Debnath Guharoy
AIBC National President

President's Column

Dear Members and Friends,

If the chemistry between President Widodo and Prime Minister Turnbull is any yardstick, the bilateral relationship is in good shape. Two men from very different backgrounds, united by their pragmatic desire to do business, have visibly taken a shine to each other. That is good news indeed. Privileged to watch them at close quarters over the last few weeks, their words herald a new beginning for this up-and-down relationship.

Actions speak louder than words. The President came to Sydney for a busy working weekend, with the meeting of leaders, the chat with CEOs and even the morning walk producing results. The
Governor-General added his support to the rekindling of ties, with
a - 21 gun salute and the ADF band doing the honours in style. To add to the momentum, the Prime Minister went FIFO for a day in Jakarta barely 10 days later. IORA and IABW crammed in to a whistle-stop tour deserves more than the loud claps he received. But it is the signed agreement for closer military cooperation, the announcement of lowered barriers for their pesticides and chemicals as well as our cattle and sugarcane that augurs well. Significant steps taken in the right direction. The two leaders have their closest aides singing off the same sheet: Trade Minister Lukita, BKPM Chairman Lembong and TTI Minister Ciobo are all putting a great deal of positive pressure on the two negotiating teams.

So it was a real pleasure to see Deddy Saleh and Ayu Made Marthini along with our Trudi Witbreuk and Peter Roberts in Canberra during the sixth round of IA-CEPA discussions, February 20-24. To be thanked yet gain for the work AIBC and IA BPG have done was heartwarming. To enjoy their company, their full teams and a total of 170 guests at the Press Club reception was memorable. I will remember the evening of February 22 because the atmosphere was noticeably warm. People present could feel the camaraderie, the bonds the negotiators have forged. I found myself thinking that negotiators who get on well, who can joke about the big asks of each other, are more likely to produce a breakthrough. Because the IA-CEPA will need a breakthrough to get well beyond haggling over tariffs and barriers, to get to a comprehensive partnership.

The two economies are in very different stages of development. We are an open market, the contrast with Indonesia is stark. There is very little for us to give to Indonesia that we haven’t given already. If their President, their Trade Minister and their Investment Board Chairman can repeatedly draw attention to the barriers we have raised to keep their paper, wood and palm oil out, we have no option but to take notice. These are vexed issues, shrouded in our real concerns with their illegal logging, wanton deforrestation and environmental damage. We can keep shaking our heads at each other but we wont be shaking hands anytime soon if we don’t find a way out of this probable impasse. If you have ideas that will help find that way forward, please write to our negotiators directly or drop me a line. Otherwise, please consider mine and if you like it, please lend your support by writing to me.

If you stop reading this column for a minute and ask the person nearest you how much money Australia provides Indonesia in aid each year and ask for the name of anything that money helped alleviate, you’ll probably get “the tsunami”. The average Melburnian and the average Surabayan wouldn’t have a clue about any other laudable project. Neither did two Indonesians with rank of Minister, when I asked them just a few days ago. But neither did they have any concern with Japanese aid being directly tied to projects. I’m not sure our politicians are getting the message from the Middle Class rising, across the world. In the East, they are rising economically. In the West, they are rising politically. Everywhere, the two common words are “jobs” and “infrastructure”. The relationship between the two are symbiotic. It’s that simple.

We are substantial donors of aid. You can make the effort and find out how much. Though we’ve heard “Aid for Trade” for three years now, I wonder how many real jobs our aid has in fact created here at home. When I’ve asked bureaucrats who should know, they have struggled to give me an answer. It’s not their fault.

We need to revisit ye olde paradigm. Over and above our chunky aid package each year, there’s a little-known $300 Million Infrastructure Development Assistance Fund over a 10-year period, announced by then Trade Minister Robb at IABW 2015. At the 2-year anniversary of that announcement, we are still rearranging the chairs, the new edifice has yet to be built and we are stuck with the time-warped ‘mandate’ of assisting with ‘road and water’ projects. I hear ‘PPP’ has been added to the list, though I’m not holding my breath. But I will urge Minister Ciobo and Minister Bishop to please reconsider the way our aid dollars are spent. I have asked for meetings, we have sent in written submissions. But change is painfully slow.

We need to use our Aid better than we have. Voters on both sides, donor and recipient, would like to see real jobs created for real people. Major slices of the money can be used to incentivise our businesses to engage with tertiary education on the ground in Indonesia by giving thousands of scholarships away for the certification of tradesmen at new schools; Feasibility Studies for hundreds of their crucial infrastructure projects that the reputation of our experts would help bring in badly needed private sector investment from across the world; to incentivize our tourism industry to build a new destination in Indonesia from planning through to construction, from waste management and power plant through to marina and adventure sports; from an alert-and-indict system that helps combat deforestation and illegal logging, tied to paper, wood and palm oil imports.

I have reason to believe that President Jokowi and many of his Ministers would rejoice in the building of new bridges, both literal and metaphorical. The Japanese and now the British seem to have no trouble linking aid directly with trade. I have reason to believe that our growing band of AIBC members and friends in the broader community would all applaud initiatives that produce real jobs for real people. In both countries. This is one way Australian Negotiators can be seen to be giving, Indonesian Negotiators be seen to be taking. If the give and take is seen to be inequitable, a robust IA-CEPA will be difficult to achieve. Much of the heavy lifting has already been done for the regional AANZFTA. Specific recommendations for the bilateral IA-CEPA have been made to the Negotiators in the IA BPG’s written submission. But new ideas are the only way we can achieve breakthroughs, asymmetrical though the give and take maybe to get past contentious issues. The Negotiators need all the help they can get. It took us 30 years to get the message on cattle. We don’t need 30 years of head-banging on paper, wood and palm oil.

While I celebrate the export of every block of cheese, every bottle of wine, I have often explained my reason to go beyond the transactional nature of our trade ties with our neighbor. The most recent attempt can be seen in my recent interviews with Fairfax Media, Asia Nikkei Review and The Australian. 

To end the column on a positive note, may I once again compliment the organisers of IABW 2017. It was well designed and well executed. I hope the deliberations and site visits will lead to more partnerships and new ventures. On our part, AIBC will support Austrade in its effort to ensure there is adequate follow-up to the big effort made in Jakarta.  Our new Executive Director Leith Doody will take the lead, on this and other programs in the offing. Watch this space. For those who may not know him, Leith has been a career trade diplomat with Austrade, finally as Senior Trade Commissioner at our Embassy in Jakarta. I’m sure you will join me in wishing him every success.

H.E. Thomas Lembong, Chairman of BKPM addressing the audience at IABW.

Till next month, warm regards.
Debnath

ACT Update

IA CEPA Networking Reception

The ACT Branch managed, on behalf of the Australian members of the Business Partnership Group, a networking reception to mark the occasion of the sixth round of the IA CEPA negotiations being conducted in Canberra, on 22 February 2017.

The networking reception at the National Press Club in Canberra, was well attended by over 170 people, including the Indonesian negotiating team, the Australian negotiating team, members of ACCI and AiG, as well as AIBC members locally and nationally. ACT Branch members were pleased to welcome Debnath Guharoy (President of AIBC), Michael Fay (Chair, NSW Branch) and members of other Branches.

The Indonesian Ambassador H.E. Nadjib Kesoema outlined his expectations for the negotiations and he was followed by the Indonesian and Australian lead negotiators on their perspectives on progress with the negotiations.

Feedback from the guests at the event was very positive:

“…The event was well managed enabling the Australian (ACCI, AIBC and AIG) and Indonesian (APINDO, IABC and KADIN) business representatives to interact not only together, but also with the Indonesian and Australian negotiating teams. This helped all present to get to know each other better. Congratulations to AIBC Canberra who initiated and organized the event…” Yos Ginting, Head of International Trade, KADIN

“…Well done on organising what I thought was a really successful event. With such a good attendance, I found it a great opportunity to network across various sectors, both Indonesian and local. As a first time attendee, I will definitely be watching out for future events…” Richard Hemingway, Director Mandanex Capital, Sydney

“…The Australia Indonesia Business Council hosts regular quality networking events that connect business and other interest groups with a common interest of building stronger links with Indonesia. This most recent event provided the unique opportunity to engage with the Australian and Indonesian negotiating teams working on the Indonesia Australia Comprehensive Economic Partnership Agreement. The presence of the Indonesian business delegation in Canberra for the negotiations added further value and a great environment for constructive engagement.  These events by AIBC reinforce the value of face to face networking at a forum where one can connect with a broad range of people to share knowledge, grow ideas and develop opportunities…”Jonathan Kobus, Senior Manager -  Investment and Enterprise Development – Innovate Canberra

“…Another great event by AIBC, well done! I really enjoyed the relaxed atmosphere and met some interesting contacts, both from Australia and Indonesia. Look forward to attending future events in Canberra...” Larry Fisher, Trade Adviser, TradeStart, Canberra Business Chamber

“…The event hosted by the AIBC Canberra chapter on 22 February was highly successful in several respects. It gave an opportunity for the IA CEPA negotiating team to debrief to the wider audience of business and officials interested in Indonesia and by engaging with several other industry bodies achieved wide coverage. With other developments including head of government meetings between Jokowi and Turnbull, this was a timely reminder and boost for the idea of building trading relationships with Indonesia…Peter Dawson, PJ Dawson and Associates, Canberra

AIBC would like to thank the sponsors for the networking event, without whose assistance the event would not have been possible: the sponsors were Coca Cola Amatil, Corrs Chambers Westgarth, EMR Capital, Monash University and the National Press Club.  Our media partner was Inside Canberra who has provided coverage of the speeches for members and guests to view.

Tony Mitchener (Chair ACT Branch AIBC), Debnath Guharoy (President, AIBC), Ibu Ayu Marthini Ni Made (Director of Trade Negotiations, Indonesian Ministry of Trade), H. E. Nadjib Riphat Kesoema (Indonesian Ambassador to Australia), Matthew Busch (Lowy Institute), Rudy Purba (Purba Consulting)

Pak Deddy (Indonesian Lead Negotiator), and his team outlining progress on IA CEPA negotiations

Debnath Guharoy (President, AIBC), Pak Deddy Saleh (Indonesian Lead Negotiator) and Ian Satchwell (Past President AIBC and IA CEPA Adviser to AIBC)

Kerrie Wilmot (Senior Manager Business Development, CIT Solutions), Penny Robertson OAM (Australian International School, Jakarta), Robert Shelton (Managing Director, DFK Everalls and Chair of Canberra Business Chamber, International Business Task Force), Melissa Healy (Director, DFK Everalls)

Tony Mitchener
Chairman-Australia Indonesia Business Council (AIBC) ACT
ACTChair@aibc.com.au

QLD Update

Networking Event with Steven Ciobo, Minister for Trade, Tourism and Investment

AIBC Queensland is delighted to have as special guest speaker, Federal Minister for Trade, Tourism and Investment, Steve Ciobo MP. Minister Ciobo has just returned from leading a business trade mission to Indonesia as part of Indonesia Australia Business Week (IABW), where Australian businesses had the ideal opportunity to explore the diverse commercial opportunities in one of the largest consumer markets in South East Asia.

The Minister will also importantly talk about the imminent free trade deal with Indonesia, the Indonesia Australia Cooperation for Economic Partnership (IA CEPA). The trade deal is likely to be completed this year which will open up exciting and significant opportunities for Australian businesses.

Please join us for an opportunity to hear from the Minister and network with other AIBC members and guests with vested interests in the Indonesian market.

Morning tea and coffee, and light refreshments will be provided. Please click here for registration and further details.

The event is kindly supported by King & Wood Mallesons.

Kathleen Turner,
Chairman-Australia Indonesia Business Council (AIBC) QLD
QLDChair@aibc.com.au

VIC Update

VIRGIN AUSTRALIA MELBOURNE FASHION FESTIVAL

On Wednesday 15th March AIBC were invited to attend the VAMFF Indonesian Fashions where two designers I.K.Y.K. and Peggy Hartanto (brought to Melbourne by the Victorian State Government) showcased their sophisticated and modern designs to a large audience comprising both Indonesian and Australian guests (including Ibu Dewi Savitri Wahab, Indonesian Consul-General). The two diverse designers were very well received by the audience.  We congratulate both Anandia and Peggy on their wonderful display of Indonesian fashion. Over 300,000 bloggers tapped in.

Anandia Marina Putri (Putri) - Creative Director (Designer) and Peggy Hartanto, Designer

From left to right:
Gonul Serbest - Executive Director Trade, Trade Victoria
Tatjana Saphira (Tata) - Muse, I.K.Y.K
Anandia Marina Putri (Putri) - Creative Director  (Designer)
Peggy Hartanto - Designer
Anaz  Siantar - Fashion blogger and influencer
Olivia Tjhin - Fashion blogger and influencer
Elxi Elvina - Fashion blogger and influencer
Photo credit: Katie Fergus

New AIBC VIC Chair

AIBC Victoria has recently undergone some changes.  Mr Murli Thadani has made the decision to stand down as AIBC VIC Chair for personal reasons.  We take this opportunity of thanking Murli for his service to AIBC.  We are delighted to announce that Jared Heath, AIBC Vice Chair and Special Counsel, Corrs Chambers Westgarth has agreed to take on the role as Interim Chair until Elections are held in August 2017.  We wish Jared well in his newly appointed role and look forward to working with Jared at a National level.

Jared Heath
Chairman - Australia Indonesia Business Council (AIBC) VIC
VICChair@aibc.com.au

WA Update

AIBC NETWORKING EVENT:
Perth Glory FC vs Brisbane Roar FC


AIBC WA welcomes you to join us for a special event to watch Western Australia’s very own Perth Glory FC take on 3 time A-League champions and Indonesian owned Brisbane Roar FC at NIB Stadium.

With both sides currently in finals contention and fighting for an all-important home final this promises to be an entertaining clash. Perth Glory will also be trying to make history with a win that could secure them a first ever spot in the 2018 AFC Asian Champions League.  

Please click here to register for this event.


Analysis & Predictions of the 2017 Jakarta Gubernatorial Elections:

‘Ahok’ and the Islamic hardliners: A threat to Indonesia’s democracy; or just robust politics?

On Thursday 16 March, the Australia Indonesia Business Council WA (AIBC), together with the Indonesia Institute (II) and the Australia Indonesia Youth Association WA (AIYA) held a joint-event focused on the upcoming Jakarta Gubernatorial Elections. The event was attended by 83 guests with standing room only. Moderated by ABC journalist and PhD Researcher, Sinead Mangan, a panel of Indonesian political experts shared their observations, analysis and commentary on the run-off elections scheduled for April.

Dr. Ian Wilson, Senior Lecturer, Politics & Security & Fellow of the Asia Research Centre at Murdoch University, described his first-hand experience of being in Jakarta during the first round of Gubernatorial Elections. He shared insights from interviews he recently performed with some of north Jakarta’s urban poor, who are feeling betrayed by slum demolitions and forced relocations.

Pak Agus Gunawan, Director Indonesia Institute and former Head of Bank Danamon in Indonesia & Head of Treasury at Chase Manhatten Bank Indonesia, highlighted the importance of voter turnout and the impact voters aligned with Agus Yudhoyono might have on determining the outcome of the election. He believed that the result is too close to call, though argued that the winning candidate would win by a margin of no greater than five percent.
Jarryd De Haan, Research Analyst at Future Directions International, commented on the blasphemy charges against Ahok, following widespread protests instigated by Islamic hardliners claiming he insulted the Koran. Jarryd described the intense political and social pressures brought on by 200,000 protesters and hypothesised who might be behind the charges and counter-charges being laid against the candidates.

After the event, guests were invited to join Sinead and panellists for a light Indonesian dinner, drinks and further discussion.

AIBC WA expresses our sincere thanks to AIYA and II for their efforts organising this joint-event.

Ross Taylor delivering the welcome address. Behind (L to R): Jarryd de Haan, Agus Gunawan, Ian Wilson and Sinead Mangan (Moderator)

Robert Sills
Chairman - Australia Indonesia Business Council (AIBC) WA WAChair@aibc.com.au

NSW Update

AIBC NSW Co-hosts Networking Event for Indonesian Young Tech Entrepreneurs under the Australia Award Fellowships Program

Tuesday evening 21st March in Sydney felt like a typical evening in Indonesia with thunderstorms, torrential rain and high humidity. Most of the 120 registered guests braved the conditions and gathered at King St Brewery, Darling Harbour. The event was co-hosted with QUT who are partners with the Commonwealth Government Australia Awards and Tech Training Company Worforce Blueprint on short course program delivery.

AIBC NSW members mixed with the young  Indonesian tech entrepreneurs from Jakarta , Bandung, North Sumatra , Aceh, Bali and Surabaya, Indonesian government officials from a number of Ministries, the Consulate, BKPM ,the Indonesian Trade office and the NSW Government.The evening was a rousing success and went on until 9pm, a sure sign of  the level of engagement and potential business opportunities . The Indonesian group will attend training programs in Brisbane and Adelaide and look forward to further interaction with AIBC branches in those States.

Indonesian Government Representatives and AIBC NSW Chair - Michael Fay

Event Attendees

Miriam Tuvlevski NSW AIBC member and representatives from Den Pasar Government office

Michel Fay
Chairman - Australia Indonesia Business Council (AIBC) NSW
NSWChair@aibc.com.au

AIBC Young Professionals – Speaker Profile Series

In the wings of AIBC’s Conference in November, the AIBC Young Professionals interviewed a number of the speakers to gain some additional perspectives.

In the first of the Series, we catch a moment with Chris Barnes and Chris Bowen.

“…get on a plane get up to Indonesia! As much as I strongly encourage people to learn the language and culture, you can’t just do that in a classroom.”  Chris Barnes.

“There’s almost no such thing as a bad idea when it comes to improving the Australia Indonesia relationship, we should be trying everything.” Chris Bowen

To read their interviews, click here and here.

Further instalments will be published in coming Editions of AIBCnews.

The 10th World Chambers Congress

The 10th World Chambers Congress will be held in
Sydney 19-21 September, 2017.

The World Chambers Congress gathers an international group of chambers, business and government leaders.

• Provides you with unique trade, investment and business opportunities.

There is already significant interest from many international chambers including Afghanistan, Asia Pacific, Brazil, Colombia, Italy, Japan, Korea, Macedonia, New Zealand, North America, Saudi Arabia, South Africa, South East Asia, Sri Lanka, United Kingdom.

World Chambers Congress 2017 Website

NB: Friday May19, 2017 is the deadline for early bird registration offer. Now is the time to organize flights and accommodation.

Do not hesitate to contact Eddie Reginato, NSW Business Chamber on 0467.524.701 should you have any queries.

Indoview

AUSTRALIA, INDONESIA AND THE NEED FOR A COMMON CAUSE

Four weeks ago, the President of Australia's closest Asian neighbour, a country of over a quarter of a billion people, spent the weekend in Sydney for talks with senior leaders including our Prime Minister. Did you notice?

Three weeks ago, Malcolm Turnbull flew to Indonesia to accelerate discussions around a free trade agreement between our two countries that will deliver enormous mutual benefit to us both. Did you notice?  Please click here to keep reading.
 

SUPPORTING STRONG INVESTMENT TIES WITH INDONESIA (FED)

Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, today met with the Chairman of the Indonesia Investment Coordinating Board (BKPM), Mr Thomas Lembong, to discuss opportunities to strengthen Australia's investment relationship with Indonesia. "Australian agriculture already invests heavily in Indonesia and that investment continues to deliver a range of benefits for both our countries," Minister Hartsuyker said. "For Australia, this investment provides increased returns and opportunities to expand our agricultural businesses. For Indonesia, it helps underpin their food security and to stimulate growth for a range of key agricultural sectors. To continue reading, please click here.

TRANSCRIPT OF DOORSTOP, JAKARTA, INDONESIA (FED)

Prime Minister, Malcolm Turnbull, discusses his visit to Indonesia, One Nation, preference deals, combatting terrorism, Australia's multicultural society, and the South China Sea.  To read the complete transcript, please click here.
 

AUSTRALIAN LIVE EXPORTS ON THE AGENDA IN INDONESIA (FED)
   
Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, spent today in Bader Lampung, Indonesia, promoting Australia's world-class livestock export industry and gaining a valuable insight into the operations of the cattle industry in Indonesia. "Indonesia is one of our most important trading partners and is our largest market for live cattle, with cattle exports to Indonesia valued at $578.4 million in 2015-16," Minister Hartsuyker said. "The Australian live export industry is especially significant for many of our northern farmers and farming communities and we are committed to building and sustaining the important and mutually beneficial trade and investment relationships that we share with key international partners, like Indonesia."  To keep reading this article, please click here.
 

TRANSCRIPT OF INTERVIEW, ABC 24 (FED)

Minister for Trade, Tourism and Investment, Steven Ciobo, discusses the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).  To view this Interview, please click here.

JOINT STATEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

26 February 2017
Prime Minister

During President Widodo’s state visit to Australia, Prime Minister Turnbull and President Widodo met for the annual Indonesia-Australia Leaders’ Meeting with other Australian and Indonesian Ministers in Sydney on 25–26 February 2017.

Leaders acknowledged the deep historical ties between Australia and Indonesia as a foundation for a strong 21st Century partnership. Leaders reaffirmed their commitment to the Lombok Treaty, signed in 2006, which is the bedrock for Indonesia and Australia’s defence and security relationship. Our relationship continues to evolve, reflecting the strength of the partnership between our two dynamic and growing countries.

To continue reading the entire Statement, please click here.

AUSTRALIA TO OPEN A NEW CONSULATE-GENERAL IN SURABAYA

Foreign Minister, Julie Bishop, said the Prime Minister announced the addition of Surabaya to Australia's diplomatic network. The Consulate-General in Surabaya, Indonesia's second-largest city, will further increase our links with Indonesia's vibrant east. Surabaya serves as East Java's key logistics, manufacturing and services hub and is an increasingly important destination for Australian trade and investment. In 2015, Australia was East Java's 10th largest export market, while Australia was East Java's seventh largest import source, including in agriculture.  Please click here to view the entire article.


NSW, INDONESIA LOOK TO BOOST BUSINESS TIES

Forging stronger business and economic ties was the focus of today's meeting between Indonesian President Joko Widodo and NSW Premier Gladys Berejiklian. President Widodo met with the Premier on his first official state visit to NSW, and Australia, since his election in 2014. Sydney is the only stop on the two-day itinerary. "NSW is committed to strengthening its ties with Indonesia, one of our closest and most important neighbours," Ms Berejiklian said.  To read the complete article, please click here.
 

Mineral Export Ban Update

In his latest article, Bill Sullivan of Christian Teo Purwono & Partners, takes another look at new regulations affecting the export of metal minerals.

"Indonesia has substantially relaxed the export ban on less than fully refined metal minerals in the case of those metal mineral producers willing and able to meet various conditions.

Taken at face value, the newly imposed export conditions are extremely onerous and might seem to herald a return to the worst excesses of resource nationalism that characterized Indonesia in the 2009 to 2014 period.

The onerous wording, however, may well be just 'smoke and mirrors' designed to divert attention from the simple and inescapable fact that the Government is allowing the export of less than fully refined metal minerals beyond what was meant to be the absolute, non-negotiable and final deadline of 11 January 2017 for full domestic processing and refining of all metal minerals."

To read this article in full, click here

Churchill Mining Arbitration - Surprising Outcome with Important Implications

In another recent article, Bill Sullivan of Christian Teo Purwono & Partners, comments on the recent findings by the International Centre for Settlement of Investment Disputes, regarding claims made by Churchill Mining against the Indonesian Government.

"Churchill Mining’s long running claims against Indonesia, in respect of the revocation of valuable coal mining licenses, have been rejected by an international arbitration tribunal.

Assuming it is not overturned on appeal, the outcome of the Churchill Mining arbitration has important implications for how prudent foreign investors should operate in Indonesia as well as for the Indonesian Government’s opposition to existing bilateral investment treaties and international arbitration of investment disputes."

To read this article in full, click here

The Ascent of Asia by Phil Ruthven AM

In this newsletter, we revisit this issue and broaden our scope to Greater Asia (including the Indian subcontinent). The proposed departure (Brexit) of the UK from the EU and the latter’s potential for other difficulties and defections, coupled with a more insular US under the Trump presidency, points to an even greater need for Australia to consolidate its future in its own region of the Asia Pacific – and, indeed, in the wider arena of Asia.

To read this article in full, click here