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December 21, 2002

In accordance with the Memorandum of Understanding on the Establishment of a Joint Commission for Bilateral Cooperation between the Philippines and Indonesia, the Third Meeting of the Joint Commission for Bilateral Cooperation (JCBC) was held in Manila, Philippines, on 20-21 December 2002.

The Philippine delegation was led by H.E. Bias F. Ople, Secretary of Foreign Affairs. The Indonesian delegation was led by H.E. N. Hassan Wirajuda, Minister of Foreign Affairs. The lists of both delegations appear as Annexes A and B.

The Leaders of both delegations expressed confidence that the Third Meeting will further strengthen the existing friendly and fraternal ties between the two countries, as reflected in their opening statements. The texts of the Statements appear as Annexes C and D.

I. ADOPTION OF THE AGENDA

1. The Meeting was held in Plenary and adopted the agenda, which appears as Annex E.

II. BUSINESS ARRANGEMENTS

2. The Meeting was preceded by a Senior Officials' Meeting (SOM). T he SOM Leaders agreed to facilitate the deliberation by setting up five working groups on: (a) Trade and Investment Issues; (b) Maritime and Ocean Issues; (c) Border, Defense, Police, Security, Consular, and Legal Issues; (d) Agriculture, Forestry, Energy Issues, and Cooperation in Joint Oil Spill Response; and (e) Cooperation in Labor, Information, Tourism, Culture and Education, and Sister-city Relations.

III. CONCRETE MEASURES TO PROMOTE BILATERAL RELATIONS

Trade and Investment Issues

3. The Meeting created a Joint Technical Working Group (JTWG) on trade and investments that would cover, among others, issues relating to the wood and rattan industries. The JTWG would have focal points - the Bureau of International Trade Relations for the Philippines and the Directorate-General on Foreign Trade MOIT for Indonesia. These focal points are tasked to exchange discussion papers and information to keep the two parties constantly updated. The JTWG will study the feasibility of joint ventures in rattan between Indonesia and the Philippines.

4. The Philippines agreed to provide Indonesia with a draft Terms of Reference on a Task Force for the Promotion of Investments.

5. The Meeting agreed to explore the possibility of concluding a Mutual Recognition Agreement (MRA) on Pharmaceutical and Cosmetic Products. The two countries would use the Agreement between the Bureau of Product Standards of the Philippines and the Standardization Council of Indonesia on Product Certification and Approval Schemes as a starting point. The Meeting also agreed that such a bilateral MRA would serve as an important building block in establishing regional MRAs, as well as MRAs between developing and more advanced countries.

6. Indonesia supported the Philippine proposal to send promotion/selling missions to Jakarta and Manado, and to encourage more active involvement of the Philippines-Indonesia and Indonesia-Philippines Business Councils in these efforts.

7. The Meeting agreed that the Philippine Tariff Commission would soon review the mid-term effectiveness of safeguard measures on ceramic tiles which could lead to the possibility of the following:

a) The lifting of the safeguard;

b) Reduction of the specific duty; or

c) Shift from tariff to quota measure.

The Philippines will submit a report on the results of this review to Indonesia. Moreover, the Meeting took note of the Philippine approach to the safeguard measure, to wit:

a) Periodic review of domestic industry performance and market conditions to determine whether the elimination of the safeguards may be accelerated.

b) Commitment to receive and consider all legitimate requests for compensation.

c) Efforts to monitor the ceramic tile exports of other players not affected by this safeguard measure, with the intention to prevent unwarranted displacement of affected players.

8. The Meeting approved the report of the Working Group on Trade and Investment, which appears as Annex F.

Maritime and Ocean Issues

9. The Meeting established a Philippines-Indonesia Joint Working Group on Maritime and Ocean Concerns. The Philippines offered to host the first Joint Working Group Meeting in the second half of February 2003.

10. The Meeting recalled the agreement at the highest level to resume the maritime boundary delimitation talks between the two countries. The two countries agreed to focus discussions, as a start, on the technical issues involved in maritime boundary delimitation.

11. The Meeting recognized the importance of establishing a Monitoring, Control, and Surveillance system and the need for this system to be region-wide in breadth in order to be effective. The harmonization of MCS systems of the Philippines and Indonesia could culminate in a possible ASEAN initiative that could be raised with the European Union during the forthcoming ASEAN-EU Ministerial Meeting in January 2003. The effective region-wide MCS would have multi-purpose applications, e.g., a seamless monitoring of fisheries, combating piracy and maritime terrorism, search and rescue operations, and marine environment protection.

12. The Meeting agreed to consolidate the efforts of the Philippines and Indonesia vis-a-vis other groupings in the MHLC Convention on the issue of tuna spawning grounds in Sulu-Sulawesi Sea. The two countries will seek to find a balance between conservation measures and the economic benefits that accrue to both countries from the endowment of tuna resources.

13. The Meeting recognized the need for a Regional Caucus on Archipelagic States that could have an organizational mechanism and would advance the cause of the archipelagic states like the Philippines and Indonesia.

14. Indonesia agreed to join in a Tri-national Sea Turtle Protected Area Program with the Philippines and Malaysia.

15. The Meeting approved the report of the Working Group on Maritime and Ocean Issues, which appears as Annex G.

Border, Defense, Police, Security, Consular, and Legal Issues;

16. The Meeting recognize the need to establish a linkage between the JCBC and the RP-RI Border Committee. It was agreed that the Philippines-Indonesia Border Committee will discuss and decide on technical matters while policy recommendations will be submitted to the JCBC.

17. The RP-RI Border Cooperation Agreement was signed on 11 March 1975. In view of significant developments in the region, the Meeting agreed to establish linkage with the JCBC. For this purpose a technical working group will be created which will undertake a comprehensive review of the 1975 RP-RI Border Cooperation Agreement to make it attuned with the prevailing security and economic environment in the region.

18. On the proposed MOU on Cooperation in Law Enforcement, the Meeting agreed that there are distinct cross-border problems that both countries have to address through cooperation in the following:

- Monitoring and exchange of information on suspected and actual criminal activities in each other's territory.

- Exchange of information on criminal elements who are fugitives from laws in each other's territory;

- Cooperation on the investigation of criminal activities of interest to either party;

- Joint police cooperation in investigating criminal activities of interest and concern to either country; and

- Exchange of intelligence information.

19. The Meeting agreed to the early negotiation and conclusion of an MOU on Cooperation in Law Enforcement. The Meeting also agreed to intensify the exchange of intelligence information between the military organizations, as well as the law enforcement agencies of the two countries.

20. The Meeting reiterated the decision of the 2nd RP-RI JCBC to convene a Joint Inter-agency Technical Working Group on the problems of fishermen as soon as possible, either in Manila or Jakarta. The Joint Inter-agency Technical Working Group will be composed of representatives of immigration, customs, police, navy, fisheries, foreign affairs, and other relevant agencies from both countries.

21. Indonesia expressed interest in discussing cooperation on legal assistance in criminal matters and agreed to consider a draft agreement submitted by the Philippines.

22. On a draft MOU on Transfer of Sentenced Persons submitted by the Philippines in 2000, the Indonesian side informed the Meeting that it is not prepared to discuss it because its domestic legislation does not recognize the verdict of a foreign court. Indonesia agreed to study the possibility of securing appropriate legislation for the amendment of its laws.

23. The Meeting had an exchange of views on regional security issues. The Philippines and Indonesia briefed the Meeting on their respective domestic security situation. The Philippine briefed Indonesia on the situation of the four Indonesian nationals kidnapped by the Abu Sayaff Group (ASG) in Southern Philippines. Indonesia expressed concern over the deteriorating health of one of the victims. T he Philippines responded that it would look into the matter as soon as possible.

24. The Meeting approved the report of the Working Group on Border, Defense, Police which, appears as Annex H.

Agriculture, Forestry, Energy Issues and Cooperation in Joint Oil Spill Response

25. The Meeting agreed to convene the Working Group on Agriculture in Indonesia on the 2nd week of May 2003 and to integrate the proposed bilateral cooperation plan on agriculture within the framework of the BIMP-EAGA.

26. The Philippines submitted the following proposals in order to further strengthen cooperation in the area of agriculture:

a) Study of coconut estate farms so that it can be replicated in the small, marginalized coconut plantations in the Philippines.

b) Technical exchange and cooperation on sugarcane research, development and Extension between the Philippines and Indonesia;

c) Technology exchange program in the production and marketing of selected horticultural crops;

d) Exchange programs on rubber production technology and marketing strategy;

e) Exchange program in the propagation of banana through tissue cultural exchange;

f) Study on the management of coconut estate farms in Indonesia;

g) Study on the management of oil palm estate farms in Indonesia;

h) Study on the extent of copra, coconut and oil palm backdoor trading between the Philippines and Indonesia.

27. The Meeting agreed to continue the two countries' close cooperation and mutual support in facing competition in international trade.

28. The Philippines proposed the revival of the MOU on Forestry Cooperation signed in 1974 and revised in 1998, with revisions taking into account crucial issues facing the forestry sector in both countries. With regard to the MOU on Combating Illegal Logging and the International Trade in Illegally Harvested Timber and Other Forest Products, Indonesia will submit to the Ministry of Forestry the Philippine counter draft. The Indonesian response on both draft MOUs is expected before the next meeting of the ASEAN Ministers on Forestry.

29. Indonesia presented the Tangguh LNG project and strongly proposed that the Philippines consider the importation of LNG from Tangguh in the western part of Papua province in Indonesia, which has huge uncommitted gas reserves of more than 8 trillion standard cubic feet (Tscf), that will be able to start commercial production in 2007. The Philippines proposed that more detailed discussions be initiated towards possible purchase by the Philippines of LNG from Tangguh.

30. The Philippines proposed that Indonesian coal companies consider directly participating and investing in the power plants of the National Power Corporation that will be privatized instead of merely supplying fuel to the same.

31. On the cooperation on developing geothermal energy, both sides have agreed on the need for joint ventures in this area as, in fact, PNOC and Pertarnina have been undertaking joint geothermal-related activities starting last year.

32. Indonesia informed that it has excess capacity of paraxylene and benzene products, as raw materials for textile and plastic industries, starting the end of 2003, and offered the excess products to the Philippines. The Philippines will pass on the information to the relevant agencies for consideration.

33. The Philippines proposed that technical cooperation be pursued, aimed at transferring/exchanging of Indonesia's experience in fabricating cross flow turbines and other related equipment, which could boost both countries' efforts in their rural electrification programs. In response, Indonesia agreed to discuss more details not only regarding micro-hydro but renewable energy in general specially related to power generation, upon confirmation with Heads of ASEAN Power Utilities Authorities (HAPUA).

34. Indonesia proposed to initiate a draft concept paper aimed at enhancing cooperation on training and education in the energy sector in anticipation of the ASEAN Free Trade Agreement (AFTA) implementation. It was agreed that the draft would be made available for review/discussion on or before May 2003.

35. Indonesia explained that there will be a new decree on Oil Spill Response. The meeting agreed to create a Working Group on Oil Spill Response, particularly between Indonesia and the Philippines initially and extend it among ASEAN countries. Indonesia agreed that the proposed draft of cooperation on Oil Spill Response will be made available for review/discussions in or before May 2003.

36. Indonesia proposed that the cooperation in science and technology be enhanced. Accordingly, the Philippines suggested that the proposal include Ocean Thermal Energy Current (OTEC) and will refer the proposal to the Department of Science and Technology (DOST) for consideration, targeting submission of the Philippine response before the next meeting of the ASEAN Ministers on Science and Technology.

37. The Meeting approved the report of the Working Group on Agriculture, Forestry, and Energy issues, which appears as Annex I.

Cooperation in Labor, Information, Tourism, Culture and Education, and Sister-city Relations.

38. The Philippines informed the Working Group that the formal signing of the MOU on Labor and Manpower Development in January next year. The Meeting discussed the topic of protection of migrant workers, one of the most important provisions in the MOU between the Philippines and Indonesia due to the fact that both countries are the biggest labor exporters in the region. The Meeting agreed to cooperate in the development of training programs in the framework of employment creation. The Meeting also noted the need to standardize the work contract and to establish a mechanism to monitor the implementation of the MOU's provisions.

39. The Meeting agreed that the discussion on the implementation of the MOU on Tourism was timely as both countries had suffered from the negative impacts on tourism in light of terrorist bombings in both countries.

40. The Meeting recognized the need for a united front against the seemingly indiscriminate travel advisories issued by certain countries against the Philippines and Indonesia.

41. The Meeting agreed to look into the possibility of reopening direct flights between the two countries, such as from Manila to Jakarta, to boost tourism. It also agreed to explore the possibilities of having a twinning program in the joint marketing and promotion of tourism.

42. The Meeting was informed of the setting up of a Philippine Technical Committee focusing on the 1996 MOU on Bilateral Cooperation in the Field of Information. The Indonesian delegation, however, expressed the view that the MOU may need to be reviewed since the implementing agency, the former Department of Information, has been restructured into the State Ministry of Communication and Information. The MOU will be submitted to the new agency for its appropriate action.

43. The Meeting saw the need to continue the teaching of Bahasa Indonesia and cooperation in the field of Islamic religious education to be implemented in Mindanao, particularly the introduction of curricula for the Madrasah Ibtidaiyah.

44. The Philippine delegation requested Indonesia to continue providing traditional music courses such as gamelan and kolintang, and hoped that Indonesia would continue with the various cultural and education workshops as such cooperation would strengthen mutual understanding and harmony among the peoples of both countries.

45. The Indonesian delegation expressed appreciation for the 163 Indonesian scholars who have benefited from the vocational training programs provided by the Philippines under the B1MP-EAGA MOU on Vocational Training.

46. The Meeting agreed that despite the potentials of sister-city/province relations, there had been lack of a follow-up mechanism to monitor the progress and constraints in the implementation of the MOUs that had been signed. The Philippines requested for a copy of the guidelines that Indonesia is formulating designating the Department of Foreign Affairs of Indonesia as the focal point in international relations conducted within the framework of regional arrangements, including the establishment of sister-city/province relations.

47. The Meeting approved the report of the Working Group on Labor, Information, which appears as Annex J.

IV. DATE AND VENUE OF THE FOURTH MEETING OF THE PHILIPPINES-INDONESIA JOINT COMMISSION FOR BILATERAL COOPERATION

48. Both sides agreed that the Fourth Meeting of the Joint Commission for Bilateral Cooperation would be held in 2003 in Indonesia. The exact dates and venue will be communicated through diplomatic channels.

V. ADOPTION OF THE AGREED MINUTES OF THE THIRD MEETING OF THE PHILIPPINES-INDONESIA JOINT COMMISSION FOR BILATERAL COOPERATION

49. The Meeting adopted the Minutes of the Third Meeting of the Philippines-Indonesia Joint Commission for Bilateral Cooperation.