Govt asked to review antidumping regulation
JAKARTA (JP): The Indonesian Steel Pipe Manufacturers Association (Gapipa) called on the government on Friday to review the procedure imposed on local companies in filing an antidumping petition.
The association charged that the government had misinterpreted the original World Trade Organization (WTO) regulation in adopting the procedure.
Gapipa vice chairman Abas F. Soeriawidjaja said that the misinterpretation of the regulation had created a loophole which endangered the survival of local industries.
This loophole had resulted in the elimination of between 5 percent and 87 percent countervailing duties imposed against steel pipe imports from Japan and Singapore early last month, he said.
Abas, who is also the president and CEO of steel pipe manufacturer PT South East Asia Pipe Industries (SEAPI), claimed that the removal of the duties was based on the misinterpretation instead of the actual dumping evidence.
"The cancellation was because of our own law, not on the evidence of dumping practices which (the ministry of finance) can not dispute," he told reporters.
The countervailing duty was recalled because the ministry found that the petitioners were also importing steel pipes which according to the existing legislation were ineligible to complain, Abas said.
The original WTO regulation stipulates that only local industries were eligible to lodge a complaint of dumping practices.
It also stipulates that "when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term domestic industry may be interpreted as referring to the rest of the producers".
"The stress is on the 'may be', meaning there can be circumstances that cancel the definition. We play hero and just rule out all companies that import, regardless of the amount," Gapipa secretary Untung Yusuf said.
He said that at the time of investigation by the Indonesian Anti Dumping Committee (KADI) two of the three original petitioners -- PT KHI Pipe Industries and PT Bakrie Pipe Industries -- were found to be importing pipes to fulfill domestic demand.
KADI imposed the temporary countervailing duty in July last year because the volume of imports was considered insignificant compared to the number of pipes dumped into the country.
However, KADI, with its new management, later changed its stance and revoked the decision on the grounds that companies which were involved in import activities could not be allowed to lodge a complaint.
Pipes imported by the two petitioners during the time of investigations were only 900 tons, while the total imports of pipes at the time reached over 120,000 tons, Abas said.
The duties affected Japanese companies like Kawasaki, Marubeni, Nippon Steel, NKK, and Sumitomo, which were imposed a duty of 12 percent, 51 percent, 5 percent, 81 percent, and 54 percent respectively.
A countervailing duty of 78 percent was imposed on all welded pipes from Singapore.
KADI's temporary countervailing duty was effective for four months after which it could be extended for a period of five years.
Abas feared that without the countervailing duties, dumping practices would again be rampant and threaten the continuance of local industries.
"Major projects like the upcoming PT Perusahaan Gas Negara (PGN) project are especially vulnerable to the practices of dumping," he said, adding that local industries could never compete with dumping prices.
Indonesia's 15 welded steel pipe manufacturers could produce up to one million tons of pipes a year, worth about $400 million, Untung said.
However, since the economic crisis in 1998 production steadily declined to about 220,000 last year from 300,000 in 1999, he said, adding that local demand depended largely on the ongoing projects within the year.
"We hope to capture the tender for the PGN project, if not this year's production could well be less than last year's," Untung added. (tnt)