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THIS AGREEMENT MADE IN DUPLICATE ON THE
15th day of August 1973
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
(hereinafter called "Indonesia")
and -THE GOVERNMENT OF CANADA
(hereinafter called "Canada") as
represented by the Secretary of State
for External Affairs acting through the
President of the Canadian International
Development Agency (hereinafter ref erred
to as "CI DA")
WHEREAS Indonesia agrees to accept a loan from Canada for
the purchase in Canada of textbook and textbook cover paper and
for the arrangement and payment of costs for ocean shipping and
marine insurance from CANADA to INDONESIA (hereinafter referred
to as "the Project") and as detailed in Annex "A" attached to
and forming part of this Agreement;
AND WHEREAS Canada expresses its willingness to make a
loan available for this specific purpose in accordance with the
terms and conditions detailed herein, it is now therefore agreed

that each party concurs with the following terms and conditions :
ARTICLE

I

The Loan
Section 1.01

'

Canada shall make available to Indonesia a development loan
in an amount of thirteen million Canadian dollars ($13,000,000)
for the purpose and in accordance with the terms and conditions
contained ....

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contained herein and in accordance with the terms and conditions
contained in the Annexes "A" and "B" attached hereto.
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 referred to as "Bank Indonesia") , and
shall credit to such account the full 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 instalment of one hundred and sixty-two
thousand and five hundred Canadian dollars ($162,500) each, due
and payable on the last days of September and March in each year
commencing on September 30, 1984 and ending on March 31, 2025.
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 on 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 ....

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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
subdivisions.
Section 1.08
Indonesia agrees that it will negotiate at the request
of Canada concerning acceleration of payments to the Receiver
General of Canada being 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 obligations in the light of its internal and
external financial and economic position.
ARTICLE

II

Use of the Loan
Section 2.01
The proceeds of the Loan shall be used by Indonesia
exclusively for the purchase of textbook and cover paper in
Canada and for the payments of freight and insurance costs as
described in Annex "A" of this Agreement . Procedures for the
procurement of the textbook and cover paper and for payment
thereof shall be as set in Annex "B" of this Agreement.
Both Annex "A" and "B" shall form part of this Agreement and
shall be subject to such modification as may be mutually agreed
upon between Canada and Indonesia.

Section 2.02
The textbook and cover paper to be financed from the
proceeds of the Loan shall be used exclusively for textbooks for
educational ....

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educational purposes and the textbook and cover paper shall be
procured in Canada and financed from the proceeds of the Loan
with 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
Any textbook or cover paper contracted for prior to the
effective date of this Agreement may not be financed from the
proceeds of the Loan unless otherwise agreed to by Canada.
Section 2.04
Proceeds from the Loan shall not be used by Indonesia to
meet the costs of any taxes, fees, custom duties or other charges
imposed directly or indirectly by Indonesia on the textbook and

cover paper authorized under the Loan.
ARTICLE

III

Withdrawals of Proceeds of the Loan
Section 3.01
Withdrawals shall be deemed to occur on the dates on which
payments are made by Canada either directly to Indonesia or its
designated agent or to a firm or banking institution in respect
of goods and services supplied under this Agreement .
Section 3.02
Subject to the conditions and limitations set forth,
Indonesia shall be entitled to withdrawals from the Loan Account
in such amounts as are required to meet the reasonable costs
of the textbook and cover paper in Annex "A" and costs of freight
and insurance thereof, as these become due and payable in
accordance with Annex "B".
Section 3. 03 . ...


- 5 Section 3.03
Indonesia or its designated procurement authority shall
provide Canada with a copy of each invitation to tender, contract
and/or purchase order issued in respect to procurement of
textbook and cover paper authorized under the Loan .
Section 3.04
Withdrawals from the Loan Account may be made in favour
of such suppliers or accredited agencies as may be designated
by Indonesia and agreed to by Canada.
Section 3.05
Indonesia or its designated agent shall submit to Canada
applications for withdrawals from the Loan Account for such
amounts as shall have been paid, or will be paid, unless otherwise
agreed to by Canada.
Section 3.06
Indonesia or its designated agent shall furnish, or cause
to be furnished to Canada such documents and other evidence in
support of applications for withdrawals 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
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 and continue to
occur Canada may, by sixty (60) days' written Notice to Indonesia,
specifying reason for suspension, suspend in whole or in part
the right of Indonesia to obtain withdrawals from the Loan

Account :
a)

A default by Indonesia in the payment of principal or of any
other payments or repayments required under a loan
agreement and the annexes attached thereto;

b)

A default on the part of Indonesia in the performance of
any other undertakings of this Loan Agreement;

c)

Any extraordinary situation which renders it impossible
for Indonesia to perform its obligations under this
Loan Agreement;

d)


Since this project represents an integral part of the IDA
Third Education Project, this loan is subject to suspension
or cancellation concurrence with the suspension and/or
cancellation of the IDA Third Education Project.

If suspension occurs and continues for thirty (30) days, or
for such period of suspension as may be specified by the IDA
under the terms and conditions of its Third Education Project,
Canada may, by sixty (60) days' written Notice to Indonesia
cancel that part of the Loan not withdrawn prior to the giving
of written Notice, and not required to meet outstanding
financial obligations to suppliers or firms incurred under
the Loan.
Section 4.03
If the full amount of the Loan is not spent by December 31,
1978, the balance remaining in the Loan will be cancelled and
the final instalments of the repayments to be made by Indonesia
shall be reduced accordingly unless otherwise agreed to by
Canada.


ARTICLE V ....

- 7 ARTICLE

V

General Undertakings
Section 5.01
Indonesia and Canada shall ensure that the Project is
carried out with due diligence and efficiency and each shall
furnish to the other all such information as shall reasonably
be requested.
Section 5.02
Indonesia shall inform Canada of any condition or
contingency which interferes with or threatens to interfere
with the accomplishment of the Project or any matter or situation
connecting therewith.
Section 5.03
Indonesia shall afford accredited representatives of Canada
with all reasonable opportunities to visit any part of the
Territories of Indonesia for purposes related to the Project
and this Loan Agreement.
Section 5.04
This Agreement and Annexes 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 subdivisions in connection with the execution, issue, delivery and
registration thereof.
Section 5.05
Indonesia shall provide or cause to be provided as needed
all local cost financing and resources which may be required to
carry out this Project.
Section 5.06
For the purposes of this Agreement and Annexes hereto,
Indonesia shall include any agent or agents authorized by and
on behalf

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on behalf of Indonesia, with regard to its rights, duties,
and obligations defined herein.
ARTICLE

VI

Section 6.01
Any communication or document given, made or sent by either
Indonesia or Canada pursuant to this Agreement and the Annexes
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 hand, mail, telegram, cable or radiogram
at its respective address namely :
For Indonesia
Mail Address:

Cable Address:
and/or
Mail Address:

Cable Address:
For Canada
Mail Address:

Cable Address:
and/or
Mail Address:

Cable Address:

Department of Foreign Affairs
Jalan Singamangaraja 97
Jakarta, Indonesia
DEPLU JAKARTA
Bank Indonesia
Jalan Kebon Sirih No. 82-84
Jakarta, Indonesia
Delegasi Jakarta

Canadian International Development
Agency
Jackson Building
122 Bank Street
Ottawa, Ontario KlA OG4
CIDA Ottawa
Canadian Embassy
Jalan Budi Kemuliaan No. 6
Jakarta, Indonesia
Domcan Jakarta
Section 6.02

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Section 6.02
Any one of the parties hereto may, by written Notice to
the other party hereto, change the address to which any written
Notice or other communication intended for the party so giving
such written Notice shall be addressed.
Section 6.03
All communications and documents submitted to Canada shall
either be in the English or the French language and all technical
specifications therein shall be in terms of Canadian standards
except where Canada may agree otherwise in writing.
Section 6.04
This Agreement may b e simultaneously executed in several
counterparts each of which executed shall be deemed to be an
original.
IN WITNESS WHEREOF the parties hereto have caused to be
subscribed the signature of their authorized representatives at
the City of Jakarta the day and year first above writt en.

ON BEHALF OF THE GOVERNMENT OF THE
REPUBJ/It OF INDONESIA

Signed

Dr B S Arif in
Dir ec tor General f or Foreign
Economi c Relations

ON BEHALF OF THE GOVERNMENT OF
CANADA

Signed

Christophe r J. Dagg
Charge d' Affaire s a . i .

ANNEX ยท11 A''

ATTACHED TO AND FORMING PART OF
THE LOAN AGREEMENT SIGNED BETWEEN
THE GOVERNMENTS OF THE REPUBLIC
OF INDONESIA AND CANADA DATED

"USE OF THE LOAN"

The proceeds of the Loan shall be used exclusively for
the purchase of textbook and textbook cover papers in Canada
from Canadian producers and for payment of costs for shipping
and insurance from a Canadian seaport to designated port(s)
of discharge in Indonesia. To be eligible for financing from
the proceeds of the Loan the textbook and textbook cover
papers supplied must contain a minimum sixty-six and two-thirds
per cent (66 2/3%) Canadian content.
Purchases and supply of the textbook and textbook cover
papers should be scheduled for delivery over a five (5) year
period and during the first quarter of each year commencing
January to March 1974 and ending during the period January to
March 1978 in accordance with the following estimated yearly
schedule of quantities:
(METRIC TONS)
1974
Textbook Paper:
Cover Paper:
TOTAL:

1975

1976

1977

3,980.0 6,022.1 6,107.5 4 ,361.1
652.4

527.7

526.7

1978

TOTAL

799.2 21,269.9

335.6 122.9

2,165.3

4,632.4 6,549.8 6,634.2 4,696.7 922.1

23,435.2

NOTE: ....

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NOTE:

The quantities of paper detailed above, in order to
meet the actual "physical" quantities needed to meet
Indonesia's requirements may result in an additional
quantity of 1,160 metric tons being requested for
supply for each of the last three (3) years of the
Project subject to agreement in writing by CIDA.

The total cost authorized herein for purchase of textbook and
cover paper plus costs for shipping and insurance is thirteen
million Canadian dollars ($13,000,000) and this amount shall
be considered the financial limitation established by this Loan
Agreement. If the amount of funds provided under this Loan
Agreement are not sufficient to finance purchase of the total
quantity of textbook and cover paper as agreed upon herein,
CIDA shall give consideration to providing such additional
funds required to complete the project. The specifications of
the required textbook and cover papers and for packing and
packaging in accordance with highest commercial standards in
preparation for shipment by sea, shall be as specified by
Indonesia and agreed to by Canada.

ANNEX "B"

ATTACHED TO AND FORMING PART
OF THE LOAN AGREEMENT SIGNED
BETWEEN THE GOVERNMENTS OF THE
REPUBLIC OF INDONESIA AND
CANADA DATED

PROCUREMENT PROCEDURES

l

1.

Withdrawals from the Loan Account shall be for payments
to Canadian suppliers for imports by Indonesia of textbook
and cover paper eligible under this Agreement and for
payment of freight and insurance thereof. Such payments
will be made under irrevocable letters of credit, expressed
in Canadian currency, that are issued by Indonesian foreign
exchange banks which have been designed by Bank Indonesia
and are sent through designated correspondent Canadian
banks.

2.

Indonesia or its designated agent shall provide Canada with
copy of each invitation to tender, contract and/or purchase
order for the procurement of textbook and cover paper under
this Loan Agreement in respect of which any withdrawal is
to be made. 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.

3.

Unless otherwise agreed by CIDA, Indonesia or its designated
agent, which for this Loan Agreement shall be Departemen
Pendidikan dan Kebudayaan, shall invite tenders CIF landed

Jakarta ....

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Jakarta for the procurement and delivery of the required
textbook and cover paper directly from a representative
list of Canadian suppliers during the third quarter of
each of the years 1973 through 1977 for each ensuing year's
requirement. The Canadian suppliers shall be responsible
for arranging and paying the costs of ocean freight and
insurance prior to shipment.
4.

A list of Canadian suppliers may be obtained from the
Canadian Embassy in Jakarta or from CIDA in Ottawa .

5.

The Borrower shall provide CIDA with copies of such tender
calls and the list of the Canadian suppliers invited to
tender.

6.

The Borrower shall instruct the Canadian suppliers invited
to tender to:
a)

Send copies of their tenders to CIDA at the same time
as they forwarded to Indonesia. (The copies of the
tenders received by CIDA will be treated as a closed
tender call and will not be opened until the time
established by the Indonesian Government.)

b)

Complete and attach to the copy of the tender call
submitted to CIDA a Canadian content Declaration Form
showing the Canadian Content of the textbook and cover
papers they are offering.

7.

If other than the lowest evaluated tender with acceptable
Canadian content is to be approved, the concurrence of CIDA
shall be obtained before the purchase contract is issued.

8.

Certification by the manufacturer that the textboo k and
cover paper is in accordance with the requirement
specifications shall be accepted by Indonesia as warranty
unless otherwise specified by Indonesia or its designated
agent.
9.

Indonesia ....

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9.

10.

11 .

Ii

I

Indonesia or its agent or agents shall submit claims for
loss or damage during sea shipment to (a) the insurance
underwriter (b) the vessels' owners and (c) the Canadian
supplier within thirty (30) days.
CIDA shall be notified concerning all claims made against
insurance and any monies recovered through such claims
shall be made payable directly to CIDA and accredited to
the Loan Account.

12 .

Indonesia will render all facilities for berthing and
discharge of the goods being financed from the proceeds
of the Loan within the framework of existing Indonesian
regulations relating to aid cargo.

13 .

Indonesia or its authorized custodian shall take all due
and necessary precautions with respect to the storage and
safekeeping of the paper pending its distribution for
ultimate use.

I
II
11

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I

Indonesia shall be responsible for the preparation and
submission of claims to Canadian suppliers for short
shipments and delivery of goods which do not comply with
the required specification within thirty (30) days from
date of discharge at the port of discharge.

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