Commission Implementing Regulation (EU) 2022/433 of 15 March 2022 imposing definitive countervailing duties on imports of stainless steel cold-rolled flat products originating in India and Indonesia and amending Implementing Regulation (EU) 2021/2012 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of stainless steel cold-rolled flat products originating in India and Indonesia

(250) Other export restrictions include licencing requirements and a qualified exporters list (in practice limited to the state trading enterprise Metal and Mineral Trading Corporation) for certain grades of the chromium ore, as well as a congestion surcharge levied on the Base Freight Rates of the Indian Railways in the rail transport of chromium ore to Bangladesh and Pakistan (being the only countries with rail connection with India).

(251) The most visible effect of the policy was the impressive reduction of the volume of export of chromium ore following the introduction of the targeted export restraints in 2008 and then again following their expansion in 2012. The development of chromium ore export is illustrated by the below graph: IND, Chromiun exports (HS 261000)

(252) Hence, the targeted export restraints achieved the goal pursued by the GOI of discouraging exports and keeping chromium ore available for the domestic downstream industry.

(253) These export volumes have to be seen against the background of the domestic consumption of the chromium ore. The GOI provided in its reply only limited data concerning export of the chromium ore (Financial Year (‘FY’) 18/19 (50) to FY20/21), while figures with regard to domestic production and consumption were provided for FY16/17 to FY19/20. Both sets of those data are provided as confidential. Nevertheless, it is possible to make on this basis a comparison of export volumes and domestic consumption for the FY19/20 (covering 9 months of the IP) and the preceding FY18/19. In both financial years, export volumes did not exceed 1,5 % of domestic consumption. It should be noted that share of imports in the domestic market was also insignificant.

(254) The Indian market also showed a constant and irrational overcapacity of production compared to the sum of domestic consumption and exports minus imports. This overcapacity could not be explained by the GOI. Such overcapacity can thus only be explained by the fact that the mining companies, including OMC in the chromium ore sector, exercised governmental functions (in particular, ensuring the adequate supply of chromium ore in line with the GOI’s policy objectives to support the downstream industry and add value to the supply chain).

(255) Second, the Commission found that according to the GOI Minerals Concession Rules of 2016, captive mines have a right of first refusal when their mining lease expires. Article 8a of the Mines and Mineral Development Act of 1957 (as amended in 2015), also provides for extended periods of mining leases for captive users and reiterates the right of first refusal in auctions of mining leases for captive users. This allows mining leases to remain predominantly in the hands of captive downstream ferrochrome producers, in line with the statements in recital (244) above. De facto, the Commission also found, as mentioned in recital (236) above, that all the private chromium ore mining owners were actually using the ore for captive production. Thus, as a result of the closing of the external borders and the preferential allocation of mining leases for captive use, there is only one predominant State-owned player remaining on the market, OMC, which thus has control over the quantities and prices of chromium ore available on the non-captive domestic market. As the predominant suppliers of chromium ore in the Indian market, OMC has to comply with the GOI’s policy objectives to support the downstream industry via low prices, as further explained in the following section, and thus exercises governmental functions.

Provision of chromium ore by the mining companies for less than adequate remuneration.

(256) In the next step, the Commission verified whether the chromium ore was in practice provided for less than adequate remuneration, in particular by OMC.

(257) As explained in recital (213), the GOI was not able to provide information about price setting or price statistics on Indian domestic prices of chromium ore. The vast majority of sales of chromium ore on the Indian non-captive market is made by OMC, and this is also the case for the vast majority of Jindal Group purchases. These sales were thus considered to be representative for the entire Indian free market.

(258) This chromium ore is sold by OMC via e-auction. However, the investigation established that OMC restricted access to these e-auctions: 70 % of the monthly production is guaranteed for so-called ‘long-term buyers’ located in the State of Odisha. Only downstream ferrochrome producers are eligible as long-term buyers, and the guaranteed quotas cannot exceed the company specific production capacity of ferrochrome. This shows that OMC, in the exercise of governmental functions, is in practice applying in another format the preferential allocation of chromium ore quantities to downstream ferrochrome producers, as is already done at the level of the allocation of mining leases as well. The remaining 30 % is also reserved for domestic downstream producers outside the State of Odisha (excluding traders).

(259) Thus, supply over chromium ore in the free market is controlled by OMC and is channelled predominantly to the downstream industry by OMC in line with the GOI’s overall intention and legislative framework, as highlighted in recitals (242) to (255) above.

(260) Yet, there was evidence showing that the pricing for the small quantities offered via e-auction is not based on free bidding offers from the companies. The auction starts with a base price, which is decided arbitrarily by the Board of OMC. The GOI explained that in the period post-IP, this base price was set as a fraction (corresponding to 13,5 %) of the international price of the downstream product, i.e. ferrochrome. However, the GOI could not explain how this fraction/correction factor was determined. After further analysis, the Commission found that the correction factor for the post-IP prices, was actually based on the historical average of prices for chromium ore set by Decision of the Board of OMC. The Commission did not receive access to the past Decisions of the Board and the GOI could not explain the principles behind these decisions. The Commission also could not find any objective link between the correction factor and the conversion cost of chromium ore into ferrochrome. Therefore, the Commission needed to use facts available as regards the price of chromium ore on the basis of Article 28(1) of the basic Regulation.

(261) In this respect, the Commission noted that, as admitted by the GOI, the base price was arbitrarily low compared to international prices for no reason. Such artificially low prices appear to accord with the GOI’s policy to provide cheap domestic chromium ore to the downstream industry. In addition, the Commission looked at empirical evidence. When looking at the purchase prices of the raw material in question provided by OMC to the Jindal Group, the Commission found that those prices, depending on the type of chromium ore, were 15 – 40 % lower than corresponding export prices of chromium ore of Turkish origin (bearing the greatest resemblance to the Indian chromium ore) to its main export market - China. On this basis, the Commission concluded that the base price of the chromium ore sold in the e-auction was set at an artificially low level with respect to market prices for chromium ore. Chromium ore prices were also too low in comparison with the downstream product (ferrochrome). Thus, the GOI’s and OMC’s allegations that prices for ferrochrome were relevant for the prices of chromium ore were dismissed.

(262) Therefore, the evidence indicated that OMC, the predominant supplier of chromium ore in the free market and from which the Indian exporter producer purchased this raw material for its further used in the SSCR production process, did not behave as a market operator; rather, when providing chromium ore OMC was exercising governmental functions on behalf of the GOI and in line with the GOI’s policy objectives to favour the downstream industry.

Conclusion

(263) The legal and economic environment in India shows that the mining companies supplying chromium ore, and in particular the SOE OMC, possess, exercise or are vested with governmental authority. Chromium ore, like other minerals in India, is a natural resource managed by the GOI as a core sector of its national economy. In particular, the GOI put in place a set of measures (namely, imposing export restrictions resulting in oversupply and low domestic prices, and setting the base prices of the ore auctions at artificially low levels for these producers) showing that the suppliers of chromium ore, and in particular OMC, are meaningfully controlled by the GOI in the exercise of governmental functions. Thus, on the basis of the evidence available, the Commission concluded that the GOI provided chromium ore to the stainless steel industry for less than adequate remuneration within the meaning of Article 3(1)(a)(iii) of the basic Regulation, as interpreted and applied in line with the relevant WTO standard under Article 1.1(a)(iii) of the SCM Agreement.

(264) Following final disclosure, the Jindal Group observed that the objective of the auction system is not to provide chromium ore at a low price but to maximize the Government’s income by selling chromium ore at the highest price possible. Furthermore, the company indicated that the GOI does not direct the price of the chromium ore but only sets the floor price of the auction.

(265) Finally, the company referred to the fact that Indian export prices of ferrochrome were higher than export prices of ferrochrome from South Africa, Kazakhstan and Turkey, which according to the company means that the Jindal Group is not benefiting from subsidized chromium ore used for the production of ferrochrome.

(266) However, the first two arguments raised by the company do not invalidate the main conclusion of the Commission with regard to chromium ore auctions, as described in recitals (258) to (261), namely that access to the auction and sales volumes are restricted, the floor price is decided arbitrarily by the OMC Board, and its level is artificially low. All the above results in a final auction price, which is indeed above the floor price, but is still not market-based as notably a comparison with Turkish prices shows (recital (261)).

(267) It is also noted that the chromium ore provided for less than adequate remuneration to the Jindal Group is affecting the cost of manufacturing of ferrochrome, which is later captively used by the company in the production of stainless steel. In any event, the financial contribution by the GOI is provided at the level of the chromium ore, not at the level of the downstream product, ferrochrome. Therefore, comparison of export prices of Indian ferrochrome with export prices of ferrochrome originating in other countries is irrelevant.

(268) Taking into account the above, the conclusion of recital (263) is upheld.

(269) In accordance with Article 3(2) and Article 5 of the basic Regulation, the Commission determined the existence of benefit and calculated the amount of countervailable subsidies in terms of the benefit conferred on the recipient, which was found to exist during the investigation period.

(270) Only one of the Indian exporting producers under investigation (Jindal Group) purchased chromium ore for the production of ferrochromium and, ultimately, SSCR.

(271) As a first step, the Commission established volumes and weighted average prices of all the Jindal Group purchases of chromium ore in the IP, split according to type of ore which was defined by the company according to form (for example friable or concentrate) and chromium oxide content. These two parameters affect price differences of different types of chromium ore.

(272) As a second step, the Commission replaced actual prices of each type of purchased chromium ore with the appropriate benchmark price.

(273) The Commission noted that the prevailing market terms and conditions in India are all affected by the structure of the market. In addition, as explained in recital (257), one predominant player – with essentially 100 % market share in the free market - acting as a public body is imposing its price. Hence, it was impossible to establish an undistorted price of chromium ore for an Indian SSCR producer or elsewhere in the Indian market. Accordingly, there were no domestic prices in India, which could be used as appropriate benchmark.

(274) Therefore, and in line with Article 6(d) second subparagraph of the basic Regulation, the Commission reverted to another country as an outside benchmark, duly adjusted to the prevailing market conditions in India.

(275) The Commission tried to identify an undistorted price of chromium ore produced in the mine of a representative other country and to simulate that such mine would actually be located in India. The majority of chromium ore worldwide is exported from South Africa to China. Thus, the Commission considered the export price from South Africa to China as a possible benchmark price. However, it was established that chromium ore originating in South Africa is very different from the chromium ore originating in India in terms of the two most important parameters: chromium oxide content and chromium-iron ratio (‘Cr:Fe ratio’) (51).

(276) The alternative benchmark proposed by the complainant was the export price of chromium ore from Turkey (being also one of the biggest world producers) to China. The Commission noted that the two parameters indicated in recital (275) are much closer in comparison of Turkish-Indian chromium ore than in South African-Indian chromium ore (52).

(277) Following final disclosure, the Jindal Group contested the Commission’s findings that such parameters as chromium oxide content and Cr:Fe ratio make the Indian chromium ore more alike to Turkish than to South African chromium ore. The company indicated that it is important to compare the Cr:Fe ratio of chrome ores with similar chromium oxide contents. According to the company, the Turkish chromium ore with 40-42 % content has a Cr:Fe ratio of 2,6-2,8, which is much higher than in case of the Indian or South African ore of the same content.

(278) As explained in recital (281), the Commission did not use the 40-42 % content chromium ore the Jindal Group referred to in order to establish the basic benchmark. The basic benchmark selected by the Commission has a 46-48 % chromium ore content with Cr:Fe ratio of 2,5 (53). It is therefore very similar to the Indian ore of a comparable chromium oxide content, as confirmed by the Jindal Group itself in its submission: ‘Indian chrome ore will have a Cr:Fe ratio of 2.4 only at a Cr2O3 level of 46 %’ (54) ‘For Indian chrome ore to have a Cr:Fe ration of 2.6 to 2.8, the Indian ore would need to have a much higher Cr2O3 of 48-50 % or higher’ (55). The above confirms that Indian ore is much more akin to Turkish ore than to South African ore with its Cr:Fe ratio of 1,3 to 1,5 (56).

(279) Furthermore, according to the Bureau of Indian Standards IS:10818-1984 specification of chromite for Metallurgical Industries (57), the normal Cr:Fe ratio for the production of high carbon ferrochromium used in the production of stainless steel is around 2,8. This means that the benchmark selected by the Commission is also more representative than the South African alternative from the point of view of the end-use of chromium ore by the Jindal Group. That is, the transformation into high carbon ferrochromium for the production of stainless steel.

(280) Furthermore, the Commission took note of the claims of the Indian exporting producer with regard to the differences still existing between Turkish and Indian chromium ore in their physical form and chromium oxide content. However, those differences were addressed by the adjustments described in recital (289).

(281) The Commission subsequently used the weighted average Turkish export price to China in the IP as a basic benchmark (58). The basic benchmark of 209 USD per tonne referred to chromium ore of chromium oxide content 46-48 %, in the form of concentrate, delivered on CIF basis.

(282) The Commission was also mindful of the Appellate Body’s ruling that adjustments for delivery charges must reflect the generally applicable delivery charges for the good in question in the country of provision (59). Purchase prices of chromium ore reported by Jindal Group were in 99,96 % on ex-works mine delivery terms.

(283) The Commission hence adjusted the basic benchmark price to the ex-works level. The CIF price was reduced by the sea freight and insurance costs (60) and domestic transport cost in Turkey (61).

(284) Following final disclosure, the GOI indicated that the OECD data used by the Commission to adjust the Turkey-China export CIF price to the ex-works level were available only until 2016. The GOI further claimed that extrapolation of the relevant indicator to the IP cannot be considered as an objective examination of prices.

(285) However, the Commission did not merely extrapolate CIF-FOB ratio as provided by the OECD for 2016. The adjustment to the IP was based on the actual freight and insurance costs differences between 2016 and the IP as quoted by Baltic Exchange Dry Index (‘BDI’) for the twenty main sea routes. A detailed calculation of the ex-works basic benchmark price was provided to the Jindal Group in the specific disclosure.

(286) The calculation of freight and insurance adjustments made by the Commission was also contested in the post disclosure submission of the Jindal Group. The company proposed an alternative source of data to adjust Turkey-China export CIF price to FOB (62). According to the Jindal Group, this data source better showed actual freight cost between Turkey and China in the IP than OECD and BDI data which are ‘a weighted average of all shipping routes’.

(287) However, the quotation provided by the Jindal Group refers to only one month of the IP, to transport between Turkey and ‘north-east Asia’ generally, and to transport of soda ash, not of chromium ore. The basic OECD CIF-FOB ratio used by the Commission takes into account the whole year, the specific sea route (Turkey-China) and the specific product (chromium ore and concentrates). It is only the BDI cost adjustment between 2016 and IP which refers to an average of several sea routes.

(288) Taking into account the above, the methodology used for the basic benchmark price adjustment to ex-works is upheld.

(289) The Commission further adjusted the basic ex-work benchmark price for physical form of the ore and chromium oxide content in order to find specific benchmark prices for each type of the ore purchased by the Jindal Group in the IP. The physical form adjustment was based on the briquetting costs (friable ore) and pelletizing plus sintering costs (concentrate ore) as provided by the Jindal Group. Chromium oxide content adjustment was based on the melting cost of the chrome indicator as provided by the complainant (63). No adjustment was done for the differences in Cr:Fe ratio, as this parameter is very close in comparison to Turkish and India ore. It was conservative approach as in fact the Cr:Fe ratio of Indian ore is slightly higher, which normally would result in higher price for the ore in the same form and the same chromium oxide content.

(290) As the Turkish chromium ore is unaffected by the government measures distorting the Indian market and as the prevailing market conditions in the two countries, including quality, availability, marketability, transportation and other conditions of purchase or sale, are comparable, the Commission considered that the price of chromium ore in Turkey is comparable to the one that would prevail in India in the absence of the GOI’s distortive measures.

(291) Finally, the Commission compared the actual cost of purchase of the domestic chromium ore by the Jindal Group in the IP with the cost, which would have been paid if the prices per type of the ore had been replaced by the respective benchmark prices.

(292) The total amount of the difference represents the ‘savings’ obtained by the Indian producer which purchased chromium ore in the Indian distorted market compared to the price, which it would have paid in the absence of distortions. Ultimately, this total amount represents the benefit conferred on the Indian producer by the GOI during the IP.

(293) Detailed calculations of the benchmarks and benefit conferred were provided to the Indian exporting producer in question in the specific disclosure.

(294) In accordance with Article 7(2) of the basic Regulation, the Commission allocated this subsidy amount over the total turnover of the company during the IP as appropriate denominator, because the subsidy granted a benefit to the entire production of the product concerned and its upstream product (hot-rolled coils), and not only to the production destined for export.

(295) The GOI’s intervention as regards the provision of chromium ore for less than adequate remuneration is directed to benefit certain industries, in particular the stainless steel industry including producers of SSCR. The subsidy is therefore specific under Article 4(2)(a) of the basic Regulation. The inherent characteristics of chromium ore limit the possible use of the subsidy to a certain industry but this does not mean that, in order to be specific, the subsidy must be further limited to a subset of this industry (64).

(296) In light of the foregoing, the Commission considered that the GOI interventions are specific to the SSCR producers within the meaning of Article 4(2)(a) of the basic Regulation.

(297) In light of all the elements mentioned above, the Commission found that the provision of chromium ore by the GOI should be considered a specific subsidy within the meaning of Article 3(1)(a)(iii) and Article 3(2) of the basic Regulation in the form of provision of goods which confers a benefit upon the recipient companies.

(298) The subsidy amount established for the Jindal Group amounted to 0,45 %.

(299) Following final disclosure, the complainant noted that the Commission’s findings revealed that a large majority of the subsidies identified for the integrated exporting producers affect the upstream stages of the production process of SSCR. According to the complainant, this means that the non-integrated Indian producer of SSCR – Chromeni – might also have benefited from subsidies conferred to Indian and/or Indonesian upstream producers. This could happen in case of domestic sales of upstream products from the Jindal Group (India) to Chromeni or in case of Chromeni’s purchases of subsidized upstream products of Indonesian origin.

(300) On the basis of the analysis of Chromeni’s production process and the company’s raw material purchases in the IP, the Commission concluded that the company could not have benefited from the purchases of subsidized upstream products of Indian origin.

(301) Chromeni purchased however upstream products, namely hot rolled coils, from a related company in Indonesia, which may have benefited from the GOID provision of nickel ore for less than adequate remuneration (see Section 4.3). In this regard, the Commission could not make any findings since there were no elements in the file to make this assessment on this matter.

(303) Taking into account high level (100 %) of cooperation of the Indian producers, the Commission considered it appropriate to set the residual subsidy amount for India at the level of the highest individual subsidy amount, that is 7,56 %.

(305) In their comments following final disclosure, the IRNC Group claimed that incorrect sales data were used for the calculation of the pass-through ratios for two related companies.

(306) This claim was found to be justified and therefore the Commission revised the respective pass-through ratios accordingly.

(307) Indonesia has significant resources of nickel. As of 2020, its resources were estimated to 21 million tonnes of nickel (65) (1,1 billion tonnes of nickel ore), around 20 % of the world’s known nickel ore reserves.

(308) Historically, Indonesia was one of the largest producers of nickel ore. However, as Indonesia had limited capacity domestically for processing the nickel ore (only two smelters as explained in recital (315)), it traditionally exported most of its nickel ore, mostly to China.

(310) Thus, the GOID progressively realised that exporting the overwhelming majority of its nickel ore reserves limited the potential benefits for the country from this scarce raw material. The benefits could be much greater for the country if the GOID managed to increase the domestic added value generated by the nickel ore reserves. To achieve this objective, the GOID focused on the domestic development of the whole industrial value chain using nickel ore up to the downstream industries, namely the smelters and the stainless steel industry as the ultimate user of this raw material. This would allow Indonesia to reap much greater benefits domestic benefits rather than simply exporting nickel ore.

(311) However, achieving this objective was not easy for Indonesia alone. The main issues faced by the GOID were the substantial financing requirements for setting up smelters and the downstream industries (i.e. several billions euros of upfront investments), and the relative lack of know-how and technology to produce stainless steel from NPI that matched the nickel ore quality extracted in Indonesia. Therefore, the GOID approached potential partner countries that could help it achieve this objective (66). The natural choice fell on China because of the historical ties and geographical proximity, and more importantly the fact that Chinese stainless steel producers were already using Indonesian nickel ore. Furthermore, China was a perfect candidate for the GOID to entice into a preferential bilateral framework to maximise the domestic added value stemming from Indonesia’s nickel ore reserves as China had substantial financing available and specific preferential policies encouraging the stainless steel industry, including for investments abroad under the long-standing ‘going out’ policy, as well as the required technology and know-how to efficiently use Indonesian nickel ore. This resulted in a long-standing cooperation framework up to today. The main milestones and relevant official documents are summarised in the following recitals.

(312) The GOID's attempts to attract Chinese investment towards Indonesian nickel industry go back to at least 2005, when Indonesia undertook to build ‘a conducive investment climate’ (67) for investors from China. In June 2005, during a visit to Beijing, the Indonesian Coordinating Minister of Economy proposed to the Chinese Vice Premier investment prospects in four sectors of the Indonesian economy, including natural resources and ‘[h]e also hoped more Chinese businesses could go to Indonesia for investment, saying that the Indonesian government would create a favorable environment to facilitate Chinese investors’ (68). In response to this offer, the Chinese Vice Premier asked Indonesia to guarantee that Chinese investments in Indonesia would be profitable (69). In addition, Indonesian officials also extended gratitude to China for providing ‘gratis and preferential loans to Indonesia.’ (70)

(313) As a result, the GOID and GOC signed a Joint Declaration in 2005 which started their cooperation in the mining and the metallurgical sectors. Based on this Joint Declaration, in 2010 GOID and GOC signed a Plan of Action, which contains a plan to encourage Chinese investment in resource-based industries in Indonesia, including mining, as further explained in recitals (563) and (584). These early agreements already show the main terms of the specific cooperation framework between the two governments, and how the governments planned to implement their strategy by relying on private investors that would benefit from a number of preferential policies and support closely watched by the governments.

(314) In 2007, the GOID introduced Law No. 27 on Long-Term National Development Plan (‘RPJPN’) for the period 2005–2025. RPJPN placed the industrial sector as the engine of growth for strengthening the economic structure. This was to be supported by, among others, the mining sector. Improving value addition in the primary sector, including mining, was highlighted as the main target to promote local and international competitiveness, and strengthen the national industrial base.

(315) In the nickel sector, increasing the value added meant building smelters in Indonesia. At that time (and until 2016), there were only two smelters in Indonesia: a nickel matter smelter belonging to PT Vale with a capacity of approximately 80 000 tonnes of nickel and a ferronickel smelter belonging to the State-owned PT. Aneka Tambang (‘Antam’) with a production capacity of 26 000 tonnes of nickel.

(316) The cost of building a smelter alone can reach EUR 1 billion depending on the technology and the production capacity. As mentioned above, Indonesia did not have either the financial resources or the right technology to build the smelters, whereas China had both and it also needed the Indonesian nickel ore for the production of stainless steel products.

(317) One of the major measures to seal this cooperation framework between the GOID and the GOC and to allow the GOID to achieve its objective was the introduction of Law No. 4 of 2009 on Mineral and Coal Mining (‘the 2009 Mining Law’) in 2009 which superseded the Law No 11 of 1967 on Mining (71). Traditionally, the GOID heavily controlled the mining sector. Article 1 of Law No 11 of 1967 on Mining already granted a predominant role to the GOID and powers to regulate this sector, stating that ‘[a]ll minerals found within the Indonesian mining jurisdiction in the form of natural resources as blessing of God Almighty are national wealth of the Indonesian people and shall, therefore, be controlled and utilized by the State for maximum welfare of the people’. The Preamble of the 2009 Mining Law further states that ‘minerals and coal that buried in the mining jurisdiction of Indonesia represents non-renewable natural wealth which is a gift from the almighty god and which possesses an important role in the fulfilling the needs of life of many people, therefore the management of these resources must be under the control of the State in order to provide real value-add to the national economy in an effort to achieve prosperity and wealth for the community in a fair manner’. In particular, Article 4 of the 2009 Mining Law stipulates that ‘(1) Mineral and coal as non-renewable natural resources constitute national wealth controlled by the state for the greatest benefit of the people's welfare’ and ‘(2) The control of mineral and coal by the state as referred to in paragraph (1) shall be realised by the Government and/or regional governments’. Importantly, through Article 103 of the 2009 Mining Law the mineral processing as an added value of mineral was required to be done in Indonesia. The Elucidation of this Article 103 paragraph (1) mentions that the obligation to conduct processing and refining domestically is intended to, among other things, (a) increase the value of mining through its commodities, (b) provide raw materials for industry, (c) provide employment, and (d) increase the State’s income. In other words, these provisions imposed an obligation on all nickel ore mining companies either to build their own nickel processing/purification facility or to sell their nickel ore to such a domestic facility, so as to achieve the overarching objective to increase the domestic added value of the nickel ore via preferential policies targeting the downstream stainless steel industry. Furthermore, Article 170 of the 2009 Mining Law provided for a five-year ‘grace period’. The objective of the ‘grace period’ was to prepare the mining industry for the domestic processing obligation and enable the companies to build the purification facilities necessary to absorb the nickel ore supply.

(319) Since the GOID’s objective to create processing capacities in Indonesia was not achieved, on 11 January 2014, through several regulations, the GOID banned the exports of nickel ore from Indonesia (for more details on the export restrictions and export ban on nickel ore, see recitals (405) – (413)).

(320) In 2017 the GOID slightly relaxed the export ban by allowing export of nickel ore with less than 1,7 % nickel content in certain quantities. These exports were subject to 10 % export duty while the exporters also needed to prove that the construction of their processing facility was going according to schedule. The reason for this was that at that time Indonesia did not have the technology to process nickel ore with less than 1,7 % nickel content into value added products, which was more suitable for batteries for electrical vehicles than for steel (see further below in Section 4.4). However, in 2020 the GOID banned completely the export of all nickel ore. The reason for the reintroduction of the ban of the low content ore was that the Chinese companies have plans to build smelters for this type of nickel ore that could be used to manufacture batteries for electric vehicles.

(322) The bilateral cooperation instigated by the GOID with the GOC on the preferential treatment to set up and favour the creation and development of the Indonesian domestic stainless steel industry goes back to the early years in 2000. It consists of a number of bilateral documents setting up the legal and policy framework leading to the adoption of several specific support policies and preferential programmes constituting countervailable subsidies covered by this investigation (see the main bilateral documents at recital (548)).

(323) The bilateral cooperation took place specifically in the Indonesian Morowali Industrial Park (‘the Morowali Park’). This is an industrial park in the Sulawesi area where Indonesia and China decided to develop the stainless steel industry.

(324) The managing company in charge of implementing the bilateral cooperation in the Morowali Park is a Sino-Indonesian company, IMIP. This company formally started its operations in October 2013.

(325) The complainant contended that the GOID controls the nickel ore sector and that nickel ore prices are distorted in Indonesia because of the GOID's intervention. Nickel contained in the nickel ore is the key component in stainless steel and its main price driver. According to the complainant, by intervening in the nickel ore market the GOID ensured that the price of raw materials for the production of stainless steel remains significantly lower than international prices to the benefit of the SSCR exporting producers in Indonesia.

(326) Mining policy covering nickel ore is administered through the Ministry of Energy and Mineral Resources (‘MEMR’), represented by the Director General of Mineral and Coal (‘DGoMC’). Mineral exports are also administered by the Ministry of Trade, represented by the Director General of Foreign Trade.

(327) Both the central and regional governments play vital roles in the mining industry, by setting national mining policies, standards, guidelines, and criteria, as well as deciding on mining authorisation procedures. Furthermore, the GOID is actively involved in development, control, evaluation, and conflict resolution in the sector.

(329) At the outset, the Commission observed that one exporting producer of SSCR purchased the nickel ore domestically from either related or unrelated companies to melt it and use it to manufacture SSCR products.

(330) The provision of nickel ore for less than adequate remuneration is one of the key measures implemented by the GOID in the context of the cooperation with the GOC in order to ensure the development of the entire industrial value chain of the stainless steel industry in Indonesia.

(331) In 2007, the GOID introduced Law No. 27 on Long-Term National Development Plan (‘RPJPN’) (72) for the period 2005–2025. RPJPN placed the industrial sector as the engine of growth for strengthening the economic structure. This was to be supported by, among others, the mining sector, including nickel ore. Improving value addition in the primary sector, including mining, was highlighted as the main target to promote local and international competitiveness, and strengthen the national industrial base. Value chain development through product processing and diversification (downstream development), structural deepening (upstream development), and vertical integration (upstream and downstream development) was expressly mentioned in the RPJPN. The development of the manufacturing industry would be focused on subsectors that met several criteria, among others, process domestic natural resources and have export development potential.

(332) As described at recitals (317) et seq., in line with its objective to increase the value added of the minerals in Indonesia, in 2009 the GOID introduced the 2009 Mining Law. Several implementing regulations, including a number of amendments, have been issued by the GOID in pursuing the goals of the 2009 Mining Law. The 2009 Mining Law introduced a number of significant regulatory changes to the licensing system, royalties, foreign ownership and raw material exports. In 2020, the 2009 Mining Law was amended via the 2020 Mining Law, enacted on 10 June 2020. This new law, which is of limited relevance to this investigation as it was effective at the very end of the IP, confirmed or further extended certain requirements on mining companies.

(333) The 2009 Mining Law granted licensing powers to both the Central Government and the regional governments, depending upon the location of the mining area, the origin of the license, and the nature of the investment made by the mining company.

(335) The 2009 Mining Law did not differentiate between Operation Production IUPs/IUPKs which are integrated with smelter/processing facilities, and the Operation Production IUPs which are not integrated with such facilities. All Operation Production IUPs were granted for a maximum term of 20 years, which could be extended for two additional terms of 10 years each.

(336) Under the industrial regulations, the ‘Industry Business License (“IUI”)’, was generally accepted as the main license for industrial businesses with the production of any type of products. The IUI is issued and administered by the Ministry of Industry. In 2013, the Central Government introduced a new type of license; an IUP Operation Production for Processing and Refining (Smelter), by way of ministerial regulations (most recently, by MEMR Regulation 7/2020). This license provides for the development and operation of smelter facilities and is issued under the authority of MEMR. Thus, processing companies are operating based on two licenses.

(337) The 2009 Mining Law also provides for administrative sanctions on the holders of an IUP, IPR, or an IUPK for breaches of the provisions as stated, inter alia, in Articles 102 and 103. Such administrative sanctions are in the form of: ‘a. written warnings; b. temporary suspension of part or all exploration activities or production operations; and/or c. cancellation of the IUP, IPR, or IUPK’ (Article 151 of the law). Finally, the Mining Law puts in place criminal sanctions on companies, which do not comply with its various provisions of up to 10 (ten) years imprisonment and a maximum fine of IDR 10 000 000 000 (ten billion Rupiah) for false reporting of mining and sales activities (see Article 159) and the sales or processing of minerals from the entities, which do not have a valid licence (see Article 161).

(338) The Commission informed the GOID that it might have to resort to the use of facts available under Article 28(1) of the basic Regulation when examining the existence and the extent of the alleged support granted to the steel industry including through the provision of nickel ore for less than adequate remuneration.

(339) The Commission requested the GOID in its questionnaire, in the deficiency letter, and during the remote cross-check to provide certain information relating to the suppliers (namely, the mining companies) and the functioning of the domestic market of nickel ore in Indonesia. These information requests included, among others, questions on the legal and institutional framework, the organization of the nickel ore market, the producers of nickel ore in Indonesia, domestic and export price-setting mechanisms and prices, as well as shareholding of companies.

(340) At initiation, the Commission requested the GOID to forward Appendix B attached to the anti-subsidy questionnaire (questionnaire for nickel ore suppliers) to the top 10 producers and distributors of the nickel ore, as well as to any other producers and distributors of nickel ore, which have provided nickel ore to the exporting producers. Appendix B consisted of a word document (‘Appendix B_Input supplier’) and an excel file (‘Appendix B - Input suppliers tables’). The GOID did forward the specific questionnaire intended for suppliers of input materials to known suppliers in Indonesia.

(341) The Commission, in its deficiency letter to the GOID of 4 October 2021, took note of the fact that it had not received any reply to Appendix B of the questionnaire from neither of the Indonesian largest nickel ore suppliers. The related suppliers of nickel ore did not provide a reply either.

(342) As a result, despite the fact that there are more than 290 nickel ore miners in Indonesia, as stated in recital (378), the Commission received a reply only from a related trader of nickel ore (PT. Ekasa Yad Resources) which anyway submitted its reply as a related company to IRNC Group, and only one unrelated nickel ore producer (PT GAG Nikel). In reply to the deficiency letter, the GOID provided only two additional replies for nickel ore producers (PT Tiran Indonesia and PT Ceria Nugraha Indotama).

(343) The replies of the three nickel ore miners were significantly deficient. PT GAG Nikel refused to provide a copy of its license and , minutes of the shareholder’s and board of directors meeting during the IP claiming that they were confidential.

(344) PT Ceria Hugraha provided the Articles of Association and business certificate only in Bahasa. Although several version of the Articles of Association were provided, they were all in Bahasa and in a picture format that could not be translated by a computer and therefore the Commission was not able to read them.

(345) PT Tiran Indonesia did not even submit a reply to the word document Appendix B_Input supplier. It only submitted a company presentation in Indonesian, a draft of the financial statement for 2019 and 2020 and the excel file Appendix B - Input suppliers tables. The company neither submitted its Articles of Association nor the license.

(346) Concerning the company that was cross-checked, PT. GAG Nikel, the GOID failed to provide its RKABs (mandatory annual working plan and budget) for 2019 and 2020 and quarterly, biannual and yearly production and sales reports submitted to the MEMR for 2019 and 2020. After the RCC of GAG Nikel the GOID submitted the Deed of Establishment of GAG Nikel but only in Bahasa and in a format that could not be translated by a computer and, therefore, the Commission could not use it.

(347) Finally, the GOID claimed that the volume of production stipulated in the RKAB as explained in recitals (414) to (424), were set in line with the volumes stipulated in the feasibility studies. However, it provided only a few pages from the feasibility studies and the environmental impact analysis of the companies for which it submitted the RKAB with some numbers, while the text related to these numbers was covered in black without any explanations, which indicates that the GOID was deliberately impeding the Commission to assess the way the miners were setting up their annual production volumes.

(348) Furthermore, the Commission noted discrepancies related to the overall consumption of nickel ore on the Indonesian market. The Commission was not able to reconcile this data with the purchases of nickel ore of the exporting producers of the SSCR. The GOID also failed to provide statistics on Indonesian domestic prices of nickel ore although according to the legislation in force it collects such information.

(349) After having received the letter regarding the possible application of Article 28 of the basic Regulation (‘Article 28 letter’), the GOID interpreted the Article 28 letter as a deficiency letter and submitted several additional documents of GAG Nikel such as the RKAB for 2019 and 2020 of GAG Nikel, the application/report for obtaining the RKAB for 2019 and 2020 and the quarterly production and sales reports of nickel whole for 2019 and 2020. All these documents were only in Bahasa. The GOID also submitted a reply to Appendix B for Antam.

(350) Considering the very late submission of these documents and the fact that they were not submitted in English, and the fact that the legal context was the Article 28 procedure and not a deficiency process, as well as the fact that in any event the Commission would not be in a position to verify this information and ask clarifications on these documents, they could not be used in the investigation. Thus, the Commission decided to disregard such information, as provided by Article 28(3) of the basic Regulation, and use facts available instead.

(351) Regarding the inconsistent data for the consumption of nickel ore in Indonesia, the GOID insisted that this data was accurate and claimed that it relied on the nickel ore quantity consumed by IRNC Group considering that it was the only stainless-steel producer who use nickel ore as input. To be noted that the GOID was asked to submit the total consumption of nickel ore in Indonesia, not only the consumption of nickel ore for the stainless steel producers. Nevertheless, as highlighted in the Article 28 letter to the GOID, this data does not reconcile with the cross-checked data of the purchases of nickel ore of IRNC Group.

(352) Furthermore, in contradiction with GOID’s statement that it did not have records of prices of nickel ore in Indonesia, the quarterly reports submitted by the GAG Nikel and the RKAB application indicate otherwise. In these documents GAG Nikel reported to the GOID all the sales of nickel ore on a transaction by transaction basis disclosing thus to the GOID the sale volume, selling prices of the nickel ore as well as the name of its customers.

(353) The absence of sufficient cooperation did not allow the Commission to collect all the information it considered relevant for its findings in this investigation. Due to the non-cooperation of the nickel miners, the Commission was also prevented from collecting additional documents and asking additional information, namely on licensing agreements between the miners and the GOID, including the underlying conditions, royalties, and references to the legislative context regulating to them. Consequently, with regard to the alleged government provision of nickel ore for less than adequate remuneration, the GOID did not provide the necessary information and evidence as requested by the Commission in its questionnaire and during the RCC.

(354) Therefore, in the absence of information to the contrary received from the GOID, the Commission partially relied on facts available for its findings regarding those aspects of the investigation in accordance with Article 28 of the basic Regulation.

(355) In the comments on final disclosure, the GOID explained that it submitted GAG Nikel’s articles of association as part of the deed of establishment, which was provided by letter of 19 November 2021. The Commission confirmed that the articles of association are part of the deed of establishment. However, the Commission noted that this submission occurred very late in the investigation, and more importantly that the articles were submitted only in Bahasa. Therefore the Commission was not able to use them.

(356) Moreover, the GOID stated that the translation of the articles of association of PT. Ceria Hugraha required time. In any event, the GOID claimed that the Commission did not require the translation of all the documents into English and, as such, the lack of translation should not impede the investigation. As for the file format, the GOID asserted that this was not specified.

(357) The Commission noted that in the instructions for the anti-subsidy questionnaire, to which the annex for inputs supplier was attached, it is clearly stated ‘Please provide an English translation for all documents and source material that you submit in response to this questionnaire’. Moreover, the anti-subsidy questionnaire was sent to the GOID on 18 May 2021, therefore the GOID had more than sufficient time at its disposal for the translation of the articles of association of PT. Ceria Hugraha. As for the file format, the Commission made the remark on the format of the document in recital (344) because it did not allow a computer-based translation, therefore the document could not be used. This claim was therefore rejected.

(358) With regard to the RKABs, the GOID recalled that it submitted them as attachments to the letter of 8 December 2021. The Commission recalled that in the letter of 19 November 2021 (which was the deadline for the GOID to submit the RCC exhibits), the GOID had informed the Commission that, based on an internal decision, GAG Nickel had decided not to provide the RKABs. The letter of 8 December 2021 was sent in response to the Article 28 letter. The Commission noted that this date was way too late in the investigation for the Commission to take into account new documents. More importantly, the Article 28 process and the comments that interested parties may submit relate to the failure to submit information and cannot be used by the parties as an opportunity to submit new information that should have been submitted in the earlier stage of the investigation, or as part of the deficiency process. The Commission therefore rejected this argument.

(359) The GOID explained also that it blackened the text not related to the volume of production data to simplify the reading of the text.

(360) The Commission noted that the GOID was requested to submit complete documents and not to blacken any part of the text. The Commission would have needed to have access to all the text to properly assess the complete information contained in the RKABs for its findings. This argument was therefore rejected.

(361) With regard to the statistical data on consumption, the GOID claimed that, since the Commission employed sampling, it could not reconcile the national consumption data with nickel ore purchased by IRNC. The Commission highlighted and clarified that the quantity of nickel ore purchased by IRNC was significantly higher compared to the national consumption data reported by the GOID. Therefore, the data submitted by GOID seem to significantly underestimate the national production of nickel ore. The GOID did not provide any facts to rebut these findings. This claim was therefore rejected.

(362) The GOID further explained that, at the time of the expiration of the deadline, it was still trying to provide information and data, since the Commission stated in the Article 28 letter that it would have considered the use of Article 28. The GOID submitted that itself and GAG Nikel did not have sufficient time to translate the documents and that during the RCC the Commission did not indicate the need to translate the documents into English. Concerning the translation, the Commission referred to the instructions in the questionnaire and recalled that it does not need to repeat each time a request for a document is made that that document has to be translated. The failure to provide information in English may lead to the application of facts available due to the impossibility of using the documents submitted. The Commission recalls that the GOID did not submit any request for extension of the deadline or indication that work was ongoing for the documents which were later submitted through the answer to the Article 28 letter. Furthermore, the Commission recalled that the GOID was involved in a number of countervailing duty investigations, and thus it was well aware that documents must be submitted in English in such investigations. Therefore, this claim was rejected.

(363) The GOID reiterated the content of its letter of 8 December 2021 in relation to the issue of Indonesian nickel ore consumption data, stating that it submitted nickel ore consumption data for the stainless steel sector. As explained above at recital (361), the Commission recalled again that the GOID was asked to submit the total consumption of nickel ore in Indonesia, not only the consumption of nickel ore for the stainless steel sector.

(364) The GOID also claimed that itself and the miners never refused to provide evidence of State shareholdings, control and decision-making processes. The GOID admitted that Antam acquired GAG Nikel’s shareholder, but recalled that GAG Nikel is still listed as a foreign entity, as explained during the RCC.

(365) The Commission considered that, in the reply to the questionnaire, there was no evidence of the State ownership of the majority owner of GAG Nikel, which was only mentioned during the RCC. Moreover, the fact that GAG Nikel is listed as a foreign entity has no relevance with regard to its State ownership. This claim was therefore rejected.

(366) GOID further explained that PT. Vale was not on the list of the top 10 input producers because it forwarded the questionnaire for input suppliers only to the input suppliers of the cooperating exporting producers. The list of the top 10 input producers provided therefore did not include PT. Vale.

(367) The Commission recalls that instructions in the questionnaire concerning the list of the top 10 input producers clearly requested the GOID to ‘provide a list containing the following information on the largest 10 producers of each of these input materials’. In the instructions, there was no reference to the supply of input materials to the exporting producers, and thus the list should have included the top 10 input producers overall in Indonesia.

(368) In conclusion, all of the claims were rejected. In any event, the Commission noted that none of these comments, taken alone or together, would have been capable of reversing the findings of non-cooperation or any other aspects of the investigation, which were thus confirmed.

(369) In order to establish the existence of a countervailable subsidy, three elements must be present under Article 3 and 4 of the basic Regulation: (a) a financial contribution by the GOID via a public body and/or entrustment or direction of private bodies to provide the nickel ore domestically; (b) a benefit to the recipient, and (c) specificity.

(370) For the first element, the Commission analysed if the set of measures adopted by the GOID led to a financial contribution in the form of government's provision of nickel ore for less than adequate remuneration to the Indonesian SSCR exporting producers via a public body or by entrusting or directing private bodies within the meaning of Article 3(1)(a) of the basic Regulation.

(371) The investigation first assessed whether the GOID provided nickel ore to stainless steel producers through mining companies acting as a ‘public body’. The relevant legal standard and interpretation for this assessment under Article 3(1)(a) of the basic Regulation stem from the WTO jurisprudence on ‘public body’ which has been explained in recitals (225) to (232).

(372) In sum, whether mining companies in Indonesia are ‘public bodies’ should be examined by looking into the core characteristics and functions of those companies, and their relationship with the GOID.

Core characteristics and functions of the mining companies in Indonesia

(373) The GOID has set up a regulatory mechanism which bestows nickel ore mining companies with authority to exercise governmental functions.

(374) The extraction and management of minerals in Indonesia are of a kind that are classified as governmental in Indonesia. In this respect, Article 33(3) of the 1945 Constitution affirms that the earth, the water, and natural resource wealth that are buried within the earth are to be under the control of the state and utilized for the greatest prosperity of the community. As stated in the preamble of the 2009 Mining Law, ‘the management of these resources must be under the control of the State in order to provide real value-add to the national economy in an effort to achieve prosperity and wealth for the community in a fair manner’. Thus, all minerals in Indonesian are public natural resources, which are controlled and utilized by the State.

(375) Through several laws and regulations, the GOID decides which company is allowed to extract nickel ore and from where (namely, mining areas). Mining companies are required to have a license in order to extract nickel ore. The GOID also determines the amount of nickel ore mining companies can extract. Pursuant to Article 5(3) of the 2009 Mining Law, the GOID ‘possesses the authority to determine the amount of production of every commodity per year in every province’. Similarly, under Articles 5(1) and 5(5) of the 2009 Mining Law, the GOID may control the production and export of minerals in the domestic interest. The GOID also requires the mining companies to increase the added-value of the minerals by requiring the further processing and purification of the nickel ore, and determines to whom the mining companies can sell the nickel ore for such further processing (Articles 102-104 of the 2009 Mining Law). Article 119 of the 2009 Mining Law further stipulates that the license ‘can be cancelled by the Minister, the Governor, the Regent/the Mayor pursuant to their authorities, when: a. the holder of the [license] does not fulfil their obligations that are already stipulated in the [licence] and the laws and regulations’.

(376) Thus, the legal and economic environment prevailing in Indonesia, as also further elaborated in recitals (396) to (400), show that the mining companies extracting nickel ore are closely linked to the government in performing governmental functions. In particular, the purpose of the mining companies, often owned by the State, is to put in effect Indonesian policies as to how to manage natural resources in a manner which best serves and contributes to national development.

Relationship with the GOID: ownership and formal indicia of control by the GOID

(377) At first, the Commission sought information about State ownership as well as other formal indicia of government control in the State-owned nickel ore miners. For this purpose, the Commission had to rely almost entirely on facts available according to Article 28 of the basic Regulation due to the refusal by the GOID and the nickel miners to provide evidence on the ownership, control, and decision-making process that led to the provision of nickel ore at less than adequate remuneration, as set out in recitals (338) to (354).

(378) The GOID stated that during the investigation period there were more than 290 nickel ore producers in Indonesia. The GOID provided a list with the ten largest nickel ore producers and specified that only one of them was State-owned i.e. Antam. The GOID also claimed that it had no ownership, control or relation upon the companies that are classified as private. Furthermore, the GOID claimed that no government official is a member of the Board of Director in PT Aneka Tambang. It should be noted that Antam failed to provide a reply to Appendix B stated in recital (340) within the deadline. The GOID submitted a reply to Appendix B for Antam after it was inform of the application of Article 28, as stated in recital (349), and therefore it could not be cross-checked anymore.

(379) Furthermore, the GOID stated that 6 % and 4 % of the nickel domestic production in 2019 and 2020 respectively was generated by State-owned companies.

(380) In the deficiency letter, the Commission asked the GOID to provide the market share for each of the ten largest nickel ore producers or, if not available, their respective turnovers. In reply to this question, the GOID actually provided another list of the 10 largest nickel ore companies based on their volume of nickel ore production in 2019 and 2020. In total, these companies represented 37 % and 42 % respectively of the total domestic production. There was an overlap of only two producers in the two lists of the top 10 largest nickel ore producers.

(381) In the deficiency letter, the Commission also asked the GOID to provide the shareholders’ structure of the top 10 largest nickel ore producers submitted in the questionnaire reply. The Commission also asked the GOID to provide the shareholders’ structure of 10 producers of nickel ore that it identified as large suppliers of IRNC.

(382) The GOID replied that apart from Antam which was a listed company, the other companies were not listed on the Indonesian Stock Exchange and therefore it could not obtain the information regarding their shareholders’ structure. In addition, the GOID provided the shareholder’s structure of two companies from the second list of the 10 largest producers of nickel ore, which showed that these two companies were privately owned. Also for the list of companies provided by the Commission, the GOID provided the shareholders’ structure of six companies, indicated as being private companies. Finally, the GOID stated that the sole exporting producer that was purchasing nickel ore in Indonesia was supplying nickel ore from private suppliers only.

(383) The investigation revealed that the GOID’s statement that it did not have information concerning the shareholders’ structure of the nickel mining companies was factually incorrect. On the contrary, the Commission found that the GOID is closely monitoring the ownership of mining companies. Firstly, when a company applies to obtain a mining license (such as IUP or IUPK), it needs to provide the shareholders’ structure to the respective Indonesian authorities as there are certain restriction to the foreign ownership. Under GR 77/2014 (73), exploration IUPs and IUPKs can have up to 75 % foreign ownership. Foreign ownership percentages of IUPs/IUPKs start at 49 % and then progressively increase to 60 % if the operation has processing/or refining activities, and again to 70 % if the operation is underground. Secondly, the shareholders’ structure is also necessary for the GOID to be able to implement the divestment requirement pursuant to the 2009 Mining Law as applied by GR 1/2017 and MEMR 9/2017 (as amended by MEMR 43/2018) as explained in recitals (425) to (433). Finally, since the enactment of 2009 Mining Law, the GOID has issued several regulations that require approval from central or regional government for changing shareholders and board members in mining companies. MEMR 27/2013 was the first regulation to introduce approval requirements for changing shareholders and board members for IUP holders. Essentially, this regulation required approval from the MEMR or the heads of regional governments (depending on their respective authority) for changing shareholders and board members in IUP holding mining companies. The latest regulation in this regard is GR 48/2017 (74). Furthermore, the shareholders structure of GAG Nikel was included in the application/report for obtaining the RKAB for GAG Nikel submitted by GOID in reply to the application of Article 28 as stated in recital (349). Therefore, each year when a mining company is applying for the mandatory RKAB, as part of the information package submitted in this regard, it has to submit its shareholder structure to MEMR. Therefore, the Commission had to resort to facts available on the basis of Article 28 of the basic Regulation to fill the gaps due to the lack of cooperation by the GOID on ownership and control of the mining companies.

(384) First, the Commission investigated the very limited information on ownership and control of mining companies submitted in the investigation. In the reply to Annex B of PT GAG Nickel, it was stated that Antam was a minority shareholder and the majority of shares were owned by another company. The GOID provided no specific information on the public nature of the shareholders of this company in its questionnaire reply. However, according to public sources found by the Commission (75), it turned out that the actual shareholder of this company was in fact the GOID, which had full ownership. This was subsequently confirmed during the RCC of PT GAG Nickel. As a result, it was clear that the GOID had failed to give full and accurate information on the actual ultimate ownership of this company.

(385) Furthermore, it is noted that PT Vale was not included by the GOID in the list of the largest nickel ore miners in Indonesia. However, based on publicly available information, PT Vale extracted in 2019 around 4,2 million (76) tonnes of nickel ore, which is more than what the top largest nickel ore miner reported by GOID extracted in 2019. Furthermore, through PT Indonesia Asahan Aluminium (Inalum) (77) the State also owns 20 % stake in PT Vale Indonesia (78). The GOID became a shareholder in PT Vale in 2020 as part of the GOID’s requirement of the divestment of stakes by foreign-owned companies. Furthermore, in reply to Art. 28 letter, the GOID stated that PT Vale was not a State-owned company (but it remained silent about the 20 % stake the Indonesian State holds in PT Vale) and that it did not produce and sale nickel ore but nickel matte. While indeed PT Vale is a manufacturer of nickel matte, PT Vale also has a nickel ore mine in Indonesia (79) and extracts nickel ore for its captive use.

(386) This shows that the GOID provided inaccurate information regarding the largest nickel miners suppliers, the GOID also contradicted itself between what it declared in the questionnaire reply and deficiency letter reply and what it explained at the RCC. Furthermore, the GOID not only submitted unreliable data for the consumption of nickel ore as explained in recital (351), also the production volume of nickel ore is unreliable as the GOID did not include the production of nickel ore for captive consumption. These blatant inconsistencies cast doubt on the accuracy and reliability of the GOID in these aspects of the investigation.

(387) In order to fill all the substantial gaps regarding State ownership and the exercise of control in the nickel ore mining companies given the limited and inconsistent information provided by the GOID, the Commission carried out research based on publicly available sources. Unfortunately, little information was publicly available on ownership and control of the mining companies, including the large ones. Nevertheless, this research revealed that in addition to Antam (80), the State also owns shares in PT GAG Nickel and PT WEDA Bay Nickel (81) through Antam, although the GOID claimed that it did not have information about the shareholders’ structure of PT WEDA Bay Nickel.

(388) In addition, the Commission research showed that another State-owned company, that is PT Timah TbK, conducts its nickel mining business thought is subsidiary PT Tim Nikel Sejahtera in Southeast Sulawesi (82). The shareholder of PT Tonia Mitra Sejahtera, one of the companies mentioned by the GOID, is the Indonesian Ministry of Trade.

(389) The Commission then calculated the share of State-owned companies based on the percentages of domestic production submitted by the GOID in the investigation. Even taking into account the public information available for the very limited number of companies (five) compared to the total number of mining companies reported by the GOID (more than 290), it could be concluded that the share of the State-owned companies in the total production in 2020 was more than 27 % (83) (the shares of PT Vale and PT Tim Nikel Sejahtera were not included in the information provided by the GOID). This alone already represents a substantial market share of companies owned by the State and should be considered as underestimated, as it is very likely that among the numerous other mining companies for which public information was not available there are other State-owned ones. On the basis of Article 28, the Commission could thus infer that a larger share of mining companies producing nickel ore was actually State-owned. This percentage can only increase in view of the divestment obligation explained in recitals (425) to (434).

(390) The Commission had to rely on its own research also with regard to management and control of the mining companies due to the lack of cooperation of GOID. Once again, limited information was publicly available. As concerns Antam, the Commission found that according to its annual reports, the Board of Commissioners is composed of five members and the Board of Directors is composed of four members. It appears that the GOID holds directly in Antam only Series A share with ‘Dwiwarna Ownership’. All other shareholders hold Series B shares. The Dwiwarna Shareholders/proxies have the exclusive rights to appoint Directors and the Board of Commissioners. In 2018, two out of five members of the Board of Commissioners and three out of four members of the Board of Directors were dismissed and replaced, on proposal by the GOID and its ‘proxy’. Similarly, in 2019 the President Commissioner, the President Director and other two directors were dismissed and replaced, on proposal by the GOID and its ‘proxy’. Moreover, the current President Commissioner is a former member of the Armed Forces, another Commissioner is a current member of the State Intelligence Agency, another one is an officer at the MEMR. Only two out of five commissioners benefit from the qualification of ‘Independent Commissioners’. Finally, in the Board of Commissioner, one director is a former employee of GAG Nikel, another one a former employee of Inalum and another one also a former employee of another State-owned company. Only one director comes from the private sector.

(391) Furthermore, GAG Nikel’s Board of Commissioners is composed of two members while, the Board of Directors is composed of two members according to GAG Nikel’s questionnaire reply or three members pursuant to Antam’s 2020 annual report). One current member of GAG Nikel’s Board of Commissioners is the former Director of Mineral and Coal Revenue of the MEMR while the former (not as of 20 June 2020) President Commissioner was an employee of Antam. The current GAG Nikel’s President Director and another director are employees of Antam, the third director is an employee of Inalum.

(392) PT Vale’s Board of Directors is composed of five members and the Board of Commissioners is composed of 10 members. The current Vice-President of the Board of Commissioners, is the current Director of Strategic Services of Inalum (84). Another member of the Board of Commissioners is the former Minister of Communication and Information of Indonesia and Deputy CEO of the Indonesian State-owned electricity company PT. PLN. Another member of the Board of Commissioners is the former Director General of the MEMR and former President Commissioner of Antam and the current assistant to the Minister of Industry for Metal, Natural Gas and Natural Resources Affairs.

(393) Based on the information on file and on its own research due to the widespread non-cooperation by the GOID, the Commission concluded that mining companies representing a substantial production of nickel ore are fully or partially State-owned, and also managed and/or controlled by the State in a close relationship with the GOID.

Government authority and the exercise of meaningful control by the GOID

(394) In addition to the State ownership and formal links between the State and the mining companies, the Commission assessed whether the mining companies possess governmental authority and whether they exercise this authority in the performance of governmental functions.

(395) The investigation confirmed that all mining companies, regardless of their ownership, are subject to and must implement a number of government-prescribed measures concerning the provision of nickel ore, namely: (1) domestic processing obligation (‘DPO’), (2) export restrictions and/or export ban, (3) mandatory annual working plan and budget (‘RKAB’), (4) divestment obligations, (5) mandatory pricing mechanism. These obligations clearly show that the mining companies are performing governmental functions.

(396) As relevant background to all these measures, the Commission recalls that according to Article 4 of the 2009 Mining Law, the minerals are controlled by the State. Furthermore, the key objective of 2009 Mining Law is to maximise the added value from the nickel ore reserves to the Indonesian economy. To do so, the legislation provides for State control of minerals and coal mining activities. Article 2(2) provides that ‘The control of mineral and coal by the state as referred to in paragraph (1) shall be realised by the Government and/or regional governments’. Furthermore, the GOID can set a mineral policy that gives priority to domestic interests, notably through the control of production and exports. Article 5(2) stipulates that ‘The national interests as referred to in paragraph (1) can be realized through the control of production and exports’. The GOID has the authority to set the annual production of each commodity for each province. Article 5(3) stipulates that ‘In conducting the control as referred to in paragraph (2), the Government has the authority to set the annual production of each commodity for each province.’ Pursuant to Article 144, the GOID is closely supervising the management of the mining business. As an implementation of this article, the GOID enacted GR 55/2010 regarding the guidance and supervision of the implementation of the management of mining activities. Article 22 stipules that the GOID’s supervision refers, among others to ‘the realization of production and sales including the quality and quantity and the price of mineral and coal’.

(397) Furthermore, as an implementation of 2009 Mining Law, the GOID enacted GR 23/2010 as amended by GR 24/2012. Based on Article 89(1) ‘The Minister shall control the production of minerals and coal made by mineral and coal Production Operation Mining Permit holders and mineral and coal Production Operation Special Mining permit holders’ and Article 89(2), ‘Control of mineral and coal production as intended by section (1) shall aim to: a. meet the environmental requirements; b. conserve mineral and coal resources; c. control mineral and coal prices.’ In addition, according to Article 90(1) ‘The Minister shall determine the national quantity of mineral and coal production at the provincial level’ and according to Article 90(2) ‘The Minister may delegate authority to the governors to determine the quantity of mineral and coal production for the respective districts/cities.’ Furthermore, Article 84 stipulates that ‘(1) Production Operation Mining Permit holders and Production Operation Special Mining Permit holders must give preference to the domestic needs of minerals and/or coal. (2) The Minister shall determine the domestic needs of minerals and coal as intended by section (1) that include the needs for processing industries and domestic direct use.’

(398) The control of production is further accompanied by the control of domestic sales and prices of minerals. Article 92(1) of this regulation authorizes the Minister to ‘control mineral and coal sales undertaken by mineral and coal Production Operation Mining Permit holders and mineral and coal Production Operation Special Mining holders’. Furthermore, Article 92(2) stipulates that ‘Control of mineral or coal sales as intended by section (1) shall aim to: a. give preference to the supply of the domestic needs of minerals and coal; and b. stabilize mineral and coal prices.’

(399) In addition to the production volume, the GOID is strictly supervising all the sales transactions on the domestic market. Article 10 of MEMR 7/2017 reads ‘Holders of Metal Minerals Production Operation IUP, Coal Production Operation IUP, Metal Minerals Production Operations IUPK, and the Coal Production Operation IUPK must submit any Metal Minerals or Coal sales contract to the Minister through the Director General or the governor in accordance with their authority.’ Furthermore, Article 11 reads as follows: ‘(1) Holders of Metal Minerals Production Operation IUP, Coal Production Operation IUP, Metal Minerals Production Operation IUPK, and Coal Production Operation IUPK are required to submit reports on the implementation of Metal Minerals or Coal sales activities every month no later than 5 (five) calendar days after the end of each month to the Minister through the Director General or governor in accordance with his authority. (2) Report on the sales of Metal Minerals or Coal referred to in paragraph (1) shall at least contain the selling price, sales volume, quality of Metal Minerals or Coal sold, point of sales, and the country or region of sales.’

(400) These measures already show the strong interference and central government control in the mining sector including the nickel ore, inter alia with regard to production and sales target, price controls, and a bias in favour of domestic needs for minerals extracted in Indonesia. This is not a mere regulatory framework for the mining business, but the framework in which mining companies are given authority which has enabled them to develop governmental functions relating to the marketing and supply of mining products so as to achieve the relevant government objectives. The following measures specific to the nickel ore sector further show how the GOID exercise its authority and control over mining companies.

Domestic processing obligation

(401) Pursuant to Article 102 of the 2009 Mining Law, ‘the holder of an IUP and an IUPK are obligated to increase the value-add of mineral and/or coal resources in the implementation of development, processing, and purification, as well as in the exploitation of minerals and coal’. Furthermore, pursuant to Article 103(1) ‘The holder of a Production Operations IUP and an IUPK is obligated to undertake processing and purification activities on domestic mine products’ and pursuant to Article 103(2) ‘The holder of an IUP and an IUPK as stated in paragraph (1) can process and purify the mine products of other IUP and IUPK holders’.

(402) The obligation to conduct processing and refining domestically is intended to, among other things, (a) increase the value of mining through its commodities, (b) provide raw materials for industry, (c) provides employment, and (d) increase the state’s income. In other words, these provisions imposed an obligation on all nickel ore mining companies either to build their own nickel processing/purification facility or to sell their product to such a domestic facility.

(403) Furthermore, Article 170 of the 2009 Mining Law provided for a five year ‘grace period’: ‘The holder of a work contract […] which has already commenced production is required to begin purification as stated in Article 103 paragraph (1) no later than 5 (five) years from the enactment of this Law’. Article 112(4) of GR 23/2010 as amended by GR 24/2012 confirmed that holders of mining business license must conduct processing and refining domestically no later than five years after the enactment of 2009 Mining Law ‘Mining authorizations, regional mining permits and small-scale mining permits granted under laws and regulations prior to the issuance of this Regulation of the Government shall remain valid until their expiration and must: … undertake domestic processing and/or refining/smelting at the latest 5 (five) years of Law Number 4 of 2009 concerning Mineral and Coal Mining coming into effect’.

(404) These obligations show that mining companies are not free to organise their production and processing activities according to business considerations. Rather, they must follow these obligations to produce and process the ore domestically in order to increase the added value in Indonesia. They are therefore vested with government authority and perform government-mandated activities as a result.

Export restrictions

(405) On 11 January 2014, the GOID issued GR 1/2014 which amended Article 112 of GR 24/2012 and added a new Article 112C. The key amendment to Article 112 was the removal of Article 112 (4) (c) in GR 23/2010 which required the holder of a mining business licence (IUP) or small scale mining licence (IPR) to conduct domestic processing and refining of minerals within five years after the enactment of 2009 Mining Law given that the deadline had passed. The key terms in this additional Article 112C were as follows: (1) Holders of Contracts of Work as referred to in Article 170 of 2009 Mining Law must refine their mining products domestically and (2) Holders of operational and production mining business licences (IUPOP) as referred to in Article 112 (4) (a) of this regulation must process and refine their mining products domestically (85).

(406) On the same day MEMR 1/2014 (86) was issued as an implementing regulation of GR 1/2014. MEMR 1/2014 provided guidance on the level of processing or refining which must be met prior to export. MEMR 1/2014 defined the 11 metal minerals that were banned from export as of January 2014. Six metals, including nickel, could only be exported in a processed form.

(407) In an attempt to alleviate the impact on miners and the country’s export revenues from the ban on export of unprocessed or insufficiently processed minerals the GOID issued GR 1/2017 allowing mining companies to continue exporting semi-processed product and certain types of ores for a five-year period from 11 January 2017, subject to conditions set out in implementing regulations. Article 4 of MOT 01/M-DAG/PER/1/2017 stipulated as follows: ‘Mining Products attached in Appendix III as intended in Article 3 paragraph (1) can only be exported with provisions: a. company owning IUP of nickel Production Operation or IUPK of nickel Production Operation: 1. has used nickel with content <1.7 % (less than one point seven percent) at least 30 % (thirty percent) of total input capacity of the possessed nickel processing and purifying facility; and 2. has built or is building purifying facility, independently or cooperate with other parties’.

(408) Based on MEMR 25/2018 there were specific rules that were applicable to metal minerals with particular criteria (i.e. nickel with a content of < 1,7 %). Article 46(1) stipulates that ‘The holders of Mining Business License (IUP) for Production Operation or Special Mining Business License (IUPK) for Production Operation can conduct the Sales of nickel with a level of <1,7 % (less than one point seven percent) or washed bauxite with a level of Al2O3 >= 42 % (more than or equal to forty two percent) abroad in the specific quantities by using the Tariff Post/ HS (Harmonized System) in accordance with the provisions of the laws and regulations at the latest of the date of January 11, 2022.’ and Article 46(2) stipulates that ‘The sales of nickel with a level of <1,7 % (less than one point seven percent) or washed bauxite with a level of Al2O3 >= 42 % (more than or equal to forty two percent) as referred to in paragraph (1) is conducted with the provisions: a. Has or is building the facility of Purification; and b. Paying the export duty in accordance with the provisions of the laws and regulations.’ The refining/smelting facility was allowed to be built either individually or jointly with other parties.

(409) The export of these products could only be conducted after examination process by surveyor and approval from the Directorate General of Foreign Trade (‘DGoFT’) was granted following a recommendation from the MEMR. The purpose of the examination was to ensure that the mining products satisfied the minimum processing and/or refining requirement.

(410) In February 2017, the Minister of Finance (‘MoF’) issued PMK No. 13/PMK.010/2017 (87) (as subsequently amended by MoF Regulation PMK No. 164/PMK.010/2018) setting out the rates of export duty for the various forms of processed metal minerals. For nickel ore with concentration < 1,7 % Ni the export tax was 10 %.

(411) Pursuant to MEMR 11/2019 the ban on nickel ore export with content below 1,7 % Ni was accelerated to 31 December 2019. Any export recommendation that had been issued by the MEMR for nickel ore export with content below 1,7 % Ni prior to the issuance of MEMR 11/2019 remained valid. However, that recommendation expired on 31 December 2019. The MEMR 11/2019 became effective on 1 January 2020. The MEMR was still able to issue export recommendation for nickel ore with content below 1,7 % Ni until the 31 December 2019.

(412) Therefore, as of 1 January 2020 all types of nickel ore are forbidden from being exported.

(413) These export restrictions and the export ban of nickel ore significantly limit the freedom of mining companies to sell nickel ore to buyers offering the highest price worldwide. These companies can only sell in the Indonesian market for the benefit of the downstream industry, mainly the stainless steel industry, despite nickel ore resources being scarce worldwide and Indonesia being a very large producer. These restrictions lead to a very limited number of domestic customers as the user industries, and also to depressed domestic prices of nickel ore. Once again, this shows that mining companies, far from being free market players, are ‘public bodies’ effectively performing governmental activities.

Annual working plans and budget (RKAB)

(414) Pursuant to Article 101 of GR 23/2010 as amended by GR 24/2012 ‘Mining Permit holders and Special Mining Permit holders must turn in all data obtained from explorations and production operations to the competent Minister, governors, or regents/mayors.’ Furthermore, pursuant to Article 103 ‘Reports as intended by Article 101 shall be progressive reports on work within a specified time frame and a specified activity submitted by Exploration Mining Permit holders and Exploration Special Mining Permit holders as well as Production Operation Mining Permit holders and Production Operation Special Mining Permit holders.’ Moreover ‘Annual working plans and budget (RKAB) as intended by Article 101 shall be submitted to the competent Minister, governors or regents/mayors at the latest 45 (forty-five) working days prior to the conclusion of each calendar year’.

(415) MEMR 11/2018 (88) (as amended by MEMR 22/2018 and MEMR 51/2018) defines the annual RKAB as ‘annual work and budget plan in the business of minerals and coal mining, covering the aspects of business, technical and environment’. MEMR 11/2018 obliges holders of mining business licence to prepare and convey the annual RKAB to the Minister or Governor in accordance with their authority for obtaining approval (Article 61 paragraph (1) point b). In addition to providing such an obligation, MEMR 11/2018 prohibits holders of a mining business licence from conducting construction, mining, processing and/or refining as well as transporting and selling activities before their annual RKAB is approved.

(416) The annual RKAB has to be submitted by mining business license holders and special mining business license holders at least 90 calendar days, and no later than 45 calendar days, before the end of the fiscal year, which also includes the obtaining of the consent for the annual RKAB.

(417) On behalf of the MEMR or the Governor, the Directorate General of Minerals and Coal (DGoMC) shall perform an evaluation of the annual RKAB and provide the consent for, or a response about the annual RKAB in no more than 14 business days after the date when the annual RKAB was completely and properly received. IUP holders are required to deliver the revised version of the annual RKAB, which must accommodate the response from the DGoMC, in no more than five days after the date when the response from the DGoMC was received. The DGoMC shall give consent for the revised version of the annual RKAB in no more than 14 business days after the date when the revised annual RKAB was completely and properly received. Holders of Exploration IUPs and IUPKs, IUP-OPs, IUPK-OPs, or IUP-OP specifically for processing and/or refining may apply for one amendment to the annual RKAB in the current year, should there be a change in their production capacity. The application for an amendment to the annual RKAB is to be submitted after the IUP holder has submitted its second quarterly report, and it has to be submitted, at the latest, by 31 July of the current year. Holders of IUP-OPs and IUPK-OPs must submit amendments to their reports on the feasibility study, should there be any changes to the technical, economic, or environmental variables, according to the provisions of the applicable rules and regulations. Holders of exploration IUPs and IUPKs, IUP-OPs, IUPK-OPs, or IUP-OPs specifically for processing and/or refining must report any amendments to the utilisation of their mining service businesses in the current year.

(418) MEMR 11/2018 has been revoked and replaced by MEMR 7/2020 (89). MEMR 7/2020 provides similar provisions as MEMR 11/2018 regarding the requirement to have the Annual RKAB.

(419) During the investigation, the GOID submitted four RKABs for nickel ore miners. The Commission noted that an RKAB includes detailed quantitative, qualitative and financial information regarding the exploration activity, resources and reserves, mining operations, processing and refining volumes, marketing and shipment on export as well as domestic markets, environment, safety, workforce, estimated financials (sales, royalties, income, income tax).

(420) Unfortunately, the GOID failed to provide actual feasibility studies and avoided to engage in discussions concerning how the production targets are set for each company, and then how the GOID monitors and act afterwards with regard to production actually achieved for the period covered by the feasibility study. Due to the lack of cooperation on this important aspect, the Commission had to rely on inferences on the basis of Article 28 of the basic Regulation.

(421) The GOID submitted the volume of production of nickel ore during the period 2017 to 2020 in Indonesia as well as the domestic consumption of nickel ore during the same period. This data showed that there was a significant discrepancy between the volume of production and volume of consumption of nickel ore. Furthermore, the volume of domestic consumption of nickel ore submitted by the GOID could not be reconciled with the volume of purchases of nickel ore of IRNC that were cross-checked during the RCC, which seems to indicate that the GOID submitted erroneous information regarding the consumption of nickel ore.

(422) Furthermore, it is noted that in addition to the annual RKAB submission requirement explained in recitals (414) to (419), MEMR 11/2018 also requires IUP holders to submit three additional reports: (a) a Periodic Report; (b) a Final Report; and (c) a Special Report, with various levels of requirements, depending on the type of IUP holder. Among the type of information required to be submitted, the IUP holders have to submit information on the production and sales activities.

(423) During the RCC, GAG Nickel confirmed that it reported on a quarterly, semi-annual and annual basis the volume of production as well as the volume and the value of the sales of nickel ore. The Commission requested the company to provide these reports for the investigation period. The Commission granted the GOID several days after the end of the RCC to submit this information. However, the GOID submitted this data only after the Commission informed the GOID about the application of Article 28 of the basic Regulation as explained in recital (349).

(424) The rules on the RKAB show one more aspect of the meaningful and strict control the GOID holds in particular over production targets of each mining company each year. The Commission concluded that as a result of these rules on RKABs, mining companies’ core characteristics and functions are to provide nickel ore in line with the government objective to support the downstream stainless steel industry. The degree of commonality or overlap in the essential characteristics of the mining companies with the GOID’s objectives and functions in the mineral sector shows that the mining companies possess, exercise or are vested with governmental authority.

Divestment obligation

(425) Under the 2009 Mining Law, foreign owned mining companies are required to divest their shares to Indonesian parties in order to promote domestic investment in the mining sector. The 2009 Mining Law was silent on the level of shareholding, which must be divested, leaving it to be further regulated by the Central Government in relevant implementing regulations.

(426) The Central Government has gradually changed the minimum percentage of divestment requirement since the issuance of the 2009 Mining Law. Currently, the prevailing minimum divestment requirement is 51 %, as applied by the fourth amendment to GR 23/2010 in 2017 (GR 1/2017) (90) and MEMR 9/2017 (91) (as amended by MEMR 43/2018 (92)).

(427) Pursuant to Article 97 ‘Mining Permit holders and Special Mining Permit holders in the scope of foreign investment must upon 5 (five) years of production divest their shares in stages, such that in the tenth year at least 51 % (fifty-one percent) of their shares shall be owned by the Indonesian participants.’ Furthermore, ‘Share divestment as intended by section (1) shall be made to Indonesian participants that include the Government, the provincial governments, or the district/city governments, State-Owned Entities, Region-Owned Entities, or national private entities’.

(428) The shares owned by the foreign investors can be sold to Indonesian private companies only if the Government, the provincial governments, or the district/city governments, State-Owned Entities, Region-Owned Entities have refused first to buy the shares. The divestment may be conducted through the issuance of new shares and/or the transfer or sale of existing shares, either directly or indirectly. To be noted that unlike mining companies, smelter companies are not subject to any divestment obligation.

(429) MEMR 9/2017 stipulates that the divestment share price is based on the ‘fair market value’, without considering the value of the mineral reserves at the time when the divestment is conducted. This provision regarding the divestment share price has been changed by MEMR 43/2018, which states that the fair market value shall not consider the mineral or coal reserves, except those which may be mined within the period for IUP-OPs or IUPK-OPs. Furthermore, the calculation of the fair market value shall be conducted by the discounted cash flow method, using the economic benefits within the divested implementation period until the end of the IUP-OP or IUPK-OP and/or market data benchmarking.

(430) Based on MEMR 9/2017, the regulated divestment share price would become: a. The maximum price to be offered to the Central Government, Provincial Government or Regency/Municipal Government; or b. The minimum price to be offered to a State-owned company (‘BUMN’), region-owned company (‘BUMD'), or national private business entity.

(431) PerMen 43/2018 amended the above provision, and stipulated that the regulated divestment share price would become: a. The maximum price to be offered to the Central Government, Provincial Government or Regency/Municipal Government, BUMN, BUMD, or a special purpose vehicle that has been established or appointed by the Government through the MEMR, together with the Provincial Government or Regency/Municipal Government, BUMN and/or BUMD; or b. The minimum price to be offered to a national private business entity by way of tender.

(432) The Government (via the MEMR) may engage an independent evaluator to evaluate the divestment share price. If agreement cannot be reached on the divestment share price, MEMR 9/2017 stipulated that the divested shares shall be offered on the basis of the divestment share price that has been calculated in reference to the evaluation that has been performed by the Government. This provision has now been removed in MEMR 43/2018.