Selanjutnya

MEMORANDUM OF UNDERSTANDING
BETWEEN
THE GOVERNMI!,NT OF THE REPUBLIC 01'' I:NDON.l!.SIA

!fil2
THE GOVERNMENT OF THE REPUBLIC OF FINLAND
CONCERNING
DAIRY DEVELOPMENT IN NORTH SUMATRA

WHEREAS, 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 THEREFORE, the Government of Indonesia and the Government
of Finland have agreed to co-operate in the implementation of
a Dairy Development project in the Province of' North Sumatra

(hereinafter referred to as "the Project") , as follows :
ARTICLE I

: THE PROJECT

1. The objectives of the Project are :
1.1. Identify the feasibility of' developing dairy industry
in the Province of North Sumatra concentrating on
areas where dairy development potential exists and
from which increasing supplies of milk to meet the
ever increasing demand for milk of the country could
be organized.
1.2. Study possibilities to utilize other agricultural
products available in the area, e.g. fruits and
vegetables to support the dairy industry •

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l.J. Assess the economic viability of the project, and
estimate the needs of capital, technical and skilled
manpower inputs.
2. The Project and the activities are described in detail in
the Plan of Operation attached hereto as Annex I, and the
distribution of work is to be agreed upon by the Competent
Authorities .

J.

The duration of the project is estimated to be 15 months

and the data analysis and report preparations should be done
in Indonesia to enable the Indonesian counterparts to
participate as much as possible in the process of data
analysis and report writing.
ARTICLE II : COMPETI!.NT AliTHORITIES
1. The Ministry of Foreign Affairs of Finland, represented

in Indonesia by the Embassy of Finland , and the Ministry of
Agriculture of Indonesia shall be the Competent Authorities
of the two Governments for the implementation of this
Memorandum.
2. In matters pertaining to the technical aspects of the
Project the Directorate General of Livestock Services shall
be delegated to represent the Ministry of Agriculture .
ARTICLE III : OBLIGATIONS OF THE GOVERNMENT OF FINLAND
1. The Government of Finland shall contribute towards the
costs of the Project up to maximum of one million three
hundred and seventy five thousand and nine hundred (1.375.900)
Finnish Marks on a grant basis.
2. For the implementation of the Project the Government of
Finland will conclude a consultancy contract with the Finnish
Export Organization FINNAGRO Oy (hereinafter referred to as
"the Consultant").

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- 3 ARTICLE

IV : OBLIGATIONS OF THE
ｇｏｖｅｒＮＡｾｈ

ｅ ｎｔ＠

OF INDONLSIA

1. The Government of Indonesia shall render such assistance
and take such action as may from time to time be required for
the smooth and expeditious execution of the Project.
2. The Government of Indonesia shall provide the Consultant
with all available relevant data and information which are
necessary for the implementation of the Project. Such data
and information shall include the following :
a . relevant statistics on livestock population, milk
production and consumption, human population and
its distribution, imports of milk (including tariffs,

duties and prices), milk production costs, prices of
milk products and feeding stuffs ;
b. development plans , agricultural projects under
consideration/preparatlon, legislation related to
milk and food, results of research concerning milk
production and marketing and other publications
related to dairy development.

3. The Government of Indonesia shall provide a senior
counterpart for maintaining continuous contact between both
Parties, assisting the Consultant for the successful
implementation of the project.

I

q. The Government of Indonesia shall ensure to the Consultant
easy access to sites and premises and appropriate guidance
needed for site studies.

5. The Government of Indonesia shall nominate and bear the

costs of the Indonesian counterpart personnel needed in the
accomplishment of the Project as defined in Annex I.

6. The Government of Indonesia shall acquire all material,
tools and labour needed for the realization of the Project
other than those provided by the Government of Finland •

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

- 4 7. For the execution of the Project the Government of Indonesia shaJl provide and bear the costs of
suitable office accommodations in Jakarta and project
site;
clerical services, telephone and telex for domestic
calls as well as other normal office services for the
Consultant (except bilingual secretary);
once return domestic flight fares for three consultants
personnel;
a driver and the operational costs of vehicles provided
by the Government of Finland for the Project;
- field survey facilities.

AHTICLE

V

:

STATUS OF THF, CONSULT.ANT

1. The Government of Indonesia shall exempt the Consultant
from income tax or any other direct tax in respect of any
emolument paid to him from the Goverrui1ent of Finland for the
official services associated with the Project.
2. All material and equipment required for the Project under
this Memorandum which shall become and remain the property
of the Government of Indonesia shall be exempted from all
customs duties, taxes and other charges on imports.
Vehicles, material and equipment imported into Indonesia for
temporary use shall be exempted from the above mentioned
duties, taxes and charges, provided that they are re-exported
at the completion of the Project.

J.

In respect of the Finnish personnel working in Indonesia

under this Memorandum the Government of Indonesia in
conformity with its regulations shall

3.1. grant free of charge multiple entry and exit visas
and other necessary permits and authorizations;

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- 5 J.2. accord exemption from customs duties, truces and other
related charges in respect of' personal and household
effects imported into Indonesia for their exclusive
use, provided that these effects, on the completion
of the Project, shall be re-exported;

J.J.

exempt the Finnish personnel from personal income tax
and any other direct tax in respect of any emoluments
paid to them from the Government of Finland
ｾｵｮ､ｳ＠

or

for official associated with the project services;

J.4.

irrespective of Exchange Control Regulations prevailing
each particular time in Indonesia impose no currency
or foreign exchange restrictions on funds introduced
into Indonesia from external sources for their personal
use and allow the exchange as well as the exportation
of such funds;

J.5.

in the event of arrest or detention for any reason
whatsoever of the Finnish personnel, or of criminal
proceedings being instituted against them, immediately
, notify the Embassy of Finland;

J.6.

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 personnel
shall to that extent be excluded unless such damage
has arisen from the gross negligence of wilful or
criminal conduct on the part of the Finnish personnel;

3.7. in the event on an international crisis affecting the
safety of foreign nationals in Indonesia accord the
same repatriation facilities to Finnish personnel as
to diplomatic personnel.

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VI : GENERAL PROVISIONS

1. The material and equipment provided for the Project by the
Government of Finland under this :Memorandum shall become and
remain the property of the Government of Indonesia at the time
of unloading in the harbour of destination agreed upon and the
title to and risk of loss of the material and equipment shall
simultaneously pass to the Government of Indonesia.
2. The Competent Authorities shall ensure that the resources
made available for the Project are exclusively utilized for
the needs of the Project and in a manner enabling the
implementation of the Project in the most effective way.

J.

For the evaluation of the Project the two Governments shall

make available to each other all such information and data as
the other may reasonably request.

4. Upon completion of the Project, Directorate General of
Livestock and the Consultant through the Ministry of Agriculture
of Indonesia shall submit a final report to the Government of
Indonesia and the Government of Finland.

5. This Memorandum and the Annex which consitute an integral
part of the 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
the respective procedural requirements.

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

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

VII : ENTRY INTO FORCE, VALIDlTY AND TERMINATION

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

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2. This Memorandum 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 TH\ GOVERNMENT OF THE

FOR THE GOVERNMENT OF THE

REPUB\IC OF INDONESIA

Signed

REPUBLIC

I

FINLAND

Signed
ESKO REKOLA

SOEDARSONO HADISAPOETRO
MINISTER OF AGRICULTURE

ｏｾ＠

ｍｉｎｓｔｾｒ＠

FOR FOREIGN TRADE

ANNEX

I

PLAN OF OPERATION
Frame of the Project
The feasibility study concerning dairy development in the
North Sumatra will be carried out taking into consideration
the following objectives of livestock development within
the Third-Five-Year Development Plan {PELITA III) of Indonesia :
a. Long-term objectives :
i.

to increase livestock population

ii.

to increase livestock production

iii.

to create more employment

through
ｯｰｲｴｷｾｩ･ｳ＠

livestock husbandry and production
iv.

to increase income of farmers

v.

to improve nutrition of the people

b. Short-term objectives :
i.

to utilize available potentials in the Province
of North Sumatra for dairy development

ii.

to establish and to develop dairy production
based on smallholder integrated farms in the
Province of North Sumatra

I

iii.

to establish and to develop dairy industry on
the basis of dairy production, collection,
processing and marketing through co-operative
movement

iv.

to meet the increasing demand of milk products
from the population.

Activities
A. The initial phase of the Project will result in
identification of priority areas for organized dairy
development in terms of :

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cattle breeds and population
feeding production and supply
- animal husbandry practices
-structure of agriculture (small farms and the prospects
for co-operation)
- infrastructure
access to markets
B. The second phase of the Project concentrates on preparation
of technical plans for collection, processing and
distribution of milk and milk products in and from the
Project area as well as

proposals for milk production

enhancement and recommendations on organizational patterns
(e.g. breeding systems and techniques, reeding supply and
fodder production, extension and training programmes,
producers 1 co-operation in organizing input supply and
milk-collection/processing, etc).
C. On completion of the Project, report (Project proposal)
will be submitted to both Governments.
Personnel
1. The Finnish personnel
The team of Finnish experts assigned to work in Indonesia
will consist of 3 members covering the following field of
specialization :
Dairy planning/Economics/development
- Dairy technology/marketing
- Dairy husbandry/production
2. The Indonesian counterpart personnel
one senior counterpart
- two counterpart personnel, one in Jakarta and one in
project site.