Phil Turtle
National President

President's Column

Dear Members and Friends,

Welcome to our final newsletter for 2019, as many prepare for a well-deserved break over the festive season. It has been a busy year for all at AIBC, with great focus on the IA-CEPA, and spreading word about this historic Agreement as far and wide as possible. Our various newsletters through the year, have illustrated just how busy things have been with a multitude of events and initiatives, undertaken on behalf of our Members, and to advance Australia-Indonesia Business relations.

Thank you for your support throughout the year, which enables AIBC to go about its vital work. With another busy year ahead, we encourage those who are not already Members, to join us on our mission, as we rely on a strong and vibrant membership base, in all of our eight Chapters around the country, to sustain us. We’d also encourage our existing Members to spread the word about AIBC, and ensure that AIBC continues to be a vibrant and valuable contributor, servicing all its Members and stakeholders.

With IA-CEPA successfully ratified by the Australian Parliament, indications are that the Indonesian Parliament will also approve the Agreement before the end of the year. As in Australia, this passage through Parliament is a robust process, with many voices being heard. Overall, the Agreement is clearly in the economic interest of both countries, and we look forward to its entry into force and implementation in the first quarter of 2020.

President Joko Widodo and Prime Minister Scott Morrison together in Jakarta (Photo: Australian Embassy Jakarta/Flickr)

Following Prime Minister Scott Morrison’s attendance at the swearing in of Indonesian President Joko Widodo on October 20 this year in Jakarta, the Indonesian President is planning for a State Visit to Australia sometime in February or March in the new year. This will hopefully be a great platform to launch IA-CEPA, and AIBC is poised to play a key role in business related activity around this visit.

Another highlight ahead, will be the AIBC Conference to be held in Darwin in October next year. This promises to be a unique event, showcasing both long-established links between Australia and Indonesia, but also highlighting many of the exciting emerging opportunities, linked with new technologies, and the now ever-present disruptors to traditional business models. We hope to see you there.

In closing I would like to thank all AIBC’s volunteer Board Members and Chapter Committees for their support and hard work throughout the year. Again, it is only through their passion and dedication to the cause, that AIBC maintains its many and various activities, and serves to promote this important relationship between our countries.

Best wishes to all from AIBC for a safe and happy festive season, and a great start to 2020.

Phil Turtle
National President

IA-CEPA Corner

Since our last issue, the IA-CEPA passed successfully through the Australian Senate, with only formalities now to progress on the Australian side. The Agreement is now before the Indonesian Parliament, with strong support for this to be ratified before the end of the year, and in time for President Jokowi’s planned State Visit to Australia in Q1 2020.

Once again, as the Agreement advances on its journey through our Parliaments, AIBC continues to promote the Agreement widely, and works alongside DFAT and our IA-BPG* partners in both countries, on the design of the Indonesia-Australia Skills Development Exchange Pilot Project and also the IA-CEPA Economic Cooperation Program.

AIBC and its IA-BPG partners also continue to advocate for a continuing role for the IA-BPG, perhaps under the developing Economic Cooperation Program, recognising that the Agreement will require ongoing promotion, review, and improvement across a broad range of sectors, and the key positions the IA-BPG member organisations together hold in each country. The IA-CEPA in its current form, is surely an important and historic Agreement, yet still holds much further promise for expansion in scope over time, as suggested in the earlier submissions by AIBC and the IA-BPG linked below.
 

IA-BPG Members meet at the Australian Embassy in Jakarta to discuss the Skills Development Exchange Pilot Program

With IA-CEPA on the verge of entry into force, AIBC is keen to hear from any organisations in either country that are preparing to capitalise on new opportunities presented by IA-CEPA, including opportunities to move staff between Australia and Indonesia for short-term skills development, under the special provisions of IA-CEPA.

Please share any brief news or interest that you may have, by contacting AIBC here. It is important that such insights are shared, to ensure the ongoing success of business and the Agreement.

Useful links for those interested in further detail on IA-CEPA include the DFAT IA-CEPA website, together with earlier submissions of AIBC and the Indonesia-Australia Business Partnership Group (IA-BPG).

(* the Indonesia-Australia Business Partnership Group IA-BPG, comprises the AIBC, ACCI, Ai Group, IABC, KADIN and APINDO).

AIBC National

IA-CEPA Workshop - Jakarta

Together with Series partners Pitcher Partners, AustCyber, Westpac, Austrade and DFAT, AIBC hosted a well-attended and energetic workshop in Jakarta, focussing on the very active Cyber Security and Education Sectors.
 

Dr Ian Martinus leads the first panel session
 

Welcoming around 60 guests was AIBC National President, Phil Turtle, together with Alison Duncan, Minister-Counsellor (Economic, Infrastructure & Investment) from the Jakarta Embassy, representing Ambassador Quinlan who was in Bali for the Sixth Indonesia-Australia Foreign and Defence Ministers 2+2 Meeting.

Dr Ian Martinus with Pak Ardi Sutedja (Indonesia Cyber Security Forum) and Prof Craig Valli

The selected venue was Greenhouse Cowork, and this environment complemented perfectly the themes being explored. Our thanks to the great team at Greenhouse, led by Angeline Hamdani, for contributing to the success of this event.

Workshop attendees enjoying panel session 3

Aside from the informative panel sessions (see full Program here), keynote addresses were delivered by internationally renowned Cyber Security expert Prof. Craig Valli (Director of ECU Security Research Institute), Erik Meijer (CEO – Telkomtelstra), and Alison Duncan. Visiting panellists and moderators included Darryl Daisley (Pitcher Partners) and Dr Ian Martinus (Director WA AustCyber Innovation Hub – ECU), both key drivers for this series of Workshops, together with Brett Dorney (General Manager - North Metro TAFE), Tony Marceddo (Director, Institute for Securing Digital Futures – ECU) and Terry Walsh (COO - Red Piranha).  To view Erik Meijer's presentation, please click here.

Erik Meijer delivers keynote address

Thanks to Ambassador Quinlan for his kind welcome and hospitality at a networking dinner at his Residence preceding the workshop, which again brought together many key people in the tech and education sectors.

Our thanks also to Andrew Barnes, Tim Martin, Nick Kittel, Elizabeth Campbell-Dorning and Hindun Harahap from the Embassy for their key contributions, as well as AIBC “Ambassador” Yudistira Adipratama and Sekar Wibowo for their assistance.

Workshop attendees gather for group photo

Building on the success of this initiative, AIBC looks forward to working on similar events with our sister-organisation the IABC, both here in Australia and in various parts of Indonesia.

Phil Turtle
National President

AIBC Conference 2020

The Conference theme is to be “Looking North : Shifting Up a Gear” reflecting that the southern high-population centres of Australia look north to Darwin (and beyond), Darwin looks north to its very near neighbours in Indonesia, and Indonesia looks north to its ASEAN and North Asian neighbours.

The Conference website, which can be viewed here, already contains some details and other materials that will be updated regularly as further information becomes available. We would particularly like to hear early from any groups keen to be involved and support the Conference as a Sponsor Partner. Please contact AIBC President, Phil Turtle, directly here with any enquiries.

For those on Twitter, please feel free to make use of the #aibc20 hashtag that we will be employing along the way and throughout the Conference.

We thank the Northern Territory Chief Minister, Hon Michael Gunner, and the Northern Territory Government, for their early support in what will be a very special Conference that is not to be missed.

Phil Turtle
National President

Export Finance Australia

Earlier this year, the Export Finance and Insurance Corporation (EFIC) was rebranded as Export Finance Australia (EFA).

This Australian Government organisation has a broad range of offerings that can assist successful Australian export related ventures, and can in certain cases even provide finance to overseas governments to fund procurement from Australian businesses. This extends significantly into the Defence sector, through the Defence Export Facility.

About EFA

Export Finance Australia is the government’s export credit agency. They provide finance for Australian businesses in a range of industries from manufacturing, consumer goods, wine, fashion, tourism, mining, engineering, construction, METS and more.

Through their loans, guarantees and bonds options, Export Finance Australia enables SMEs, corporates and governments to take on export-related opportunities, and support infrastructure development in the Pacific region and beyond.

Supporting businesses in the export supply chain

Aside from traditional exporters, Export Finance Australia also supports businesses operating in the export supply chain. These could be domestic businesses who don’t export themselves however supply goods or services that are integral for an export contract.

Loans to help businesses go global

When helicopter modification company HeliMods wanted to break into the US and European markets, Export Finance Australia provided them with a A$1.05 million loan to satisfy a set of commercial terms and ultimately secure a deal.

In the tourism industry, they provided Adrenalin, Snorkel and Dive with a A$575,000 loan to purchase another boat and expand their tourism operations to meet growing international tourism demand.

If you need finance to grow your business global, visit exportfinance.gov.au or call 1800 093 724 to see if they could help.

Indonesia Port Infrastructure Investment

“Infrastructure Investment in Indonesia: A Focus on Ports”, a 12-chapter research monograph, has been published as the final output for AIC Strategic Research Project 3 – ‘Efficient Facilitation of Major Infrastructure Projects’. The book represents over 3 years of AIC Infrastructure research (2016-2019) by an international team from Universitas Indonesia (UI), Universitas Gadjah Mada (UGM), Institut Teknologi Sepulu Nopember (ITS) and the University of Melbourne.  To view this report please click here.

Australia Awards CAFÉ Program

The AIBC has for a number of years developed a close relationship with the Australia Awards and its scholars and alumni from all parts of Indonesia. In fact, AIBC’s “Ambassador” in Indonesia, Yudistira Adipratama, is a proud Australia Awards alumnus, having made a key contribution during our Conference on the Gold Coast in 2018.

One of the important initiatives of the Australia Awards is their “Connection, Association, Friendship, Exchange” or CAFÉ Program, that assists scholars find their feet in Australia, and develop important broad connection into the community. Those chosen to participate in the Australia Awards, are carefully selected from a large number of applicants, and are of course high-potential individuals, that often already hold important positions in Indonesia.

Participation in this Program can be enormously beneficial and enjoyable for both parties, and AIBC commends Members and Friends to get involved.

To find out more about this Program, and register your interest, please see the CAFÉ flyer here.

ACT Update

The ACT AIBC chapter has been rather active in November and December!

We met formally with the Ambassador Bapak Kristiarto Soeryo Legowo and the Embassy’s economic and trade representatives to introduce the newly appointed ACT Committee and to reaffirm our commitment and to take forward IA-CEPA in a partnership approach, with the focus to promote trade opportunities for Australian  businesses, and in particular those in Canberra.

Minister for Trade, Tourism and Investment Simon Birmingham and DFAT Secretary Frances Adamson warmly addressed the international diplomatic community at the Friends of DFAT evening reception on 27 November attended by AIBC and the Ambassador Legowo.

On 5 December, AIBC ACT hosted BKPM, the Indonesian Investment Coordinating Board and the Cilacap Regency to receive an update on the Indonesian Investment climate and understand the key investment project opportunities in Cilacap.  Some highlights from the presentation.

• Indonesia’s digital economy is predicted to reach $ 130 Billion by 2020;
• The growth of the logistics industry in Indonesia is largely attributed to the boom in e-commerce.  Noting that the e-commerce legislation has just passed Indonesian parliament and they are now in process of construction the technical component of the legislation;
• 5 of the 7 Unicorns in Southeast Asia are from Indonesia (Bukalapan, Gojek, Traveloco, Tokopedia, Ovo) * reached US$1bn in revenue;;
• E-commerce market is currently US$8 bn and projected to grow to US$65 bn;
• Australia is 12 largest investor in Indonesia valued at US$1,719 mill (Singapore is #1 at $38,095 mill, followed by Japan, China, HK and Malaysia);
• Top 5 largest Aust investment: Mining $733m; Food crops & livestock $170m; Basic Metal $204m; Hotel $130m; Other services $111m;
• Tourism and Higher Education and VET are the two main investment sectors that Australia have a competitive advantage;
• Investment policy reforms are aimed at improving investment climate and ease of doing business. It includes super deduction tax for vocational training and R&D (introduced in June 2019), and Online Single Submission (OSS) an integrated online system with data sharing.  Please click here to view the IICB slide deck.

AIBC ACT also met with an Indonesian Government  delegation looking to learn from Australia’s experience on e-commerce framework and legislation.  The meeting comes as new regulation was passed earlier this month in light of Indonesia’s internet economy growing at a break-neck speed, buoyed by rising smartphone use, and expected to triple to $133 billion by 2025, according to a recent report by Google, Singapore state investor Temasek Holdings and global business consultants Bain & Co.  The delegation, lead by Pak Suhanto Director General of Domestic Trade, Ministry of Trade had a robust discussion on the importance of proactively including industry, in particular SMEs, in the development of the technical elements with e-commerce legislation and also the implementation and gradual adoption. Other topics that we also discussed included: licencing, ensuring transparency around regulation and compliance,  monitoring and evaluation processes and essential data security. We look forward to being available to further engagement with the Ministry and the Embassy on this very important issue for both countries.

Prerana Mehta
ACT Chair

NSW Update

On 5 December 2019, the Indonesian Investment Promotion Centre (IIPC Sydney) hosted a meeting between the delegations from the Regency of Cilacap (Regency from the province of Central Java), BKPM and the AIBC NSW Committee. The agenda of the meeting was in regards to several investment opportunities in Cilacap region and how AIBC can help the regency’s push in attracting investment potential from Australia.

The Regency of Cilacap currently offers various investment opportunities in agriculture, aquaculture, tourism and infrastructure sectors. The Cilacap Regency delegates were focussed on promoting the potential development of aquaculture food processing facilities for their shrimp and eel farming industry. The discussion also touch on how the utilisation of the Port of Tanjung Intan, one of Indonesia’s International port, could be an advantage for investors investing into the regency.

In the meeting, the Cilacap Regency was represented by Vice-Regent Bapak Drs Farid Ma’ruf and Head of Investment Development (DPMPTSP) and Ibu Ir. Lydia Retnoningsih. Also attending was BKPM’s Deputy Director for Regional Promotion Facilitation, Ibu Eva Vera, the Director and Deputy Director of IIPC Sydney, Bapak Henry Rombe and Ibu Arum Paramitha respectively.
 

Attending from AIBC NSW Chapter was Deputy Chair, Pat Hanna, Secretary, Francisco Widjojo, and Committee Members, Di Robinson, Don Turner and Chris Kristian. Michael Fay from AFG Venture Group was also part of the discussion.

Nick Alexander
NSW Chair

SA Update

Indonesia Update for Businesses in South Australia

What can we expect from Jokowi’s second presidential term?

The Australian Indonesian Business Council of South Australia (AIBC SA) in collaboration with Flinders University presented an event “Indonesia Update for Businesses in SA, what can we expect from Jokowi’s second presidential term?”

The event was opened by SA Chair Amalia Sosrodiredjo to welcome special (VIP) guests, distinguished speakers, and guests in the audience. The Minister for Trade, Tourism, and Investment, the Hon. David Ridgway, MLC and the Consul General of Indonesia for QLD/NSW/SA, Mr Heru Hartanto Subolo gave their valuable remarks and encouragement for our bilateral trade agreement.
 

SA Committee with VIPs and distinguished speakers:

L-R (Andrew Bain (AIBC SA Secretary), Olivia Atmadja-Sharp (Committee), Dr Priyambudi Sulistiyanto, the Minister for Trade, Tourism, and Investment SA, the Hon. David Ridgway, MLC, the Consul General of Indonesia for Qld/NSW/SA Mr Heru Subolo, Amalia Sosrodiredjo (AIBC SA Chair), David West (Committee), Will Angove (AIBC SA Vice Chair), Blaine Gordon (Committee) – on the background via video conference: Assoc. Prof. Paul Burke, Mr Ian Betts)

Our speakers talked about why the topic, Indonesia update for businesses in SA is important, and why has the Australian Government negotiated a comprehensive economic agreement with Indonesia (IA CEPA)? What’s in it or benefit for SA businesses?

• Dr Priyambudi Sulistiyanto (Flinders University) presented a political lens of Indonesia in relation to trade and investment and the current new cabinet of Jokowi;
• Assoc. Prof. Paul Burke (Australian National University) presented an economic perspective and market opportunity and risks in Indonesia and overview of SE Asia economy;
• Mr. Ian Betts (Hill and Associates) shared his experience leading Risk Intelligence Service in Indonesia, providing a broad spectrum of risk and security areas in Indonesia and his view on defence strategy under Jokowi’s new cabinet.

We had a great mix of interactive audience from businesses, students, organisations, university, and community.

In conclusion, all speakers encouraged optimism of the new Jokowi’s cabinet to build stronger relationship between Indonesia and Australia, and support each other through any avenue possible.

Guests enjoying the presentations

Amalia Sosrodiredjo
SA Chair

VIC Update

IA-CEPA Panel Discussion

IA-CEPA Panel Discussion: On 19 November, AIBC Victoria co-hosted an IA-CEPA Panel Discussion with the Australia Indonesia Centre (AIC) and Perth USAsia Centre.  The event explored the way in which IA-CEPA might provide a new platform to deepen economic ties in the digital economy.  The evening commenced with a welcome from the Indonesian Consul-General, Ibu Spica Tutuhatunewa; then Kyle Springer (Perth USAsia Centre) provided an overview of IA-CEPA, followed by a panel discussion moderated by Helen Brown (AIC Digital Economy Fellow) and featuring Brian Kraft (Cardno), Tracey Monahan (KeyOptions), Ricki Mulia (Tapp Group).

Ibu Spica, Consul General for Victoria and Tasmania welcomes Guests

End of Year Event: On 5 December 2019, AIBC Victoria and the Indonesian Consulate hosted a joint end of year celebration, kindly hosted at the Consulate.  The Consul-General, Ibu Spica Tutuhatunewa, and AIBC Victoria Chair, Jared Heath, both gave speeches reflecting on the successes of 2019 and outlining the priorities and events for 2020.  Tributes were also paid to Dr Zanael Arifin, Consul/Minister Counsellor and Acting Consul-General, whose posting in Melbourne was concluding.  Pak Zanael’s warm friendship with AIBC and many talents were fondly recalled.  After the formalities, there was an enjoyable evening of networking and Indonesian food.

Jared Heath, AIBC VIC Chair thanks outgoing Consul/Minister Counsellor, Dr Zanael Arifin
 

Indonesian Investment Promotion Centre (IIPC): On 16 December, the AIBC Victoria Committee met with the IIPC Director, Henry Rombe and Deputy Director, Arum Paramitha during their visit to Melbourne.  IIPC is the representative office of the Indonesian Investment Co-ordinating Board (BKPM) in Australia based in Sydney and it was a great opportunity to discuss priorities and events for 2020.

Jared Heath
VIC Chair

Indoview

The 8th Partnership Meeting: Promoting Strategic Dialogue in Responding to Digital Transformation in the Red Meat and Cattle Sector

The 8th Partnership Meeting was held in Bali, Indonesia on 4 November 2019. The meeting was co-chaired by Wisnu Wijaya Soedibjo of BKPM Indonesia and Jodie McAlister of Department of Agriculture, Australia. Partnership members from both countries, representing the Government and Industry participated in the meeting.

Co-chairs Mr Wisnu Wijaya Soedibjo and Ms Jodie McAlister welcomed members to Bali and acknowledged the achievement of Partnership over the last twelve months. “This year alone, the Partnership has trained over 74 Indonesians in commercial cattle breeding and management, and has produced software and tools to help potential investors plan for cattle business. This is an important milestone to help accelerate the commercial viability of cattle breeding business in Indonesia,” said Mr Soedibjo.  To continue reading this article, please click here.

Indonesia is preparing six steps to accelerate foreign investment.

First, being one of the countries in the top 50, Ease of Doing Business/EODB, after stagnating at 73 this year.

Second, execute large investments that have been delayed due to obstacles in the field. Third, encourage investors to establish relationships with local small and medium enterprises (SMEs) to create a productive investment atmosphere.

Third, encourage investors to establish relationships with local small and medium enterprises (SMEs) to create a productive investment atmosphere.

Fourth, the government will encourage wider but quality investment spread, including outside of Java. Fifth, carry out investment promotion which is focused on the sector and destination country of promotion.

Fifth, carry out investment promotion which is focused on the sector and destination country of promotion.

The sixth is increasing the ability of domestic investors to face the slowing pace of the global economy. "Every investment problem must be solved," said Chairman of the Investment Coordinating Board (BKPM) Bahlil Lahadalia.  To view more comments on Twitter, please click here.

New Licensing Requirements for Foreign Construction Companies

In his recent article, Bill Sullivan of Christian Teo & Partners, looks at the recent changes to licensing requirements for Foreign Construction Companies.

"Earlier this year, the Ministry of Public Works issued a regulation on the licensing of foreign-owned construction services entities. This regulation has the potential to cause significant problems for some of Indonesia’s older-established, foreign-owned construction companies.

The very important supporting role that foreign-owned construction companies have in the local energy, infrastructure and mining industries means that any withdrawal, from Indonesia, of foreign-owned construction companies will be a material issue for the local energy, infrastructure and mining industries.”

To read this article in full, click here.

Indonesia Market Update

In their November 2019 edition of “Indonesia Market Update”, Morelink Asia Pacific provide news updates across many key sectors including the Indonesian economy, investment, trade, retail, agrifood, manufacturing, automotive, ICT and infrastructure sectors.

To read this update, click here.

Indonesian Consumer Confidence

Roy Morgan Indonesian Consumer Confidence rose 1.5pts to 159.5 in October 2019. However, Consumer Confidence is now 3.5pts lower than it was a year ago (163.0). Now 43% (up 3ppts) of Indonesians say their families are 'better off' financially than this time a year ago, while 9% (up 1ppt) say their families are 'worse off' financially. Some 90% (up 1ppt) of Indonesians expect Indonesia to have 'good times' financially during the next 12 months, and only 10% (unchanged) expect the nation to have 'bad times' financially. Some 65% (up 1ppt) of Indonesians say 'now is a good time to buy' major household items, and 32% (down 1ppt) say 'now is a bad time to buy' major household items. Meanwhile, analysis of Consumer Confidence by employment and occupation shows declines across most categories over the past year, with the steepest drop among those not in paid employment. The monthly Roy Morgan Indonesian Consumer Confidence Rating is based on 1,279 in-depth face-to-face interviews conducted in October throughout Indonesia.  To continue reading the entire article, please click here.