In 2003 Canadian business started seeing the world as its stage and today, a little more than 11 years later, diversific
The Indonesia Canada Chamber of Commerce Monthly Newsletter
PRESIDENTIAL ELECTION
JULY 2014
FINAL COUNTDOWN
Canada Indonesia Relationship Reaching New Heights Corporate Liability for Corruption in Indonesia Rocky Mountain Rotary Club Reaches across the Pacific
Rocky Mountain Rotary Club
Gives generously to Indonesia Welcome to the July edition of Bahasa Business, the Indonesia Canada Chamber of Commerce (ICCC) monthly newsletter. While many great and exciting things happened this month, it was sadly also a time of mourning as Canada’s friend and neighbor from the south, Matt Wheeler passed away in a tragic car accident. This month’s Bahasa Business features none other than Prabowo Subianto and Joko Widodo, the country’s two presidential candidates. The Indonesia Canada Chamber of Commerce was invited to a discussion with the two candidates supported by the Indonesian Chamber of Commerce and Trade and Bahasa Business was there to engage in the discussion. We share the results in our feature article. Happy 147th Birthday Canada! Needless to say the highlights this month for the Indonesian-Canadian community were the two Canada Day events held by the Canadian Embassy in Indonesia and the ICCC, respectively. Participants enjoyed a myriad of Canadiana including (and most importantly, Canadian beer). The Rocky Mountain House Rotary Club in Alberta, Canada reached across the pacific ocean to support two areas in Indonesia with their very generous wheelchair program. Represented by Zone 24 Assistant Regional Coordinator, Past District Governor Al Bergsma from the Rocky Mountain House Rotary Club, the first wheelchair distribution was held in Solo, West Java. Said Endang Pratjojo, from the Yogyakarta Tamansari Rotary Club, “The recipients were very excited not only because the donation of 20 wheelchairs is so generous, but because this support came from Canada, which is so very far away. It was also so heart warming to see the genuine caring and family
atmosphere created by Mr. Al Bergsma as he not only conducted the handover ceremony but he was very active in engaging the participants and made everyone feel special and loved.” Following the wheelchair handover in Solo, there was unfortunately no time for sightseeing as Al Bergsma went straight to the airport to fly to Bali, which was the second targetted area to receive wheelchairs. In Bali a total of 53 wheelchairs were donated and distributed. Said Nengah Latra, the Direktur of the Bali Centre for Empowerment of People with Disabilities (PUSPADI BALI), “The appreciation the people of Bali have for the support we have been given by our brothers and sisters at the Rocky Mountain Rotary Club is reflected not only in the smiles from the recipients but from the great support we have of Balinese government officials like the Karangasem Regent Mr. I Wayan Geredeg and several other sub-regents who came to welcome and show their gratitude. There are many people in need here and we have managed to spread the generosity to recipients from more than 8 villages.”
Some very touching news comes from Canadians from the Rocky Mountain Rotary Club who warmed the hearts of Indonesians in Solo, West Java, and Bali with their generous wheelchair program. According to the Fraser Institute, there was also reason to celebrate for many Canadians in June as they reached Tax Freedom Day – meaning that theoretically all earnings from this day onward are their own. Corruption in any country is always a possible issue and SSEK, whose expertise embraces all essential areas of the law and has been honed over two decades of meeting the legal needs of clients, provides another high value article this month entitled ‘Corporate Liability for Corruption in Indonesia’, which is a must read for anyone doing business. In a month of many highlights, we can not forget that Indonesia became Canada’s largest trading partner in Southeast Asia, surpassing Thailand and in ‘Canada – Indonesia Relationship Reaches New Heights’ we share some of the Canadian companies that are working hard to keep the relationship growing. With the key message being that more Canadian companies are always welcome. Bahasa Business readers we thank-you for your readership, comments, and content and invite you to enjoy this edition. Edwin Pieroelie Secretarie-General ICCC
ICCC Welcomes the Holy Month of Ramadhan To all our Muslim members, friends, and colleagues, the ICCC wishes you a spiritually enlightening month of Ramadhan.
KADIN Discussion with Indonesia’s
Presidential Election Candidates On Friday June 20, 2014, The Indonesian Chamber of Commerce and Industry (KADIN) organized a Presidential and Vice Presidential candidate discussion at the Jakarta Theater. The event was designed to provide a balanced discussion with both candidate teams, and KADIN expressly worked to not favor any of the candidates. It was also very unique that the event was aired in a joint cooperation between TV stations “Metro TV” and “TV One” which are recognized as competitors to each other with drastically opposing views on who are the right candidates to lead the country. Technically, one hour was first allotted to Presidential candidate Prabowo Subianto and his vice Presidential candidate Hatta Rajasa. Once the discussion was finished, they left the studio and one hour was then allotted to Presidential candidate Joko Widodo and his vice Presidential candidate Jusuf Kalla. For both sessions the key topics were; 1. Industry, Trade, Investment, and Energy and Minerals, 2. Food, Farming, and Marine, 3. Infrastructure and Connectivity, regional economic development and sustainable development, 4. Finance and funding Human Resource Development, workers, and small and medium sized enterprises, 5. Signing of an MOU to support a partnership with KADIN.
Prabowo Subianto - Hatta Rajasa
Joko Widodo - Jusuf Kalla
Throughout the discussion it was clear that team Prabowo Subianto - Hatta Rajasa were focused on the bigger picture and in a nod to the business community Prabowo stated that many challenges in the energy, banking, and infrastructure sectors could be managed if the government and business sector, supported by other key stakeholders, worked closely together.
The atmosphere in the studio become more festive and light hearted as Joko Widodo’s answers were often filled with humor, accentuated each time he would give an answer in point form and strongly gesticulate the number 2 (alluding to his candidacy number) whenever he arrived at his second point.
Prabowo noted that with a dynamic population, a large segment of youth, and the desire to stand shoulder to shoulder with other nations, the pieces of Indonesia’s success were present and it is the government’s role to put them in place.
Throughout the discussion it was clear that the Joko Widodo - Jusuf Kalla team were focused on the specific solutions and the technical details of their strategy with the take-away key message that their Presidency would be focused on cutting government bureaucracy.
He stated that for the next 20 years the key focus of all stakeholders should be to work hard to make Indonesia agriculturally and energy independent in addition to improving the welfare, health, and education of Indonesians and controlling the population explosion.
In responding to the need for food security Joko Widodo stated it was not enough to talk about “developing more rice paddies” but a closer look was needed into the support systems, like water availability. Based on this analysis one of his key policies will be to develop 20-25 water damns in the next five years.
While Prabowo lamented that every 10 minutes Indonesia lost 6 soccer sized fields of forests, he noted that these destroyed areas could become the solution to Indonesia’s agricultural and energy independence by
Joko Widodo used the same approach when discussing marine development stating it was not enough to encourage more fishing. His plan is to develop up to 100 fish processing centers with cold storage
turning them into productive land. Pointing to an estimated 100 trillion rupiah in marine losses a year Prabowo offered to increase the number of coast guard vessels and increase the number of beach patrols.
capabilities across Indonesia with the condition that the private sector is welcome but that fishermen had to have an important role in operations.
In the area of infrastructure development Prabowo-Hatta were in full support of KADIN’s recommendation to develop a Bank Infrastructure and Infrastructure Coordination Agency reporting directly to the President. Hatta Rajasa added that for every infrastructure development project the government should be required to provide investors with a detailed Internal Rate of Return (IRR) report and an accompanying Public Private Partnership (PPP) plan. Hatta Rajasa was also in favor of the government, state-owned enterprises, or the private sector being involved in infrastructure development and stressed the importance of developing infrastructure especially in easter Indonesia. In the last segment of the discussion, Prabowo Subianto and Hatta Rajasa signed to MOU to work closely with KADIN but Prabowo ended the segment with a joke, quipping that this was the fastest MOU he had ever signed.
In regards to marine development Joko Widodo detailed his plan for a “sea highway” connecting East with West not through pavement and asphalt but through affordable shipping connected by deep sea ports. Again he expressed approval of the private sector’s involvement in this development but encouraged the private sector to also be involved in land infrastructure development. When discussing energy, Jusuf Kalla received one of the most boisterous audience reactions when he stated that they will put an end to the “oil mafia”, whose activities have incurred enormous state losses, by the end of their first term. In summary of their main message Joko Widodo emphasized the need for less government bureacracy and the need to get rid of the “why make it easy when we can make it more difficult” culture. In a surprise move, Joko Widodo and Jusuf Kalla did not agree to sign the MOU with Jusuf Kalla stating, “We are not going to sign this MOU because we will work closely with KADIN, regardless if we sign or not.”
Corporate Liability for Corruption in Indonesia By Michael S. Carl (
[email protected]) and Nico Angelo Putra Mooduto (
[email protected]) of SSEK Legal Consultants
Anti-corruption compliance is rightly a focus of companies operating in Indonesia. One of the more interesting questions for such companies, particularly foreign investment companies, is whether the company and/ or individual company Directors can be prosecuted for corruption as a result of the actions of employees. Based on a plainEnglish reading of Law No. 31 Year 1999 regarding Eradication of the Criminal Act of Corruption, as amended by Law No. 20 Year 2001 (the “Corruption Law”), a company and/ or individual Directors may be exposed to potential criminal charges for corruption. Potential Corporate Liability Articles 2, 3 and 5 through 16 of the Corruption Law delineate the perpetrator of a criminal act of corruption with the phrase “setiap orang” (any person). “Orang” (person) itself is defined under Article 1 point 3 of the Corruption Law to include a company. Pursuant to Article 1, point 1 of the Corruption Law, a company is a group of persons and/or assets organized either as a legal entity or as a nonlegal entity. Therefore, any person, which includes a company, committing a criminal act of corruption under one of the foregoing provisions of the Corruption Law may be punished with criminal sanctions. The liability of a company for criminal acts under the Corruption Law is specifically enshrined in Article 20 of the Corruption Law, which, in the relevant part, reads as follows: (1) If a criminal act of corruption is committed by or in the name of a company, the criminal charges and verdict may be made against the company and/or its officers. (2) Criminal acts of corruption are committed by the company if such criminal acts are committed by persons based
on an employment relationship or other relationship, acting in the corporate scope, whether alone or in concert. Despite the clear language of the Corruption Law, there are very few cases in which the Indonesian courts have subjected a company to criminal liability for corruption. We have found only two court decisions in the area of corruption law that have applied the concept of corporate criminal liability. The cases involved PT Giri Jaladhi Wana, decided by the Banjarmasin District Court in 2011, and PT Indosat Mega Media (IM2), decided by the Corruption Court in 2013. It is worth noting that in both cases the corrupt acts were committed by Directors and the companies were held to have benefited directly from the corruption.
charged where a criminal act of corruption is committed by or in the name of a company. However, we read this provision as requiring the Director to have adopted policies or given directions giving rise to the act of corruption. We could not find instances in which an individual was held criminally liable under the Corruption Law by reason of his or her status or position alone, for example, by reason of his or her serving as a Director. Indonesian law enforcers and courts appear to require, at a minimum, that a person direct or cause the corrupt act or, perhaps, have knowledge of the corrupt act.
Thus, while the Corruption Law permits the bringing of charges against a company, the fact remains that law enforcement agencies have been reluctant to invoke its provisions against companies as opposed to individuals.
In the several cases in which individuals in positions of responsibility were held criminally liable under the Corruption Law, the courts scrutinized the defendant’s individual involvement in the corruption to determine his or her guilt. In all of the cases that we examined, the guilty defendants were in one way or another personally/directly involved in the corruption.
Potential Director Liability
Conclusion
There is also a legal question whether Directors may be held individually responsible in their corporate capacities for alleged acts of corruption by others in their organizations. Looking at the matter more broadly, the question is whether the Indonesian criminal justice system will hold an individual criminally responsible for acts of corruption by virtue of the person’s status or position regardless of whether the person had direct involvement in the acts of corruption. Phrased differently, the question is whether a Director may be held liable by reason of his/her acts or omission in failing to prevent the corruption.
A plain-language reading of Indonesia’s Corruption Law indicates that companies and Directors may be prosecuted for the corrupt acts of their employees. In practice, companies have indeed been found guilty where they have benefited from the acts of their Directors. Conversely, the law is yet to be tested on whether, by virtue of his/her position alone, a Director may be held individually liable for corruption committed by others.
Article 20 of the Corruption Law indicates that an officer, including a Director, may be
Until we meet again: Matt “Wheels” Wheeler Matt “Wheels” Wheeler was an American teaching, living and loving life with his wife Mary and daughter Megan in Jakarta, Indonesia when he was taken away too soon in a tragic car accident. The fact that Bahasa Business, the Indonesia Canadian Chamber of Commerce newsletter, dedicates a page to say good-bye is testament to Matt’s character and his ability to bring communities together and to strengthen relationships through sport. Matt lived and breathed hockey and is recognized as a driving force of the informal and formal international hockey league in Jakarta. But his love of sport transcended beyond hockey and he could use any sport to form the basis of new friendships. Ever ready to lend a helping hand it was only a few weeks ago where Matt was prepared to join team Canada in the international six-a-side futsal tournament. He didn’t play, but his spirit was there. In touching tributes across Southeast Asia, friends and colleagues have taken moments of silence before they begin play on tennis courts, soccer pitches, and of course, hockey arenas.
Rest in Peace Matt Wheeler.
Canada – Indonesia Relationship Reaches New Heights This first quarter of 2014 Indonesia became Canada’s largest trading partner in Southeast Asia, surpassing Thailand. Following are some of the Canadian companies operating in Indonesia that are working hard to make the Indonesia-Canada relationship even stronger:
l In Communications Technology and Innovation Blackberry, Open Text, ToonBoom, Wesley Clover, C-COM Satellite, MDA
l In Infrastructure SNC Lavallin, B+H, Airport Kinesis, Morrison Hershfield
l In Consumer Products MAC Cosmetics, La Sensa, Nygaard l In Energy and Environment Talisman, Husky, Pan Orient, Master Flo, McElhanney, Golder, Enerflex, Vale, Hatch, Hatfield, Terralog, Redpath, CBM Asia
McElhanney
l In Financial Services Manulife, Sunlife
l In Aerospace & Defence Bombardier, Viking, CAE, Eomax, Ultra Electronics
l In Education LaSalle International College of Design, University of Waterloo, Aviation Strategies, McGill, UBC, University of Alberta, University of Toronto, SFU, Humber College amongst the many.
l In Health Jamieson Vitamins, ImmunoTech, Cellex-C
l In Power Ballard, Manitoba Hydro
l In Agrifood & Agriculture Canpotex, Maple Lea Foods, McCain, Cavendish, Voortman Cookies, Clearwater Seafood
BC Hosts ASEAN Visit
In the first week of June, British Columbia’s Premier Christy Clark met with a delegation of high-ranking government officials representing the Association of Southeast Asian Nations (ASEAN) in Vancouver to promote the province’s competitive advantages as part of the ASEAN Economic Ministers Roadshow to Canada.
on to Toronto.
“This visit gives senior ASEAN officials the opportunity to see what sets B.C. apart - our business-friendly climate, short shipping times across the Pacific, and our skilled workforce,” said Premier Clark.
The program in Vancouver includes events with Canadian Minister of International Trade Ed Fast and Teresa Wat, British Columbia’s Minister of International Trade and Minister Responsible for the Asia Pacific Strategy and Multiculturalism. The itinerary features a luncheon seminar devoted to Canada-ASEAN energy linkages, including LNG, and a roundtable discussion about British Columbia’s transportation infrastructure.
The ASEAN Economic Ministers Roadshow to Canada, organized in partnership with the Department of Foreign Affairs, Trade and Development, includes a three-day stop in Vancouver before moving
Bahasa Business readers interested in more information about the ASEAN visit and about BC in general can contact Sam Oliphant, Press Secretary at the Office of the Premier, +1 250 952-7252.
Canadians Celebrate Tax Freedom Day In June the residents of nine out of ten Canadian provinces had reason to celebrate as they had reached Tax Freedom Day, recognized as the day when Canadians start working for themselves and not the government. The one province not celebrating in June was Alberta, who celebrated the occasion the month before (on May 23, to be exact). According to a press release issued by the Fraser Institute, Tax Freedom Day measures the total tax burden imposed on Canadian families by the federal, provincial and local governments. In short, if a taxpayer had to pay all their taxes up front, they would give the government each and every dollar they earned before Tax Freedom Day. “Without our Tax Freedom Day calculations, it’s nearly impossible for Canadian families to know all the taxes they pay because governments levy such a wide range of taxes including income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, vehicle taxes, profit taxes, import taxes, ‘sin’ taxes on liquor and tobacco, and more,”
said Charles Lammam, resident scholar in economic policy at the Fraser Institute and co-author of Canadians Celebrate Tax Freedom Day. After accounting for all taxes, the average Canadian family (with two or more people) in 2014 will pay $43,435 in total taxes, or 43.5 per cent of their annual income. This is higher than last year and the $1,355 increase in the average Canadian family’s total tax bill includes increases in income taxes ($589), payroll and health taxes ($364), sales taxes ($191) and property taxes ($47). Unfortunately for Canadians, no category of taxes decreased between 2013 and 2014. The Fraser Institute lamented Canada’s high tax rate stating, “When governments spend beyond their means, they borrow, incurring deficits, which are essentially deferred taxes. This year, the federal government and seven provincial governments are planning deficits totaling $18.8 billion, with Ottawa expecting a $2.9 billion deficit while the provinces expect combined deficits of $15.9 billion.”
Province
Alberta Prince Edward Island British Columbia Ontario Saskatchewan New Brunswick Manitoba Nova Scotia Quebec Newfoundland & Labrador
Tax Freedom Day
23 May 5 June 6 June 7 June 7 June 9 June 10 June 14 June 14 June 22 June
*Note: The later the Tax Freedom Day, the heavier the tax burden. Bahasa Business readers who are interested in finding more about Tax Free Day and the Fraser Institute’s calculations can visit the website, https://www.fraserinstitute.org
Is Canada’s Growing Trade with Indonesia and the Booming ASEAN Region a Good Thing? In 2003 Canadian business started seeing the world as its stage and today, a little more than 11 years later, diversification of trade to emerging markets has flourished. With the world economy on the verge of a new growth cycle, there is increased curiosity -- and not just in Canada -- about the planet’s next big market. This same curiosity has turned Canada’s eyes toward Indonesia and the ASEAN economies which has a collective GDP of $2.2 trillion -- about 20 per cent greater than Canada’s - and an impressive population base of just over 600 million. Add to that the collective growth dynamic, which in the next cycle will have very few rivals and the prospects like this are hard to ignore. In 2012 the Canada-ASEAN Business Council was formed and 2013 saw the first annual Canada-ASEAN Business Forum meeting in Singapore, attracting 220 regional and Canadian business leaders, government officials and prominent local media personalities. Despite the relatively recent global minded transformation amongst Canadian businesses, an interesting survey by the Asia Pacific Foundation of Canada has found a significant Canadian presence spread broadly across ASEAN Association members with a reasonably long history of commercial involvement. Canadian businesses also enjoy a diverse industrial representation, led (but not dominated) by professional services, manufacturing and oil & gas operations. Most of the Canadian operations are small and medium-sized enterprises, who are on balance highly satisfied, quickly profitable, upbeat about their prospects in spite of regional business risks, and proving it by diverting a good share of their regional investment to ASEAN economies. Results like this suggest strongly that there is much greater Canadian potential in the region. Canadian businesses have even been challenged by former SecretaryGeneral of ASEAN Dr. Surin Pitsuwan to double Canada-ASEAN trade by 2018. But is it possible? In the 2000-2008 period, Canadian exports to ASEAN grew by 9 per cent annually -- just under the average pace to emerging markets as a whole. Post-crisis, the rate of growth is exactly the same. Doubling trade by 2018 would require notching that pace up to 15 per cent annually which is not an unachievable target given the potential of the region and its average import growth. So to gauge whether to invest in Indonesia and ASEAN is good for Canadian businesses we need to consider a few facts: China is running
Peter Hall
Chief Economist, Export Development Canada
out of labour, but instead of giving in to lower growth, is investing heavily in manufacturing facilities in ASEAN. These factories will likely serve the global market, but will be focused on the needs of the swelling Chinese middle class -- currently growing by over 40 million annually. The ASEAN middle class will also benefit -- in Indonesia alone, it is growing by some 7 million annually. Stack these numbers against Canadian population, and they’re stunning. The bottom line? Indonesia and the ASEAN region will undoubtedly be a force to be reckoned with in the coming economic cycle. It has fast-growing customers, has a rapidly-growing domestic base, has a rich population base that could prove to be a great release valve for Canada’s population-constrained future and an attitude of greater openness that suggests great promise for outward-bound Canadians.
“Banff Theme”
Canada Day Celebration
Hundreds of people from the Indonesian-Canadian community, Indonesian government officials, and members from the diplomatic community enjoyed a “Banff Theme” reception to celebrate Canada’s 147th birthday at the Four Seasons Hotel hosted by the Canadian Embassy in Indonesia. Canada Day, which is officially celebrated on July 1 to mark the creation of the Canadian Federation in line with the British-North American pact, was celebrated early in Jakarta to account for the upcoming Ramadhan holy month. In his opening speech Canadian Ambassador to Indonesia Donald Bobiash impressed the guests with his Indonesian language skills which included a lengthy segment of his speech spoken purely in Bahasa Indonesia. H.E Donald Bobiash has been a strong proponent of building the Canadian brand here in Indonesia and his presentation was both humorous and inspiring. It was clear that guests enjoyed both the food and the decorations. The very delicious food selection which included steak, salmon, and even pierogies, was perfectly accentuated by Banff-themed room decorations including a photo-booth displaying the Banff Springs hotel, a 6 foot tall standing brown bear ice sculpture, a photo slideshow presentation, and numerous Banff backdrops.
Families Celebrate in Red and White At the ICCC Canada Day Picnic H.E Donald Bobiash and wife Teresa Rozkiewicz led dozens of families from the Indonesian-Canadian community celebrate Canada Day with face-painting, swimming, a circus show from the Red Nose Foundation, and of course a delicious hot dog and hamburger barbecue. With all proceeds from the entrance fee and the sale of raffle tickets going to the Red Nose foundation not only was everyone having fun but it was all for a good cause. Said Red Nose Foundation founder Dan Roberts, “We are very appreciative of how supportive the ICCC and the Canadian Embassy have been to us over the years and I can honestly say Canada Day is one of the Red Nose Foundation kids’ favorite events to perform. The participants are all friendly and responsive and we couldn’t ask for a better crowd.”
The time is right
to join
ICCC
The Indonesia Canada Chamber of Commerce (ICCC) is a membership organization that exists primarily to promote positive business growth for social and economic development both in Indonesia and in Canada. The ICCC vision is to be recognized as the home of ideas and information to best support the connecting of Canadian and Indonesian business interests and our organization works at the grass-roots business level to nurture local business relationship networks for the benefit of all our members. There is truth in the phrase “strength in numbers” and we invite all businesses in the Indonesian-Canadian community to join us. Below is a list of the ICCC Board of Directors who extend a warm welcome to join our organization. Chris Bendl President
Richard D. Emmerson Vice President
Nyoto Irawan Vice President
Dean Boulding
Chairperson – CSR & Sustainable Development Committee
Tracy Reynolds Chairperson – Policy Committee
Stephanie Cooke
Helmi Maemozax Board Member
Derrick McClure Board Member
Neil Prendergast Board Member
Vice President
Chairperson – Event Committee
Cameron Tough
Tony Costa
Luc St. Amour
Helen M. Vanwel
Ipung Kurnia Treasurer
Edwin Pieroelie
Secretary General & Chairperson – Communications Committee
Mario Babin
Chairperson – Membership Committee
Board Member
Gregory Elms Board Member
Charles T. Kidd
Board Member Board Member
Aditi Dixit
Board Member
Board Member
Henry Lowis Board Member
contact our ICCC Secretariat at +62-21-527-7890 or
[email protected] for further information.
photo from www.btamtoday.com
In line with the prolific Greek philosopher Aristotle’s observation that “nature abhors a vacuum”, various first quarter mining and import/export data reveals that China, along with the major commodities buyers, have moved to the Philippines, India and Australia to meet key mineral supplies cut off by Indonesia’s new law on the processing of raw minerals. As reported by Bloomberg News, customs data has reveals nickel ore deliveries from the Philippines surged to 3.98 million metric tons in June, the highest level since September 2012, while bauxite from India surged to a 10-month high of 547,475 tons. Bauxite shipments from Australia rose 21 percent from April to 1.24 million tons. Before imposing a ban on exporting raw minerals earlier this year with the intention
Nature Abhors a Vacuum: China Quickly reacts to Indonesia Mining Law
to foster a local refining industry, analysts at Goldman Sachs Group Inc estimated Indonesia as accounting for more than 10 percent of global bauxite supplies. Indonesia was also the biggest source of ore used by China to produce nickel pig iron, a lower grade alternative to refined metal used to make stainless steel. In a Bloomberg News interview with Chen Ruikan, from SMM Information & Technology Co. in Shanghai, the analyst stated “More Chinese smelters are replacing Indonesian ores with material from the Philippines.” Bloomberg further reported Ye Yonggang, an analyst with Jinrui Futures Co. in Shenzhen, as saying that Indian bauxite is also emerging as a substitute for Indonesian shipments and Australia is also increasing cargoes.
China’s laterite nickel ore imports from Indonesia, fell 87 percent last month to 38,885 tons, while bauxite shipments in May were 44,968 tons, down 91 percent from April according to customs data. Nickel futures have climbed 34 percent this year, making them the best performer on the London Metal Exchange. They traded at $18,618 a ton at 5:12 p.m. Shanghai time. Aluminum, which is made from bauxite, has advanced 5.4 percent in 2014. Bloomberg News concluded that Indonesia is poised to maintain export restrictions on raw ores as Joko Widodo and Prabowo Subianto, both candidates in the nation’s July election, support the policy.
Contributors
Bahasa Business is managed by ICCC Secretary General Edwin Pieroelie in coordination with local PR agency klirkom (www.klirkom.com) and contributing members from the Indonesian and Canadian community. In this July 2014 edition, special appreciation goes to: KADIN Wely Kustono Karina Sherlen Minie
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