Indonesia’sExportQuality* Infrastructure* · AVA Agri-Food and Veterinary Authority (Singapore) BLA Bureau of Laboratory Accreditation (Thailand) B4T Centre for Materials and Technical

Indonesia’s Export Quality Infrastructure

A study conducted by DFC S.A.U for the European Union


i

PREFACE 1

EXECUTIVESUMMARY 2

I.CONTEXT 6

I.1MacroeconomicPerformanceandtheTradeChallenge 6

I.2.TechnicalRegulationsAbroadandMarketAccessforExports 7

I.3.VoluntaryInternationalStandardsandTrade 8

I.4.TheIncreasingLinkageofVoluntaryStandardsandTechnicalRegulations 9

I.5.PrivateStandardsandMarketAccessforExports 9

I.6EQIandtheFutureofTrade 10

II.OBJECTIVES 12

III.ACTIVITIESANDMETHODOLOGY 14

III.1Activities 14

III.2Methodology 15

IV.EXPERIENCEOFOTHERASEANCOUNTRIES 17

IV.1ChoiceofCountries 17

IV.2TheirEconomicContext 18

IV.3.CoreOverallFindingsonEQIinSingapore,MalaysiaandThailand 19

Table of ConTenTs

Table of Contents


A study conducted by DFC S.A.U for the European Unionii

V.MAPPINGOFTHEINDONESIANEQIINFRASTRUCTURE 23

V.1.TheFeaturesofaSoundEQI 23

V.2.GovernmentStructureandEQI 24

V.3QualityInfrastructure 25

V.3.1Metrology 28

V.3.1.1Scientific&TechnicalMetrology:AnInstitutionalAssessment 30

V.3.1.2LegalMetrology:AnInstitutionalAssessment 31

V.3.2Standardisation 32

V.3.2.1Standardisation:TheInstitutionalSituationinIndonesia 33

V.3.2.2TheStandardsInstitutions 34

V.3.2.3TheRegulatoryBodies 34

V.3.3TestingandQuality:ConformityAssessment 40

V.3.3.1TestingandCalibrationLaboratories:PublicSectorInstitutions 40

V.3.3.2Testing:PrivateSectorEntities 42

V.3.3.3Inspection:PublicSectorInstitutions 43

V.3.3.4Inspection:PrivateSectorInstitutions 44

V.3.3.5Certification–certificationofconformityofproducts

orsystemswithstandardsortechnicalregulations 44

V.3.3.6Certification:PublicSectorInstitutions 44

V.3.3.7Certification:PrivateSectorInstitutions 45

V.3.3.8ObservationsonTesting,InspectionandCertification: 45

V.3.4Accreditation 46

VI.ASSESSINGTHEEQISYSTEM 50

VI.1Factorsbehindtheproblems 50

VII.VISION 52

VII.1TheComplianceChallenges–InternationalandEURegulations 52



iii

VII.2TheVisionforIndonesia’sEQI 53

VII.3WhatTheComplianceSystemMustHave 53

VII.4Traceability:TheFundamentalFeatureofanEfficientEQISystem 54

VII.5TheFourKeyDimensionsoftheVision 54

VII.5.1Traceability 55

VII.5.2Information 55

VII.5.3Competence 56

VII.5.4PrivateSectorInvolvement 56

VII.5.5LinkingtheDimensionsoftheVision 57

VIII.ROADMAP 58

VIII.1.ImplementingChange 59

VIII.1.1RoutestoEfficiencyIncrease 59

VIII.1.2TheActorsforChange 60

VIII.2.ToolsforChange:AnEQIInventoryandInformationManagementSystem 61

VIII.2.2HowIndonesianInstitutionsCanCreateTheInformationSystem 62

VIII.2.3.ProductsOfTheInformationSystem 63

VIII.3.TraceabilityInMetrology 65

VIII.3.1StrategicManagement 65

VIII.3.2.HowIndonesianQIInstitutionsCanImproveTraceabilityInMetrology 65

VIII.4.HowIndonesianQIInstitutionsImproveTraceabilityInCA&ValueChain 66

VIII.5.HowIndonesianQIInstitutionsImproveandEnsureCompetence 66

VIII.6.HowQIInstitutionsIncreasePrivateSectorInvolvement 67

IX.MONITORINGCHANGE 68

X.CONCLUSIONSANDRECOMMENDATIONS 70

GLOSSARY 74

TermsandInstitutionsrelevantfortheQualityInfrastructure 74


A study conducted by DFC S.A.U for the European Unioniv

list of Tables and figures

lIsT of Tables anD fIGURes

Figure1 :Fourchains:Publicandprivatesectorresponsibilities 23

Figure2 :Qualityinfrastructure 26

Figure3 :Qualityinfrastructure 27

Figure4 :Metrology:Whyitmatters? 29

Figure5 :Metrology:Functionstobeperformedandor/coordinated 29

Figure6 :Standardizationandtechnicalregulations 33

Figure7 :MSTQ-StandardizationinIndonesia 33

Figure8 :MSTQ-Technicalregulatoryauthorities 35

Figure9 :MSTQ-Qualityaccreditation&certification 47

Figure10:Challenges-international&EUregulations 52

Figure11:VisionforIndonesia’sEQI 53

Figure12:Whatthecompliancesystemmusthave? 53

Figure13:Traceabilityinthevaluechain 54

Figure14:Whattheroadmapcovers 58

Figure15:AchievingEQIefficiencyduringpoliticaltransition 59

Figure16:Inventoryinformationsystem 62

Figure17:Productsoftheinformationsystem 63

Figure18:Monitoringchange 68

Table1 :SWOTAnalysisoftheEQISystem 50

Table2 :Traceability:ThebasickeyforEQI 55

Table3 :Information:ThemissinglinkinEQI 55

Table4 :Competence:Thekeyforconfidence 56

Table5 :Involvement:Themissinglinktotheusers 57

Table6 :Objectivesarelinked 57

Table7 :Inventory-collectinformation 61



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ACCSQ ASEANConsultativeCommitteeonStandardsandQuality

APEC Asia-PacificEconomicCooperation

ASEAN AssociationofSouthEastAsianNations

AusAid AustralianAidAgency

AVA Agri-FoodandVeterinaryAuthority(Singapore)

BLA BureauofLaboratoryAccreditation(Thailand)

B4T CentreforMaterialsandTechnicalProducts,Bandung

BBIA CentreforAgro-Industries,Bogor

BBK CentreforCeramics,Bandung

BBKK CentreforChemicalsandPackaging,Jakarta

BBPK CentreforPulpandPaper,Bandung

BBT CentreforTextilesIndustry,Bandung

BPOM AgencyforFoodandDrugs

BPPT NationalAgencyforAssessmentandAppliedTechnologies

BOT BoardofTrade(Thailand)

BSN NationalStandardizationAgency

CASE ConsumersAssociationofSingapore

CIDA CanadianInternationalDevelopmentAgency

CSIS CentreforStrategicandInternationalStudies,Jakarta

CSP CountryStrategyPaper

DS DepartmentofStandards(Malaysia)

EUD EUDelegationinJakarta

EDB EconomicDevelopmentBoard(Singapore)

ETAT EuropeanTechnicalAssistanceTeam

EU EuropeanUnion

lIsT of abbRevIaTIons

list of abbreviations


A study conducted by DFC S.A.U for the European Unionvi

EuroCham EuropeanChamberofCommerceinIndonesia

EQI ExportQualityInfrastructure

FDI ForeignDirectInvestment

FTA FreeTradeAgreement

GATS GeneralAgreementonTradeinServices

GATT GeneralAgreementonTariffsandTrade

GDP GrossDomesticProduct

GoI GovernmentofIndonesia

HDC HalalDevelopmentCorporation(Malaysia)

HVA HighValueAdded

IEC InternationalElectricalCommission

IMF InternationalMonetaryFund

IMs ImplementationManagers

ITC InternationalTradeCooperationDepartmentofMoT

JICA JapanInternationalCooperationAgency

KADIN IndonesianChamberofCommerceandIndustry

KAN NationalAccreditationCommittee

KIM-LIPI CenterforCalibration,InstrumentationandMetrology

LIPI IndonesianInstituteofSciences

LFM LogicalFrameworkMatrix

MATRADE MalaysiaTradeOrganisation

MDGs MillenniumDevelopmentGoals

MIDA MalaysiaIndustrialDevelopmentAuthority

MITI MinistryofInternationalTradeandIndustry

MENRISTEK MinistryforResearchandTechnology

MoA MinistryofAgriculture

MoE MinistryofEnvironment

MoF MinistryofFinance



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MoFo MinistryofForestry

MoH MinistryofHealth

MoI MinistryofIndustry

MoMP MinistryofManpower

MMAF MinistryofMarineAffairsandFisheries

MoPW MinistryofPublicWorks

MoT MinistryofTrade

MoTr MinistryofTransportation

MOSTI MinistryofScience,TechnologyandInnovation(Malaysia)

MRA MutualRecognitionAgreement

MS MalaysiaStandard

MST MetrologySocietyofThailand

MSTQ Metrology,Standards,TestingandQuality

NAFED NationalAgencyforExportDevelopment

NIP NationalIndicativeProgramme

NEM NewEconomicModel(Malaysia)

NIMT NationalInstituteofMetrologyThailand

NMSP NationalMetrologyStrategicPlan(Thailand)

OIC OrganisationoftheIslamicConference

OWM OfficeofWeightsandMeasures(Thailand)

PMC ProjectManagementCycle

PTB PhysikalischTechnischeBundesanstalt,Germany

QI QualityInfrastructure

RIA RegulatoryImpactAssessment

SIRIM MalaysiaStandardAgency

SME SmallandMediumsizedEnterprises

SPRING SingaporeStandardsAgency

SPS SanitaryandPhytosanitaryMeasures


A study conducted by DFC S.A.U for the European Unionviii

SQB SIRIMQASBerhad

SS SingaporeStandard

STE Short-termExpert

TBT TechnicalBarrierstoTrade

ToR TermsofReference

TREDA TradeResearchandDevelopmentAgency,MoT

TEEAM TheElectricalAndElectronicAssociationofMalaysia

TIC Testing,Inspection,Certification

TISI ThailandIndustrialStandardsInstitute

TR TechnicalRegulations

TSP EU-IndonesiaTradeSupportProgramme

USAID UnitedStatesAidAgency

WTO WorldTradeOrganization



1

ThisPapersummarisestheresultsofaprojectconductedintheperiodAugust–December2010.

TheworkwassupportedbytheEuropeanUnion.Thebackgrounddocumentsproducedduringthe

projectcanbeobtainedfromtheTeamLeader,Dr.PeterO’Brien,E-mail:[email protected].

PRefaCe

Preface


A study conducted by DFC S.A.U for the European Union2

Indonesiaisinaperiodofrapideconomicgrowthinwhichexportsplayamajorrole.Thecountry

seekstoupgradethevalueaddedofexports,expandtherangeofexportsintomoresophisticated

products,anddiversify intomanyforeignmarkets.Theseaimsimplythat itmusthaveawell

functioningQualityInfrastructure(QI)whichcanensurethattheprocessesandproductswhich

thecountrycanexportareabletocomplywiththeincreasingnumberofTechnicalBarriersto

Trade(TBT)whichcanmakeentryintoexternalmarketsdifficultorevenimpossible.

Animpressiverangeoftechnicallaboratoriesandfacilities,mainlythoughnotentirelylocatedin

thepublicsector,alreadyexist.Similarly,therearealargenumberofexperiencedanddedicated

professionalsworkingintheseQIinstitutions.Fundingforthem,whilealwayssubjecttothe

usuallimitations,isonthewholequitegood.Technicalhelpfromarangeofforeigndevelopment

partners,inAsiaandinEurope,hasbeenprovidedovermanyyearsandcontinuestoencourage

domesticimprovements.Yettheinstitutionsdonotfunctionasasystem.Eachtendstooperate

inisolation,withscarceevidenceofsharingofresponsibilities,policymakingandoperations.

Furthermore,theQIinstitutionshavebutweaklinkswiththeprivatesector,whetherthatsector

isconsideredasasupplierofQIservicesorasademanderofthem.

Theresultisthat,althoughinprincipletheIndonesianQIcouldmakeamajorcontribution,it

isfailingtodoso.Seriousproblemsexistintermsof:confusedauthoritiesandresponsibilities;

pooruseoftheconsiderableassetswhichthecountrypossesses;ongoingcompetitionamong

institutions,frequentlyexacerbatedbyeffortstogaininfluenceeveninareaswhereaninstitution

doesnothavespecifictechnicalcompetence;andanapproachtoplanningwhichcontainsan

exeCUTIve sUmmaRy

executive summary



3

unhealthymixofinflatedexpectationsandinsufficientattentiontothedynamicofinternational

changesinthetraderegulatoryenvironment.

TheurgencyofmakingefficiencyimprovementstotheQIstructure,andthusrealisingthe

substantialbenefitswhichcomefromharnessingthesynergiesinherentinawellfunctioning

system, isdue to the internalandexternaldynamicsof thecurrent situationof Indonesia.

Internally, the exceptionally important moves towards much greater autonomy and

decentralisationimplysubstantialrisksthat,atleastduringwhatislikelytobeaprolonged

transitionphase,therewillbesignificantproblemsinensuringthattheQInetworkoperates

eventoitscurrent level.Externally,IndonesiaisfacedwiththefastmovingTBTfrontier,

the very strong competition in its export markets (especially from some of itsASEAN

neighbours),andthecommitmentsandrequirements,allofwhicharetimebound,intowhich

ithasenteredinASEAN,intheWTO,andtoanincreasingdegreethroughbilateraltradeand

cooperationarrangements.

Inshort,thecountryhasnowenteredaperiodofmajoropportunitiesbutalsoofmajorrisks.

Standingstill,orcontinuing“businessasusual”,isnotanoption.Eitheraconcertedeffortis

madetoregisterimprovementsinlinewithagreedpoliciesandapproaches,orthereisastrong

likelihoodthatthingswillgobackwards.

Thefocusofthepaperisonhowtomakethoseimprovements.Morespecificallystill,thefocus

isonwhatcanbedonebytheQIinstitutionsthemselves,withoutwaitingforhighlevelpolitical

andpolicydecisions.Anumberofthosedecisionsareinfactverynecessary.Indonesiahasno

coherenttradepolicy;ithasnoqualitypolicy;ithasconflictinginstitutionalmandates,some

ofwhichcanonlybedealtwiththroughhighleveldecisions;ithascivilserviceregulations

whichareinimicaltomakingthebestallocationsoftechnicalstaff;ithaspricingpoliciesforthe

provisionofQIserviceswhichsignificantlylimitthepossibilitiesforQIinstitutionstodevelop

thescopeoftheirwork.



Theneedforsuchdecisionsishighlightedbythechangeprocesseswhichhavetakenplace,

over the last several years, in some of Indonesia’sASEAN neighbours (and competitors).

CountriessuchasThailand,MalaysiaandSingapore,haverecognisedthat totalengagement

with trade and investment (including significant foreign investment) is a powerful way of

reducingpovertyandenhancingincomesacrosstheboard.ThesecountrieshaveoptedforQI

structureswheremaximumuse ismade of broad public and private partnerships, inwhich

theentitiesareencouragedtooffertheserviceswhichtheyarebestsuitedtoprovide,andto

offer thematcompetitivepricesanddeliveryconditions.Corporatisationofpreviouslystate

enterprises,aprocess throughwhichsomepublicownershipandcontrolcanberetained(to

ensurethatdesirablesocialgoalsaremet),whilecreatingthespaceformanagementinlinewith

fullefficiencyrequirements,hasbeensystematicallyadopted.

Ministriesinthesecountries,whilestillhavingsomeregulatoryfunctions(thoughthesetooare

moreandmoreinthehandsofsemipublicbodies),havefocusedonprovidingpolicyandoversight

for thecorporatisedentities.There is, inotherwords,substantialseparationofpolicymakers,

regulatorsandoperators(QIserviceproviders).Theseshiftshavebeenmadewhileplacingstrong

emphasisondevelopingrelationswiththeprivatesector,sothatitplaysthefullestpartpossible

inthesystem.Eachcountry,ofcourse,hashaditsownproblemstomeet,eachcountryhasbeen

followingthepathforwelloveradecade,andineveryinstancethereremainsmuchtobedone.

Butthecriticalpointisthatavisionexistsofastructurewhereallpartiesareparticipatingand

collaboratingtothefull.SuccessfulQIisacollaborativeventure,notacompetitivestruggle.

ThepaperarguesthattheQIinstitutionscansetthemselvestargetswhichstemfromthefundamental

technicalneedtoprovidetraceability.Toachievetraceability,andthetechnicalcompetencewhich

mustunderpinit,theinstitutionsmustbegintoshareinformationatalllevels.Throughacarefully

designedandimplementedprocessofinformationsharing,theinstitutionswillbegintoworktogether

toenhancesystemefficiency.Asthatincreases,withprivatesectorQIserviceprovidersparticipating

intheprocess,therealinvestmentneedsofthesystemwillbecomeapparent.



5

Aswithanyexaminationofasystem,theinformationsharingwillrevealwherethe“blockage

points”are,andsuggesthowtheycanbeovercome.Informationproductscanlikewisebemade

available through thisprocess,productsofdirectvalue to Indonesianprivateproducersand

exporters,aswellaspotentiallytoforeignbuyersandimporters.Theinformationcanalsotake

Indonesianenterprisesintoastillmorechallengingfield,thatofresearchanddevelopment.Asa

huge,naturalresourcericheconomy,whichiscurrentlyobtainingexceptionallyhighpricesfor

itsexportsofrawmaterials,Indonesiahastraditionallynotbeenstronglycommittedtoresearch

anddevelopment.Inthefuture,thatwillalmostcertainlyhavetoalter.Theinformationbase

onwhichinnovativeactivitiescanbedevelopedwilldrawonmanysources–andoneofthem

shouldbe the information in theQI system.After all, standards (mandatory andvoluntary)

embodythelatestthinkingonwhattechnicalcriteriaprocessesandproductsshouldembody.

Hencethatinformationshouldbepubliclyavailable,andutilisedtothefull.

Noneofwhatisproposedhereisundertakenforitsownsake.QIshouldnotbeaclosedworld

ruledbytechnicians.AQIexiststoprovideaservice,whichultimatelyistheretoencouragethe

growthanddevelopmentoftheeconomyofIndonesiaandthewelfareofitspeople.Themajority

offirmsinthecountryaredomesticallyowned,smallandlimitedintheirresources.Butthese

firmsareoftenconnectedtolargerentities,throughsupplychainsandsubcontractingnetworks.

Traceabilityrequiresthatthesefirmsalsocanprovidetheproperstandardofproductsandthat

theirproductionprocessesareconsistentwiththenorms.Inthissense,theQIinstitutionshave

thepossibilitytomakeapowerfulcontributiontothewelfareofIndonesiaandtoitsprosperous

future.Thetimetoseizethatpossibilityisnow.



I.1 MacroeconomicPerformanceandtheTradeChallenge

Indonesiahasenteredaperiodofrapideconomicgrowth.Theprojectedrateofexpansion,

asestimatedintheAugust2010DraftBudgetStatementfor2011,is5.8%for2010,with

accelerationinsubsequentyearsto6.3%in2011,upto6.9%in2012,7.4%in2013,and

7.7%in2014.Theseexpectationsareunderpinnedbyarecentimprovementinthebalance

ofpaymentsandforeignexchangereserves(whichnowstandattheequivalentofsome

6-7monthsofimportsatnormalrates),andarelativelystableexchangerateasmeasured

against a basket of relevant currencies.Bank Indonesia, the country’sCentralBank, is

committedtomaintainingstabilityinboththeexchangerateandtherateofinterestover

thecomingyears.

In order to achieve and sustain this impressive performance, Indonesiamust strengthen its

situationwithregardtoregionalandinternationaltrade.Currently,theratiooftradetoGDPis

approximately25%,whichisnoticeablylowerthanthefigureformostotherASEANcountries.

Moreover, the composition of that trade is strongly biased towards primary or relatively

unprocessed(lowvalueadded)products.Inthoseproducts,Indonesiaissubjecttopowerful

competitioninallmarkets(EU,ASEAN,Japan,NorthAmericaandothers)fromseveralfellow

ASEANmembersandotherAsiancountries.Forexample:inagriculturalproducts,including

foodandfisheries,thereiscompetitionfromThailand,Vietnam,Indiaandothers;intextiles,

Thailand, China, Korea and India are important international traders; in clothing,Vietnam

andPhilippines are significant;while inmanufacturedproducts, suchas telecommunication

equipment,Malaysia,Thailand,China,JapanandKoreaareallpowerfulplayers.

I. ConTexT

Context



7

Indonesiaisthereforefacedwithasignificanttradechallengeifitistosustainitsfastoverall

economicgrowth.Thattradechallenge,however, isbynomeanssimplyamatterofoverall

volumeoftrade.Itisalso,andstillmoreimportantly,amatterofthequalityandstandardsof

goods tobeexported.Allof thecountriescitedabove,namely theASEANandotherAsian

competitorsofIndonesia,areengagedtoagreateroflesserextentinconstantupgradingofthe

valueaddedandqualitydimensionsoftheirexports.Thatupgradingoccursfortworeasons.One

isthatthehigherthevaluedaddedcomponentofexports,thegreaterthenetreturnsfromthose

exports.Thesecondreasonisthatrelentlesslyrisingstandardsinexportmarkets,especiallythe

EUandotherOECDmembers,directlyandindirectlyobligetraderstoimprovethequalityof

whattheyexport.

I.2. TechnicalRegulationsAbroadandMarketAccessforExports

Inmanyproductfields,therearelegallymandatoryTechnicalRegulations(TR)whichmustbe

metiftheproductsareeventogainentryintothemarkets.TheseTRexistinordertoprotect

thehealthof thepopulation in the importingmarket, public safety, security and thenatural

environment.Providedtheymeetcertainscientificconditionsandaredesignedinwayswhich

seektominimisetradeimpacts,suchTRareperfectlyacceptableundertheWTOagreements

onTechnicalBarriers toTrade (TBT)andSanitaryandPhyto-Sanitary (SPS)arrangements.

Hence,beforeanIndonesianmadeproductcangoonsaleinforeignmarkets,itmustbecertified

tobeinconformitywiththeapplicableTRinthosemarkets.Thatcertificationmustbedoneby

entitiesofrecognisedimpartialityandcompetence.Theseentities,inturn,mustbeaccreditedto

performtheirfunctionsbybodieswhichthemselvesmeetaseriesofinternationallyrecognised

conditions.

Itisapparent,therefore,thattherehastobeinplaceinIndonesiaasystemwhichcanprovide

thesetechnicalservicestotherequiredtechnicalandobjectivitylevels.OvertheyearsIndonesia

has of course established, essentially via theprovisionof publiclyowned services, awide

rangingquality infrastructure (QI)designedessentially tomeet internalneeds.Thoseneeds



includeIndonesia’sowninternalTRandanumberofelementsrelatedtostandardisingproducts

andservicessoldinthedomesticmarket.Astheworld’sfourthlargestcountry,thatdomestic

marketorienteddevelopmentprocess inQI isperfectlynormalandnecessary.Butsincethe

1990s, most of the world’s largest developing countries (China, India, Brazil) which had

similarlycreatedsystemswhichweredomesticmarketoriented,havebeenraisingtheprofile

ofinternationaltradeintheireconomies,andthusbegunadaptingtheirQIsuchthatitbecomes

asystemwhichservesthegrowinginternationaldimensionsoftheireconomies.Indonesiais

nowengaginginsuchadaptationofitsownsystemtowardsaninternationallycompatibleone.

ThatsystemcanbereferredtoasIndonesia’sExportQualityInfrastructure(EQI).

I.3. VoluntaryInternationalStandardsandTrade

IndevelopinganEQI,TRarenottheonlymajorhurdlewhichIndonesia’sexportsmust

overcome.To an increasing extent, and acrossmore or less thewhole range of traded

goodsandservices,exportsshouldseektomeetvoluntaryinternationalstandards.These

arenotlegallybinding,buttheyarecommerciallycritical.Thesestandards,whichapply

notonlytoactualproductsmadeandservicesprovidedbutalsotomanagementstructures

used toconductabusiness,aresetup through transparentprocesses inwhich technical

expertsfrommanycountriesworktogetherinordertoformulateperformanceconditions

andcharacteristicswhichproductsandservicesshouldmeetinordertoprovidethemost

suitablecustomersatisfaction.

The leading bodies in which standards formulation takes place include the International

Standards Organisation (ISO), the International Electrical Commission (IEC), the Codex

AlimentariusoftheFAOandWHO,aswellasotherentities.Indonesiaisrepresentedinthem

byappropriategovernmentMinistriesandpersonnel.Ineverycasetheaimisfortheretobefull

consensusamongallpartiesonthenatureofthestandard,althoughtherearesomeinstances

where,usuallyforspecialtechnicalreasons,oneormorecountriesmayreserveitspositionwith

regardtotheproposedstandard.



9

I.4. TheIncreasingLinkageofVoluntaryStandardsandTechnicalRegulations

Toanincreasingdegree,thereisintegrationofsuchstandardswithTR.Inotherwords,TR

themselvesfrequentlymakereferencetointernationalstandardswhichapplyinthefield

concerned.Inthissense,therefore,whatisinastandardeffectivelybecomesobligatory

becauseitisincorporatedinaTR.Indonesiaandallothercountriesarethusinasituation

where,toagrowingdegree,TRandinternationalstandardsmustbelookedatasintegrally

relatedpartsofthesamewhole.TheEQI,andimprovementofit,mustbeviewedinthis

perspective.

I.5. PrivateStandardsandMarketAccessforExports

In the rapidly changingworld of quality, there is a third dimension, in addition toTR and

international standards,which nowadays is acquiring ever greater importance, especially in

fieldssuchasfoodproducts,informationtechnologyandsomeothers.Thatdimensionisusually

calledPrivateStandards.Thesearestandardswhicharenotestablishedintheforumsofthe

internationalentitiesmentionedabove,butinsteadareformulatedbygroupingsofimportant

producersand traders in specificfields.Thestandardsarecalled“Private”because theyare

notworkedoutthrough,andaccordingto,theprocessessetintheinternationalbodies.These

standardsareofcoursevoluntaryandareperfectlylegal.Theymatterbecausethegroupswhich

establishthemoftenincludemajorinternationalwholesalebuyers,andmajorretailchainsin

keyconsumermarkets.Thisisparticularlyclearinanumberofareasoffoodproducts,clothing,

electronics,furnitureandelsewhere.

Amoment’sreflectionsuggeststhat,unlessanexporteralsomeetsthestandardswhichthese

buyersconsiderimportant,thepracticalchancesofsuccessfulexportarelikelytobesmall–

eventhoughallapplicableTRandinternationalstandardshavebeenmet.Thisisbecauseactual

accesstothemarketinganddistributionchainsinsideleadingmarketsisverydifficulttoobtain

unlesstheexporterisperceivedbythekeybuyersasmeetingtheirstandards.Theprospectsof

enteringmarketsthroughsomesmall“independent”buyersareinpracticeoftenminimal.



ForcompaniesinIndonesiawhichareaffiliatesofmultinationalenterprises,privatestandards

mightnotrepresentanyparticularproblem.Giventhatthemultinationalenterprisemayitself

bepartofgroupssettingprivatestandards,theaffiliateswillautomaticallymeetthemthrough

theapplicationofthemultinational’sowncorporatequalitypolicy.ButforIndonesianowned

firms, thechallengewillbe fargreater. It follows thatanEQIsystem, if it is tooffera full

rangeoftoplevelservicestousers(essentiallyIndonesianfirms),mustalsokeeptheexpansion

ofprivate standards inmind.This is additionally so since, over time, certainof theprivate

standardsmaywellcometobepartofinternationalstandards.

I.6 EQIandtheFutureofTrade

Asitentersaperiodofexceptionaleconomicgrowth,Indonesiaisthereforefacedwithamajor

requirementwithregardtointernationaltrade.Itmustsimultaneouslyexpandtotaltrade,raise

the value added element in that trade, and be equipped to provide evermore sophisticated

support services inEQI tocompaniesproducing in thecountry.Thoseservicesmustbeput

on an equivalent footing to, and be consistentwith, the standards employed in top quality

markets.A successful response to that challenge calls for a concerted effort encompassing

technical improvements, managerial improvements, capacity building, resource allocation

improvements, andbetter systemicgovernance.Thesechangeswill almostcertainly require

underpinning frommodifications to regulatory systems in Indonesia, a higher profile being

giventoawarenessbuildingabout“qualityculture”,andenhancedcomplementaritiesofpublic

andprivateparticipationinEQI.

Thesearedauntingchallenges.InsuchalargecountryasIndonesia,wherefederalandprovincial

governmentbodieshavevaryingjurisdictions,effectiveresponsetothosechallengesimplies

acarefulprocessofconsensusbuildingwhichalmost certainlycan takeplaceonlyoveran

extendedperiodoftime.Sequencingofactionsneedstobedonesuchthatthemorepressing

andurgenttradedemandsaremet,whileappropriatebalancesinthesystemaremaintained.

Theaccumulationofskills,bothforindividualinstitutionsandatthesystemiclevel,canoccur



11

onlyifthereissufficientstabilityofinstitutionalmandatesandstaffing.Moreover,changesin

EQIinIndonesiaitselfinevitablyaretosomedegreeconditionedbychangesinASEAN,and

internationally(inexportmarketssuchastheEU,andrelevanttradebodiessuchasWTO).



The overall objective of the projectwas to contribute to a further integration of Indonesia

intotheinternationaltradesystem,throughtheupgradingofIndonesia’sEQIsystemsothatit

becomescompliantwithinternationalstandards.Thespecificobjectivesofthestudywere:

• toanalyse the institutionalarrangements related to Indonesia’sEQIsystemand the

decisionmakingprocessesleadingtotradepoliciesinthisarea.

• toproposeavisionforanimprovedIndonesianEQIsystem,andastrategicroadmap

toreachit,inconsultationwithdifferentstakeholders.

• tomobilisestakeholdersintotheendorsementofthevisionandroadmap.

The studywas in no sense (technical, managerial, financial, social responsibility) an audit

ofindividualinstitutions.Itwasasystemfocusedanalysisseekingtoassistinthesearchfor

overall improvements in Indonesia’sEQI. It sought to locategaps, duplication,weaknesses

ofcoordination,andothersystemicissuesinEQI.Ittriedtoseewhetherthereareany“nerve

points”,orcriticalobstacles,which,ifovercome,couldleadtosignificantpositiveimpactson

systemicefficiency,betterutilisationofthesystembytraders,andontoimprovedexportsand

exportearnings.

Inmostsystems,thereareelementswhichmaybelessobviouslypresentbutmayinfacthave

apowerfuleffectontheoperationandorientationofthesystems.Those“latent”actorsmay

includeotherkeyMinistries,suchastheMinistryofFinance,keypolicymakingstructures,

especiallywithregardtotradepolicies,andofcoursethepressures(andoftenpositiveincentives

forimprovements)whichcomefromIndonesia’sactivemembershipinregional(ASEAN)and

II. objeCTIves

objectives



13

international(forexample,WTO)organisations.Hence,anyattempttograspwhatthesystem

actuallylookslikeanddiscoverhowitinfactfunctions(asprerequisitesforarrivingatsensible

andrealisticpathsofimprovement),musttakethisbroaderperspectiveofwhattheIndonesian

EQIis.Theprojecttriedtomakeasmuchprogressaspossibleinthisdirectionalso.

Theprocessofmobilisingstakeholderswillalmostcertainlybegradual–meaningspreadover

asignificanttimeperiod.Itisnecessaryinordertorefineandmaturethefindingsofthisproject.

Endorsementitselfwillcomelater,asaproductofaconsensusbuildingeffortwhichshouldbe

continued.Atthatlaterstage,EQIwouldhopefullyalsohaveahigherprofileintheeconomic

arena,andperhapsreceivebackingattoppoliticallevels.



III.1 Activities

Thestudywasconductedthroughaseriesofsteps,eachofwhichculminatedinapresentation

ofinformationobtained,analysisconducted,andproposalsforthenextphases.

Step One: Institutional Mapping and Gap Analysis

ThisfocusedonanassessmentoftheinstitutionsinvolvedintheEQIandoftherelationships

amongthem.

Theoverallmapwasconceivedtocontainfourprincipalkindsofinstitutions:

• IndonesianPublicServiceProviders.

• IndonesianPrivateentities(whichincludebothserviceprovidersandbusinessfirms

andassociationswhichusetheEQIservices).

• Regionalandinternationalinstitutionswhichseemtoplayanactiverolewithregard

tosomeaspectsofIndonesia’sEQI.

• Externaldonorsandtechnicalassistanceserviceproviders,agroupinginwhichtheEU

isincluded.

Withregardtogovernmentministries,thereareoftenseveralrelevantdepartments,orpartsof

theinstitution,whichoccupyimportantrolesinthesystem.Hencethetotalnumberofactors

onthemapismorethanappearsjustfromacountofinstitutions.Inpractice,thetotalnumber

extendstowellabove50.

III. aCTIvITIes anD meThoDoloGy

activities and methodology



15

Step Two: Vision for Improvement

ThatVisionwasdesignedbasedontheemergingresultsfromtheinstitutionalmappingandgap

analysis,theproposalsandideasbeingreceivedfromthepersonsandinstitutionsinterviewed,

theinsightsgleanedfromthefieldvisits tootherASEANcountriesandrelatedcomparative

workandtheassessmentsofwhatwouldrepresentarealistic,achievableandvaluablesetof

targetsatwhichtheupgradingprocesscouldaim.

Step Three: Roadmap for Change

TheRoadmapseekstospelloutthevariousmilestonesthatwillhavetobeachievedbydefined

points in time and sets out how thesemilestones are to bemet, including the institutional,

policy,financialandotherpossibleimplicationsoftheprocess.

III.2 Methodology

Theworkreliedprimarilyonacombinationof:

• interviewswithselectedinstitutions(publicandprivate,nationalandinternational)in

IndonesiaandsomeotherASEANcountries.

• website research directed at supplementing the information base (especially with

regardtomanytechnicaldetailsconcerningTRandstandardsinmajorexportmarkets

affectingIndonesianfirms,practicesandprocessestoupgradeEQIwhicharebeing

followed in other countries, and details of technical assistance programmes being

managedandsupportedbydonorsotherthantheEU).

• analyticstudieswhichshedlightonthepossiblecostsandlikelyreturnsfromimproving

EQI.

• three workshops that were conducted with Indonesian stakeholders of various

Government Institutions with the aim to discuss and consolidate the findings and

conclusionsinaprocessorientedmanner.Thefirstworkshopfocusedonthemapping,

thesecondonthevisionandthethirdontheroadmapforIndonesia’sEQI.



Inthetimeavailable,comprehensivebenchmarkinganalysisofthesystemassuchcouldnot

beundertaken.Nevertheless, somecomparisonsof Indonesia’sEQIsituationwerepossible,

particularly with regard to otherASEAN countries. When a more perfectedmapping/gap

analysis isfinalised, itshould thenbepossible toassess thesystemagainststandardcriteria

for network analysis, including coherence, coordination, inclusiveness, efficiency and other

indicators.



17

IV.1 ChoiceofCountries

InordertoanalysetheASEANlevelstrategiesforenhancingEQIsystemsacrosstheregionand

assesshowanIndonesianstrategywouldbestbelinkedwiththeworkatregionallevelthreeother

ASEANcountries,Singapore,MalaysiaandThailand,werevisited.Interviewswithkeyinstitutions,

public and private,were conducted on the basis of questionnaires sent in advance to all groups

interviewed.Documentaryresearch,basedonwebsitesandmaterialsreceivedfromtheinstitutions,

wasextensivelyused.Followingthevisits,regularcommunicationwiththegroupsvisitedhasbeen

madetoensurethatconclusionsandfindingsareconsistentwiththesituationsineachcountry.

Thecriteriaforcountrychoicewere:

• CurrentlevelofEQIdevelopment

• SimilaritiesofexportstructuretothatofIndonesia

• Marketorientationofexports(EU,US,ASEAN,Japan)

• WhetherornotacontinuousimprovementprocessforEQIisknowntobeinprogress

Singapore:IthasaworldclassEQIwhichiscontinuouslyupgradedinaccordancewiththe

highestinternationalstandards.Itisseekingtosupplyanexceptionallywiderangeofmarkets.

Malaysia and Thailand: Intermediate level of EQI. These countries exhibit important

similaritiesintheirtradestructureswithIndonesia,henceconsiderationoftheircurrentposition

andfutureperspectivescanbevaluableasanindicationofwhatchallengesmayfaceIndonesia

from regional competitors. Thailand has also been following the “single trade window”

approach,whichIndonesiastartedtoimplementin2010.

Iv. exPeRIenCe of oTheR asean CoUnTRIes

experience ofother asean Countries



Thepurposewastoobtainsomeinsightsintoeffortswhichhavebeenmade,andarebeingmade,in

thesethreecountriestodeveloptheirQIwiththeaimofincreasinghighvalueadded(HVA)trade.

IV.2 TheirEconomicContext

During2010,Indonesiahasexperiencedsomewhatsloweroveralleconomicgrowththanits

ASEANneighbours.Fortradeithasshownlargerrisesthanalloftheminimports,alongwith

justaboveaverageexportincreases(theAugust2010dataforIndonesia,coveringthefirst8

monthsof2010,dohowevershowariseof40%ascomparedwiththesameperiodin2009).

Thesituationintradecanbesummarisedasfollows:

• IndonesiahasamuchlowertradetoGDPratio(25%)thananyofthecountriesvisited.

Sincetheworld’slargestcountriesalwayshavelowersharesoftradetoGDPthantherest,

thisfactinitselfisnotsurprising.Butthemagnitudeofthegapissubstantial.Singapore’s

ratioiswellabove100%,Malaysiaisabout80%andThailandroughly65%.

• Singapore,MalaysiaandThailandallfigurewellintotheworld’stop30exportingand

importingcountries(2009WTOdata);Indonesiaisranked30forexports.

• Theproductbreakdownofexportsshowsthatmanufacturesaccountforapproximately

75%forMalaysia,roughly50%forThailandandslightlylowerforSingapore(where

servicesfigureprominently in the total). Indonesiacompares favourablywith these

ratios.Cumulativedataforthefirst8monthsof2010,whenthetotalofallexports

reachedalmost$100bn,showtheindustrysharetobeover61%.

• ProcessedagriculturalproductsareasignificantpartofexporttradeforbothThailand

andMalaysia,whilefishandseafoodexportsarestronginThailand.

• AllcountrieshaveanincreasingshareofexportsgoingtotheAsiaPacificregion,with

EUcountriesplayingaquiteimportantroleasdestinationsforexportsfromSingapore

andThailand.



19

TheeconomiesdiffermarkedlyalsowithregardtoForeigndirectinvestment(FDI).Itaccounts

foralargeshareoftotalinvestmentinbothSingaporeandMalaysia,andisalsoquitesignificant

inThailand.ForIndonesia,FDIisfarlesssignificant,thoughrecentdevelopmentssuggestthat

theremaybesubstantialmanufacturinginvestmentsfromotherAsiancountries(China,Korea,

Japan)inthenearfuture.TheFDIpositionaffectsexport tradeverystronglysincemanyof

theinvestingfirmsselllargesharesoftheiroutputabroad.Thesefirmsalsousuallyactas“self

containedcircuits”forcontrolofqualityofexports.

IV.3. CoreOverallFindingsonEQIinSingapore,MalaysiaandThailand

Whileeachofthe3countriesvisitedisdistinct,thereareseveralfeatureswhichcanbefound

inallofthem:

(1) Thereisstrong awareness,inboththepublicandprivatesectors,oftheimportanceof

qualityissuesascriticaltoenhancedcompetitiveness.

(2) QI is closely linked with clearly articulated national plans for economic growth and

development.Thisisreflectedintheelaborationofnationalstrategiesfortheimprovement

ofthevariouselementsofQI.Forexample,ThailandhasaNationalMetrologyStrategy

coveringtheperiod2009-2017whichfocusesonChemistryandBiology,inlinewiththe

mainaimsofeconomicdevelopmentinthecountry.

(3) Linkages with the private sector are strong.Itismuchmorethana“token”stakeholder

in the formulation of policies, the development of standards and similar things. The

privatesectorisalsoamajoroperatorinmanydimensionsofEQI.Forinstance,thereare

some140calibrationlaboratoriesforscientificmetrologyinThailand,ofwhichthelarge

majority are private andThai (someareownedby Japanese andSingapore interests).

InMalaysia themarket forprovisionofTesting, InspectionandCertificationServices

(TIC),whichisgrowinginvalueatapproximately15%perannum,ishighlycompetitive.

SIRIMisoneoftheparticipants,butthelargemajorityofthe15orsofirmsareprivate

(mainlyaffiliatesofinternationalcompanies).Pricesforservicesofferedcanbesetfreely

byallcompetitors,includingSIRIM.Onevaluableresultofthemarketapproachhasbeen



thatthefirmsaretendingtospecialisewithintheTICenvironment,sothathigherquality

outcomesareachieved.

(4) The institutional landscape reflects very sharply the orientations towards growth, the

private sector and competition. Government Ministries are firmly placed as coordinators

and policy makers – they are not operators.KeyinstitutionsforQI(SIRIMinMalaysia,

SPRINGinSingapore,TISIinThailand)functionaccordingtobusinessprinciples.While

thedegreeofgovernmentownershipvariesineachcase,themanagementanddecision

takingisdonealongprivatesectorlines.

(5) Partnerships of public institutions and private firms designed to tackle critical QI issues

are quite common.InThailandFXA,aprivateThaicompanymadeupofsoftwareexperts,

hasdesignedacomputerbasedtraceabilitysystemwhichallowscompleteidentification

atallstagesoftheproductionanddistributionchainforawiderangeoffoodproducts.

Thecompanyworksinharmonyprincipallywithtwoministries(AgricultureandPublic

Health),andtoalesserextentwithtwoothers(IndustryandTransport).Thetraceability

systemlinkstogetherthedatabaseswhicheachoftheministrieswaspreviouslyusingfor

itsownpurposesonly.

(6) The current institutional structure has taken a number of years to build, and changes

continue to take time. Inall3countries,theeffortstocreatethepresentsetofinstitutions,

including their legal status (corporatized bodies, quasi public institutions and other

variants)havegoneonforatleast10years.Thereareno“quickfixes”forimprovingEQI.

(7) The institutions all have special programmes to assist SME.Inoneinstance(MATRADE

inMalaysia),theinstitutionexplicitlyorganisestrainingforSMEinthevariousaspects

ofMSTQ.Everycountryrecognises,however,thatreachingouttoSMEisverydifficult.

Noneofthecountriesconsidersthatitspresentlevelofoutreachisanywherenearbeing

satisfactory.

(8) Public and private actors working together seek to be proactive and not reactive.The

Standards institutions provide a certain amount of “early warning” information about

complexnewprocessesofTechnicalRegulationwhicharebeingdevelopedandintroduced



21

inexportmarkets (for instance,all3countrieshavebeenworking, throughpublicand

privatechannels,onREACHeversincethebeginningoftheprocessintheEU).

Wherereactivitycanhardlybeavoided,suchastheavianflu(HNI)problemwithpoultry

some2yearsago,majormeasureshavebeentakenveryquickly.InThailand,whichis

theworld’ssecondlargestexporterofprocessedpoultry,theEUDelegationassessedthe

rapidityandcomprehensivenessoftheThairesponsetobeexemplary.Itwasnotablethat

theauthoritieshadthepowerandthemeanstoimplementdrasticsafetymeasures.They

alsofollowedupimmediatelybyrequestingEUtoassistinthespeedyestablishmentof

thenecessarytestingandinspectiondeviceswithinThailandtoensurethecountryiswell

preparedforanyfuturemassivealertsofthiskind.

(9) “Dual standards”, meaning that products sold domestically may not have the same

quality as those sold in export markets still exist to some extent in Malaysia and

Thailand though this phenomenon has more or less been eliminated in Singapore.The

incidenceofmajorsafetyproblemswithindomesticmarketsinthesecountriesdoesnot

seemtohavebeensignificantinrecentyears,thoughtheyarenotentirelyabsent.

(10) The 3 countries all have strong representation abroad, through embassies, trade

missions, investment promotion offices, private business chambers and other links,

whichcontribute significantly toknowledgeaboutdevelopments in exportmarkets.A

premiumisdemonstrablygiventoobtainingandusinginformationasavitalelementin

theproductionandtradeeffort.

(11) Active participation in international MSTQ bodies is increasingly accorded priority.

There seems to be keen awareness of the possibilities for these countries to become

“standardsmakers”andnotsimply“standardstakers”.Apowerfulexampleistheexplicit

focusofMalaysiaonbecomingaworldleaderforHalalproducts(whichcoveravery

widerangeofitems).

A company has been formed (the Halal Development Corporation, HDC; under the

oversightofMITI)with theobjectiveofbecomingtheinternationalpacesetter in this

field.GiventhattheestimatednumberofHalalconsumersintheworldisoftheorder



of1.6–1.9bn,andestimatesofcurrentannualglobaltradeinHalalproductsexceed$2

trillion(morethan100timestheexportsofIndonesia),thepotentialisenormous.

AstrongstandardsfocushasbeengiventotheHalal initiative.At theOrganisationof

Islamiccountries(OIC)meetinginApril2009,Malaysiawasassignedtheleadrolein

developmentofHalalstandards.MalaysiaStandard(MS)series1500isnowthelandmark

standardinthisarea.Specialfocushasbeengiventoefficientcertificationinthisfield.As

ofmid2010,theprocesswhichhadpreviouslytakenonaveragesome8monthshadbeen

cuttoonemonth.SixinternationalcompaniesoperatinginMalaysiahavebeencertified.

(12) Singapore, Malaysia and Thailand give importance to EQI matters in their trade

negotiations. In earlier years, theWTOprocesswasdominant, and in that period the

countries were all essentially smaller players. But now the swing is firmly towards

bilateralagreements(and,toalesserextent,regionalarrangements).

Singapore,withitsadvancedinfrastructureandclearlystatedambitiontobecomeaglobal

hub for innovationandhighquality,putsagreements relating toEQI (suchasMutual

RecognitionAgreements,MRA)asanessentialpartofanybilateralagreement.Malaysia

andThailand,which are not in the same situation as Singapore from the perspective

ofoveralldevelopment,adopt lessambitious targetsbutstill seekrecognition through

bilateralarrangementswithleadingpartners.

(13) Foreign assistance is no longer a significant contributor to development of QI.All3

countriesnowrelytoaverylargeextentontheirownresources.Amongforeignpartners,

Japanappearstobethemostactive.Itseffortsseemtobedirectedmainlyatassisting

thedevelopmentof“completechainsoftraceability”infoodandfisheries.TheJapanese

assistancealsomakesuseofbothpublic andprivategroups, especially forupgrading

qualitystandardsintheindustrialsectorwhereJapanesecompanieshavesignificantFDI.



23

V.1.TheFeaturesofaSoundEQI

MappingandgapanalysisofIndonesia’sEQIinfrastructurefocusesonanassessmentofthe

institutionsinvolvedintheEQIandoftherelationshipsamongthem.

Publicandprivatesectorarelinkedintheentirevaluechainwithbothsectorshavingrolesand

responsibilitiestomeettherequirementsofinternationalmarkets.

v. maPPInG of The InDonesIan eqI InfRasTRUCTURe

mapping of The IndonesianeqI Infrastructure

FOUR CHAINS: PUBLIC AND PRIVATE SECTORRESPONSIBILITIES

Producerand

ExporterChain

MSTQChain

LawEnforcement

TheImpementation

Chainfor MSTQ

The continuous system from collecting the raw meterial to delivery of product to the final uses (consumer)-Private Sector

The Assurance thatproducts meet standars in all respects-Public Sector,with some Private Sector

help (as serviceprovider)

Public Sector, with some Private Sector help (as

service provider)

Public Sector

Thediagramsuggeststhefundamentalpoint:MatchingtheChainsleadstoaQualityEfficient

Economy(QEE).Ifthechainsfittogether,theywillproduce

Figure 1 : Four chains: Public and private sector responsibilities



3KEYCHARACTERISTICS

• NoGapsOfCommunicationOrCooperationBetweenTheChains–EachWorksTo

HelpTheOthers.

• NoDuplicationOfAuthorities–ResponsibilitiesAreClear.

• NoGapsInAnyChain–TheyAreAllSeamless.

Inanysystemwhichhasthesethreecharacteristics,therewillbethreekeyoutcomes

3RESULTS

• CostReduction.

• Confidence.

• CompetitiveStrength–athomeandabroad.

V.2.GovernmentStructureandEQI

Formorethanadecade,Indonesiahasbeengoingthroughmajorpoliticalreforms,whichare

notyetentirelycompletedandimplemented.

TheGovernmentofIndonesiadidestablish,however,aNationalDevelopmentPlanRPJM2005

–2025tobeimplementedin4phases,eachof5years.ThecurrentstepRPJM2(2010-2014)

focusesonthe“ConsolidatingthereformedIndonesia,increasingqualityofhumanresources,

capacitybuildinginscienceandtechnology,strengtheningeconomiccompetitiveness”

ThegoaltoimprovethestructureofEQIfitsthereforeperfectlywellintothecurrentphaseof

nationaldevelopment.

ImprovingthequalityofIndonesiangovernmentinstitutionsisnoteasyduetoseveralfactors.

(1)Institutionalcompartmentalizationandfragmentation.

(2)Insufficienceofsystemgovernanceandstrategicplanning.

(3)Constraintsimposedbycivilservicerulesonallocationofhumanresources.

Thecomplexityof thepoliticalsituationhascontributed toastronglyriskaversebehaviour



25

ofinstitutionsandindividuals.Anypronouncedmovestowardschangeonthepartofspecific

actorsrendersthemvulnerabletoseriouscriticism,whileatthesametimenotofferingthem

aprospectofsignificantrewardsfor therisks theyare taking.Inotherwords, therearefew

“institutionalincentives”favouringchange.

TheAutonomyProcessaddsfurtherconstraintstothesystem:

• Inrecentyears,andinmanyfields,authorityaswellasoperationalresponsibilitiesare

beingdevolvedtoregions.Thisprocessappearsirreversible.

• ItplacesIndonesiainasituationsimilartoothermajorcountriesintheworldwhich

havefederalstructures,forexampleIndia,USA,Brazil,SouthAfrica.

• AkeyquestionforEQIistherefore:whatauthorities/responsibilitiesshouldremainat

nationallevel,andwhichonesshouldbeatregionallevel?

• Coordinationacrossthedifferentlevelsbecomesacrucialfactorinthedevelopmentof

EQI.

V.3 QualityInfrastructure

AQIisbasedonanumberofcomponents.Thesecomponentsarecloselyrelatedandforma

networkwhoselogicallinksarebasedonatechnicalhierarchy.Thefollowingdiagramsetsout

thelinkages.Itcanbeviewedinthreesegments.Thecentralpart(the“spine”)showsthecore

componentswhichshouldexist inafullyarticulatednationalsystem(andwhichdoexist in

Indonesia).Tobeacceptedinternationally,andthereforeprovidethesupporttoexportswhich

nationalproducersandtradersrequire,thespinehastobeconnectedtothekeyinternational

institutions– these institutionsareshownon the righthandsideof thediagram.Thewhole

systemexists,however,toserveproducersandtraders.Accordingtotheproduct(andservice)

sectorstheyworkin,andtheprocessestheyuse,thesefirmsformpartoftheirownvaluechains.

Thetruetraceabilityofstandardshastobeassessedinthosevaluechains.Theyarerepresented

schematicallyonthelefthandsideofthediagram.



Source:PTB

Thenationalnetworkmustbegearedtointernationalrequirements.Itisonlyiftheserequirements

aremetthattherecanbeanassurancethatinternationaltradeofgoodsandserviceswillnotbe

impededbyTR.ApictureofthefullydevelopedCompliance/Competitivenesssystemisshown

inthefollowingdiagram.

Figure 2 : Quality infrastructure



27

Source:PTB

TheNationalQIisbasedonfourpillars:Metrology(M),Standardization(S),Testing(T)and

Quality(Q),ofwhichthelasttwoelementscanbecombinedtoConformityAssessment(CA).

Metrology

• Calibrationlaboratories

• MetrologyinChemistry

• VerificationSystem(legalmetrology)

Standardization

• VoluntaryNational&internationalstandards

• TechnicalRegulations(TR). InIndonesia theseareusuallyreferred toasStandards

Wajib.

Testing&Quality(ConformityAssessment)

• Testing,Analysis&Inspection

• Accreditation&certification

Figure 3 : Quality infrastructure



Improving a country’s capacities in metrology, standardization, testing, quality assurance,

accreditationandcertificationareatthecoreofimprovingtheabilitytoexporthighquality,

highvalueaddedproducts.

It is apparent, therefore, that there has to be in place in Indonesia a systemwhich can

provide these technical services to the required technical and objectivity levels. Over

the years Indonesia has of course established, essentially via the provision of publicly

owned services, a wide ranging quality infrastructure (QI) designed essentially to

meet internalneeds.Thoseneeds includeIndonesia’sowninternalTRandanumberof

elementsrelatedtostandardisingproductsandservicessoldin thedomesticmarket.As

theworld’s fourth largest country, that domesticmarket oriented development process

inQIisperfectlynormalandnecessary.Butsincethe1990s,mostoftheworld’slargest

developing countries (China, India,Brazil)which had similarly created systemswhich

weredomesticmarketoriented,havebeenraisingtheprofileofinternationaltradeintheir

economies,andthusbegunadaptingtheirQIsuchthatitbecomesasystemwhichserves

thegrowing internationaldimensionsof theireconomies. Indonesia isnowengaging in

suchadaptationofitsownsystemtowardsaninternationallycompatibleone.Thatsystem

canbereferredtoasIndonesia’sExportQualityInfrastructure(EQI).

V.3.1Metrology

ThewordMetrologycomesfromtheancientGreekwordsmetron(measure)andlogos(study

of)andisthescienceofmeasurement.Metrologycoversalltheoreticalandpracticalaspectsof

measurement,asetofoperationstodeterminethevalueofacertainquantity.

Both,scientific&technicalmetrologyaswellas legalmetrologyare thebasisfor technical

development, trade and business.Without a reliablemetrology network that is traceable to

internationalmetrologyitisnotpossibletocreateconfidencetoconformityassessment.



29

MetrologyinIndonesiaiscarriedoutbyseveralGovernmentInstitutionsbasedonpresidential

decrees and a Legal Metrology act. The institutions represent Indonesia in the relevant

internationalmetrologyorganizations.

METROLOGY: WHY IT MATTERS?

Without it, no confidence can be placed in the otherelements of MSTQ

the foundation for acceptabilityand recognition of Indonesia’s systemin the rest of the world

provides the system bywhich users of goods andservices can be sure they are not cheated

also provides buyers of exports with similarassurances

Trade and Business

Scientific & TechnicalMetrology

LegalMetrology

METROLOGY: FUNCTIONS TO BE PERFORMED AND/OR COORDINATED

Scientific & Technical LegalKIM-LIPI, RC CHEM-LIPI & BATAN Directorat Metrologi - MOTCustody of Nasional Reference Standards(KIM-LIPI) & National Reference Matrials

(RC CEM LIPI)

Participation in, and where possibleorganisation of, Inter Comparissons

Calibration of InstrumentProvision of CertifiedReference Materials

Research and DevelopmentinMetrology & Calibration

Training

Type Approvals for domestic & imported measuring devices

Verification and Re-verification(calibration) of measuring devices

Market Surveillance on measuringdevices used for trade

Training of Staff

Figure 4 : Metrology : Why it matters?

Figure 5 : Metrology : Functions to be performed and or coordinated



TheInstitutionsdealingwithscientificmetrologyinIndonesiaare:KIM-LIPI,RCChem–LIPI

&BATAN.LocatedwithintheMOT,DIMETisinchargeforlegalmetrology.Thesituation

oftheseinstitutions,asassessedbytheconsultantteam,issetoutinthefollowingparagraphs.

V.3.1.1Scientific&TechnicalMetrology:AnInstitutionalAssessment

KIM-LIPI

ResearchCenter forCalibrationInstrumentationandMetrologyPuslitKIM-LIPIwas

appointedascustodianofnationalstandardsbypresidentialdecreein2001replacingdecree

from1989.ItsupportstheNationalAccreditationCommitteeKANwithinter-comparisontests

oncalibrationinregardsofservingasreferencelaboratoryandwiththeevaluationofresults.

Internationally,KIMparticipates in inter-comparison testsprovidedbyADMPonanannual

basisandhasorganizedoneitself.ItfollowsandcooperateswithAPMPonaregionalbasisand

BIPMoninternationalbasis.

ObservationsonKIM:

• KIMisinchargeforscientificmetrologybutDIMET-MoT(DirektoratMetrologi)still

holdsthephysicalnationalstandardformassbutdoesnothavethefacilitiestouseit

fortraceability;KIMservesasreferenceformassinIndonesia.

• KIMhasbudgetconstraintsinregardstopurchaseofequipmentandmaintenanceoffacilities

RCChem-LIPI

ResearchCenterforChemistryRCChem–LIPIistheappointedIndonesiancustodianfor

chemicalreferencestandards.(RENSTRALIPI2010-2014).

ObservationsonRCChem-LIPI:

• RC Chem –LIPI does, at present, not have the assets (buildings, equipment) and

capabilitytofulfillthedesignatedtask.

• RCChem–LIPIissupportedbyPTB.Nospecificprojecthasyetbegun.Itisexpected

thatanyprocesstoputRCChem-LIPIinapositiontomanagechemicalmetrology

wouldtake8–10years.

• RCChem–LIPIisplanningtocooperateandcoordinatewithBBIA–MoI,POMN-



31

BPOM, PPMB-MoT andNCQC-MMAF in order to establishChemicalReference

MaterialsforIndonesia.

• RCChem–LIPIislackingfacilities,HRandorganizationalstructure

V.3.1.2LegalMetrology:AnInstitutionalAssessment

DirektoratMetrologiDIMET-MoTisinchargeforLEGALmetrologyinIndonesiabasedonthe

LegalMetrologyactno.2-1981(anActofwhichrevisionhasbegun,andmaybecompletedby2013).

Itsresponsibilitiesare:

• Policydevelopmentonlegalmetrology.

• holdstheIndonesianMASSreferencestandard.

• doesstandardspolicydevelopment.

• typeapprovalformeasuringinstrumentsused(madeorimported)inIndonesia(OIML).

• verification&re-verificationofmeasuringequipment.

• MarketSurveillanceonmetrologyequipmentusedfortrade.

• followandcooperatewithOIMLoninternationalbasis.

ObservationsonDIMET-MOT:

• TheroleofDIMETinpolicydevelopmentappearstobeunclear.

• EverysinglemeasuringdeviceisverifiedbyDIMET-MoTwhetheritisusedforlegal

metrologyornot.

• Itcannottracethosedeviceswhichareusedforlegalmetrology.

• Itissupposedtohandlemorethan60milliondevicesatpresent,andthisnumberis

growingannuallyatasignificantrate.

• Asanexample:therearecurrentlyabout38millionKWHmetersinuse.KWHmeters

aresupposedtobere-verifiedevery10years–3.8millionperyear.Thereisalsoa

substantialamountofwatermeters,taxiargos,balancesetc.

• Yettherearecurrentlyonly835metrologyinspectorstocarryoutthetask.Andthese

inspectorsareemployedbytheregionalgovernments,notbyMoT.

• Allequipmentusedforlegalmetrologymustbeverifiedandphysicallycalibratedby



DIMET-MoTand/or theDINAS.Calibrationcertificates issuedbyKANaccredited

calibrationlaboratoriesarenotacceptedasreference.

BATAN

Center for Nuclear Energy Development BATAN was established through Presidential

Decree No. 103, 2001 on BATAN& BAPETEN Tasks, Function, and Responsibility and

throughPresidentDecreeNo.64,2005

BATANisinchargeforNUCLEARENERGY

V.3.2Standardisation

It is the process of establishing technical standards that is carried out based on consensual

agreementof the interestgroupsaffectedby thegiven issue.Astandard is adocument that

establishes uniform engineering or technical specifications, criteria, methods, processes, or

practicesinaccordancewiththecurrentstateoftechnology.

Themainfunctionsofstandardizationareto

• eliminatetechnicalobstaclestotrade.

• enhancetechnicalcooperation.

• increasesuitabilityofproducts,systemsandservices.

• reducecostforproducers,suppliersandconsumers.

Standards are, per definition, voluntary but their application can be made mandatory by

nationallawsor(technical)regulations.Standardsareusedtoimplementguidelines,adesign,

ormeasurementsinordertoobtainsolutionstoanotherwisedisorganizedsystem.Technical

regulationsareimplementedtoprotectlife,health,propertyandtheenvironment.

ThefielddiscussedhereincludesVoluntaryNational&InternationalStandardsandTechnical

Regulations (Standards Wajib). The linkage of the national and international elements is

depictedinthefollowingdiagram.



33

Source:PTB

V.3.2.1Standardisation:TheInstitutionalSituationinIndonesia

STANDARDIZATION AND TECHNICAL REGULATIONS

National Value Chain

Applicale to all productsandprocesses

WTOTBT/SPS

Notificationauthorities

- Health- Safety- Environment- Consumer Protection

TechnicalRegulations

(compulsory)Ministri n

Ministri 1

Ministri 2

Ministri ...

WTOTBT/SPSEnquirypoints

Notifications

Comments

Con formity assessmentInfo worldwide

InquiriesComments

NationalStandards

Bodt

Participation in Technical Commit tees

National Standard (voluntary)International Standards

Regional Standards

CODEX Alimentarius

ISO

International QI System

MSTQ - STANDARDIZATION IN INDONESIA

NationalStandardization

Body BSN

Ministry ofManpower (Depnaker)

TechnicalRegulatingAuthorities

MoT, Mol, MoA, MMAF, MoE, MoF, Mo Health, MoPW(PU), BPOM (Agency for Food & Drugs), Mo Transportation (MenHub). Mo Manpower

l

Figure 6 : Standardization and technical regulations

Figure 7 : MSTQ-Standardization in Indonesia



V.3.2.2TheStandardsInstitutions

NationalStandardizationBodyBSN

NationalStandardizationBodywasestablishedbyPresidentialDecreeNo.13of1997,later

amended by Presidential Decree No. 166 of 2000 regarding Position, Duties, Function,

Authorities, Organization Chart as well as Working Conditions of Non-departmental

Government Institutions.A furthermodification by PresidentialDecreeNo. 103Year 2001

made BSN a non-departmental government institution with main responsibility to develop

and conduct standardization activities in Indonesia.This agencywas established to replace

thefunctionofNationalStandardizationCouncil–DSN.Inperformingitstasks,theNational

Standardization Agency refers to the Government Regulation No. 102 of 2000 regarding

NationalStandardizationwhichsetoutitsresponsibilities:

• Assessmentandpreparationofnationalpolicyinthefieldofstandardization.

• DefiningIndonesianNationalStandards(abbreviatedSNI).

• Organisingnationalandinternationalcollaborationinthefieldofstandardization.

• Provideinformationsystemsonnationalandinternationalstandards.

• ServeasWTO-TBTnotificationandenquirypoint.

MinistryofManpowerResponsibilities

• Prepare SKKNI (Standard Kompetensi Kerja Nasional Indonesia) for professional

competence.

• SKKNI(StandardKompetensiKerjaNasionalIndonesia)onprofessionalcompetence

forselectedpositions(e.g.operators,bankdirectors).

• SKKNIarevoluntarybutmaybemademandatorybyregulatingauthorities.

V.3.2.3TheRegulatoryBodies

The regulatory structure and the specificmatters regulatedby eachMinistry/Institution, are

describedinthefollowingdiagramandthetextbelow



35

TheIndonesianGovernmentInstitutionsinvolvedinthefieldoftechnicalregulationsandtheir

authoritiesandresponsibilitiesare:

MinistryofTrade(MoT)

• TRfortradestandardization(labeling)

• TRforqualitycontrolofexport/importproducts.(registrationNPB&NRP)

• TRforConsumerProtection

MinistryofMarineAffairs&Fishery(MMAF)

• FishandseafoodproductsinIndonesia,currently81regulations

• Definesgoodpracticesinfisheriesproductionanddistribution

• EU-appointedas“competentbody”forfisheryproducts

MinistryofAgriculture(MoA)

• Nonprocessedproducts(rawsugar,cocoabean,rawrubber,horticultural

product,livestock)

• Veterinarycontrolforanimaloriginfoodbusiness

• Nationalstandardizationsysteminagriculture

MSTQ - TECHNICAL REGULATORY AUTHORITIES

MOT MOI MOA BPOM MOForest

LebelRegistrationImport &Export

MMAF

FisheryProducts & Processes

FoodBaveragesIndustry op Forest and PlantationProducts(IHHP)FurnitureAutomotiveMachinesTextilePaintsEECetc

Fresh Food Plant OriginRegistrationLive stockFood of animal origin

MOTransp.MOManp MOEnv

VehiclesProfession,PressureVessels

Waste water,Air emission Waste & Hazardous waste

ProcessedFoodContaminant,Food additiviesRegistrationFood labelsDrugs & Cosmetics

Raw material from forest and timberPlantationSawn timber and plywood

Figure 8 : MSTQ-Technical regulatory authorities



• GoodManufacturingPractices(GMP)

• Registrationoffreshfoodofplantorigin

• Foodsafetycontroloffreshfoodofplantoriginatborderpoint

• GoodAgriculturalPractices(GAP)forfruitandvegetables

BPOM(AgencyforFood&Drugs)

• Legislation,regulationandstandardizationforpharmaceutical,cosmeticandprocessed

food,contaminant,foodadditivesandfoodlabeling

• Licensingandcertificationofpharmaceutical,cosmeticandprocessedfoodindustries

MinistryofIndustry(MoI)

• Regulatorfor22industrialproductsectors(3moresectorsareexpectedtobeadded

inthenearfuture)andtheregulationofmandatorymarkingofproductswiththeSNI

labelandtheSNInumberitrefersto.

• Automotive

• Chemicalsforconstructionmaterial

• Chemicalproductsandfertilizer

• Furniture

• Toys,sportequipment,houseequipment

• Ceramicsincl.glass

• Plastics&plasticproducts

• Ships&itscomponents

• Variousproducts,suchasspectacles

• Footware,suchasshoesandsandals

• Pulp&Paper

• Textile

• Paints

• Packaging(subcommittee)

• Jewels

• DownstreamChemicals



37

• Machineries

• Electronic&electricalcables

• Airplane(notactiveyet)

• Food

• Beverages

• Metals

• Salt(inpreparation)

MinistryofTransportation(MoTr)

• Allmeansofpublictransport(goods&people)

• VehiclesoperatedinIndonesia

MinistryofEnvironment(MoE)

• Environmentalissuessuchaswastewatereffluent,airemission(pollution),wasteand

hazardouswaste,generatedbyproductionandproducts

• Installationandoperationofwasteincinerators

MinistryofForestry(MoFo)

• Rawmaterialfromforestandtimberplantation

• Sawntimberandplywood

• SustainableProductionForestManagementandTimberLegalityVerification

• GOI–MoFoisnegotiatingaVoluntaryPartnershipAgreement(VPA)withEU

MinistryofPublicWorks(MoPW)

• Safetyofbuildingsandconstructions

MinistryofManpower(MoMP)

• Allkindsofpressurevessels(incl.gastanksandsteamboilers)

• Certification of selected operators (pressure vessels, forklifts etc.) and professions

withreferencetoSKKNI(StandardKompetensiKerjaNasionalIndonesia)

MinistryofHealth(MoH)

• Qualityofdrinkingwaterfromwellsandpublicwatersupply(PAM)

• Healthfacilities



ObservationsontheRegulatorySituation:

• AsofDecember1,2010thereare76technicalregulationslistedontheBSNwebsite,

20fromtheMinistryforEnergyandMineralResourcesonelectricalinstallations,38

from theMinistryof Industryonvarious industrial products and required labeling,

1fromtheMinistryforAgricultureonsugar,2fromBPOMonfoodcodingandon

sweeteners,14fromtheMinistryofTransportationonairtrafficand1fromDirectorate

GeneralofPostandTelecommunicationonstandardization.The76regulationsrefer

to157SNIandmaketheseSNImandatory.

• Only4ofthelistedtechnicalregulationshaveaWTOTBTnotificationnumber.

• There are 2 different regulations on sugar, one fromMoI (56). SNI 01-3140.2-2006

andonefromMoA(12)1.SNI01-3140.1-2001.SincetheSNInumberissamewitha

differentyear,MoIreferstotherevisedversionbuttheMoAregulationisstillonthelist.

• ThereisnoUmbrellaLawonRegulationnoristhereasingleInstitutiononRegulatoryAffairs.

• Theregulatorysystemisoverlappinginmanyfieldsandisnottransparent.Theonly

exceptionistheMinistryofMarineAffairsandFisheryMMAFthatisthesoleauthority

fortheentirevaluechainofallfisheryproducts,wildcatchaswellasfarming.

• Therolesandauthoritiesofcentralgovernmentinstitutionsandlocalgovernmentsin

theregions(OtonomiDaerah)isnotregulatedproperlyandleadstofrictions.

• Thereisnoseparationofregulatorsandoperators!SeveralGOIinstitutionsoperatein

bothareas.

• Marketsupervisionisinsufficient.

• Muchstrongerprivatesectorinvolvementisrequired.

• DirectorateMetrology(MoT)istheregulatorforlegalmetrologybutalsotheoperator.

Itdoesnothavethecapacitytofulfillthistask.

• TheroleofDirektoratIHHP–IndustriHasilHutandanPerkebunanofMoIappearsto

beoverlappingwithotherministries.

• All woods (wood, rattan, bamboo) harvested in forests are under the authority of the

MoForestry.WoodsthatcomefromplantationsareundertheauthorityofMoAexceptteak.



39

• Certificatesoforiginforallkindsofwood(forest&plantation)areissuedbyMoF.

• InJakartathereare5stationstocheckroadworthinessoftransport(bus,truck)vehicles

butimplementationisveryweak.

• AllproductsunderTechnicalRegulations(SNIwajib)havetoberegisteredbyPPMB-

MoT(soleauthority)withanNPBnumberforimportedproductsandanNRPnumber

for local products. There are currently 57 TR (SNI wajib) registered withWTO.

PPMBconductsregistrationbasedonconformityassessmentperformedbynotified

bodies(CAB)whichareappointedbytheregulators(MoI,MOAetc.).CABsmustbe

accreditedbyKANandtheymustbelocatedinIndonesia.

• ThereisagovernmentregulationthatrequiresarecommendationfromMoTtoimport

finishedgoods.Itisnotclearwhatarethecriteriatogetthisrecommendationandwhat

arethebenefitsforconsumerprotection.

• BPOMchecksfoodproductsinretailpackagingbasedonSNIandprovidesBPOM

registrationnumbers.

• EXPORT:Thereisalistof23commodities(likeRubber,essentialoils,cacaoetc.)that

havetobetested&certified(mandatory)forexport,eventhoughcertificationisnot

mandatoryfordomesticuseSeeKeputusanMenperindagNo164/MPP/Kep/6/1996

Itisplannedtobringcacaointothemandatoryareaalsowhenitisusedinthedomestic

market.

• BPOMpreparesstandardsforprocessedfood,contaminant,foodadditivesandFood

labelling(Healthact).

NOTE:MoTrecentlymadeanewregulationonlabelling–allproductsmusthavelabels

inIndonesianlanguage.MoIandotherministriesalsocreatelabellingregulations.

• TheMoImadeproductlabellingwithSNImarkandnumbercompulsoryforvarious

products.

• Thereisconfusiononthelabellingissue.Itisunclearwhoisinchargeforwhatand

thereappearstobenopropercoordination.



V.3.3TestingandQuality:ConformityAssessment

• AccreditationandCertificationserveastoolstoensurecompetenceandtheapplication

ofstandardizedminimumrequirements.

• Test laboratories, Inspection andCertification bodies are accredited to demonstrate

theircompetence.

• Certificationof a product (a termused to include a process or service) is ameans

ofprovidingassurancethatitcomplieswithspecifiedstandardsandothernormative

documents. In contrast to that, one of the characteristic functions of the personnel

certification body is to conduct an examination, which uses objective criteria for

competencescoring.Certificationbodiesforproductshavetomeetallrequirements

stated in ISO Guide 65 and Certification Bodies for persons have to meet all

requirements stated in ISO 17024 if they wish to demonstrate that they have the

competenceperformingthesecertifications.

• Testingandcalibrationlaboratoriesconducttestsandcalibrationsbasedonsuitableand

verifiedmethodsandhavetomeetallrequirementsstatedinISO17025iftheywish

todemonstratethattheyoperateamanagementsystem,aretechnicallycompetent,and

areabletogeneratetechnicallyvalidresults.

• Inspection bodies carry out assessments which may include the examination of

materials,products,installations,plant,process,workprocedures,orservices,andthe

determination of their conformitywith requirements, and the subsequent reporting

ofresultsoftheseactivitiestoclientsand,whenrequired,tosupervisoryauthorities.

InspectionbodieshavetomeetallrequirementsstatedinISO17020iftheywishto

demonstratethattheyhavethecompetenceperformingtheseinspections.

V.3.3.1TestingandCalibrationLaboratories:PublicSectorInstitutions

There are severalMinistries and Institutionswhich operate calibration and test laboratories

acrossthewholeofIndonesia.Theseare:MinistryofTrade(MoT),MinistryofIndustry(MoI),

Ministry ofMarineAffairs and Fishery (MMAF),Ministry ofAgriculture (MoA),Agency



41

for Food andDrugs (BPOM), the Indonesian Institute of Sciences (LIPI) and theNational

AgencyforAssessmentandAppliedTechnologies(BPPT).Therearealsotheentitiesworking

onprovincialanddistrictlevels,theDINAS.Thesebodiesprovidetestingfacilitiesservingas

ConformityAssessmentBodies(CAB)fortheregulatedareaandasproducttestingunitsfor

voluntarytestsaccordingtoSNIandinternationalorforeignstandards.Atpresentasubstantial

numberoflaboratoriesusedforconformityassessmentarenot(yet)accreditedoroperateon

ascopethatisnotcoveredbytheiraccreditation.Thelistoftheirspecificresponsibilitiesand

internalorganisationisasfollows:

MoT–LaboratoryforQualityTestingofExportandImportGoods(PPMB) (food&feed,

essentialoils,mosquitoessences,fertilizers,cement,textile,tires,cement,furniture,electricalcables).

MoA - 10BalaiBesar (CAB)&33DINAS (residue pesticides, veterinarymedicine, feed,

agriculturalproducts,agriculturalmachinery&equipment,qualityseeds/seedlings,fertilizer,

pesticides,organicfoodsystem,QualityManagementSystem(QMS)&CABforfoodsafety

with33DINASand1MoAlab.)

MoI–AgencyforResearchandDevelopmentofIndustry(ARDIorBPPI)

- CenterforStandardization

- CenterforResourcesandEnvironment

- CenterforIndustryBusinessClimate(PusatIklimUsahaIndustri)

- CenterforTechnologywithR&Dcentersprovidingtestingandqualitycontrolfacilities

forproductsindifferentsectors.11BalaiBesar+11Baristan

• CenterforChemistryandPackagingBBKK,Jakarta

• CenterforAgroBasedIndustryBBIA,Bogor

• CenterforTextileBBT,Bandung

• CenterforCeramicsBBK,Bandung

• CenterforPulp&PaperBBPK,Bandung



• CenterforMaterialsandTechnicalProductsB4T,Bandung

• CenterforIronandMachinesinBandungBBLM,Bandung

• CenterforIndustryofFarmProductsBBIHP,Makassar

• CenterforEnvironmentalTechniquesBBPP,Semarang

• CenterforLeather,RubberandPlasticsBBKKP,Yogjakarta

• CenterforHandycraftsandBatikBBKB,Yogjakarta

- plus the 11 Balai Riset dan Standardisasi (BARISTAND) laboratories spread over

Indonesia in BARISTAND Aceh, Medan, Padang, Palembang, Tanjung Karang,

Surabaya,Banjarbaru,Pontianak,Samarinda,Manado,Ambon.

MMAF–Feed&Medicine,Health,Residue(3MMAF,2provinces&3private),Disease(46

MMAF&about39provincial/DINAS),NationalCenterforQualityControl(NCQC).

BPOM–BPOMoperates30BalaiPOMlaboratories (ProcessedFood&Drugs)acrossall

partsofIndonesia.NationalQualityControlLaboratoryforDrugsandFood(PusatPengujian

ObatdanMakananNasional-PPOMN).

BPPT – B2TKS-Strength of materials, structures & components, BTL-Environmental

Technology&Biotechnology,LAPTIAB-Pharmaceutical&MedicalTechnology,STPPolymer

Technology&RoHS.

LIPI–Quality&TestingTechnology,Biology,Chemistry,Physics,Metallurgy,Electronics&

Telecommunication,GeoTechnology,PuslitKIM-LIPI.

V.3.3.2Testing:PrivateSectorEntities

Sucofindo (48 branches and 18 laboratories), TUVs, SGS and many more private service

providersconducttestingofvariousproductsaccordingtoSNI,Indonesianregulations(SNI

wajib),International&othernationalstandards(ISO,EN,ASTM,JIS,DIN,AFNORetc.).Some



43

serveasCAB(EUnotifiedbody)forproductsunderInternational&otherNationalRegulations

(EUdirectives,Foodlaw,USFood&DrugsAdministration,UN/ECEonautomotivepartsand

vehicles,CBonsafetyofelectricalandelectroniccomponents,equipmentandproductsand

others)basedonstatusasappointed.

V.3.3.3Inspection:PublicSectorInstitutions

On an Indonesia-wide basis there are the followingMinistries and Institutions:MoT,MoI,

MMAF, MoA, BPOM, MoE, MoTr, MoMP, BPPT. Again, at province and district level

therearetheDINAS.Theseinstitutionsconductinspectionsforconsumerprotection,import

&export,metalproducts,structures, food&fishery, farming, livestock, feedproduction&

distribution, medicine distribution, pressure vessels, steam boilers, vehicles, loaded trucks,

packagingdangerousgoodsforland-,sea-,air transport,wastewater,airemission,waste&

hazardouswaste,incinerators.

Thespecificresponsibilitiesare:

MoT:Consumerprotectionbymarketsurveillance,PPMB(import&export).

MoI:B4T(metalproduct,activestructures,welding).

MoA:farming,livestock.

MMAF:medicinedistribution,feedproduction&distribution,wildcatch&farming,collection,

processing&EUborderinspectionforfisheryproducts.MMAFhas40inspectorsforGMP,

GAP,HACCP.Inspectionisperformedonce/yearandhas43inspectorsforhatcheriesandabout

50inspectorsforfarming(monitoringresidueplan).

Thereareabout250inspectorsonregionallevelunderregionalauthority.

BPOM:Consumerprotectionbymarketsurveillanceforprocessedfood&drugs.Licensing

and certification of processed food, pharmaceutical and cosmetic industries based onGood

Manufacturing Practices; Pre-market evaluation of products; Post-marketing surveillance

includingproductsamplingand laboratory testing, inspectionofproductionanddistribution

facilities,investigationandlawenforcement.



MoMP:Inspectionofpressurevessels,steamboilersetc.

MoTr:Inspectionofvehicles,loadedtrucks,packagingdangerousgoodsforland-,sea-&air

transport.

MoE:Inspectionofwastewatereffluent,airemission(pollution),wasteandhazardouswaste

generatedatproductionsites,incinerators.

V.3.3.4Inspection:PrivateSectorInstitutions

Sucofindo,TUVs,SGS,Lloydsandmore

• Pre-shipmentinspection(variousproducts)forexport.

• TUVandothers:conducttechnicalinspectionofpressurevessels,elevator,conveyor

&machines,vehiclesforexporttoEU.

TUV: technical inspectionofpressurevessels, elevator, conveyor&machines, vehicles for

exporttoEU;Pre-shipmentinspection(variousproducts)forexport.

SGS:Pre-shipmentinspection(variousproducts)forexport.

SUCOFINDO:Pre-shipmentinspection(variousproducts)forexport.

V.3.3.5 Certification–certificationofconformityofproductsorsystemswithstandards

ortechnicalregulations

Certificatesareprovidedforproducts,personsandsystemsthatfulfilminimumrequirements

described in standards.The certificates aredeliveredby awide rangeofpublic andprivate

sectorinstitutions,whichingeneralspecialiseinparticulartypesofcertification(bygeneric

theme,byprocess,andbyproduct).

.

V.3.3.6Certification:PublicSectorInstitutions

Theinstitutionsinvolvedandtheirresponsibilitiesareasfollows:

• Productcertificationincl.packaging&labelling–CAB&LsPro.

• SystemCertification–QMS,EMS,GMP,GMA,GHP,HACCP,FoodSafety(health

certificates),Eco-label,FSC,TimberLegality-CAB&LsPro.



45

• Inspection–food(fresh,processed,fish),vehicles,pressurevessels,legalmetrology,

environment(effluents,emission,waste),forest-CAB&LsPro.

MoT:PPMB(CABfor,food,primarybatteries,lamps,tires;LsProforcpo,fertilizercement,

steelbars).

MoI: 11BB&11Baristan (CAB for pressurevessels, heat exchanger, tanks, pipes, tires,

ESlamps,drycellbattery,CB,food,bottleddrinkingwater,wastewater,foodpackaging&

packaging dangerous goods, LsPro for lamps, cement, tires, concrete steel, textile, glass&

ceramics,pulp&paper,EMS,QMS,HACCP,jewelry.

MMAF:Certification is conducted for GoodAquaculture Practice (GAP), GoodHandling

Practice(GHdP),GoodManufacturingPractices(GMP),andHazardousAnalysisandCritical

ControlPoint(HACCP).Healthcertificatesareissuedbytheprovincialfisherylaboratoriesthat

areundertheauthorityoftheProvincialGovernments.

BPOM:Certificationofprocessedfood,pharmaceuticalandcosmeticindustriesbasedonGood

ManufacturingPractices,HACCPforprocessedfood.Healthcertificatesforexport.

V.3.3.7Certification:PrivateSectorInstitutions

Sucofindo,TUVs,SGS,BureauVeritas,Lloyds,AgungLestariandmanymoreprovideproduct

&systemcertificationaccordingtoSNIandinternationalorforeignstandards.

Privatecertificationbodiesprovideproduct&systemcertificationfortheregulatedarea(CAB)

TUVRheinlandandsomeothersareEUnotifiedbodyforpressurevessels,elevator,conveyor,

machines,automotiveparts&vehiclesUN/ECE,medicaldevices,EMC,electricalsafetyCB.

V.3.3.8ObservationsonTesting,InspectionandCertification:

• MMAF is both a Regulator and an Operator, conducting inspections onmedicine

distribution,feedproduction&distribution,wildcatch&farmingandprocessing.It

isgenerallyadvisedthatthefunctionsofregulatorandoperatorshouldbeseparateto

avoidanypotentialconflictofinterest.



• Health certificates are mandatory for export but not for domestic market. Health

certificatesareundertheauthorityofMMAF,whichdelegatesittothoseregionallabs

• GoIinstitutions“certify”theirowninspectors,apracticethatbearstheriskthatcompentence

cannot be ensured. In element 4.2.1 of ISO 17024 it is stated: “The certification body

shallbestructuredsothattogiveconfidenceinitscompetence,impartialityandintegrity.

In particular, the certification body shall be independent and impartial in relation to its

applicants,candidatesandcertifiedpersons,includingtheiremployersandtheircustomers,

andshalltakeallpossiblestepstoassureethicaloperations.”

• B2TKS-BBPTdoesproductcertificationincludingfactoryinspections

• ThereisaconsumerAssociationJLK(foundation)withlittlepower,producersarenot

broughttocourtfornonconformingproducts–lawenforcementisweak!

• Ministry of Manpower is in charge to inspect all kinds of pressure vessels (incl.

Gas cylinders) on the market. Competence appears questionable since many such

installationscanbefoundthatareinverypoorandunsafeconditiondespitethefact

thattheyhavetherequiredinspectioncertificate.

• PPMB-MoTdoesnothavetheauthoritytodoborderinspections(atports,airports),

theauthorityiswithcustoms.

• BPOMinspectorstakesamplesfromthemarket.Ifproblemsarefoundtheproductsaretaken

fromtheshelvesandproduceristoldtoconductcorrectiveaction.BPOMcanwithdrawa

license(registration)foraproductandpublishthatthroughthemedia.BPOMdoesnot,

however,automaticallyinformotherinstitutions(e.g.MoI)ofwhatithasdone

• BPOMisnotauthorizedtowithdrawacompanylicenseandclosedownthefactory.

MoIhasthatauthority-butifitisnotinformedbyBPOM,thenthatauthorityisnot

likelytobeused.Sanctionsaredefined(MoJustice)butareusuallynotapplied.

V.3.4Accreditation

Accreditation comes from the Latin word credito--meaning to trust. Accreditation certifies the

conformityassessmentofproducts,systemsorpersonsonthebasisofacertainsetofcriteria.The



47

accreditationprocessserves toverify thepreparednessandcapabilitiesof the testing,calibration,

inspectionandcertificationorganizations.Accreditationisanofficialrecognitionthattheorganization

ispreparedtocarryoutcertainactivitiesinaccordancewithcertaindefiniteconditions.

NationalAccreditationCommitteeKAN:Status,ResponsibilitiesandActivities

• TheauthorityofKANasaccreditationbodyforlaboratories,certification(products,

systems,personnel)andinspectionisbasedonPP102-2000andPresidentialDecree

No 78 – 2001. KAN is internationally recognized by theAsia Pacific Laboratory

Accreditation Cooperation (APLAC), International Laboratory Accreditation

Cooperation(ILAC)andInternationalAccreditationForum(IAF).

• KANdefinesandimplementspolicyonaccreditation,certification,inspectionbodies

andlaboratories

BadanNasionalSertifikasiProfesiBNSP:StatusandResponsibilities

• The“accreditationbody”forcertificationbodiesissuing“professionalcertificates”for

individuals(personnelcertification)BNSPworksbasedonPP23-2004andUU(law)

No13–2003.BNSPusesSKKNI(StandardKompetensiKerjaNasionalIndonesia)

asreferenceforcertification.

MSTQ-QUALITYACCREDITATION & CERTIFICATION

NationalAccreditation

Committee KAN

Badan NasionalSertifikasi Profesi

BNSP

works based on PP 23 - 2004and UU (law) No 13 - 2003

l

works based on PP 102 - 2000and Presideltial DecreeNo 78 - 2001

l

Accreditation - “Recognition of Competence”1. Laboratories (testing, calibration)2. Certification Bodies for : a. System Certification

(process), b. Product Certification, c. Certification of personnel

3. Inspection Bodies

Figure 9 : MSTQ-Quality accreditation & certification



ObservationsrelatedtoKANandBNSP:

• DespiteitsinternationalrecognitionbyAPLAC,ILACandIAFthecompetenceofKAN

isnotoninternationalstandardlevel.Thereforetestreports,certificatesandinspection

resultsissuedbyKANaccreditedlaboratories,certification-andinspectionbodiesare,

infact,veryoftennotacceptedbyforeignuserssincethereisreasonabledoubtonthe

correctnessoftheresultsandverdicts.Userscannotbeforcedtoacceptconformity

assessment(CA)documentsandhavetherighttorequestCAtobeconductedbyan

institutiontheytrust.

• AccordingtotheagreementswithAPLAC,ILAC&IAFnoothersigningaccreditation

bodywillcarryoutaccreditationsinIndonesia.LaboratoriesoperatinginIndonesia

can therefore not choose to be accredited by other accreditation bodies to achieve

acceptancebytheinternationalbusinessworld.

• KANneedstoimprovecompetence(HR,assessorsincludingexternalassessorswho

infactareabout95%ofallKANassessorsinIndonesia).

• KANdoesnothaveaproperelectronicdatabaseandinformationsystem(includingof

courseasuitablesoftwaretool)topermitproperorganizationofitsworkprocess.

• KAN is part of BSN and therefore not independent. Regulator (BSN) and operator

(KAN)shouldbeseparatetoavoidanypotentialconflictofinterest.Onesuchconflict

appearstobethefinancialdependenceofKAN,whichobtainsitsbudgetthroughBSN.

• KANhasamassive,growingtaskbutverylimitedresources.

• Kanhascurrently34fixedstaffandthisnumberhasremainedstaticduringthelast

yearsdespiteconstantgrowthinthedemandforaccreditations.

• Income generated by accreditation services goes to the KAS NEGARA (national

treasure),90%isreturnedtoBSN–KAN.

• PriceschargedforKANservicesarefixedbytheMoFinancebasedoncostdatasupplied

byKAN.Thepriceappearstobesetwithonlyaverysmallmarginonoperatingcost.

• Revenuefromservices isabout50%of the totalbudgetusedforKAN.Remaining

50%comefromMoFviaBSN.



49

• KANneedsmorefinancialflexibilitytoallowhiringofcompetentassessors.

• According to PP 102-2000 every institution conducting conformity assessment

accordingtoSNI(mandatoryandvoluntary)hastobeaccreditedbyKAN.Atpresenta

substantialnumberoflaboratories,certificationbodiesandinspectionbodiesusedfor

conformityassessmentarenot(yet)accreditedoroperateonascopethatisnotcovered

by their accreditation. For example the transport packaging inspection performed

undertheMinistryofTransportationisnotaccredited.

• KANalsoprovidesaccreditationstononSNIstandardslikeISO,JISetc.iftheyhave

thecapacityandcompetencetodoso.

• According to anASEAN agreement accreditation will be mandatory forASEAN

harmonizedstandards(voluntary&mandatory).



STRENGTHS WEAKNESSES OPPORTUNITIES THREATS1:ManyPhysical

Assetsin(Buildings,Equipment)exist

2:RegulatorySystemsinPlace

3:AvailableCompetence

4:BusinessGrowth

1:Notefficient2:Notproperly

coordinated3:Insufficient

implementation4:Traceabilitynot

fullyensuredinthevaluechain

5:MaintenanceofGOIfacilitiesnotensured

1:Useinformation2:Enhanced

Competencewillcreateconfidence

3:MakeUserfriendly4:InvolvePrivate

Sector5:CreateFullSingle

system

1:Growingworkload2:LossofCredibility

athome&abroad3:LossofBusiness

Opportunitiesfordomesticproducers

SWOTAnalysisoftheEQISystem

vI. assessInG The eqI sysTem

assessing The eqI system

VI.1Factorsbehindtheproblems

FactorOne:InstitutionalEgo

• Institutionsliveseparatelives;actionsarefocusedontheinstitution’sownsituation,

withlimitedattentiontowhetherthisfocusgeneratesdysfunctioninthesystem.

• Competitionandnotcooperationtendstoshapeinstitutionalbehaviour–effortgoes

intogainingmore“territory”(officiallysanctionedresponsibilities,moreresources)

fortheinstitution,evenattheexpenseofotherEQIinstitutions.

• Theprevailingperceptionseemstobe“zerosumgame”–thepossibilityofcreatinga

positivesumgame,whereeveryonecouldgain,isnotconsidered.

FactorTwo:InsufficiencyofSystemGovernanceAndStrategicPlanning

• Nohigherlevelauthorityappearstoexistwithpowerstoensurethatinstitutionswork

Table 1 : SWOT Analysis of the EQI System



51

withinclearlydefinedspheres,andcooperateratherthancompete.

• Itseemsdifficulttoidentifyastrategicapproachwhichcouldintegratethedevelopment

of EQI with other objectives of Indonesia. This complicates the task of strategic

planninginEQIitself.

• StrategicVisionsinkeyrelatedfields,suchasTradePolicy,arethemselvesnotfully

articulated.

FactorThree:ConstraintsOnAllocationOfHumanResources

• Civil Service rules and procedures appear to limit the possibilities for significant

interchangeof personnel across institutions and therefore limit the development of

systemwideknowledge.

• Withininstitutions,relativelyearlyobligatoryretirementregulationsmaylimitthefull

useoftheskillsofexperiencedandqualifiedstaff.

These factors probably exist to some extent inmost countries.But theASEANexperience

reviewed earlier suggests that Indonesia has significant problems compared with its major

partnersandcompetitors.Aclearstrategicvisionisessential,butishardtodiscern.Thereare

gapsinkeyareasofpolicy.Institutionsdonotseethemselvesaspartofaconnectedsystem.

Thecharacterofgovernmentadministrativerulesdoesnotsupporttheoptimumdevelopment

ofofficialinstitutions.Alloftheseare“soft”issues,inthattheydonotrefertoinadequacies

of buildings, equipment andothermaterial resources.Yet experienceof somanycountries,

includinginASEAN,demonstratesthatchangingtheperceptionsofinstitutionsandindividuals

isfrequentlyfarmoredifficultthansolvingthe“hard”issues.Indonesia’sneighbourshaveall,

intheirownwaysandwithintheirowncultures,engagedinsuch“soft”changesformanyyears

andarenowreapingtherewards.Indonesiaitselfhastofollowasimilarprocess.



Based on the gap analysis, EQImodels applied in competing exporting countries, and the

ASEANregionalstrategiesintermsofEQIintegration,theavisionforanimprovedIndonesia’s

EQIsystemisdesigned,whichtakesintoaccountthecountry’sinstitutionalrealities,export

priorities,capacityconstraintsandcompetitivenesslevel.

VII.1TheComplianceChallenges–InternationalandEURegulations

InternationalandEUregulationsaredevelopedwiththeaimtoensuresafetyforconsumersand

latelymoreandmorewiththeintentiontoreducenegativeimpactsontheenvironment.

vII. vIsIon

vision

CHALLENGES - INTERNATIONAL & EU REGULATIONS

GMPFSMS QMS

HACCP

IEC

UN/ECE

SA

EMSOHSAS

FLEGTREACH

WEEE

PaPW 94/62 EC67/548 EEC

88/379 EEC

RoHS

GAqPGAcP

GHdP

SAFETY & ENVIRONMENT

PROCESS ORIENTED

Figure 10 : Challenges-international & EU regulations



53

VII.2TheVisionforIndonesia’sEQI

VII.3WhatTheComplianceSystemMustHave

“InordertooptimizetheproductivityoftheR&DInstitutionsattheMinistriesaCoordinating

Institutionisrequiredwhichidentifiesthetechnologicalneedsandseekstechnicalsolutionsin

aunifiedwayofthinking.”

VISION FOR INDONESIA’S EQI“ Competent EQI System Actor provide User Friendly service to help

Producers meet Compliance Requirements in Export Markets ”

TechnicalCompetence

l Ttrade Policyl Legal Frameworkl Regulatory Frameworkl Institutional Structurel Information Systems

StrategicManagement

l Properly built and maintained laboratoriesl Up to date, well maintained equipment & methodsl Competent scientific and technical staffl Traceability in all areas of the value chainl Involvement of the private sector

WHAT THE COMPLIANCE SYSTEM MUST HAVE ?

Competence

InformationNetworks to

keep up to date

Legal andRegulatoryFramework

Policy andInstitutionalFramework

User FriendlyMethods

CoordinationFunctionfor the

PROCESS

Figure 11 : Vision for Indonesia’s EQI

Figure 12 : What the compliance system must have?



(Untuk meningkatkan produktivitas litbang di kementerian, perlu pembangunan kelembagaan

agar jajaran yang mengetahui kebutuhan teknologi dengan jajaran yang menemukan solusi

teknologi berada dalam kesatuan daya pikIr) (Source: RPJMN, Buku II BAB IV)

VII.4Traceability:TheFundamentalFeatureofanEfficientEQISystem

TheindispensablerequirementwhichtheEQIsystemmustsatisfyis traceabilitythroughout

thesystem.

VII.5TheFourKeyDimensionsoftheVision

Toreachfulltraceability,competence,informationandprivatesectorinvolvementareessential.

Hence these four things are the objectives of the vision. They are shown in the following

diagrams.

TRACEABILITY IN THE VALUE CHAIN

GAP QMSHACCP EMS

GHdPGHdPGMPHACCP

GMP GHdP

Farms

Vessels

Mines

Forests Suppliers Suppliers Suppliers

Pre-Processing

CollectionHandling

DistributionPackaging

Transport&

Storage

Handlingand

DistributionProcessing

Accreditation

Inspection Testing Certification

MetrologyAccountingCustomsLaw EnforcementLogisticLand OwnershipAdministration

Figure 13 : Traceability in the value chain



55

VII.5.1Traceability

VII.5.2Information

Coordinationandahighergradeofefficiencycanbeachievedbycollectingandanalyzinginformation

thatthencanbeprovidedasproducttoallactors,publicandprivateinthevaluechain.

TRACEABILITY : THE BASIC KEY FOR EQI

l Ensure Traceability among suppliers, collectors and processorsArea Four : Traceability in the value chain

l Ensure traceability of calibration & test results to national reference laboratories with proficiency tests

l Ensure Traceability of national reference laboratories to intarnational reference laboratories with proficiency test

Area Three : Provision of proficiency tests to ensue traceability of calibration & test results

l Ensure traceability of national physical & chemical standard to industrial metrology

Area Two : Provision of network to ensure traceability of (E) QI actors to national standards

l Ensure reliable physical & chemical metrology traceable to international standards

Area One: Provision of national reference standards traceable to international standards

Area 1Area 2 Area 3 Area 4 OBJECTIVE to ensure traceability

of all activities in the value chain(National & International

INFORMATION: THE MISSING LINK IN EQI

l Use information to provide dients with a clear picture of what the institutions in the EQI system offer

l Development of information system (HELP DESK) which give firms the opportunity to develop quality based trade to the maximum

Area Three : Information for Outreach

l Sharing of data bases among institutions doing similar work to avoid duplication, increase efficiency

l Share information to detect gaps in service provision, ensure that user need are met

Area Two : Information to Strengthen System Coordination

l Online system for tracking service provision and management of the workloadl Data bases to permit planing of future needs

Area One : Informatian for Internal Institutional Improvement

Area 1Area 2

Area 3 OBJECTIVE to maximise the use of information in achieving system

improvement of EQI

Table 3 : Information : The missing link in EQI

Table 2 : Traceability : The basic key for EQI



VII.5.3Competence

CompetenceofallactorsinthevaluechainisrequiredtoensureaproperlyfunctioningEQI

system that provides confidence for all users, national and international. Test laboratories,

Inspection and Certification bodies are accredited to demonstrate their competence. It is

thereforeessential that thecompetenceof thehighest level in the system, theaccreditation,

issufficienttoassessandensurethecompetenceoflaboratories,inspectionandcertification

whichwill then provide reliable results and verdicts on products and systems in the value

chain.ThisappliestoGoodPracticeandHygieneSystemsforfarming,fishing,handlingand

manufacturingaswellasforproductionofcomponents,productsandpackaging.Itisessential

thattheverdictsgivenbylaboratories,inspectorsandcertifiersareactedupon.Ifthatdoesnot

happen,thesystemisagainrenderedsuspect.ThesituationofIndonesiatodayisweakwith

regardtoimplementation.

VII.5.4PrivateSectorInvolvement

Involvementoftheprivatesector,usersaswellasserviceproviders,willenhanceknowledge,

createasenseofownershipandreducetheburdencarriedbythepublicsector.Standardisation

is the process of establishing technical standards that is carried out based on consensual

COMPETENCE: THE KEY FOR CONFIDENCE

l Ensure awareness for potential impact of results & verdicts for clients and the publicl Create professionalism to ensure reliable resultsl Ensure regular participation in proficiency tests for self control

Area Two : Create awareness and sense of professionalism in laboratories,inspection bodies & certification bodies

l Ensure sufficient capacity (HR, data & informasi. infrastructure etc)l Ensure sufficient competence of assessors

OBJECTIVE to maximise the Competence of laboratories, inspection

& Certification in EQIArea 1Area 2

Area One : Provision of competent & reliable accreditation scheme

Table 4 : Competence the key for confidence



57

VII.5.5LinkingtheDimensionsoftheVision

agreementoftheinterestgroupsaffectedbythegivenissue.Itisthereforeessentialtoinvolve

theprivatesectortoachievethemaingoaltoeliminatetechnicalobstaclestotrade,enhance

technicalcooperation,increasesuitabilityofproducts,systemsandservicesandreducecostfor

producers,suppliersandconsumers.

INVOLVEMENT: THE MISSING LINK TO THE USERS

l Create reliable channel for feedback from corporate & public sectorl Create and implement procedures to ensure feedback is analysed and taken into accountl Ensure sense of ownership through involvement and success

Area Thee : Provision of procedures to ensure involvement of stakeholders

l Establish reliable means of information to ensure availability for all stakeholders in a timely manner

l Ensure information is understandable and establish hotlines for questicns

Area Two : Provision of network to ensure information is distributed

l Ensure users (industry) understand the value of standards and technical regulations for their businessl Ensure users (industry) understand the value of traccobility for their business l Create a sense of ownershipl Ensure awareness of consumer groups

Area One : Create awareness on the value of (E) QI facilities

Area 3 OBJECTIVE to maximise the involvement of the corporate & private

sector in EQI

Area 2

Area 1

OBJECTIVES are LINKED

l Confidence on conformity assessment for products

INFORMATION

COMPETENCE

PRIVATE SECTORINVOLVEMENT

TRACEABILITY

INFORMATION COMPETENCE PRIVATE SECTORINVOLVEMENT

TRACEABILITY

requires

requires

requires

requires

provides provides provides provides

l KAN provider info on

competent service providers

l Servicel Knowledge(SNI)l product scope

l Assessorsl Calibrationl test, Inspectl Certify

l Calibrationl Testingl Supply Chain Management

l Trainingl Consultancy

l Metrology (calibration, CRM)l Proficiency Tests

l Methodsl Standardsl Regulations

l Internationall Nationall Metrologyl Value Chain

l Regulationsl Standardsl Supply Chainl Service

l Equipmentl Value Chainl Products

l Testingl Inspectionl Calibrationl Conf. Assessment

Table 5 : Involvement : The missing link to the users

Table 6 : Objectives are linked



AstrategicroadmapforIndonesia’sEQIsystemimprovementmustshowwhatneedstobedone

toimplementthevision.

vIII. RoaDmaP

Roadmap

WHAT THE ROADMAP COVERS

CHOOSING THE DIRECTIONS FOR CHANGE

THE CORE AREAS FOR ACTION

INSTITUTIONS AND INDICATORS

l Issues and Routes for Changel National Priorities and the Vision for Indonesia’s EQI

l Strategic Managementl The Information Inventoryl Traceabilityl Competencel Private Sector Involvement

l The Agencies Involvedl Monitoring and Indicators (OVIs)

Figure 14 : What the roadmap covers



59

VIII.1.ImplementingChange

Successfulmanagementofchangemustkeepaclearsightofwhatistobeachieved,andthekey

obstacleswhichmustbeovercome.Thediagramsummarisesthepoint.

ACHIEVING EQI EFFICIENCY DURINGPOLITICAL TRANSITION

l but the institutions do not work together

l Sharing capabilities, equipment and knowledge

l because of the ever changing balance of responsibilities among provinces and the central government

The Fundamental Message-most of the elements exist

The Changes required to close gaps and remove contradictionsmust come from the Intitutions

This will be hard

VIII.1.1RoutestoEfficiencyIncrease

• TheTopDownRoute.

Provides a single authority for change, states a direction. Requires intensive

implementationeffortandstrongcommunicationwithstakeholders.

• TheExternalFacilitationRoute.

OutsideGroupshelpinstitutionalinsiderstocreatechangeattheleveloftheoperating

institutions.

• TheInternalRoute.

Organisationsdoitentirelyontheirown,withtechnicalstaffleadingtheway.

The routes are notmutually exclusive. In practice, it is almost certain that allwill have to

be pursued simultaneously.The speed at which results can be achievedmay be in inverse

proportiontotheeffectoftheresults.Forexample,itmaywelltakeaconsiderabletimebefore

Figure 15 : Achieving EQI efficiency during political transition



politicalresults(thetopdownroute)canyieldanythingtangible–butwhenthathappens,the

impactscanreverberatethroughthesystem.

VIII.1.2TheActorsforChange

The identified routespoint to thekeygroupsofactorswhocanbringaboutchange.Within

Indonesia,therearethreeprincipalsetsofactors:

(1) PoliticalDecisionMakers:theycanalterthelegal,institutionalandfinancialparameters

withinwhichtheEQIsystemoperatesinsideIndonesia,andcanhelptoshapethetrading

environmentinwhichfirmsoperate(theexportspace).

(2) EQIInstitutions:it istheywho,byembracingasystemefficiencydrive,canalterthe

situationontheground.

(3) PrivateSector:userfirmsoftheEQIsystem,whileperhapsnothavingdirectpower,can

articulatetheirneedsandpushthesystemtowardsprovidingwhatisrequiredtoassist

trade.PrivatefirmswhichareEQIservicesupplierscan themselvesplayan important

roleinmeetingthoserequirements.

Maximumchangeimpactwillbeachievedwhenthethreesetsofactorsworktogetherandin

thesamedirection.Thisentailsbuildingtheirconfidenceineachother,andrecognisingthat

eachhasanessentialroletoplay.

TheEUcanalsobeapositiveactorforchange.ThismeansthatoverallEUtradepolicytowards

Indonesia,whichisconductedthroughBrussels,shouldbesetinapositive,exportenhancing

directionforIndonesia.ItalsomeansthatspecificEQIassistancecanbeprovidedtohelpthe

variousIndonesianactorsperformtheirchangeenhancingroles.Thelatterkindofsupportwill

comethroughTSPIIandotherprogrammeswhichaffecttrade.

Thereis,tosomedegree,afitbetweeneachsetofactorsandthechangesinstrategicmanagement

andtechnicalcompetencewhicharerequired.PoliticalDecisionMakersworkatthelevelof

strategicmanagement,inthesensethattheireffortsshapetheparameterswithinwhichother



61

actorsmustoperate.Butpoliticaldecisionscannotbetakeninavacuum;theyrequireinputs

fromtheothergroups.EQIinstitutionsfunctionmostlywithrespecttooperationalmatters,so

technicalcompetenceissuesaretheareaswheretheyshouldfocus.Buttheymustalsotakecare

toconductgoodstrategicmanagementoftheirowninstitutions,andofthesystemasawhole.

That iswhycooperation among them is crucial.Atpresent thePrivateSectorhasnotbeen

accordedenoughspacetomakeitsviewsfeltandensurethatitsneedsareheard.Asthatspace

increases,soitalsocanaddtotechnicalcompetenceandstrategicmanagement.

TheEUmustworkasasupportentity,beingreadytoofferassistancewhereitcanandaccording

toavailability.

VIII.2.ToolsforChange:AnEQIInventoryandInformationManagementSystem

Themostsuitablepracticaltooltocreatebothcooperativeprocessesandefficiencyimprovement

istheconductofanindepthEQISystemInventory.Todothismeansstartingoutbydefining

whatisneeded,andfindingoutwhatIndonesiaactuallyhas.

Thetwosidesofthebalancesheetareshowninthediagram.

INVENTORY - COLLECT INFORMATION

Define what we need Find out what we have

Export sectors subject to CA &CA services required

Indonesian RegulationsTest & calibration labs

l Number of exporters, type of

products and services required

l Applicable International

standadrs & regulations

l Testing methods, allowed limits

& required detection limis

l Required process CA (GMP, GAP, GHdP,

GLP, HACCP,QMS, etc)

l People involved (education, experience,

training, certification)

l Methods & detection limits

l Equipment available

l Authorized personnel

l Traceability procedures

Certification bodiesl Methods (products & systems)


Inspection bodiesl Methods (products & systems)


ACCREDITATION STATUS

Table 7 : Inventory-collect information



Thetableincludesreferencesto:

(1) Theinternationalregulatorystandardsforprocesses,productsandmanagementsystems,

whichIndonesianexportshavetomeet.

(2) AninventoryoftheIndonesianbusinessesengagedinexport.

(3) AninventoryofthetechnicalEQIinstitutions.Hencetheinformationsystemdescribed

here covers not only the technical resources of Indonesia, but also the international

regulatorysystemasitaffectsexportsaswellasapictureoftheIndonesianexportsector.

Itfollowsthatsomeoftherequiredinputstotheinformationsystemcomefromwithin

EQIwhileotherswillhavetobeobtainedfromothersources,bothIndonesianandforeign.

The institutional participants in the system are shown in the chart below. It covers some

internationalgroupsaswellastheIndonesianinstitutions.

VIII.2.2HowIndonesianInstitutionsCanCreateTheInformationSystem

Themajorstepstobetakenare:

• IdentifyanInformationManagementBody-IMB.

INVENTORY INFORMATION SYSTEM

InfoManagement

Body

BPPT

BPOM

MoFo

MoPW MoTr

MMAF

MoE

Mol

MoT

MoABSN

LIPI

OIMLWTOISO

APLAC

ILAC

BIPM

DINAS

InspectionCertiication

Private

Testing & Calibration

Figure 16 : Inventory information system



63

• Ministries&AgenciesprovideinformationonalltheirConformityAssessment(CA)

facilitiestoIMB.

• Ministries&AgenciescollectinformationfromDINASinrelatedfieldsandprovide

informationtoIMB.

• KANprovidesdataonaccreditedCAfacilities(GoI&private)toIMB

• IMBbuilds and operates database and provides information to all participants and

potentialusers.

• Ministries,agencies,BSN/KANbuildDatabasesandHelpDesksforusers

• IMBtoencouragebusinessassociationsandprivateQIserviceproviderstoparticipate

intheInformationSystem.

VIII.2.3.ProductsOfTheInformationSystem

PRODUCTS OF THE INFORMATION SYSTEM

EFFICIENCYl Optimum use of existing facilities in the systeml Investment Planningl Optimum Use of Personnell Choice of reference laboratoriesl Traceability improvements

IDENTIFICATION OF POTENTIAL SCOPE FOR CLIENTS EXPANSION

l Consultation regarding the possibilities for joint service provision l Subcontracting among all institutionsl Working with private service providersl Data bank(s) for Users information and CA service facilities

COMMUNICATION, IMAGE BUILDING AND MARKET CREATION

l Commercialisation of information products (publications, videos, etc...)l Awareness raising within indonesial Image building fo external markets (Commercial Attaches, trade fair etc...)

TheinformationsystemcanprovideanumberofproductsforCAserviceproviders,publicand

private,andforproducers,suppliersandexporters.

Figure 17 : Products of the information system



PRODUCTSTHATHELPEFFICIENCYOFTHEEQISYSTEM

Detailedanalysisoftheinformationwillmostlikelyshowthatutilizationofavailablecapacities

isnotoptimal.Theinformationcanbeusedtoplanactivitiesandfurtherinvestmentsinamore

efficientmanner.TheInventorywillprovideinformationabouthighlyspecializedlaboratories

that would likely be able to serve as reference laboratory for selected tests on particular

products.Theinformationcouldbeusedtocreateanetworkofnationalreferencelaboratories

fortheentireindustry.Effortscouldthenbemadetocloseexistinggapsandtoupgradeand

ensurecompetence.Selectednationalreferencelaboratoriescouldthenensuretraceabilityto

international reference laboratories for their particular area though regular participation in

PT and conduct PT for all national laboratories (public, service providers, users) to ensure

traceabilityonnationallevel.Datawillshowwhichlaboratoriesconductwhichcalibrations,

testsandanalysis.Basedonthisinformationitwillbeeasytoselectallpotentialparticipantsfor

particularPTschemes.Alllaboratoriescanthenbemonitoredregardingregularparticipation

andresultsinPTs.

PRODUCTSTHATFACILITATESYSTEMCOOPERATION

CAfacilitiesshouldbeabletoselectpotentialcooperationpartnersforsubcontracting.Private

serviceprovidersaremuchmoreprofitorientedthanpublicinstitutions.However,theyarealso

eagertocoverawiderangeofservicesandsatisfytheircustomerexpectations.Privateservice

providersarethereforeinterestedtouseavailablefacilitiesthroughsubcontractingratherthan

takingtheriskoflargeinvestmentintestingfacilities.

PRODUCTSTHATHELPPRODUCERS/EXPORTERS

Users need information on applicable technical requirements for export destinations and

available facilities forCAaccording to these requirements.Thedatabank(s) couldbeused

totomakeavailablereliableinformationforallstakeholdersinatimelymanner.HelpDesks

andhotlinesforquestionsofuserscouldbeestablished.Thedataanalysisshouldalsoprovide

information of resources and production capabilities in relation to expected export market



65

demand. Promising product sectors can then be selected and related development plans

established.Thesedevelopmentplansshouldincludeallaspectsofthevaluechainincluding

requiredprocess-andproductcertificationrequirements.

VIII.3.TraceabilityInMetrology

VIII.3.1StrategicManagement

TheKeyDecisionsare:

• CreatetheNMIforinstancebystrengtheningthestatusofKIM-LIPI.

• EstablishReferenceInstitution(s)forchemicalmetrology(MIC)andNetworkofCRM

providers.

• DevelopandenactarevisedNationalMetrologyLaw.Revisionisrequiredtorepresent

the updated status and functions of NMI and MIC, and therefore modernize the

Indonesianinstitutionalstructureinscientificmetrology.

• RedefinethetasksofLegalMetrology.

• SetrealisticobjectivesofLegalMetrologyforthenextdecade.

• ModifyandImplementLegalMetrologyPlan.

• Establishcoordination&cooperationbetweenscientific/technical&legalmetrology.

VIII.3.2.HowIndonesianQIInstitutionsCanImproveTraceabilityInMetrology

ThePrinciplesStepsare:

• Establishcomprehensivesystem(s)andschedulesforPToncalibrationandchemical

metrology.

• ImproveorganizationandevaluationofPT.

• Establishtrainingmodulesoninterpretationandutilizationofcalibrationcertificates.

• Establishtrainingmodulesonqualityassuranceinlaboratories.



VIII.4.HowIndonesianQIInstitutionsImproveTraceabilityInCA&ValueChain

TheIssuestobecoveredare:

• ReferenceLaboratories:Setthemupforselected(product)sectors.

• PT:Establishcomprehensiveschedulesforalllaboratories(incl.private)forselectedsectors.

• PT:Organizationandevaluation.

• PT: Establish training modules on interpretation and utilization of PT evaluation

resultsasbasisforcorrectiveactions.

• CRM:Improveprovisionanddistribution.

• CA test methods: Establish reference list, methods and criteria for inspection and

certificationforselectedsectors.

• Source Identification :Establish trainingmodules; select suitable service providers

(GoI&private)fortraining;andconductTrainingofTrainers(ToT).

• PilotProjects:Selectsuppliergroupsandconducttheprojects.

VIII.5.HowIndonesianQIInstitutionsImproveandEnsureCompetence

There is one StrategicDecision to be taken - separateKAN fromBSN.This separation is

toensure therearenopotentialconflictsof interestandprovidefinancial independenceand

flexibilityforKAN.Itmightevenbeconsideredtoallowmoreinvolvementoftheprivatesector

inKAN.ItcannotbeoveremphasizedthatKANisacriticalinstitutioninthesystem,especially

forinternationalrecognition.Itsinstitutionalpositionmustthereforebestrengthened.

Aseriesofimprovementsarealsorequired:

• Improve accreditation system through increased capacity (IT& staff) ofKANand

increasednumber,scope&competenceofKANassessors.

• Establish training modules on quality assurance in laboratories (determination of

detection limits,measuring uncertainty, verification& interpretationof test results,

statisticalmethods).

• Increase scope and competence of laboratories, inspection and certification bodies

buildingonco-operationandsubcontracting.



67

• Ensure theawarenessof responsibilities ofCAproviders (managementandstaff)

ofthelikelyconsequencesandimpactsoftheirresultsandverdictonclientsandthe

generalpublic.

• ProvidetrainingmodulestoimproveknowledgeofIndonesiansuppliers(SME)on

GAcP,GAqP,GMP,GHdP,HACCPforselectedsectors;thenconductToTcoursesfor

suitableserviceproviders(GoI,associations,private).

VIII.6HowQIInstitutionsIncreasePrivateSectorInvolvement

Mapping The Private Sector

• EstablishdatabaseandprocedurestoincludetechnicalexpertiseofPrivateSector.

Strengthening Service Provision:

• ShareinformationandcreateclimateforcooperationbetweenPublicandPrivateQI

ServiceProviders.

• InitiatetwinningandincreasedelegationofCAactivitiestoPrivateSector.

Developing Technical Regulations and Standards

• EncouragePrivateSectorparticipationintheformulationofTRandstandards.

• ProvidecapacityforinterpretationandapplicationofTRandstandards.

Creating Real Time Information

• Consult in depthwith the Private Sector (service providers and userswith special

attentiontoSMES)ontheirneedswithregardtoinformationconcerningstandards-TR

andrelatedbarrierstotrade;onthebasisofperceivedneeds,createappropriateuser

friendlyhelpdesks,hotlines.



Ifchangeisoccurring,itmustbemeasured.Todothat,threethingsareneeded.

• First,apictureofthestartingposition(thesocalled“baseline”situation)isneeded.

• Second,theconstructionofindicators–quantitativeorqualitative–whichcanmeasure

alterationstotheoriginalpicture.

• Third,usingtheindicatorsasabasisforcorrectiveactions(whererequired).

Thediagrambelowsummarisestheprocess.

Indicatorsareusuallydefinedtoallowtheevaluationofchanges.Onesuitableindicatorwould

betheexistenceofatradepolicywhichcan,atpresent,notbefound.Theestablishmentofan

InformationManagementBodyandtheamountofdatacollectedwouldalsoindicatedevelopment

asexpected.Anindicatorforefficiencyoflaboratorieswouldbetheaverageutilization(%)of

Ix. monIToRInG ChanGe

monitoring Change

MONITORING CHANGE

l Baseline Measures are needed

l These can only be created from within the system

l Once that picture is there, you can discover :l (1) whether you have equipment which each other could usel (2) whether this would allow you to carry out tasks that are currently not

donel (3) Exactly what you might need in the future, and how additional resources

could be put at disposal of whole system rather than just a single institute

Figure 18 : Monitoring change



69

laboratoriesbeforeandafteractivitiesonefficiencyimprovementhavebeenimplemented.The

existenceofcomprehensiveschedulesforProficiencyTestingandthegradeofimplementation

ofthesescheduleswouldalsoprovideinformationonthestatusofimprovement.



ThepaperhasshownthatIndonesiahasmostofthetechnicalresourcesinplacewithwhichto

achievefullcompliancewiththefastchangingfrontierssetbyTBTandSPSininternational

markets.Thekeystepstoimprovementarefortheexistinginstitutionstoworktogetherasa

system,somethingwhichoccurscurrentlyonlytoaverylimitedextent,andtherebytopursue

thegoalofsystemefficiency.Giventheheavyworkloadpressuresofseveralpartsofthesystem,

andonparticular“nervepoints”ofthesystem,suchasaccreditation,therewillbeneedover

timeforadditionalresourcestobetargetedtowardstheseareas.Butthecriticalinitialstepis

mobiliseandutiliseeffectivelytheresourcesalreadyinexistence.

Thoseresourcesarenotconfinedtopublicsectorinstitutions.AnumberofQIserviceproviders,

mostly thoughnotentirelyaffiliatesofwellknown internationalfirms,operate in Indonesia

andpossessimportantlaboratoriesandskills.Theseentitiesthereforeformpartofthe“capital

stockinQI”whichexistsinthecountry.Theymustbeinvolvedtoamuchgreaterextentsothat

thebestusecanbemadeofeverythingwhichexists.TheseprivatesectorQIserviceproviders

operateonaprofitbasis–theyselltheirservicestoprivateproducersandexporters.Hencethey

possessknowledgewhichisnotonlyofatechnicalkind;theyalsohaveanacutesenseofwhat

thedemand,actualandlatent,forQIservicesreallyis.

Withinthepublicsectorinstitutions,this“feelforthedemandpulse”islittlepresent.ThreeoftheBalai

BesarundertheMinistryofIndustryhavebeeneffectivelycorporatised,undertheBLUprocess,and

mustthereforeobtainalargemajority(around80%)oftheirrevenuethroughsellingtheirservices.

Theseentitiesdohaveknowledgeofthedemandrequirementsintheirproductareas.Buttheyarestill

onlyasmallminorityofthetotalsetofpublicsectorinstitutions.Indonesiaisonlyatthebeginning

x. ConClUsIons anD ReCommenDaTIons

Conclusions and Recommendations



71

ofthegrandpartnershipofpublicandprivateQIproviderswhichwasinitiatedincountriessuchas

Malaysia,SingaporeandThailandsome15yearsago.PrivatesectorinvolvementintheQIprocess

thereforerepresentsamajorchallengeforthefuture.

ThepaperproposesathoroughsysteminventoryofQIasakeytoolforacceleratingtheprocess

ofchange.GiventhatmodernTRandstandardssettingactivitiesfocusonprocessratherthan

product, theachievementof full traceability is theprincipleonwhicha soundsystemmust

bebuilt.Competenceateverystageof thevaluechain isanecessary, thoughnotsufficient,

conditionfortraceabilitytobethere.Hencethepaperrecommendsaseriesofdetailedsteps,at

alllevelsoftheprocess,throughwhichcompetencecanbeachieved.

TheInformationInventoryshouldbeconductedthroughtheparticipationandcooperationof

all institutions, public and private,which are part ofQI.The purpose is for them to share

informationonresources,requirementsandcooperationpossibilitieswhichcanleadtooptimum

useofthesystemcapabilities.Thesystemshouldbemanagedbyacompetent,neutralbody

whichhasthefunctionsof:collatingandanalysingtheinformation;transformingthematerial

intoinformationproductswhichcanassistallparticipantsandusersoftheQIsystem(meaning

especiallytheprivateproducers);distributingtheinformationproductsthroughtheappropriate

channels,withinIndonesiaandabroad;andpointingtotheremaininggapsandrequirements

foradditionalresources.

AsmoothlyfunctioningInformationSystemforQIwillcertainlytakesometimetocreate,and

willbeagradual,andmutual,confidencebuildingprocessamongallparticipantsandusers.It

wouldbenaïvetosupposethatinstitutionswhichhavemaintainedaconsiderabledistancefrom

eachotherovermanyyears,andwhichtendtocompeteratherthancollaborate(aconclusion

whichholdswithininstitutionsaswellasacrossthem)wouldquicklylearntoworkwitheach

other.Butiftheprocessisbegunwithcaution,thenitwillgathermomentum.

The paper therefore deals primarily with a “bottom up” approach to improvement and



compliance.Thetechnicalinstitutionsthemselvesareperceivedastheagentsofchange,andin

chargeofitsmanagement.Thepaperalsorecognises,however,thatIndonesiaisinthemidstof

acomplexandextendedperiodofpoliticalchange,theendpointsofwhicharethemselvesnot

knownwithanycertainty.Inthisprocess,therearesomechangeswhichitwouldbedesirable

tomake“fromthetop”,andwhichinfactcanonlybemadeatthatlevel.Theseinclude:policy

changes(especiallywithregard to tradeandanationalqualitypolicy); institutionalchanges

(suchasthecreationofanNMI,aclearerseparationofKANfromBSN);andlegalchanges(a

newNationalMetrologyLaw,forexample).

Yetthese“topdown”improvementsdonotcoverallthatisrequiredfromthetoplevel.One

ofthepervasiveremnantsoftheearlierstructureforQIistheoverlappingresponsibilities,the

confusionaboutwho is truly inchargeofwhat,whichcreatespermanentuncertainty in the

mindsofusers,aswellascreatingwastefuluseofresources.Decisionstoclarifythismustbe

made.TheQIsysteminstitutionscanthemselvesproposethesechanges,andwillbeinabetter

position todosoas the Information Inventoryproceeds.But thedecisions themselvesmust

ultimatelybetakenbyhigherauthorities.

Anycomplexprocessofefficiencyimprovement,assetoutinthispaper,willleadbothtoresource

reallocationneeds,andtotheidentificationoftheactivitieswhichrequireadditionalinvestment.

ThecurrentsituationinIndonesia,especiallyrelatingtocivilservicerulesregardingswitchingof

staffacrossMinistriesandinstitutions,andthemovementofstaffwithininstitutions,imposefar

toomuchrigidityinthesystem.Theyareabarriertoefficiency,andconsiderationshouldbegiven

tomakingthemmuchmoreflexible.Atthesametime,thefactthatQIinstitutionsarepublic,

andderivetheirrevenueforthemostpartfromtheMinistryofFinance,meansthatadequate

allocationsoffundsdependonthepersuasivenessofthecasewhichismadeforsuchallocations.

Within Indonesia there does not seem to be any ministry or institution which can currently

“championthecase”forproperresourceallocation.UntilQIisgivensufficientimportanceatthat

level,thereisalwayslikelytobeadistinctlysuboptimalsituation.



73

ForeigndevelopmentpartnerscanprovidearangeofresourceswhichcanhelpIndonesiato

carrythroughthetransformationprocessandachievetheworldclasscomplianceforwhichthe

countrystrives.Agreatdealhasbeenaccomplishedovertheyears,andIndonesiaisnowon

thethresholdofmakingthebreakthrough.Ithastheresources,ithastheskills–whatisnow

neededisthedeterminationtoworktogethertoachievethegoal.



TermsandInstitutionsrelevantfortheQualityInfrastructure

APLAC-AsiaPacificLaboratoryAccreditationCooperationhttp://www.aplac.org

APLAC is a cooperation of accreditation bodies in the Asia Pacific region that accredit

laboratories,inspectionbodiesandreferencematerialproducers.

APMP-AsiaPacificMetrologyProgrammehttp://www.apmpweb.org

APMP is a grouping of national metrology institutes (NMIs) from theAsia-Pacific region

engaged in improving regionalmetrological capability through the sharingof expertise and

exchangeoftechnicalservicesamongMemberlaboratories.APMPisalsoaRegionalMetrology

Organization (RMO) recognized by the InternationalCommittee forWeights andMeasures

(CIPM) for thepurposeofworldwidemutual recognitionofmeasurement standards andof

calibrationandmeasurementcertificates.

BIPM-Bureauinternationaldespoidsetmesureshttp://www.bipm.org

TheInternationalBureauofWeightsandMeasuresistheEnglishnameoftheBIPM,astandards

organisation,oneofthethreeorganizationsestablishedtomaintaintheInternationalSystemof

Units(SI)underthetermsoftheConventionduMètre(MetreConvention).

CEN-EuropeanCommitteeforStandardizationhttp://www.cenorm.be

Foundedin1961bythenationalstandardsbodiesintheEuropeanEconomicCommunityand

EFTAcountries,CENiscontributingtotheobjectivesoftheEuropeanUnionandEuropean

EconomicAreawith voluntary technical standardswhich promote free trade, the safety of

GlossaRy

Glossary



75

workersandconsumers,interoperabilityofnetworks,environmentalprotection,exploitationof

researchanddevelopmentprogrammes,andpublicprocurement.

COMPETENTAUTHORITY:

AbodyappointedbytheEUwithauthoritytoactonbehalfofanEUmemberstate(s)toensure

thattherequirementsofselectedEUdirectivesaremet

EUROMET-EuropeanMetrologyhttp://www.euromet.org

IEC-InternationalElectrotechnicalCommissionhttp://www.iec.ch

ILAC-InternationalLaboratoryAccreditationCooperationhttp://www.ilac.org

ILACisaninternationalcooperationoflaboratoryandinspectionaccreditationbodies.

IMEKO-InternationalMeasurementConfederationhttp://www.imeko.org

ISO-InternationalOrganisationforStandardizationhttp://www.iso.ch

ISOistheworld’slargestdeveloperandpublisherofInternationalStandards.ISOisanetwork

ofthenationalstandardsinstitutesof163countries,onememberpercountry,withaCentral

SecretariatinGeneva,Switzerland,thatcoordinatesthesystem.

ITU-InternationalTelecommunicationUnionhttp://www.itu.int

NSWNationalSingleWindow

A National Single Window NSW is an electronic system that facilitates trade, increase

efficiencyoftheGovernmentdeliverysystemandprovidebenefitstoallmembersofthetrading

community,includingGovernment

NOTIFIEDBODYec.europa.eu/enterprise/newapproach/nando/

NotifiedBody isaConformityAssessmentBody(CAB)for the regulatedarea.Notification

isanactwherebyaMemberStateinformstheCommissionandtheotherMemberStatesthat

abody,whichfulfils therelevantrequirements,hasbeendesignatedtocarryoutconformity

assessmentaccordingtoadirective.NotificationofNotifiedBodiesandtheirwithdrawalare

theresponsibilityofthenotifyingMemberState.Thenotifiedbodymusthaveitsheadofficein

oneoftheEuropeanmemberstates.



OIML-InternationalOrganizationofLegalMetrologyhttp://www.oiml.org

The International Organization of LegalMetrology (OIML) is an intergovernmental treaty

organizationwhosemembershipincludesmemberstates,countrieswhichparticipateactivelyin

technicalactivities,andCorrespondingMembers,countrieswhichjointheOIMLasobservers

TECHNICALREGULATIONS

Technicalregulationsareissuedbyregulatorybodies(GovernmentInstitutionswithlegislative

authority)withtheaimtoguaranteethesafetyofconsumersusinggoodsandservices.Technical

regulationsarebinding(mandatory)intheirentirety.

WELMEC-EuropeanCooperationforLegalMetrologyhttp://www.welmec.org

WTOEnquiryPointwww.wto.org/english/tratop_e/.../tbt_enquiry_points_e.htm

Article10.1oftheWTOAgreementofTechnicalBarrierstoTraderequiresthat“eachMember

shallensurethatanenquirypointexistswhichisabletoanswerallreasonableenquiresfrom

otherMembers and interested parties in otherMembers as well as to provide the relevant

documentsregarding:

(1) anytechnicalregulations,

(2) anystandards,

(3) anyconformityassessmentprocedures,

(4) the membership and participation of the Member … in international and regional

standardizing bodies and conformity assessment systems, as well as in bilateral and

multilateralarrangementswithinthescopeofthisAgreement,

(5) thelocationofnoticespublishedpursuanttothisAgreement,and

(6) thelocationofotherenquirypoints”.

Documents

Indonesia’sExportQuality* Infrastructure* · AVA Agri-Food and Veterinary Authority (Singapore) BLA Bureau of Laboratory Accreditation (Thailand) B4T Centre for Materials and Technical