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MEMORANDUM OF UNDERSTANDING

BETWEEN
THE
ｇｏｖｅｒｎｍｾｔ＠

OF THE
ｒｾｐｕｂｌｉｃ＠

OF INDONESIA

!.@

THE GOVERNNENT OF THE REPUBLIC OF FINLAND
CONCERNING
THE PREFEASIBILITY STUDY OF PULP AND PAPER MILL
DEVELOPMLNT IK CLNTRAL JAVA

1nIEREAS, the Government of' the Republic of' Indonesia (hereinafter referred to as "the Government of' Indonesia") and the
Government of' the Republic of' Finland (hereinafter referred
to as "the Government of Finland") desiring to co-operate in

furthering the cordial relations between the two countries
and promoting the economic and social development in Indonesia
WHEREAS, the Government of' Indonesia and the Government of
Finland have on July 18th, 1979 signed a Memorandum of'
Understanding concerning co-operation in the agricultural
sector ;
NOW TIIBREFORE, the Government of Indonesia and the Government
of Finland have agreed to co-operate in carrying out a Prefeasibility Study of a Pulp and Paper Mill based on Pine Plantation in Central Java (hereinafter referred to as "the Project"),
as follows :
ARTICLE

I

: THE SCOPE OF THE PxOJECT

The Project and the activities for implementing it are
described in detail in the Terms of Reference attached
hereto (Annex I).
ARTICLE

II : COMPETENT AUTHORITIES

1. The Ministry of Agriculture of' Indonesia and the Ministry
for Foreign Affairs of Finland, represented in Indonesia by
the Embassy of Finland, shall be the Competent Authorities
of the two Governments for the implementation of this
Memorandum.

. .... I I . ....

I

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2 -

2. In matters pertaining to the technical aspects of the
Project, the Finnish Consultant, mentioned in Article III
paragraph 2, and PERUN PERHUTANI shall be delegated to
represent the respective Competent Authorities.

ARTICLE

III :
ｏｂｌｉｇ

ａｔ

ｉｏｾ＠

S OF 1'HE
ｇｏｖｌｦｩ

ｾ Ｗﾷ＠ ｔｾ

ｔ＠

OF FINLAND

1. The Government of Finland shaJl contribute towards the
costs of the Project up to the Maximum of four hundred

thousand

(!.ioo.ooo)

Finnish Marks, equivalent to US$100.ooo,

on a grant b a sis.
2. For the impleme ntation of the Project the Government of
Finland will conclude a consultancy contract with Finnish
Companies TVW Paper Machine Group, Enso- Gutzeit Oy and
Jaakko P6yry International Oy (hereinafter referred to as
"the Consultant").
ARTICLE

IV : STaTUS OF THE
ｃｏｾｓｕｌｔａｎ＠

1. The Government of Indonesia shall exempt the Consultant
and its personnel from income tax or any other direct tax
in reepect of any emolament paid to him from the Government

of Finland for the official services associated with the
Project.
2. All material and equipment imported into Indonesia for
the Project under this Memorandum shall be exempted from all
customs duties, taxes and other charges on imports, provided
that they become and remain the property of the Government
of Indonesia.

J. In respect of the Finnish personnel working in Indonesia
under this Memorandum the Government of Indonesia shall :

3.1. in case of any damage to a third party caused by
Finnish personnel in the course of their official
duties in Indonesia under this Memorandum be liable
in their place, and any claim against Finnish
persomiel shall to that extent be excluded unless
such damage has arisen fron1 the gross negligence of
wilful or criminal conduct on the part of the
Finnish personr el;

..... I I . ....

- 3 3.2. in the event of an international crisis affecting
the safety of foreign nationals in Indonesia accord
the same repatriation facilities to Finnish personnel
as to diplomatic personnel.
Al-\TICLE

V : GEN-SH.AL PROVISIONS

1. The Competent Authorities shall ensure that the resources
made available for the Project are exclusively utilized for
the needs of the Project and in manner enabling the implementation of the Project in the most effective way.
2. After the completion of the project PERUM PERHUTANI and
the Consultant through the Ministry of Agriculture of Indonesia shall submit a final report to the two Governments.

3. This Memorandum may be amended or modified

by mutual

negotiations between the two Governments, such an amendment
or modification shall be made in writing in accordance with
their respective procedural requirements.

4. Any dispute arising out of the interpretation or
application of this Memorandum shall be settled amicably
through consultation or negotiation between the two Governments.

5. All information and data received by a Party from the
other Party for the implementation of the Project shall be
confidential.
ARTICLE

VI : ENTRY INTO FORCE , VALIDITY AND TERMINATION

1. This Memorandum shall enter into force upon signing of
the Memorandum and shall remain valid until the completion
of the Project.

. .... I I . ...•

- 4 2. This Memorandum of' Understanding may be terminated by
written notification by either Party to the other and such
termination shall have effect at the expiration of' three
months from the date of such notification.
· DONE in Jakarta on this fifteenth

day of October 1979, in

duplicate in the English language.

FOR Tl:IL \GOVERNMEKT OF THE

FOR THE GOVERNMENT OF THE

REPUBL°iC OF INDONYSIA

REPlJBLIC OF FINLAND

Signed

Signed

SOEDARSONO
ｈａｄｉｓｐｏｾＧｔｒ＠

MINISTER OF AGRICUifURE

ESKO REKOLA
MINISTER FOR FOREIGN TRADE

I

I

ANNEX

TERMS OF REFERENCE FOR A P.t