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AGREEMENT
BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
AND
THE GOVERNMENT OF CANADA
ON

GENERAL COMMODITY LOAN

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THIS AGREEMENT MADE IN DUPLICATE THE
610 DAY OF ..{t,"ff,"'" 6l ?.. 19 fl
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
(hereinafter called "Indonesia")
and

THE GOVERNMENT OF CANADA
(hereinafter called "Canada" acting through the
Canadian International Development Agency)

GENERAL COMMODITY LOAN
WHE.REAS Indonesia wishes to purchase in the
territory of Canada certain commodities as described in

Annex "A" of this Agreement;
AND WHEREAS Canada is willing to make a General
Commodity Loan available for this purpose on the terms and
conditions provided herein ;

NOW THEREFORE the parties hereto agree as follows:
ARTICLE

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The Loan (1970 - 71 and 1971 - 72 Program)
Section 1.01
Canada shal1 make available to Indonesia on the
terms and conditions hereinafter set forth a General
Commodity Loan in an amount not to exceed four m111ion
Canadian dollars ( $. 4,000,000 ).
Section 1.02
Canada shall open on its books a Loan Account in
the name of Bank of Indonesia, acting for and on behalf of
the Government of Indonesia (hereinafter ref erred to as

"Bank Indonesia"), and shall credit to such account the full
amount ••••

- 2 amount of the Loan. Withdrawals, payments and disbursements
may be made from the Loan Account in accordance with the
provisions of this Agreement.
Section 1.03
This Loan shall be free from interest, commitment or
service charges.
Section 1.04
Repayment of the principal amount of the Loan shall
be made in eighty semi-annual instalments of fifty thousand
Canadian dollars ($ 50,000) each, due and payable on the
last day of September and March in each year commencing on
September 30, 1981 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 on the instalments of principal then remaining payable in the reverse
order of their maturity.

Section 1.06
All payments and repayments, 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 taxes, charges or other restrictions imposed under
the Laws of Indonesia and those in effect in its territories
or administrative political or juridical divisions or subdivisions.
Section 1.08

- 3 Section 1,08
Indonesia agrees that it will negotate, , at the
request 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 such an acceleration should take

place on the basis of the capacity of Indonesia to service a
more rapid liquidation of its abligations in the light of its
internal and external financial and economic position,
ARTICLE

II

Use of the Loan
Section 2,01
Except as may otherwise be specifically agreed to by
Canada, the proceeds of the Loan shall be used by Indonesia
exclusively for the purchase of certain commodities in Canada
and for the payment of ocean freight and marine insurance for
such commodities, 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", both Annexes being subject to such modification as
may be agreed upon between Canada and Indonesia.
Section 2.02
The commodities to be finance from the proceeds of the

Loan shall be procured in Canada and shall have an overall
Canadian content of not less than sixty-six and two-thirds
(66 2/3) per cent unless otherwise agreed to by Canada.
Section 2,03
Commodities contracted for prior to 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

- 4 Section 2,04
Proceeds from the Loan shall not be used by Indonesia
to meet the costs of any taxes, fees or customs duties imposed
directly or indirectly by Indonesia on the items procured.
ARTICLE

III

Withdrawals of Proceeds of Loan
Section 3.01
Withdrawals from the Loan Account will be for payments

to Canadian suppliers for imports by Indonesia of commodities
eligible under this Agreement, for the payment of ocean freight
and marine insurance for such commodities, and for payments of
any banking charges in Canada which may arise out of transactions under this Agreement. Such payments will be ma.de under
irrevocable letters of credit, expressed in Canadian currency,
issued by Indonesian foreign exchange banks designated by Bank
Indonesia through the designated correspondent Canadian bank.
Section 3,02
Withdrawals shall be deemed to occur on the dates on
which reimbursements are made from the Loan Account to the
Canadian bank for the payments to suppliers ref erred to in
Section 3.01
Section 3,03
Subject to the conditions and limitations set forth,
Indonesia . ahal1 be entitled to withdrawals from the Loan
Account in such amounts as are required to meet the reasonable
costs of the commodities in Annex "A" and the costs of ocean
freight and marine insurance for such commodities, as these
costs become due and payable.
Section 3,04

- 5 Section 3.04
As set forth in Annex "B" hereto, for public sector
procurement, the Indonesian procuring agency shall provide
Canada with a copy of each invitation to tender, contract
and/or purchase order for the procurement 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 $ 100,000,00
(Cdn) each, unless otherwise agreed to by Canada, Bank Indonesia and/or the relevant Indonesian foreign exchange bank,
designated by Bank Indonesia, shall provide 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 documents and other
evidence in support of the letters of credit referred to in
Section 3.01 as Canada may reasonably request, such evidence
to be sufficient in form and substance to establish that the
amounts to be withdrawn are properly related to the purposes

of the Loan .Agreement,
ARTICLE IV
Cancellation and Suspension
Section 4.01
Indonesia may, by sixty (60) 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
financial obligations to suppliers or firms incurred under the
Loan,
Section 4.02

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Section 4,02
If any of the following events
occur, Canada may, by sixty (60) days
specifying the reason for suspension,
part the right of Indonesia to obtain
Loan Account:

occur and continue to
notice to Indonesia,
suspend in whole or in
withdrawals from the

(a) A default by Indonesia in the payment of principal
or in any other payments or repayments required
under this Agreement and the Annexes hereto;
(b) A default on the part of Indonesia in the performance of any other undertakings under this
.Agreement;
(c) 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 prior to the giving of
such notice, and not required to meet outstanding financial
obligations to suppliers or firms 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, 1972 the balance
will be cancelled and the final instalments of the repayment
to be made by Indonesia shall be reduced accordingly.
ARTICLE V
General Undertakings
Section 5,01
Indonesia and Canada shall each ensure that this
Agreement is carried out with due diligence and efficiency
and ••••

- 7 and each shall furnish to the other all such information as
shall reasonably be requested.
Section 5.02
Indonesia shall afford accredited representatives of
Canada .all reasonable opportunities to visit any part of the
territories of Indonesia for purposes related to this Loan
Agreement.

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Section 5.03
This 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 subdivisions in connection with the execution,
issue, delivery. and registration thereof.
Section 5.04
Indonesia shall at all times provide or cause to be
provided as needed all other monies and resources which may
be required to ｩｭｰｾ･ｮｴ＠
this Agreement.
Section 5.05
For the purposes of this Agreement and Annexes hereto,
Indone•ia shall include any agent or agents authorized by and
on behalf of Indonesia with regards to its rights, duties and
obligations herein.

ARTICLE VI
Communications
Section 6.01
communication or document given, made or sent by
either Indonesia or Canada pursuant to this Agreement or any
.A:n.y

Annex ••••

- 8 Annex hereto shall be in writing and shall be deemed to
have been duly given, made or sent to the party to which it
is addressed at the time of its delivery by band, mail,
telegram, cable or radiogram at its respective address,
namely :
For Indonesia:

Bank Indonesia

Mail Address:

Djalan Kebon Sirih No. 82-84•
Djakarta, Indonesia.

Cable Address:

Delegasi, Djakarta.

For Canada:

Canadian International
Development Agency
122 Bank Street,
Ottawa, Ontario,
KIA OG4.
Canada.

Mail Address:

Cable Address:
and/or

CIDA Ottawa
Canadian Embassy

Mail Address:

Djalan Budi Kemuliaan 6,
Djakarta, Indonesia.

Cable Address:

Domcan, Djakarta.

Section 6.02
Any one of the parties hereto may, by notice to the

other party hereto, change the address to which any notice or
request intended for the party so giving such notice shall be
addressed.
Section 6.03
All communications and documents submitted to Canada
shall be in either the English or the French language and all
technical specifications therein shall be in ter111S of Canadian
standards except where Canada may agree otherwise in writing.
Section 6.04

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Section 6,04
This Agreement may be simultaneously executed in
several counterparts each of which so executed shall be
deemed to be an original, and such counterparts together
will constitute and be one and the same Agreement, which
will be sufficiently evidenced by such original counterparts,

IN WITNESS WHEREOF, the parties hereto have caused
to be subscribed the signatures of their authorized representatives at the City of Djakarta the day and year first
above written,

Fq\_ THE GOVERNMENT OF THE

ｾｕｂｌｉｃ＠

OF INDONESIA.

FOR THE GOVERNMENT OF

CANADA.

Signed

Signed

ADAM MALIK

W.T. DELWORTH

Minister for Poreign Affairs

Ambassador

ANNEX "A"
Eligible Items Under This
Loan Agreement
The Loan Agreement shall consist of the purchase
of certain commodities referred to in the A and B categories of Deviea Kredit list of Indonesia from Canadian
suppliers and the payment of ocean freight and marine
insurance for such commodities, except that the total
value of items supplied under this Agreement shall not
exceed four million Canadian dollars (dollars 4,000,000).
Approved commodities provided under this Loan
may be ordered in any amount and in any combination of
categories, within the ceiling of the $ 4.0 million total
and within the period which the Loan is in force, except
that purchases under this Loan shall have a cumulative
average of sixty-six and two-thirds (66 2/3) per cent
Canadian content.
For the sake of efficient shipment, however, Canada may
wish to establish certain minimum quantities of orders
for various commodities. In the case of newsprint and
chemical fertilizers, for instance, the minimum value of
orders supplied shall be $50,000 and $500,000 respectively.

ANNEX " B "

Procurement Procedures for Eligible Items
Under Thie Loan Agreement

1.
Commodities eligible for financing under this Loan
Agreement may be procured by either the public sector
{government departments and/or agencies) or by the private
sector under the following respective procedures:
Public Sector:
2.
All public sector procurement shall be subject to
competitive tender procedures unless prior approval for
waiver is obtained from CIDA.

3.
Before any PU»chase contracts are entered into, the
prospective contracting party shall invite tenders from a
representative number of Canadian suppliers of the required commodities unless otherwise agreed to by CIDA.

4.

List of Canadian suppliers may be obtained from
the Canadian Embassy in Djakarta or from CIDA in Ottawa.
Copies of each tender call, a list of companies invited to
tender, and the assessment of the tenders received will be
forwarded to CIDA and/or the Canadian Embassy, Djakarta.
Prior to the issuance of a purchasing contract, Bank Indonesia will obtain confirmation from Canada to the use of
the Loan for each transaction through CIDA and/or the
Canadian Embassy, Djakarta, which will constitute clearance
for the transaction for Canadian content and tendering
regulations.

5.
The Canadian companies invited to tender shall be
intructed tos
(a) Include •••l;

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(a)

(b)

Include in their tender a declaration of the
Canadian content of the items they are offering
for purchase;
Send copies of all tenders to CIDA at the same
time as they are forwarded 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 recipient.)

(c)

Complete a Canadian Content Form and forward
it to CIDA with each copy of tender.

(d)

Submit to CIDA technical specifications,
complying with Canadian quality standards, for
the commodities 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 before the purchase contract is
issued.
7.
CIDA may upon receipt of formal advance application,
waive the requirement for competitive tenders in the situations specified hereunder:
(a)

When procurement is proposed under certain
supplier/importer relationships and the buyer
is a recognized customer of the supplier;

(b)

When procurement concerns a commodity which is
only available from a single source;

(c)

When procurement concerns a commodity which

by nature •••

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by nature and specification is peculiar to a
specific manufacturing process or end product;
(d)

When commodities are to be procured under such
other conditions which appear to CIDA to merit a
waiver from the tendering procedures.

a.

Applications for waiver, supported by reasons therefore,
must be forwarded through the Canadian Embassy, Djakarta, to
CIDA in Ottawa. No procurement action shall be initiated until
the notification of approval is given by CIDA.
Private Sector
9.
Private sector procurement may be without tender for
individual transactions not exceeding $ 100,000.00 (Cdn.)
each, unless otherwise agreed to by CIDA.
10.
Prior to shipment of commodities, 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 specified in the Letter of Credit, to CIDA for approval.
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Payment Procedures for Eligible Items Under This Loan .Agreement

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11.
Canadian suppliers shall be instructed to prepare and
submit for payment to the designated Canadian correspondent
bank commercial invoices detailing c.r.F. costs. Canadian
suppliers shall also be instructed to submit to the designated
Canadian correspondent bank all negotiable documents, including bills ｯｾ＠
lading, consular, commercial and marine insurance invoices as well as non-negotiable and duplicate

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copies •••••

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copies of each of the above.
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12.
The Canadian supplier or the designated Canadian
procurement agent of Indonesia shall be responsible for:

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(a)

Arranging and paying tor ocean freight and
insurance;

(b)

Inspection of the commodities prior to packing
and shipping.

13.

The Government of Indonesia shall be responsible for
the preparation and submission of claims to Canadian suppliers for short shipments, and for the preparation and
submission of marine insurance claims in the event of losses or damage to commodities while in transit.

14.

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 has been
terminated.

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15.

For the purposes of this Loan Agreement, the
designated Canadian correspondent Bank for Indonesia shall
be the Bank of Montreal and the Indonesian Foreign exchange
banks shall be the following:

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(a)

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Offices throughout Indonesia of 1

Bank Indonesia
Bank Ekspor Impor Indonesia
Bank Rakjat Indonesia
Bank Bumi Daya
Bank Dagang Negara
Bank

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Bank
Bank
P.T.
P.T.
P.T.
(b)

Umum Nasional P.T.
Negara Indonesia 1946
Bank Persatuan Dagang Indonesia
Bank Dagang Nasional Indonesia
Bank Perdana

Djakarta Offices of :
American Express International Banking Corp.
First National City Bank
BaJUi:kok Bank Ltd.
Bank of America
Chase Manhattan Bank
Bank of Tokyo Ltd.
Hong Kong and Shanghai Banking Corp.
Chartered Bank
Algemene Bank Nederland N.V.
Deutsch Asiatische Bank