Selanjutnya

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THIS AGREEMENT MADE IN OOPLICATE THE
28th day of January, 1976
BEI'WEEN

THE GOVERNMENT OF THE REPUBLIC OF INOONESIA
(hereinafter called "Indonesia")
-

and-

'nIE GOVERNM:Em OF CANADA

(hereinafter referred to as "Canada") as
represented by the Secretary of State for
External Affairs acting.through the President
of the Canadian International Developnent
Agency (hereinafter referred to as 11CIDA11 )
WHEREAS Indonesia wishes Canada to provide financing for certain
goods and services to be used for developnental projects (hereinafter

referred to as "the Projects") as described in Annex "A" of this
Agreement.
AND WHEREAS Canada is willing to make a loan available for the purpose of financing these projects on the tenns and conditions provided
herein;
NOW 'IHEREFORE the parties hereto agree as follows:

ARTICLE 1
The Loan

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Section 1.01
Under the tenns of a Memorandum of Understanding signed in Ottawa on
July 4, 1975 Canada shall make available to Indonesia on the tenns and

- 2 -

conditions hereinafter set forth a developnent loan in an amount not to
exceed twenty-five million Canadian dollars ($25,000,000).
Section 1.02
Canada shall open on its books a Loan Acco}lllt 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 amomt of the Loan.

Withdrawals, payment and disbursements may

be made fran the Loan Account in accordance with the provisions of this
Agreement.
Section l.OJ
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 three hundred and twelve thousand and five
hundred Canadian dollars ($312,500) each, due and payable on the last day
of September and March in succeeding years commencing on March 31, 1986
and ending on September JO, 2026.
Section 1.05
Indonesia shall have the right to prepay the principal in whole or
in part on any date without notice to Canada.

The amount of any prepay-

ment shall be applied to the instalments of the principal then remaining
payable in the reverse order of their maturity.
Section 1.06
All payments as set forth herein, shall be made by Indonesia in
Canadian dollars to the Receiver-General for Canada, and shall be deemed
to have been paid when received by the Receiver-General for Canada.

-3Section 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

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in its territories or administrative, political or judicial divisions or
subdivisions.
Section 1.00
The Parties agree that they will negotiate, at the request of either
the Government of Indonesia or the Government 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

detennine whether, 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 aid and economic position, such an acceleration should
take place.

ARTICLE II

Use of the Loan
Section 2.01
Except as may be otherwise be specifically agreed to by Canada, the
proceeds of the Loan shall be used by Indonesia exclusively for the purchase of certain equipnent, materials and services in Canada and for the
payments of freight and insurance for such equiµnent, materials and services, which are required to undertake develoµnent projects which are
ｾｰｲｯｶ･､＠

by CIDA related to the developnent of Indonesia.

Specific pro-

jects recommended by Indonesia for financing under this loan agreement
will be approved by CIDA through an exchange of letters. Eligible

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Ｌ Ｍｾ＠

-4equipnentt materials, and services which may be required to carry out the
Projects, 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
Each of the Projects to be financed from the proceeds of the Loan shall
have an overall Canadian content of not less than sixty-six and two-thirds
percent (66 2/3%).

Section 2.03
Projects 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
The equipnent and materials supplied under this Agreement are for
danestic Indonesian consumption 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 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 shall be for payments to Canadian
suppliers for imports by Indonesia of equipnent, materials and services
eligible under this Agreement and for the payment of freight and insurance

- 5thereof.

Such payments will be made under irrevocable letters of credit,

expressed in Canadian currency, issued by Indonesian foreign exchange
banks designated by Bank Indonesia through designated correspondent
Canadian banks.

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Section ,3.02
Withdrawals shall be deemed to occur oo the dates on which reimbursements are made from the Loan Account to the designated Canadian bank for
the payments to suppliers referred to in Section 3.01.
Section 3.03
Subject to the conditions and limitations set forth, Indonesia shall
be entitled to withdrawals fran the Loan Accol.lllt in such amounts as are
required to meet the reasonable costs of the equipnent, materials and services in Annex "A" and the costs of freight and insurance thereof, as these
become due and payable.
Section 3.04
Indonesia or its designated agent shall provide Canada with a copy of
each invitation to tender, contract and/or purchase order for the procurement of equipnent, materials or services 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.

'

Section 3.05
Unless otherwise agreed to by CIDA, proceeds from the Loan must be
utilized an a "pari passu" basis.

An

initial amount of up to $5 million

of the CIDA loan may be committed upon the entry into effect of the CIDA
and EOC/Chartered Bank Financing Agreements. No additional CIDA funds may
be committed or drawn down before $35 million of the

ｾｄｃＯｨ｡ｲｴ･､＠

Bank

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-6loan is carunitted, in accordance with the EDC/Chartered Bank Financing
Agreement.

The EDC and Chartered Bank funds and those of CIDA will have

to be committed strictly on a pari passu basis.

For each additional por-

tion of $5 million of CIDA funds or part thereof committed, Indonesia will
have to carunit or utilize an additional $35 million or a corresponding
part thereof for materials/services requiring EDC/Chartered Bank funds.
Section 3.06
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 fonn 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 withdram by Indonesia prior to the giving of such
notice and not required to meet outstanding financial obligations to suppliers or !inns incurred under the Loan.
Section 4.02
If any of the fallowing events 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 to make withdrawals under the Loan Agreement or declare the principal outstanding due and payable immediately and
cancel the part of the loan not previously withdram:

- 7(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 undertakings under this Agreement;

(c)

any extraordinary situation which renders it
impossible for Indonesia to perform its obligations under this Agreement.

Section 4.03
If the full am om t of the Loan is not committed by January 27, 1981
the balance will be cancelled by sixty (60) days• written Notice from
Canada and the final instalment or instalments of the repayment to be
made 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 reasonably be requested.

Responsibilities of

Indonesia with regard to equipnent, materials and services shall be as
described in Annex "C", this Annex being subject to such modification as
may be agreed upon between Canada and Indonesia.
Section 5.02
Indonesia shall afford accredited representatives of Canada all
reasonable opportmities to visit any part of the territories of Indonesia
for purposes related to this Loan Agreement.

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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 judicial divisions or subdivisions in connection with the
execution, issue, delivery and registration thereof.
Section 5.04
Indonesia shall provide or cause to be provided as needed all local
costs financing and resources 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 right, duties and obligations herein.

ARTICLE VI
Section 6.01
Any communication or document given, made or sent by either Indonesia
or Canada pursuant to the present Agreement or any Allllex thereto 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:

Department of Foreign Affairs
Jalan Singamangaraja 97
Jakarta, Indonesia.

Cable Address:

DEPLU JAKARTA

and/or
Mail Address:

Bank Indonesia
Jalan Kebon Sirih No. 82-84
Jakarta, Indonesia

Cable Address:

Delegasi, Jakarta.

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For Canada:

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Mail Address:

Canadian International Developnent Agency
122 Bank Street
Ottawa, Ontario KlA cx:z4.

Cable Address:

CIDA, Ottawa

and/or

Canadian Embassy

Mail Address:

Jalan Budi Kemuliaan No. 6,
Jakarta, Indonesia

Cable Address:

Demean, Jakarta.

Section 6.02
Any one of the parties hereto may, by notice to the other party,
change the address to wMch any notice or request intended for the party
so giving such notice shall be addressed.
Section 6.03
All canmunications and documents subnitted to Canada shall be either
the English or the French language and all technical specifications therein
shall be in terms of Canadian standards except where Canada may otherwise
agree in writing.

ARTICLE VII
Simultaneous Execution of Agreement
Section 7.01
This Agreement may be simultaneously executed in several counterparts
each of which so executed shall be deemed to be an original.
Section 7.02
This Agreement and Annexes A, B, and C attached hereto, which fonn
part of this Agreement, may be amended from time to time upon agreement
of the parties concerned.

Amendment to the main body of the Agreement

shall be executed by a f onnal amendment signed by the authorized

- 10 -

representatives.

However, amendments to the annexes may be by an exchange

of letters between Indonesia and Canada.
IN WITNF.5S WHEREOF the Parties hereto have caused to be subscribed
the signature of their authorized representative at the City of Jakarta
as of the day and the year first above written.

Signed on behalf of
the Government of
the Republic of Indonesia.

Signed on behalf of
the Government of Canada.

Signed

Signed

Ferdy Salim
Acting Director General for
Foreign Econanic, Social and
Cultural Relations,
Department of Foreign Affairs

Paul Gerin-Lajoie
President, Canadian International Developnent Agency

ANNEX 11 A11 TO JOINT FINANCING
LOAN AGRm1ENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC
OF INDOITTSIA
- and -

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'THE GOVERNMENT OF CANADA
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Use of the Loan
1)

The proceeds of the Loan are to be used exclusively to finance the
purchase of certain equipnent, materials and services in Canada and
for the payments of freight and insurance which are required for
·developnent projects in Indonesia.

The equipnent, materials and ser-

vices supplied tmder the Loan shall not exceed twenty-five million
Canadian dollars ($25,000,000) and shall be approved through simple
exchange of letters between CIDA and Indonesia.
2)

Purchases under the Loan shall have an overall Canadian content of not
less than sixty-six and two-thirds percent (66 2/3%) and shall be
eligible for export under Canadian export regulations and for import
under Indonesian import regulations.

3)

Atanic energy materials and equipnent, arms, armaments, guns, ammunition, and all other equipnent or materials for primarily military use
or for the manufacture thereof are prohibited for supply llllder this
Loan.

4)

At CIDA's request, substantiation may be required from time to time
that the products and services purchased under this Agreement are
required for developnental purposes by Indonesia.

ｉ ｾ＠

ANNEX "B" TO JOINT FINANCING LOAN AGREEMENT
BETWEEN THE GOV!"....RNM.ENT OF THE REPUBLIC OF INOONESIA
- and THE GOVERNMliNT OF CANADA
Procurement and Payment Procedures
1.1 For equipnent, materials and services eligible for financing under
this Loan Agreement, Indonesia must officially request that the
item be included under this Loan Agreement and receive approval by
CIDA through simple exchange of letters. Project proposals with
definition and justification of the project, along with other supporting documentation will be supplied to CIDA in support of
requests by Indonesia.
1.2 Equipnent, materials and services eligible for financing under this
Loan Agreement may be procured by the public sector {government
departments and/or agencies).
Procurement· Procedures
Procurement of Consultant Services
2.1 Where consultant services may be procured in Canada under this
Agreement, a competitive proposal call shall be made from a representative number of qualified Canadian finns, unless otherwise
agreed to by CIDA. List of Canadian finns may be obtained from the
Canadian .Embassy in Jakarta or from CIDA in Ottawa.
2.2 The list of Canadian finns invited to propose shall be as approved
by CIDA unless otherwise agreed to by CIDA.
2.3 Where a Canadian finn is selected, the contract with the finn will
be negotiated and let by Indonesia; the terms and conditions of the
contract shall be subject to approval by CIDA.
Procurement of Eguiµnent and Materials
3.1 All procurement of equipnent and materi;il.s shall be subject to competitive tender procedures unless prior approval for waiver is obtained
from CIDA.

- 2 -

3.2 Before any purchase contracts are entered into, the prospective contracting party shall invite tenders from a representative number of Canadian
suppliers of the required products unless otherwise agreed to by CIDA.
A copy of each Invitation to Tender, together with a list of Canadian

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suppliers invited to tender, shall be forwarded by Indonesia to the
Canadian :'m!bassy in Jakarta or to Canada.

3.4 Tenders for materials, equipnent and construction services will be called
on the basis, as may be applicable in the particular case, of supply,
delivery to site, installation and erection, construction, completion
and warranty maintenance thereof.

Where applicable tenders shall be

instructed to show separate costs of supply FOB and insurance and freight,
and the cost of local operation in Indonesia in their bids.
3. 5 Lists of Canadian suppliers may be obtained from the Canadian Embassy in
Jakarta or from CIDA in Ottawa.
will be forwarded to CIDA.

The assessment of the tenders received

Prior to the issuance of a purchasing con-

tract, Bank Indonesia will obtain confirmation from Canada to the use of
the Loan for each transaction through CIDA which will constitute clearance for the transaction for Canadian content and tendering regulations.

3.6 The Canadian companies invited to tender shall be instructed to:
a)

include in their tender a declaration of the Canadian content of
the equipnent and materials they are offering for purchase;

b)

send copies of all tenders to CIDA at the same time as they are
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 including statement that the
price is fair and reasonable and forward it to CIDA with each
copy of tender;

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- 3 d)

subnit to CIDA, technical specifications complying with the
Canadian quality standards for the equipnent and materials to be
supplied.

3.7 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.
3.8 CIDA may upon receipt of fonnal advance application, waive the requirement for competitive tenders in the situations specified hereunder:
a)

when procurement concerns equipnent and materials which are only
available from a single source;

b)

when procurement concerns equipnent and materials which by nature
and specification are peculiar to a specific manufacturing process
or end equipnent and materials;

c)

when equipnent and materials are to be procured under such other
conditions which appear to CIDA to merit a waiver from the tendering procedures;

d)

applications for waiver, supported by reasons therefore, must be
forwarded through the Canadian Embassy, Jakarta to CIDA in Ottawa.
No procurement action shall be initiated until the notification of
approval is given by CIDA;

e)

prior to shipnent of equipnent and materials, 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.

3.9 The Canadian supplier or the accredited Canadian selling agent for
Indonesia shall be responsible for:
a)

arranging and paying for freight and insurance;

b)

inspection of the equipnent and materials prior to packing and
shipping•

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-4Payrn ent Procedures
Eguipnent, Materials and Services
4.1

The Bank Indonesia shall , when a contract is awarded, open through
Canadian Bank letters of credit in favour of Canadian suppliers.

4.2 CIDA shall confinn to the Canadian Bank that the Bank will be reirnbursed by the Canadian International Developnent Agency from the
developnent loan funds, upon receipt of evidence of shipnents having
been made under and in confonnity with tenns of letters of credit
opened by Bank Indonesia.

4.3 All banking charges incurred by Bank Indonesia

in connection with the

opening of letters of credit through the Canadian Bank will be reimbursed by CIDA from the developnent loan funds.

Any interest charges

that may be payable by Bank Indonesia to the Canadian Bank in the event
of that bank advancing funds to meet payments to Canadian suppliers will
also be reimbursed by CIDA fran the developnent loan funds.

Statements

of disbursements will be prepared by CIDA and forwarded to Bank
Indonesia at least on six monthly basis.

RESPONSIBILITIES OF THE GOVERNMENT OF THE REPUBLIC OF INOONESIA
1.

With respect to equipnent and materials, and to consultant services provided from Canada:
Indonesia will arrange with Indonesian custan officials to properly clear through Indonesian customs free of imports, custans

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and other duties and taxes all equipnent and materials required
to support and undertake the implementation of the project(s).
Indonesia will exempt the consultant and its personnel (other
than personnel who are citizens or pennanent residents of Indonesia)
fran, or bear the costs of, any taxes, duties, fees, levies, and
other impositions imposed under its laws and regulations or the
laws and regulations in effect in its territories or any political
subdivision.
1.2

Indonesia will provide at no cost to the loan account, local facilities and services to pennit the consultant to implement the
project(s).

Details of facilities and services requirements shall

be subject to individual contractual obligation.
1.3

Indonesia will provide:
a.

all Indonesian permits, licences and other such documents required to enable Canadian personnel to carry out their respective responsibilities in Indonesia.

b.

all export and exit permits required for the return of any of
the material, equipnent or effects (including personal effects)

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which are the property of or are provided by the Government of
Canada, the finn of individual Canadian employed on the provision of services under this Agreement;
c.

access to those parts of Indonesia required to enable Canadian
personnel to carry out their responsibilities in Indonesia.

1.4

Indonesia will indemnify and save hannless, at no cost to the Loan
Account, Canada or its personnel engaged in the performance of

- 2 duties in connection with the Loan; from any civil liability arising from any claims resulting from:
a.

injury or death of any such personnel during the performance
of his duties relative to the Loan;

b.

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injury or death of any person arising from the work of the
project; and

c.

property damage arising from the work of the project(s).

This

provision will not relieve any such personnel of Canada from
liability for any fraudulent or criminal act.
2.

With respect to Materials, Equipnent and Construction Services provided
from Canada:
2.1

Arrange for inspection and testing, as necessary.

All foreign

exchange costs pertaining to inspection and testing of materials
and equipnent procured in Canada for projects funded under this
Loan will be reimbursable under this Agreement, where these costs
are not already reimbursable under existing financing arrangements
for the project(s) concerned.
2.2

Undertake to be responsible for adequate insurance for short shipments, losses or damage to the equipnent and materials during
shiµnent and in transit.

If any part of the lost or damaged equip-

ment and materials is pre-financed for replacement out of the Loan
Fund pending settlement of insurance claims, on settlement of such
claims the amounts will be deposited to the account of the Loan
Fund and will be paid in Canadian dollars.

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

'/fj \

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2.4
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Demurrage resulting from failure to provide proper berthing shall
be to the account of the Indonesian Government or its designated
agent and may be considered a liable charge against the Loan.

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