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DEVELOPMENT LINE OF CREDIT LOAN

BE'IWEEN

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

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AND

JQTH

DAY OF

OCTOBER,

1972.

BETWEm THE GOVERNMENT OF THE REPUBLI C OF INDONESIA (hereinafter called "Indonesia")

and

--THE GOVERNMENT OF CANADA (hereinafter referred to as "Canada") as represented by the Secretary of State for Exter nal Affairs acting through the Pr esident of the Canadian International Development Agency (hereinafter r eferred to as "CIDA")

WHEREAS Indonesia wishes to purchase in Canada certain equipment and

conunodities as described in Annex "A" of this Agreement, AND WHEREAS

Canada is willing to make a development loan available f or this purpose

on the terms and conditions provided herein; NOW THEREFORE the parties

hereto agr ee as follows:

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ARTICLE I

The Loan

Section 1 . 01

Canada shall make available to Indonesia on the terms and conditions

hereinafter set forth a development It>an in an amount not to exceed

six million Canadian dollars ($6, 000, 000).

Section 1 . 02

Canada shall open on its books a Loan Account in the name of Bank Indonesia

acting for and on behalf of the Government of Indonesia (hereinafter

r eferred to as "Bank Indonesia"), and shall credit t o such account the

full amount of the Loan. Withdrawals , payments and dis bursements may

be made from the Loan Account in accordance with the provisions of this

Agreement.

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Section 1.03

This Loan shall be free from interest, corrmitment or service charges.

Section 1. 04

Repayment of the nrincipal amount of the Loan shall be made in eighty

semi-annual instalments of seventy- five thousand Canadian dollars ($75,000)

each, due and payable on the l ast day of September and March in each year

coJIDilencing on September 30, 1982 and ending on March 31, 2022.

Section 1.05

Indonesia shall have the right to prepay principal in whole or in part

on any date without notice to Canada. The amount of any prepayment shall

be applied qn the instalments of principal then remaining payable in the

reverse order of their maturity.

Section 1 . 06

All payments and prepayments, as set forth herein, shall be made by

Indonesia in Canadian dollars to the Receiver- General of Canada, and shall

be deemed to have been paid when received by the Receiver- General of Canada.

Section 1.07

The principal of the Loan shall be paid without any deductions whatsoever

and more particularly shall be free from any tax.es, char ges or other

restrictions imposed under the laws of Indonesia and those in effect in

i ts territories or sul:x:livisions .

Section 1 . 08

Indonesia agrees that it will negotiate, at the r equest of Canada, concerning

acceleration of payments to the Receiver- General of Canada to be made under

this Agreement at any time after six ( 6) months before the first payment

of principal becomes due and payable. Indonesia and Canada shall mutually

determine whether, on the basis of the capacity of Indonesia to service

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a more rapid liquidation of its obligations in the l i ght of its internal

and external financial aid and economic position, such an acceleration

should take place.

ARTICLE II

Section 2 . 01

Except as may otherwise be specifically agreed to by Canada, the pr oceeds

of the Loan shall be used by I ndonesia exclusively for the purchase of

cer tain equipment and corrmoditi es in Canada and for the payment of ocean

freight and marine insurance for such equipment and corrmodities. All

items required to carry out the Loan Agreement shall be as described in

Annex " A" , and procedures for their procurement and payment shall be

those set forth in Annex

"B" ,

ooth Annexes being subject to such modification as may be agreed upon between Canada and Indonesia.

Section 2 . 02

The equipment and coilIIlodities to be financed from the proceeds of the Loan

shall be procured in Canada and shall have an overall Canadian manufactured

content of not less than sixty- six and two- thirds per cent (66 2/3

%).

Section 2 . 03

Equipment and commodities contracted for prior t o the effective date of

this Agreement may not be financed out of the proceeds of the Loan except

as may otherwise be agreed to by Canada.

Section 2 . 04

The equipment and commodities supplied under this Agreement are for domestic

Indonesian conslllllption and shall not be re- exported by Indonesia.

Section 2.05

Proceeds from the Loan shall not be used by Indonesia to meet the costs of

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any taxes, f ees or customs duties imposed directly or indirectly by

Indonesia on the i t ems procured.

ARTICLE Ill

Withdrawals of Proceeds of Loan

Section 3.01

Withdrawals f r om the Loan Account shall be for payments to Canadian suppliers

for imports by Indonesia of equipment and commodities eligible under this

Agreement and for the payment of ocean f r eight and marine insurance for

such equipnent and commodities. Such payments will be made under irrevocable

l etters of credit, expressed in Canadian currency, issued by Indonesian

foreign exchange banks designated by Bank Indonesia through designated

correspondent Canadian banks.

Section 3 . 02

Withdrawals shall be deemed t o occur on the dates on which reimbursements

are made from the Loan Account to the designated Canadian bank for the

payments to suppliers referr ed to in Section 3. 01.

Section 3 . 03

Subject to the conditions and limitations set forth , Indone sia shall be

entitled to withdrawals from the Loan Account in such amounts a s are

r equired to meet the reasonable costs of the conmodities in Annex "A"

and the costs of ocean freight and marine insurance for such commodities,

as these become due and payable.

Section 3 . 04

As set forth in Annex "B" hereto , for public sec tor pr ocurement, the

Indonesian procuring agency shall pr ovide Canada with a copy of each

invitation to tender, contract and/or purchase order for the pr ocurement

of commodities under this Loan Agreement in respect of which any withdrawal

is to be made . Private sector procurement may be without tender for

individual transactions not exceeding $200, 000 (Cdn. ) each, unless otherwise agreed to by Canada. Bank Indonesia and/or the relevant

Indonesian foreign exchange bank, designated by Bank Indonesia, shall pr ovide Canada with a copy of each irrevocable letter of credit issued

under this Agreement.

Section

3.05

The Indonesian procuring Agency shall furnish, or cause to be furnished

to Canada such doclllllents and other evidence in support of the letters

of credit referred to in Section J . 01 as Canada may reasonably request,

such evidence to be sufficient in form and substance to establish that

the amounts to be withdrawn ar e properly related to the purposes of the

Loan Agreement.

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Cancellation and Suspension

Section 4. 01

ARTICLE

IV

Indonesia may, by sixty (6o) days • notice to Canada cancel all or any

part of the Loan not withdrawn by Indonesia prior to the giving of such

notice and not required to meet outstanding financi al obligat ions to

suppliers or finns incurred under the Loan.

Section 4 . 02

If any of the following events occur and continue to occur, Canada may,

by sixty (60) days ' notice to Indonesia, specifying the reason for

suspension, suspend in whole or in part the right of Indonesia t o obtain

withdrawals from the Loan Account:

a) A default on the part of Indonesia in the perfonnance of any

undertaking under this Agreement;

b) Any situation which renders it impossible for Indonesia to perform

its obligations under this Agreement.

If suspension occurs and continues for thirty (30) days , Canada may by

sixty (60) days' notice to Indonesia, cancel that part of the Loan not

withdrawn pr ior to the giving of such notice, and not required to meet

outstanding financial obligations to suppliers or finns incurred under

the Loan.

Section 4.03

Unless otherwise agreed to by Canada, if the full amount of the Loan is

not spent by September

30, 1973,

the balance will be cancelled and the

final instalments of the repayment to be made by Indones ia shall be

reduced accordingly.

ARTICLE

V

General Undertakings

Section .5.01

Indonesia and Canada shall ensure that this Agreement is carried out with

due diligence and efficiency and each shall furnish to the other all such

information as shall reasona bly be requested.

Section .5.02

Indonesia shall afford accredited representatives of Canada all reasonable

opportunities to visit any part of the terr itories of Indonesia for

purposes relat ed to this Loan Agreement .

Section .5.03

The present Agreement and any Annex hereto shall be free from any taxes,

fees or other charges that may be imposed under the laws of Indonesia

and those in effect in its territories or administrative, political or

juridical divisions or sul:xiivisions in connection with the execution,

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issue, delivery and registration thereof.

Section

5.04

Indonesia shall at all times pr ovide or cause t o be provided as needed

all other monies and r esource s which may be required to implement this

Agreement.

Section

5.05

For the purposes of this Agreement and the Annexes hereto , Indonesia shall

include any agent or agents authorized by and on behalf of Indonesia with

regard to its rights , duties and obligations herein.

ARTICLE VI

Section 6 . 01

Any communication or doctUDent given, made or sent by either Indones ia or

Canada pursuant to the present Agr eement or any Annex thereto shall be in

writing and shall be deemed t o have been duly given, made or sent to the

party to which it is addressed at the time of its delivery by hand, mail,

telegram cable or r adiogram at its respective address , namely:

For Indonesia

Mail Address:

Cable Address:

For Canada

Mail Address :

Cable Address : and/or

Mail Address :

Cable Address:

Bank Indonesia

Jalan Kebon Sirih No . 82- 84 Jakarta, Indonesia

Delegasi, Jakarta

Canadian International Development Agency

122 Bank Street

Ottawa, Ontario , Canada, KlA OG4

CIDA, Ottawa Canadian Embassy

Jalan Budi Kemuliaan No . 6 Jakarta, Indonesia

Domcan, J'akarta

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Section

6.02

Any one of the parties hereto may, by notice to the other party, change

the address to which any notice or r equest intended for the party so

giving such notice shall be addressed.

Section

6.03

All conrnunications and documents subnitted to Canada shall be either the

English or the French language and all technical specifications therein

shall be in tenns of Canadian standards except where Canada may otherwise

agree in writing.

Section

6.04

This Agreement may be simultaneously executed in several counterparts each

of which so executed shall be deemed an original.

IN

WITNESS WHEREOFb the parties hereto have caused to be subscribed the

signatures of their authorized repres enta tives at the City of Jakarta

as of the day and year first above written.

On behalf of the Government of

the Republic of Indonesi a

Signed

Adam Malik

Mj.nister of Foreign Affairs

On behalf of the Goverrunent

of Canada

Signed

W. T. Deh..crth Ambassador

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5.

The Canadian compani es invited t o tender shall be instructed to : a) include in their t ender a declaration of the Canadian content of

the products they are offering for purchase;

b) send copies of all tenders t o CIDA at the same time as they are

f orwarded to the recipient Indonesian procurement agency ; (the

copies of tenders received by CIDA will be treated as a closed tender

call and not opened until the dates established by the r ecipi ent);

c) complete a Canadian Content Fonn and f orward it to CIDA with each

copy of tender;

d) suhnit t o CIDA, technical specifications complying with the Canadian

quali t y standards for the pr oducts to be supplied.

6.

If other than the lowest tender with acceptable Canadian content is

to be approved, the concurrence of CIDA shall be obtained bef or e the

purchase contr act ｾ ﾧ＠ issued.

7.

CIDA may upon receipt of f ormal advance application, waive the

r equirement for competiti ve tender s in the situations specified hereunder:

a) when procurement is pr oposed under certain supplier/importer

r elationships and the buyer is a r ecognized customer of the supplier;

b) when procurement concerns a pr oduct which is only available from a

singl e source ;

c) when procurement concerns a pr oduct which by nature and specifica tion

i s peculiar to a specific manufacturing pr ocess or end product;

d ) when pr oducts are to be procured under such other condi tions which

appear t o CIDA to merit a waiver f r om the t endering pr ocedures •

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Between the Government of the Republic of Indonesi a

And the Government of Canada

Procurement Procedures

1. Products eligible for financing under this Loan Agreement may be

procured by either the public sector ( goverranent deoartments and/or

agencies) or by the private sector under the following respective

procedures :

Public Sector

2. All public sector pr ocurement shall be subject t o competitive tender

procedures unless prior approval for waiver is obtained from CIDA.

3.

Before any purchase contr acts are entered into , the prospective

contracting party ｳｾｬｬ＠ invite tenders from a representative number of

Canadian suppliers of the r equired pr oducts unless otherwise agreed to

by CIDA.

4.

Lists of Canadian suppliers may be obtained from the Canadian Embassy

in J akarta or from CIDA in Ottawa. Copi es of each tender call, a list of'

compani e s invited to tender , ｡ｾ､＠ the assessment of the tenders received

will be forwarded to CID.A and/ or the Canadian Embassy, Jakarta. Prior

to the issuance of a pirchasing contract, Bank Indonesia w.i.11 obtain

confirmation from Canada to the u se of the Loan for each transaction

through CIDA and/or the Canadian Embassy, Jakarta which will constitute

clear ance for the transact ion for Canadian content and tendering r egulations •

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519(i) , 519(iii); 520; 521; 599; 676; 677; 678; 685; 687(i); 709;

742, 742( i ) ; 838(iii); 84l(ia); 880;

905,

905(i); 905(ii);

906,

906(i); 906(ii) ;

907,

907(i), 907(ii) ; 910; 911; 912; 922; 923;

924(ii) ; 925;

926,

926(i); 93l(ii); 933(ii); 936; 938; 939; 940; 941;

942; 943.

Anns, armaments , guns, a.rmnunition, and all other equipment or materials

for military use or for the manufacture thereof .

- All atomic energy materials and equipnent.

At CIDA1_{s request , substantiation may be required from time to time}

that the products being purchas ed under this Agreement are r equired

for developmental purposes by Indonesia. CID.A res erves the r iglt. to

amend this negative list as may be r equired and as may be r equested

by Indonesia.

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12, 12(ii) (iia); 24; 36(i); 39(iia); 58; 59(ii); 6l(i); 71;

123; 174; 175; 184(iib); 20l(ii); 202, 202(i); 203(i); 237 ;

281; 283; 284; 285; 286; 337; 343; 344(ii); 346(ia)(ib); 347;

349;

351 ,

35l(i) , 351(2);

355, 355(ii) ,

355(ii-a-b); 742; 742(ii) ;

743; 764; 838(ii); 839(i); 883; 900(i) ; 90l(i); 902(i); 903(i) .

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32; 42(i) , 42(iii); 43; 47;

85;

185; 190; 204; 255; 264; 309(ii);

333; 338; 344(ii); 453; 519 ; 899; 900( ii); 90l(ii); 6o2(ii);

903(ii) .

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4; 8, 8(i), 8(ii); 9; 10; 11; 12, 12(ia), 12(ib) , 12(ii); 13;

14; 15; 16; 17; 18; 19; 20; 21; 23; 26; 27; 28; 29; 30; 31; 33;

34; 35; 36; 37; 38;

39,

39(i), 39(iia) , 39(iib); 41, 41(i) , 41(ii);

43(ii); 44; 45; 46; 47; 48, 48(i), 48(ii); 49, 49(i), 49(ii);

50(i); 51;

52;

52(i); 52(iia) , 52(iib) ;

53 ;

54;

55 · 56 ;

6l(ii) ;

62; 63 ; 64;

65;

66;

67,

67(i), 67(ii);

69;

73; 74;

76,

76(i) ,

76(ii); 77; 78, 78(i), 78(ii); 79;

80,

80(ii); 81;

82;

83; 84;

86; 87 ; 88; 89; 90; 91; 92;

93,

93(i) , 93(ii); 94;

95 ; 96,

96(i) ,

96(ii); 97; 98; 99; 100; 101, lOl(i) , lOl(ii); 102; 103; 104;

105; 106; 107, 107(i) , 107(ii); 108; 110; 111, lll(i), lll(ii);

112; 113; 114; 115; 116; 117, 117(i), ll7(ii), 117(iia), ll7(iib);

118, 118(ii) , 118(iia); 119; 120; 121, 12l(i), 12l(ii); 122; 129;

130; 134; 159(ii) , 159(iii); 194(i); 202(ii);

203 ,

203(ii); 205(ii) ;

208, 208(i) , 208(ii); 212; 213; 290;

295;

298; 334(i); 345;

346(iii) , 346(iv) , 346(v) , 346(vi) , 346(vii);

352(v),

352(vi),

352(vii); 352(viii); 356(ij),

356(k ),

356(v) ,

356(vii ),

356(ix),

356(x) ,

356(xii) , 356(.xiii) , 356(xiv);

357,

357(ii);

358;

36o(iv) ,

36o( v) , 36o( vi) , 360(

via) ,

36o( vib) , 360(

vii) ,

360( viii) , 36o(

ix);

411; 413; 414; 429; 430; 431; 432; 433; 434; 435; 438; 439; 474;

475; .503; .508; 514; 516, 516(i), 516(ii), 516(iii); 517;

519,

Between the Government of the Republic of Indonesia

And the Goverrunent of Canada

Use of the Loan

The proceeds of the Loan are to be utilized exclusively t o finance the

purchase f r om Canadian suppliers of certain pr oducts which are required

for development purposes in Indonesia and for the payment of ocean freight

and marine insurance for such nroduct s pr ovided that the total value of

items supplied under the Loan shall not exceed six million Canadian

dollars

($6 ,000,000).

Approved pr oducts purchased under this Loan may be ordered in any amount and in any combination of categories within the

ceiling of the

$6.0

million total and within the period in which the Loan

is in force pr ovided that (a) purchases under the Loan shall have a

clllllUlative average of sixty- six and two- thirds

(66 2/3)

per cent Canadian

manufactured content, and ( b) unless otherwise agreed to by CIDA ,

purchases of raw and semi- processed materials and corrmodities shall not

exceed

$3 .0

million, and (c) the products are eligible for export under

Canadian export regulations and are eligible for import under Indon esian

import regulations . For the sake of efficient shipnent, Canada r eserves

the right to es tablish certain minimum quantities or orders for various

pr oducts . In the case of newsprint and chemical fertilizers , the minimum

value of orders supplied should be

$50, 000

and

$.500 ,000

respectively. In the case of all other pr oducts the minimum value of the orders should

be

$5, 000 .

Negative List

The following products shall not be eligible for financing under this Loan:

- Items from

A,

B, C and D l ists according to decree number

334/KP/X/1971

of October

29, 1971,

f r om the Minister of Trade of Indonesia:

12(iia) ; 40; 42(ii); 135(i)(ii); 16S(i).

8 . Applications for waiver, supported by rea sons therefore, must be

forivarded through the Canadian Embassy, Jakar ta t o CIDA in Ottawa. No

procurement action shall be initiated until the notification of approval

is given by CIDA.

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Private Sector

9.

Private Sector procurement may be without tender for individual

transactions not exceeding $200, 000 (Cdn. ) each, unless otherwise agreed to by CIDA.

10. Prior to shipment of products, the Canadian supplier shall complete

a Canadian Content Form and forward it along with technical specifications

complying with Canadian quality standards and all supporting documentation,

as s pecified in the Letter of Credit, to CIDA for approval.

Payment Procedures for Eligible Products Under This Loan Agreement

11. Bank Indonesia agrees to issue a general instruction to accredited ""

foreign exchange banks in Indonesia that Letters of Credit op ened on behalf

of Indonesian importersstipulate that advice by the Canadian correspondent

bank of the credit to the Canadian suppliers shall be subject to confirmation

by CIDA.

12. Letters of Credit shall instruct Canadian suppliers to prepare and

sul::mit for payment to the designated Canadian correspondent bank all

necessary documents, incl uding negotiable bills of lading, commercial

and marine insurance invoices as well as non- negotiable and duplicate copies

of each of t he above.

13. The Canadian supplier or the accredited Canadian selling agent

for Indonesia shall be responsible for :

a) arranging and paying for ocean freight and insurance;

b) inspection of the products prior t o packing and shipping .

14. The Government of Indonesia shall be r esponsible for the pr eparation

and sutmission of cla:ims to Canadian suppliers for short shiµnents , and

for the preparation and subnission of marine insurance claims in t he event

of losses or· damage to comnodities while in transit .

15. Statements of disbursements will be prepared by CIDA and forwarded

to Bank Indonesia at six- month intervals, normally the first of March

and the first of September of each calendar year until the Loan Agreement

ha s been terminated.

16. For the purposes of this Loan Agreement , the designated Canadian

correspondent BanksCfor Indonesia shall be the Bank of Montreal and the

Toronto- Dominion Bank and the Indonesian f oreign exchange banks shall be

the f

ollowin,g:-a) Offices throu ghout Indonesia of:

Bank Indonesia

Bank Ekspor Impor Indonesia Bank Rakyat Indonesia

Bank Bumi Daya Bank Dagang Negara Bank Umum N'asional P. T. Bank Negar a I ndonesi a 1946 P. T. Bank Bali

P. T. Bank Dagang Nasional Indonesi a P. T. Bank Perdania

P . T. Pan I ndonesi a Bank

b) Jakarta O:f:fices o:f:

American Express Internati onal Banking

Corp.

First National City Bank Bangkok Bank Limited Bank o:f America Chase Manhattan Bank Bank o:f Tokyo Limited

Hong Kong and Shanghai Banking

Corp.

Chartered Bank

Algemene Bank Nederland N.Y. Deutsch Asiatische Bank