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MEMORANDUM OF UNDERSTANDING

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

AND

THE

GOVERNMENT OF CANADA

OMBILIN COAL MINES PROJECT

I
MEMORANDUM OF UNDERSTANDING
BETWEEN THE GO'VERNMENT


·o·p

THE RE'PUBLIC OF INDONESIA

AND THE' GOVERNMENT

Ombilin Coal

OF CANADA

Mines Project

The Government of the Republic of Indonesia and
the Government of Canada, desiring to record an understanding

I

concerning the provision of technical assistance in the form of
experts, equipment, and training awards for assistance in the

rehabilitation and development of Ombilin Coal Mine in West
Sumatra, Indonesia, have agreed as follows :
Article I
The project shall be known as the Ombilin Coal Mine
Project and is being undertaken in Indonesia by a team of
Canadian experts with counterpart assistance organized by the
Ministry of Mines and by P.N. Tambang Batu-bara - a State Coal
Mining Enterprise of the Government of the Republic of Indonesia.
The project shall consist of the provision of experts, equipment,
and training awards, as outlined in Annex ''A'' attached hereto,
for the purpose of assisting in the continued rehabilitation
and development of Ombilin Coal Mine and to increase the numbers
of trained Indonesian coal mining personnel.
Article II

I

As part of its contribution under its cooperative
assistance program with Indonesia


the Government of Canada,

through the Canadian International Development Agency (CIDA),

l

shall provide an amount not to exceed $ 900,000 (Candian) to
pay for :
(a)

the services of a team of Canadian experts who will

-

I
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undertake to assist in the rehabilitation and
development of the Ombilin Coal Mine;
(b)


training awards for Indonesian personnel involved
in the mining sector; and

(c)

equipment to be provided for the Ombilin Mining School
as listed in Annex ''B''.

Article III
As detailed in Section

4

of the Annex ''A'' attached

hereto, the Government of the Republic of Indonesia shall provide
adequate numbers and suitably qualified counterpart personnel and
bear the cost of all administrative assistance and local support
other than that referred to in Section 3 of Annex ''A'' as the

responsibility of the Government of Canada.
Article IV
The implementation of the project shall be in accordance
with Annex ''A'' attached hereto. It is estimated that the project
will require approximately four years to complete.
Article V
This document does not constitute an international
treaty. It is intended only to set out administrative responsibilities of the two governments in relation to Canadian technical
assistance made available to the Government of the Republic of
Indonesia within the framework of the program of technical
cooperation between the two countries. This document may be amended
at any time with the mutual consent of the two parties.
sセQ・、@

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and Executed in duplicate at Jakarta the 2 5 day of

ON B hセf@
OF THE GOVERNMENT OF

THE RE\rUBLIC OF INDONESIA

/}

/

/fl4'r4-91·

ON BEHALF OF THE GOVERNMENT
OF CANADA
Signed

Signed

.

-

ANNEX "A" TO THE MEMORANDUM OF UNDERSTANDING
OMBILIN COAL MINES PROJECT


1.0

Description of the Project
The project shall cons ist of:

(a) the provision of Canadian

experts as required to assist in the rehabilitation and
development of Ombilin Coal Mine;

(b) the provision of

training awards for Indonesian mining personnel; and (c)
the provision of equipment for the Ombilin Mining School
as listed in Annex "B".
2.0. Project Terms of Reference
The Terms of Reference for the Canadian experts are as
follows:
2.1. Canadian Project Coordinator

The Canadian Project Coordinator will advise Indonesian
officials and Ombilin Coal Mine administrators in the
rehabilitation and development of the mine and in the
setting up of the mining school and will:
2.1.1

Assist CIDA and Indonesia in identifying and
selecting Canadian technical expertise for
positions as experts to Ombilin Coal Mines.

2.1.2

Assist CIDA and Indonesia in the preparation,
implementation and coordination of training
programs in Canada. This will include close
coordination with Canadian institutions and
companies who might be involved in supplying such
programs.

2.1 . 3


Assess the impact on productivity that results
from training programs at the Ombilin Coal Fields
in Indon esia .

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- 2 2.1.4

Assist CIDA and Indonesia by identifying and
preparing of specifications for equipment to
be provided to the Ombilin Mining School.

The above duties will involve close liaison between CIDA and
Canadian institutions. From time to time, travel between the
contractor's place of residence, CIDA headquarters, Canadian coal
mining operations, Canadian educational institutions and the coal
mining operations in Indonesia will be necessary and subject to

the prior approval of CIDA.
2.2

Canadian Experts
Under general direction of the Canadian Project
Coordinator the Canadian experts shall :
2.2.1

Provide assistance in the person of a senior
coal geologist who will assist Indonesian
officials in assessing the coal potential of
the mine and make recommendations regarding
present and future exploration programmes.

2.2.2

Provide assistance in the person of a senior
mining engineer who will in conjunction with
the coal geologist evaluate the production
potential of the coal deposits and based upon

such assessments make recommendations as to
the mining techniques and procedures to be
followed in the extraction of coal.

2.2.3

Provide assistance in the person of a mechanical
engineer to assist in the rehabilitation and
development program and develop suitable
maintenance procedures.

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2.2.4

3 -

Draw up detailed course outlines for the
programmes in each area of expertise .

2.2.5

Coordinate the receiving and installing of
training equipment and materials.

2.2 . 6

Cooperate with Indonesian officials in the
development of printed and visual training aids

2. 2. 7

Assist in the training and development of
Indonesian instructors to their full potential.

2.2.8

Provide such advice and assistance deemed
appropriate and necessary to augment the
production and production capacity of the
Ombilin Coal Mine.

2.2.9

Prepar e a long term plan which shall include
recommendations on coal extraction, mine
maintenance, safety, training, transportation,
marketing and other areas which may in the
view of the experts b e relevant, to be used
as a basis for the long term development of
the Ombilin Coal Mine.

3.0

Contribution of the Government of Canada
The Government of Canada shall provide an amount which is
estimated at $900,000(Canadian) and which shall include:
3.1

Provision of the services of a team consisting of a
Project Coordinator and up to three (3) Canadian
experts to undertake the project as outlined in
se ction 2 above.

3. 2

Provision of training awards for I ndon e sian minin g
personn e l. These awards will be grant e d for trainin g
in Canada or in a d es ignat e d third countr y wh e r e su c h

I

- 4 training may be available. Nominations of trainees by
the Government of the Republic of Indonesia would be
made in the normal manner and subject to the approval
of the Government of Canada.
3.3

Provision of the equipment described in Annex "B" to
assist in the reopening of the Ombilin Mining School.

3.4

Provision of costs of travel between Canada and project
headquarters in Indonesia, including hotel and living
expenses for three weeks in Indonesia or until located
in permanent accommodation, whichever is the lesser,
for Canadian team members and their dependents.

3.5

Provision of periodic narrative reports on the progress
of the project to the Government of the Republic of
Indonesia.

3.6

Participation in an annual project review at which
time the Canadian Project Coordinator and Indonesian
Project Leader shall present a joint report reviewing
and assessing the project and providing guidelines for
the future development and management of the project,
including recommendations about budgetary and other
matters for at least one year in advance of the
requirements of the Government of Canada and the Government of the Republic of Indonesia.

4.0

Contribution of the Government of the Republic of Indonesia
The Contribution of the Government of the Republic of
Indonesia shall include:

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4.1

Provision of adequate qualified Indonesian counterpart
personnel for all me mbers of the Canadian team of experts
and such other support staff as is required to successfully implement the project.

4.2

Provision of adequate buildings and facilities, to house
the proposed Omb i lin Mining School, including a fully
serviced site with adequate utilities and access.

4.3

Provision of accommodation and transportation for the
team of Canadian experts assigned to the project, as
follows:
4.3.1

Free housing up to normal standards for
expatriates working in Indonesia under a program
of technical cooperation.

4.3.2

Regulation Government of the Republic of Indonesia
allowances for the team member, but not his
dependents, while travelling on duties in Indonesi
arising out of his assignment.

4.3.3

Transportation with drivers for all team members
on official project business as well as for
personal use . All maintenance and operating costs
to be included.

4.3 . 4

Provide and bear the cost of transportation for
the professional equipment and household effects
of the team member and his dependents between
points of entry and departure and the duty station

4.4

Appointment of an Indonesian Project Leader who shall
have overall responsibility on behalf of the Government
of the Republic of Indonesia for the implementation of
the project, and who would be the Indonesian counterpart
for the Canadian Project Coordinator.

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4.5. Nomination of Indonesian personn e l

for training

programs who will, on their return to I n donesia,become
involved in the operation of the Ombilin Coal Mine.
4.6. Provision of suitable office accommodation and
services including, as appropriate, suitable airconditioned office space and furnishing (including
typewrites and electric calculators), clerical staff,
typists, domestic telephone and postal services and
other facilities necessary in order that the team of
Canadian experts may implement the project effectively .
4 . 7 . Establishment of a Rupiah counterpart fund to cover
costs of the team of Canadian experts incurred in the
execution of the project. Payments from this fund
will be made subject to the approval of the Government
of the Republic of Indonesia .
4.8.

Provision of exemption from import, customs and other
duties in taxes in accordance with regulations of th e
Government of the Republic of Indonesia in effect at
that time on :
4.8.1. All professional and technical equipment
required for the use of each Canadian expert
for his assignment throughout the p e riod of
the project.
4.8.2.

Personal and household effects of the Canadian
expert and his accompanying dependents.

4.9. Import, customs and other duties and taxes s hall be
paid, according to the applicable laws and regulations
on Indonesia, if the effects mentioned in 4.8 are sold
except where the buyer enjoys similar privileges.

-74.10. Releasing the team of Canadian experts and their
accompanying dependents who do not have permanent
residence in Indonesia from payment of all resident
and local taxes for the duration of this project.
4.11. Informing the team of Canadian experts

and

accompanying dependents of all local laws and
regulations which may affect their work.
4.12. Indemnification without cost to the Government of
Canada, and saving harmless the Canadian team from
and against, all claims, losses, damages, costs,
actions and other proceedings made, sustained,
brought or prosecuted in any manner based upon,
occasioned by or attributed to any injury,
infringement, damage or death arising from any act
occuring during the performance or the pur p orted
performance of their function pursuant to any
agreement between the Canadian team and the
Government of Canada . This provision shall not
relieve any person from liability for any criminal
or fraudulent act.
4.13. Provision, as promptly as possible, of :
4.13.1. All permits. licences and other documents
necessary to enable the Canadian team to
carry out their respective responsibilities
in Indonesia.
4.13.2. All export and exit permits required for
the return to Canada of any of the materials
equipment, effects (including personal
effects) which are the property of the
Canadian team and accompanying dependents.

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4.14. Provision of reasonable access to those parts of
Indonesia required to enable the team of Canadian
experts to carry out their responsibilities, in
accordance with regulations and laws of the
Government of the Republic of Indonesia.
4.15.

Participation in an annual project review at which
time the Canadian Project Coordinator and Indonesian
Project Leader shall present a report reviewin g and
assessing the project and providing guidelines for
the future development and management of the project,
including recommendations about budgetary and other
matters for at least one year in advance of the
requirements of the Government of Canada and the
Government of the Republic of Indonesia.

5.0.

Project Implementation
5. 1.

The project will follow generally the procedures laid
out in the report,

"A Plan To Increase The Annual

Output Of The Ombilin Coal Mines",
セウ@

submitted to

the Government of the Republic of I ndonesia in
February 1975.
5. 2.

The project will start with the mission of the
Canadian Project Coordinator to Indonesia. This
initial assignment will be to confer with Indonesian
officials in preparing the plans for the project.

5. 3.

During this initial period, the selection of
counterparts for training will commence and training
programmes will be discussed and drawn up .

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5.4

Equipment lists for the Ombilin Mining School will be
drawn up during this period and the required equipment
will be ordered and shipped to the project site.

5.5

The Canadian experts will be added to the project
staff as facilities are available at which time, under
the direction of the Canadian Project Coordinator and
Indonesian Project Leader, they will commence their
duties.

5.6. An annual project review each year will be held at
which time Canadian Team Leader and Indonesian Project
Leader will present a report reviewing and assessing
the project and making proposals for the future
development and management of the centre.

ANNEX "B" TO THE MEMORANDUM OF UNDERSTANDING
OMBILIN COAL MINE PROJECT

Equipment to be provided for Ombilin Mining School
1.

Library books

2.

Surveying equipment - Land and Mine

3.

Mechanical Engineering equipment

4.

Ventilation of mine equipment

5.

Geological laboratory equipment

6.

Minerals ore dressing laboratory equipment

7.

Mining Engineering equipment

8.

Assay laborator y e quipment

9.

Miscellaneous equipment

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Government of Canada Contribution
1.

Experts

2.
3.

Training
Equipment

4.

Contigencies

TOTAL CANADIAN CONTRIBUTION

,__

CDN $
CDN $

230,000

CON $

80,000

CDN $

120,000

CD N $

900,000

470,000

ANNEX "C" TO THE MEMORANDUM OF UNDERSTANDING
OMBILIN COAL MINE PROJECT
PROJECT

BUDGET

Government of Indonesia Contribution
A.

Budget 1975/1976
1. Exploration, mapping and design for
openpit mining (surface mining)

u. s. $

685,000

2. Drilling equipment and land surveying U.S. $

190,000

3. Equipment for exploitation and
development working
a. Underground

U.S. $

724,000

b. Openpit

U.S. $

1,650,000

c. Spares

U.S. $

431,000

U.S. $

3,680,000

Coal haulers

U.S. $

37,000

Off highway dump trucks

U.S. $

578,000

Bulldozers

u. s. $

477,000

Miscellaneous

u. s. $

150,000

U.S. $

1,242,000

Heading Machine

U.S. $

350,000

Chain

U.S. $

1,322,000

U.S. $

150,000

U.S. $

1,822,000

(Accommodation, transportation,
offices, miscellaneous)

U.S. $

187,000

TOTAL BUDGET 1976/1977

U.S. $

3,251,000

TOTAL BUDGET
B.

Westfalia chain
conveyor

1975/1976

Budget 1976/1977
Surface Equipment

Underground Equipment

and belt conveyors

Miscellaneous

C.

Experts