons produced in 2009, as well as to increase its NPK fertilizer production to 2.2 million tons, about 70 percent higher than 1.3 million tons in 2009.

Indonesia is also importing to meet reported surging demand for fertilizer.

Indonesia joins top rank of climate action leadership

The Jakarta Post, Ursula Schaefer-Preuss and Katherine Sierra , Manila | Tue, 03/23/2010 10:03 AM | Opinion

One of the first international meetings to focus on climate finance since the Copenhagen summit last December ended here in Manila this week with plans to allocate some US$1.1 billion from the new multilateral Climate Investment Funds (CIF) for country-led, low-carbon growth in the Asia and Pacific region.

Indonesia features prominently in these plans.

Some $400 million in support from the Clean Technology Fund (CTF), approved in Manila on Monday, will help mobilize some $2.7 billion in public and private sector financing to help Indonesia nearly double its geothermal capacity and transform the country’s use of renewable energy, ultimately supporting the government’s objective of meeting its goal of reducing greenhouse gas emissions by 26% by 2020.

In further support to achieving this target, Indonesia is also among the countries named this week that will receive funding for pilot programs to reduce emissions from deforestation under the Forest Investment Program (FIP).

Both programs for Indonesia were approved in advance of the CIF Partnership Forum. It is fitting that this meeting was held in Asia, for this is the region where more people — especially women and the poor — are vulnerable to climate change impacts than in any other part of the world.

On top of that, Asia’s energy demand is projected to almost double by 2030, which means that unless development and consumption patterns shift the region will soon become the largest source of new greenhouse gas emissions.

The CTF plan for Indonesia is designed to transform the country’s development pattern while supporting its continued economic growth.

It will help unlock geothermal power resources to expand people’s energy access while avoiding greenhouse gas emissions, to green urban areas, and to make it financially attractive to tap into the sun’s power.

Indonesia has the world’s largest geothermal power potential, and the plan allocates extensive co-financing to expand large-scale geothermal electricity generation.

It will also accelerate initiatives to promote energy efficiency and use of renewable energy sources by creating risk-sharing facilities and addressing financing barriers to small- and medium-scale investments.

The low-carbon growth investments in Indonesia are an example of similar programs now approved to receive CTF financing in Kazakhstan, the Philippines, Thailand and Vietnam.

Taken together, these programs will demonstrate how future energy demands can be satisfied in ways that will not generate excessive levels of greenhouse gases.

From our vantage point as multilateral development bank partners in helping countries implement these CTF-funded plans, this bold action on the part of Indonesia and other Asian nations is a harbinger of a fundamental shift in climate action around the globe.

And the same sorts of actions are moving forward in developing countries in every region of the world.

While developing countries have not been the primary source of climate-altering greenhouse gas emissions from the past burning of fossil fuels, they are taking positive actions to help achieve a global solution to the common challenge posed by climate change.

As they continue on a path to improved economic prosperity for their citizens, they are making a wise choice to do so in a climate-friendly way that will also help ensure their energy security and improve their quality life.

This climate-smart approach offers lessons which all, including those in developed countries, can look to emulate in coming years.

The CTF is founded on partnerships between policymakers, indigenous peoples, private sector entities, civil society and others.

Its unique governance structure provides equal voice to contributor and recipient countries and it also ensures that the programs it supports are embedded in national development plans.

The CIF’s were created in response to the Bali Action Plan, which resulted from the 2007 climate change talks in Indonesia, and called for commitment of new and additional financial resources from developed countries for developing countries to help address the climate change challenge.

A group of developed nations then pledged over $6 billion to the CIFs — a powerful signal of their serious support for developing countries, in helping them to respond to climate change.

Without measures to build resilience to climate change impacts, we know that the 60% of the working population in Asia and the Pacific who rely on agriculture for their livelihoods will suffer tremendously.

Fresh-water availability will fall, irrigation will become more difficult, and millions more children will go home hungry.

The CIFs expect to pilot measures that will support better water and forest management and agricultural adaptation measures that can ensure food security for Asia and the world.

The potential to replicate alternative approaches to energy and food production can transform development, placing us all on a more stable and sustainable footing.

As developing countries pick up the climate reins, we must all stand together to ensure their commitment to climate action is supported at the global level.

The need is enormous, and so is the funding and knowledge gap.

Developed countries must continue to provide financing for investments and knowledge, and a new regime for climate action must emerge. Without such actions, the progress achieved so far cannot be sustained.

Together, the global community must test and apply effective ways to combine reducing poverty, providing economic growth, and building a climate-smart greener future.

The meetings in Manila, buoyed by Indonesia’s climate action, offer an important and welcome glimpse into such a future.

At the Asian Development Bank and World Bank, along with our fellow development banks with whom we have joined in a first-time alliance on this issue, we pledge our support to make this future a reality.

Ursula Schaefer-Preuss is vice president for knowledge management and sustainable development at the Asian Development Bank. Katherine Sierra is vice president for sustainable development at the World Bank.

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Ban Ki-moon: Don't wait for disaster

Program to change our water ways

The Jakarta Post, Jakarta | Mon, 03/22/2010 10:16 PM

The UNESCO office in Jakarta is working with the Public Works Ministry and the Asian Development Bank on a pilot project along the Citarum River basin in West Java on a program called SWITCH-in-Asia, a press release made available on World Water Day said Monday.

SWITCH, a program for Asia, is a collaborative action research and demonstration program designed to encourage the development of sustainable cities with respect to water use.

The program aims at providing better services to all people, to prevent water quality destruction via optimizing recovery and reuse schemes, the release said.

“The current water practices have proven to be grossly inefficient and unsustainable. We need to radically rethink the way we live and deal with water,” said Hubert Gijzen, director of UNESCO’s regional science bureau for Asia and the Pacific.

“We can no longer afford to deal with water issues in a fragmented, ad hoc and incident-driven manner,” he said.

A paradigm shift in water use also applies to those who have access to water, Gijzen said. As an example, he said, many households unnecessarily used clean purified water to flush their toilets.

Fertilizer Plant to be Built in Donggi-Senoro

Tempo Interactive, Monday, 22 March, 2010 | 18:34 WIB

TEMPO Interactive, Jakarta: The government will build a fertilizer plant near the Donggi-Senoro gas field. According to Coordinating Minister for the Economy, Hatta Rajasa, the central Indonesia region needs a fertilizer plant. “We plan to do it,” Hatta said in Jakarta on Friday.

Hatta added that the plant is crucial to meet local demands for fertilizer. The Donggi-Senoro gas production would best be used by a fertilizer plant, which will be constructed near the gas field area.

However, Hatta could not confirm yet where the financing will be coming from. “It could be anyone,” he said.

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Government Asked to be Serious about Sun Storms

Tempo Interactive, Monday, 22 March, 2010 | 19:27 WIB

TEMPO Interactive, Padang:The West Sumatra provincial government has been asked to be serious about the sun storm which is predicted to hit the area between 2012 and 2015. The West Sumatra branch of the Indonesian Geologists Association coordinator, Ade Edward, said the preparation includes mitigation to reduce the disaster’s impacts. “The sun storm may trigger natural disasters, such as volcanic activities, tectonic earthquakes, and extreme weather conditions, including in West Sumatra,” he said yesterday.

When disaster strikes and power and telephone lines are down, Ade assumes that disaster management agencies will not be able to use standard mechanisms. “As such, the disaster mitigation system must be adjusted to anticipate the negative effects of the sun storm,” he concluded.

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Indonesia`s Merukh wins US$3 bln Swiss contract to supply coal

Antara News, Monday, March 22, 2010 17:36 WIB

Jakarta (ANTARA News/Asia Pulse) - Indonesia\'s PT Merukh Enterprises said it has secured a 30-year contract to supply coal to Swiss buyer Glencore International.

Company chief commissioner Jusuf Merukh said Merukh Enterprises will supply 30 million tons of coal valued at around US$3 billion to the Swiss trading company every year.

He said his company has secured a loan pledge of US$600 million to develop the Batu Licin coal concession.

Source:
Business in Asia Today - March.22, 2010
published by Asia Pulse

"One billion Indonesian trees for world` launched

Antara News, Monday, March 22, 2010 15:21 WIB

Jakarta (ANTARA News) - The Indonesian government has launched a more massive tree planting program called "One Billion Indonesian Trees for the World", according to the forestry ministry.

The new program was kicked off following successes in previous programs such as `Indonesian Contemporaneously Planting Action` (2007 and 2008), `Women`s Movement of Tree Planting and Caring` (2007), `Indonesian Tree Planting Day launching` and `the National Planting Month (2008)`, and `One Man One Tree`, the forestry ministry said in a statement received by ANTARA here on Monday.

The government has allocated a DIPA BA budget for procurement of 36 million seedlings this year and hopes to get 300 million more from the private sector, state companies, NGOs, regional governments and other donors.

Additional 320 million seedlings are expected to be received from Community and Rural Forest program, 300 million from Forest and River Basin Rehabilitation program, and 50 million from People`s Forest Partnership program.

The "One Billion Indonesian Trees for the World" program is also aimed at improving the welfare of the people especially those living near forest areas, according to the forestry ministry.

The ministry urged the Indonesian people to participate in the program.

"In the next five to 10 years, the Indonesian people will enjoy the beauty of a green Indonesia with prosperous and disaster-free people," the statement said.

RI oil palm farmers ready to boycott Nestle products

Antara News, Sunday, March 21, 2010 00:59 WIB

Medan, N Sumatra (ANTARA News) - Oil palm planters in 20 Indonesian provinces are ready to boycott Nestle products if the foreign company really stops buying crude palm oil (CPO) from national producers, a spokesman said.

"About 10 million oil palm farmers spread in 20 Indonesian provinces have stated their readiness to boycott Nestle products. Apkasindo (Association of Indonesian Oil Palm Farmers) is now preparing to draw up a list of Nestle products in the market," Apkasindo Secretary General Asmar Arsjad said here Saturday.

He said Apkasindo had so far only obtained oral statements of readiness from its regional chapters in the country but the association`s central executive board would on Monday (March 22) officially send letters to them to ask for their support for and participation in the boycott of Nestle products.

The boycott was meant to respond to Nestle`s decision to terminate its CPO purchasing contract with PT Sinar Mas which would have a devastating impact on the livelihood of Indonesian oil palm farmers, he said.

Nestle had reportedly decided to stop buying CPO from Indonesian producers as oil palm cultivation in the country was considered to be harming the environment.

Meanwhile, Laksamana Adiyaksa, treasurer of the North Sumatra chapter of the Indonesian Oil Palm Entrepreneurs Association (Gapki), said the oil palm planters` boycott threat "should be reacted to wisely by all stakeholders."

"It does not mean that we are afraid or very concerned about the threat but it should be discussed in a business-like way," he said.

The government should also be involved as a mediator in solving the problem caused by Nestle`s boycott of Indonesian CPO which had not happened for the first time, he said.

He said Indonesian CPO producers were increasingly paying attention to the environemntal aspects of their production processes under the Roundtable Sustainable on Palm Oil (RSPO) system."Nestle should not have acted unilaterally," he said.

Earlier, Irfan Mutyara, chairman of the North Sumatra chapter of the Indonesian Chamber of Commerce and Industry (Kadin) had said Indonesia was one of the world`s major CPO producers and exporters and thus, if Nestle stopped buying Indonesian CPO, there would be other buyers.

"If a buyer boycotts a product, the producer can do likewise against the buyer`s product and ask domestic consumers to follow suit," he said.

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Maluku artist team to Grace Indonesia fair in Netherlands

Antara News, Saturday, March 20, 2010 22:17 WIB

Ambon (ANTARA News) - A Maluku artist team is being prepared to grace an Indonesia Fair to be organized by the Indonesian Embassy in the Netherlands early next month.

The chief of Maluku`s Cultural Park, Semmy Toisutta, said here on Saturday he was preparing the artist team, made up of a Hawaiian music band and a number of traditional dancers to highlight the Indonesia Fair to be held in the Netherlands early April this year.

"We are currently preparing an artist team for the Indonesia Fair at the request of the Indonesian ambassador in the Netherlands," Toisutta said.

He said the artist team would present Maluku songs accompanied by Hawaiian music, and Maluku traditional dances, namely Tari Lenso, Pinemou, Pataheri, Sasi Laut, Kabaressy, Mahina Arika, and two other contemporary dances produced by the Maluku Cultural Park to accompany Banda Neira and Panggayo songs.

"We are specially producing the two contemporary dances to be performed to the tunes of Banda Neira and Panggayo songs during the Indonesia Fair in the Netherlands later," Toisutta said.

He added that besides highlighting the Indonesia Fair, the artist team from Maluku would laters also perform in five major cities in the Netherlands.

"Our artist team has also been asked to perform in five other cities in the Netherlands," Toisutta said without naming the cities.

He said the Indonesia Fair would last five days from April 1 to 5, 2010, and therefore the team would leave for Amsterdam on March 30.

It was hoped the Maluku art performances at the Indonesia Fair and in the five Dutch cities would arouse the interest of Dutch people to visit the "Province of a Thousand Islands" later.

"Maluku has characteristic art and cultural performances which we expect to be able to entice Dutch people in particular and Europans in general to visit Maluku province," Toisutta said.

Pasar Malam Indonesia, The Hague

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Papuans to benefit from US$1 million scholarship fund

The Jakarta Post, Jakarta | Fri, 03/19/2010 10:55 AM

A US$1 million scholarship program for Papuans to study in the US, signed on Wednesday, is expected to benefit both Indonesia and the US, say representatives of Indonesia and the US.

Deputy Minister of National Education, Fasli Jalal, welcomed the funding, which is part of PT Freeport Indonesia’s corporate social responsibility program. He said it could enhance the quality of educators in Papua as the program is for Papuans wishing to complete graduate degrees in masters and community college programs in the United States.

“[This program] is strategic for Papua because the standards of Papuan universities, such as Universitas Cendrawasih and Universitas Negeri Papua, can increase through cooperation,” Fasli said.

“In Papua itself, more than 50 higher education institutions are not up to the standard mandated for teachers and lecturers,” Fasli said.

He said studies such as biodiversity, food security and water management, are essential to Papua.

The US also expects to benefit from the arrival of Papuan students, who will bring a new perspective to the institutions they will study in.

“They are coming from a region that is not well known to most Americans and if they go to universities that do not have East Asia or Pacific study programs, it will certainly enhance their college’s understanding of eastern Indonesia,” said the executive director of the American-Indonesian Exchange Foundation (Aminef) Michael E. McCoy.

Aminef will select grantees and disburse the funds.

Freeport will not require recipients of the grants to work for them as the funds are part of their corporate social responsibility program.

“Freeport has been in Indonesia for 41 years and this is part of our commitment to the Indonesian government and Indonesian people, especially the Papuans,” said the executive president director and chief administrative officer of Freeport, Sinta Sirait.

The US government, which supports the higher education component of the emerging Indonesia-US Comprehensive Partnership, responded positively to the MoU signing.

“Scholarship recipients will return home and contribute to the development of their community and Indonesia,” said US Ambassador Cameron Hume.

Freeport will also continue to support Aminef with its Fulbright program, which sent 22 masters degree scholarship recipients from Papua to study in the US between 1998 and 2009. This latest program will be valid for the next five years, from 2010 to 2015. (gzl)

Four nuclear power plants planned for operation in 2017

The Jakarta Post, Jakarta | Sat, 03/20/2010 9:35 AM

A panel of nuclear experts said Thursday that nuclear electric power could benefit Indonesia in the future if handled correctly through complete understanding of regulations, team diligence and knowledge of plant equipment, operations and maintenance.

“What is really important is a high human motivation because it will increase both safety and availability,” Prof. Ishikawa Michio of the Japan Technology Nuclear Institute said in a seminar at the Agency for the Assessment and Application of Technology office in Central Jakarta.

“That is why you have to put a lot of money in the regulations for safety measures,” he added.

According to Hudi Hastowo of the National Nuclear Energy Agency of the Republic Indonesia, the country has done extensive preparatory work on most infrastructure issues that would allow it to introduce nuclear power.

Indonesia has established a national energy policy under Law No. 17 of 2007, which declares that nuclear energy will be part of the energy mix for 2015-2019.

As a result of this policy, the country is planning to construct four units of nuclear power plants of about 4,000 megawatts each, which are expected to start operations in 2017.

Nuclear energy is also expected to meet about 2 percent of the nation’s electricity demands by 2025.

Meanwhile, Research and Technology Minister Suharna Surapranata, who also attended the seminar on “Prospects of Nuclear Electric Power in Indonesia”, explained that energy security is crucial to national security.

“Nuclear technology is a necessity. In order to transform Indonesia into a developed country, we need to find alternative energy resources that are renewable and sustainable,” he said.

There are approximately 437 operating nuclear power plants worldwide, with 55 more units under construction.

As many as 60 countries, including Indonesia, are considering building nuclear plants, while 25 countries have shown interest in their development.

Last month civil society groups insisted that there were no urgent reasons to develop nuclear power plants in Indonesia, citing the country’s large sources of alternative energy, ranging from coal, geothermal heat, water, and wind.

They also said that the current severe energy shortage was due to the government’s failure to deal with energy resources, with most of the nation’s coal and gas being exported. (tsy)

There are approximately 437 operating nuclear power plants worldwide, with 55 more units under construction.

UI to become research center for climate change in Asia

Adianto P. Simamora, The Jakarta Post | Sat, 03/20/2010 9:48 AM

The University of Indonesia (UI) may be set up as a research center for climate change in the Asia Pacific region (UI-RCCC) focusing on scientific data to support policy makers in dealing with climate change.

The final decision for the establishment of the center will be made within the next three months with researchers from 50 universities to contribute expertise to the center.

“There is an opportunity to establish the UI-RCCC to the developing country leg of proposed United University Institute for Climate Transition Innovation, whose developed country leg is proposed for establishment in Australia — likely to be hosted at Monash University,” the conference statement said.

“This would place UI-RCCC as a leading component of the UN system.”

The two-day conference opened by Vice President Boediono concluded Friday.

Climate researchers among others from China, Australia, Thailand, Japan and the US attended the seminar jointly organized by the UI and the Association of Pacific Rim Universities World Institute (AWI).

Co-chair of the international climate center, Jim Falk from the University of Melbourne, said that the center would provide Indonesia with a powerful capacity to address climate change challenges.

“It will help Indonesia on adaptation and mitigation efforts to decrease greenhouse gas emissions to meet targets announced by President [Susilo Bambang Yudhoyono],” he told The Jakarta Post.

The conference agreed that Indonesia had assumed the role as a global leader in emission reduction.

“Sustained research is vital to creating the capacity to implement emission reduction, already national policy,” it said.

Indonesia has promised to voluntarily cut 26 percent of emissions by 2020 with its local budget and by 41 percent if developed nations provided financial assistance.

Jatna Supriatna, co-chair of the conference, also lecturer at the University of Indonesia, said that science should be used as the basis in making emission-cut decisions.

“We hope the UI research center for climate change contributes scientific data to help the government in emission-cut targets,” Jatna, also director of the International Conservation (CI), said.

Environmental law expert from the University of Indonesia Andri Wibisana said the government needed an act or regulation specifically addressing climate change.

US helping Indonesian air force improve aircraft safety

Antara News, Friday, March 19, 2010 17:29 WIB

Jakarta (ANTARA News) - The US Embassy`s Office of Defense Cooperation (ODC) is assisting the Indonesian Air Force improve the safety of its aircraft, the US Embassy here said in its webiste.

The Indonesian military and three US Air Force Technical Coordination Groups (TCG) have recently conducted reviews on F-5, F-16, and C-130 aircraft. This was the first in-country review in 2 years, and the most in depth ever.

Team members traveled to Bandung, Halim, Madiun, and Malang Air Force Bases to work directly with air crews and maintenance teams to help them remedy some of their long-standing maintenance problems.

The TCG, a team of technical experts, come from various US Air Force Bases within the United States. They travel worldwide to assist countries resolve critical maintenance issues, and to brief on the latest innovations in the world wide fleet of Lockheed Martin built C-130 `Hercules` aircraft, F-16 `Fighting Falcons,` and Northrop`s F-5 `Tiger.` The Indonesian Air Force Hercules aircraft were all built between the 1960`s and the mid-1980`s.

Although the US sanctions with Indonesia were officially lifted in 2005, maintenance issues have been a challenge for the Indonesian military. In recent years, the ODC at US Embassy - Jakarta has been cooperating with the Indonesian Air Force.

"Bringing the TCG teams back is one of the first steps," Lt. Colonel Alex Thagard, Director of Air Force Programs at ODC, explained. "Many of the programs and platforms used by the Indonesian Air Force require immediate updates, in order to keep pace with changes that have occurred within the US Air Force over the last two decades."

The ODC is also cooperating with the Indonesian Air Force and the US State Department to provide grant funding to send their C-130`s to the United States for Periodic Depot Maintenance (PDM) inspections.

The first airplane for inspection and maintenance is scheduled to fly to the US in June.

Australia to help improve road network in W. Kalimantan

The Jakarta Post, Jakarta | Fri, 03/19/2010 4:41 PM

Travel time will be cut and road safety improved for people using part of a major West Kalimantan highway being significantly upgraded with Australian support.

The Australian Embassy said in a statement made available to Antara state news agency on Friday that Australian Ambassador to Indonesia Bill Farmer, Indonesian Public Works Minister Djoko Kirmanto and West Kalimantan Governor Cornelis H.M. launched Thursday an improvement project on the Pontianak-Tayan road network.

The 31.5-kilometer stretch is an important link in the Trans Kalimantan Highway and Farmer said the upgrading project would significantly improve travel for motorists.

"Better roads mean better access to markets, education, hospitals and other services," Farmer said.

He further said that by reducing dust affecting local communities to making it faster and cheaper for traders to transport goods, the road improvement project would provide practical benefits for the people of West Kalimantan and their economy.

More than 500 cars, trucks and motorbikes use the highway every day and this number will increase significantly as motorists choose the upgraded roads over longer alternative routes.

Good infrastructure is vital for social and economic development and Australia is committed to supporting Indonesia's efforts to improve major roads.

This project is one of the 20 roads and bridges in nine provinces being upgraded with Australian support. These highways will demonstrate that new approaches to design, contracting and construction will extend the life of roads and deliver better value.

The road improvement projects are funded by a concessional loan of A$300 million from Australia to Indonesia and a A$30 million grant.

Over four years of construction, the overall road program is expected to generate more than 5,000 construction jobs. Australia's support is part of the five-year A$2.5 billion dollar Australia-Indonesia Partnership.