H&A Daily Risk Assessment - 6 Apr 2017

[Jakarta Info]

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Please find attached H&A Daily Risk Assessment - 6 Apr 2017

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[Jakarta Info]

Dear Clients,

 

Please find below H&A Daily Risk Assessment - 6 Apr 2017

  

GOV’T EXPEDITES IDUL FITRI PREPARATIONS    COUNTRY HEADLINES

The government has accelerated the construction of new toll roads ahead of the annual Idul Fitri exodus, which is expected to fall in the last week of June this year. Minister of Transportation Budi Karya Sumadi said on Wednesday 5 April that the government is aiming to reduce congestion during this year’s exodus by opening 281 kilometres of new toll roads across the country. “We pledge to operate or at least perform limited functional operations on the 145 kilometre toll road section connecting East Brebes and Ngaliyan in Semarang, Central Java, which is also part of the trans-Java toll road. It would help the traffic flow during the upcoming exodus period,” said Sumadi, as reported by Kompas. The 145 kilometre section is part of a 227 kilometre toll road connecting Semarang to Surabaya in East Java, which the minister remains hopeful will be completed in full by the end of June. The government is also eager to open 66 kilometres of the trans-Sumatra toll road project for the Idul Fitri exodus. It is planning to speed up land procurement, which has been the main hurdle to completing the projects. The director general of road construction at the Ministry of Public Works and Housing, Arie Moerwanto, told Koran Tempo that problems remain involving land certificates and owners who have not agreed to purchase prices. Toll Road Regulatory Agency (BPJT) head Herry Trisaputra Zuna said that land procurement for the projects should have been completed last year. The target intends to make up for the government’s shortcomings last year, when the overall year-end figure of new toll roads was a mere 44 kilometres, well below the target of 135 kilometres. In 2016, dozens of travellers reportedly died due to severe fatigue as millions of motorists were stranded in traffic jams, some for up to two days, during the Idul Fitri exodus. Severe congestion was reported along the East Brebes toll road that connects West and Central Java. The ministry is predicting that the number of overland travellers this year will increase by about 10 percent compared to 2016. It has also forecast that road congestion during the upcoming mass exodus will likely take place on toll roads connecting Tangerang and Merak, Jakarta and Tangerang, Cikampek and Palimanan, Pejagan and Pemalang, as well as Jakarta to Bogor and Ciawi. Ministry of Transportation data highlights 28 points across Java that are always heavily congested during the annual exodus.

TOP ISSUES 

NATURAL DISASTERS

The National Disaster Mitigation Agency said on Tuesday 4 April that landslides have been the most frequent natural disasters in Indonesia during the first months of 2017. (Page 2)

NATIONAL DEFENCE | MILITARY | FOREIGN AFFAIRS

Vice President Jusuf Kalla has voiced his objection to President Donald Trump's order to scrutinise US trading relationships, including with Indonesia. (Page 4)

PHYSICAL RISKS

POLICE | OPPORTUNIST, ORGANISED & VIOLENT CRIME

Four Arrested for Online Fraud

Police on Wednesday 5 April arrested four men for internet fraud which allegedly caused IDR4.1 billion (USD290,000) in losses to online ticket agency Tiket.com. A police spokesman said that the suspects had breached the security system to get access to the agency’s trading system. Three were arrested in Tangerang (Banten) and one in Balikpapan (East Kalimantan).

Sources: Media Indonesia | Warta Kota | Kompas | Koran Tempo 

Former Police Officer Sentenced for Drug Trafficking  

The Palu District Court in Central Sulawesi on Wednesday 5 April sentenced a former police officer to 15 years in prison for the trafficking of two kilograms of crystal methamphetamine. He was arrested during an operation in October in 2016.

Sources: Media Indonesia | Warta Kota | Kompas | Republika

Taiwanese Drug Traffickers Arrested in West Jakarta

Two members of a Taiwanese drug syndicate were arrested on Wednesday 5 April after allegedly smuggling 3.7 kilograms of methamphetamine into the country. Police also arrested two Indonesians in connection with the smuggling. The two Taiwanese nationals were arrested while trying to sell the drugs to an Indonesian national at a restaurant in West Jakarta. The drugs were allegedly ordered by a 40-year-old inmate at Cipinang Prison in East Jakarta. Police had allowed the two Taiwanese nationals to pass through Soekarno-Hatta International Airport on 31 March with the drugs strapped to their legs and then placed them under surveillance while they were in Jakarta.

Sources: The Jakarta Post | Kompas | Media Indonesia | Republika

Police Recapture Escapee Accused of Sex Abuse

Depok Police arrested a fugitive who had escaped from custody on 27 March over child molestation allegations. A police spokesman said that Hasan was arrested in Matraman, East Jakarta, on Tuesday 4 April after allegedly sexually abusing his neighbour’s five-year-old son in Tapos. Hasan has been charged with violating the 2014 Child Protection Law and if found guilty could face 15 years' imprisonment.

Sources: Warta Kota | Pos Kota | The Jakarta Post | Liputan 6

Tangerang Police Bust House Robbery Syndicate

Tangerang Police on Wednesday 5 April detain two members of a robbery syndicate that has allegedly been targeting empty houses in the city. A police spokesman said that the pair was arrested shortly after robbing an empty house on Jl. Pengayoman Selatan, Tangerang (Banten). The suspects were caught by residents. A police spokeswoman said that the suspects usually broke into houses after owners had left for work and stole valuable belongings.

Sources: Warta Kota | Republika | The Jakarta Post

NATURAL DISASTERS

Landslides Most Reported Disasters in 2017: BNPB

The National Disaster Mitigation Agency (BNPB) said on Tuesday 4 April that landslides have been the most frequent natural disasters in the country during the first months of 2017. It also warned that people should remain alert for more landslides as about 40 million citizens, or 17 percent of the population, live in landslide-prone areas. As of 2 April, the agency had recorded 251 landslides across Indonesia. The BNPB has identified 918 locations in 274 regencies prone to landslides. The areas include East Java, Central Java and West Java. Earlier on 1 April, landslides struck Ponorogo, East Java, killing at least three people and displacing more than 200. As of writing today, Thursday 6 April, 25 remain missing, possibly buried under 50 metres of mud.

Sources: The Jakarta Post | Koran Tempo

Flooding Hits Banten

Heavy rain on Wednesday 5 April resulted in flooding that inundated thousands of houses in Cilegon, Banten. Transport from the city to neighbouring Anyer regency was disrupted. The floodwaters have since subsided.

Source: Detik

ENVIRONMENT & CLIMATE

Police Probe Oil Spill in West Java River

Authorities in West Java are investigating an oil spill in the Cibingbin River following reports that thousands of litres flowed into the river from pipes belonging to a textile company. A police spokesman said on Wednesday 5 April that officers questioned employees of PT Central Georgette Nusantara Printing Mills shortly after the incident occurred on 30 March. Reports indicate that the oil spill was caused by a broken valve. Residents in Cimahi said that hundreds of fish have died and hectares of rice fields in the area have been contaminated. The pollution reportedly reached the Saguling Dam which also connects to the Citarum River.

Sources: The Jakarta Post | Antara News

INDONESIA HIGH WAVE ALERT THURSDAY 6 APRIL

Height Location Remarks

2.0 – 3.0 m Waters off Manado (North Sulawesi). The Sunda, Bali, Lombok and Alas Straits. The northern reaches of the Malacca Strait. Waters off Bawean (East Java), Manado (North Sulawesi) and Amamapare (Papua). Waters to the west of Aceh. Waters to the north of the Natuna and Anambas (Riau) Islands, Karimun Java (Central Java), Halmahera (Maluku), Papua and West Papua. Waters to the south of Kalimantan. Waters from the north of Banten to West Java. Waters from the west of the Simeulue Islands (Aceh) to Mentawai Islands (West Sumatra). Waters from Bengkulu to the west of Lampung (southernmost Sumatra). Waters from the south of Java to Lombok (West Nusa Tenggara). The South China, Java and Halmahera Seas. The eastern reaches of the Sulawesi Sea. The northern reaches of the Maluku Sea. The eastern reaches of the Banda Sea. The waters of the Sangihe and Talaud (Sulawesi), Kai and Aru (Maluku) Islands.  

Hazardous for fishing vessels and motorised wooden vessels.

Source: Meteorology, Climatology and Geophysics Agency (BMKG)

JAKARTA AIR QUALITY INDEX THURSDAY 6 APRIL

    

UTILITIES & INFRASTRUCTURE

Government to Normalise East Java Rivers 

The Public Works Ministry has allocated IDR400 billion (USD29 million) to normalise four rivers in Pasuruan, East Java, to alleviate flooding. A ministry spokesman said on Wednesday 5 April that the projects would be completed within four years.

Sources: Media Indonesia | Kompas | Republika | Koran Tempo

BUSINESS RISKS

NATIONAL SECURITY | POLITICAL AFFAIRS

Constitutional Court Rules on Regional Election Disputes 

The Constitutional Court (MK) on Wednesday 5 April rejected 40 lawsuits on regional election disputes mostly because the margin between rival candidates was greater than the 1.5 percent required by law to file suit. The regions included Nagan Raya and Langsa (Aceh), Dogoiyai and Sorong and Jayapura (Papua), Sarolangun (Jambi), Payakumbuh (West Sumatra), Jepara and Pati (Central Java) and Halmahera (Maluku). The court’s decision means that the General Elections Commission’s ruling on election winners in those regions will stand. The MK, however, ordered repeat elections in Intan Jaya and Tolikara (both in Papua).

Sources: Media Indonesia | Kompas | Republika | Koran Tempo

DPR Elects New KPU and Bawaslu Members 

The House of Representatives (DPR) on Wednesday 5 April elected new members of the General Elections Commission (KPU) and five members of the Elections Supervisory Agency (Bawaslu). The new KPU members are Pramono Ubaid Tanthowi, Ilham Saputra, Hasyim Asy'ari, Wahyu Setiawan, Viryan, Evi Novida Ginting and Arief Budiman while the new Bawaslu members are Ratna Dewi Pettalolo, Mochammad Afiuddin, Rahmat Bagja and Fritz Edward. The new KPU and Bawaslu members will serve until 2022.

Sources: Media Indonesia | Warta Kota | Kompas | Republika | Koran Tempo 

 

NATIONAL DEFENCE | MILITARY | FOREIGN AFFAIRS

Vice President Responds to US Trade Order

Vice President Jusuf Kalla has voiced his objection to President Donald Trump's order to scrutinise US trading relationships, including with Indonesia. Trump ordered his administration on 31 March to study the causes of deficit in US trade with Indonesia and other 15 countries and restrict trade activities should they be proven to be abusing trade rules. “The US cannot say that Indonesia is cheating. How come? We never forced them to buy our goods. They buy them because Indonesia makes good and cheap stuff," said Kalla on Tuesday 4 April.  The US posted USD13.2 billion deficit in trade with Indonesia last year, up from USD10.3 billion a decade earlier, according to US Census Bureau data. The amount is small compared to the USD347 billion deficit that the US posted in trade with China in the same period. Kalla said that Indonesia-US trade is based on the rules of free and fair trade and the US might not be able to sell more to Indonesia because the prices it offers are higher than other markets.

Sources: Antara News | Kompas | The Jakarta Globe | The Jakarta Post

Afghan President Meets Widodo

President Joko Widodo and Afghan President Ashraf Ghani held a bilateral meeting at the State Palace on Wednesday 5 April. The meeting was the first between the two heads of state. The presidents signed five memorandums of understanding (MOUs) on education, agriculture, statistics, bureaucracy reform, and fiscal policy. In addition to being among the first countries to recognize Indonesia's independence in 1945, Afghanistan cooperates with Indonesia on capacity building and terrorism prevention. Afghanistan is one of Indonesia's largest export destinations after Iran in the Middle East.

Sources: Kompas | Media Indonesia | The Jakarta Post | Tempo Interactive

Malaysia Deports 106 Indonesian Migrant Workers

Malaysia’s Immigration Department deported 106 Indonesian migrant workers via the Entikong border in Sanggau regency, West Kalimantan, on Tuesday 4 April. Preliminary investigations found that the migrant workers were deported for various reasons. Some lacked a passport or proper work permit, while others were deported as a result of illnesses, according to a spokesman for Entikong Police. The deported workers, he said, were mostly from West Kalimantan, East Java, West Nusa Tenggara, East Nusa Tenggara and South Sulawesi.

Sources: Antara News | Detik | The Jakarta Post

OTHER RISKS

CITY | TRAFFIC | LOCAL AFFAIRS

Demand Slides in Jakarta Property Market: Jones Lang LaSalle

Data from property firm Jones Lang LaSalle shows that the market for office and residential properties in Jakarta has continued to slow due to weak demand since 2015. In the first quarter of 2017, rent for Grade A offices in the central business district fell by 4.7 percent quarter on quarter with only 73 percent occupancy, according to the data. A spokesman on Wednesday 5 April predicted that rents will continue to fall in 2017 and 2018. Meanwhile, the residential market has also not been improving and is expected to continue weakening this year. The 20 percent luxury tax for properties above IDR10 billion (USD750.000) has continued to reduce the demand for condominiums. “The average sales rate is 67 percent, compared to 80 percent in the middle of 2015. But it is still better than other countries in Asia," she said.

Sources: The Jakarta Post | Republika

UPCOMING EVENTS DIARY

Date Event Public Holiday Remarks

Thu 13 – Sun 16 Apr 9th Indogreen Environment & Forestry Expo

No Jakarta Convention Centre

Fri 14 Apr Good Friday Yes Observed by Christians nationwide

Sun 16 – Wed 19 Apr Megabuild 2017 No Jakarta Convention Centre

Wed 19 Apr Jakarta Gubernatorial Election Yes

(Jakarta only) Jakarta residents return to the polls on 19 April to vote in the second round of the gubernatorial election.

Wed 19 – Fri 21 Apr The  Indonesia International Creative Textile Apparel Accessories Exhibition (INATEX) 2017 No Jakarta International Expo (JIE) Kemayoran

Thu 20 Apr Indonesia Summit (Economist Conference) No A strategic business event examining Indonesia’s economy and politics, at the Shangri-La Hotel, Jakarta.

Mon 24 Apr Ascension of Prophet Muhammad (Isra Mi’raj) Yes Observed by Muslims nationwide.

Wed 26 – Sun 30 Apr INACRAFT 2017 No Jakarta Convention Centre (JCC)

Thu 27 Apr – Sun 7 May Indonesia International Motor Show 2017 No Jakarta International Expo (JIE) Kemayoran

Mon 1 May International Labour Day Yes Public Holiday

Thu 11 May   Waisak; Buddha’s Birthday Yes Observed by Buddhists nationwide

Fri 12 May Commemoration of the 19th anniversary of the 12 May 1998 riots. No Widespread riots in Jakarta followed fatal student shootings which have never been fully resolved. Student demonstrations likely in observation of the day.

Thu 25 May Ascension of Jesus Christ Yes Observed by Christians nationwide.

 

COUNTRY RISK RATING – INDONESIA

Terrorism Crime Ethnic, Religious & Social Conflict Health Risks & Services

H (B3) M (C2) H (B3) H (B3)

Natural Disasters Corruption & Fraud Business Ethics & Compliance Utilities & Infrastructure

H (B3) H (B3) H (B3) H (B3)

Qualitative Risk Analysis Matrix - Level of Risk:

Probability

Rating Consequence Rating

Insignificant

1 Minor

2 Moderate

3 Major

4 Catastrophic

5

A (almost certain) H H E E E

B (likely) M H H E E

C (possible) L M H E E

D (unlikely) L L M H E

E (rare) L L M H H

Legend:

E Extreme risk Immediate action required

H High risk Senior management attention needed

M Moderate risk Management responsibility must be specified

L Low risk Managed through routine procedures

 

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