Decree No. 650/MPP/Kep/10/2004 concerning provisions on the operation of forward auction market of agro commodities

PROVISIONS ON THE OPERATION OF FORWARD AUCTION MARKET- OF AGRO COMMODITIES (Decree of Uie Minister of industry and Trade No. 650/MPP/Kep/10/2004 dated October 18, 2004) TH[: MlNISrER OF INDUSTRY AND TRADf::, Considering: a. that in the framework of supporting the acceleration of economic growth in the industry and agro-trade sQctors, efforts to d(-'!ve\op busin~ss c\irnatc condu cive lo creation of efficfent trade in agro commodities are needed; b. that in relation to tile matter in letter a, lt is neces sary to develop forward auction market of agro com modities as a marketing instrument which is trans parent1 just and dignified by regulating the operation of the auction market; c. that for the purposes, it ls necessary to slipu\ate a decree of the Minister of Industry and Trade; In view of; 1. Law No. 22/1999 (BN No. 6361 pages lA ~ SA and so on) on regional administmtion (Statute Book of 1999 No. 60, Supplement to Statute Book No. 3839); 2.. Government Regulation No. 25/2000 (BN No. 6471 pages 19/\ - 20A and so on) on the authority of the government and the authority of provinces as autono mous regbns (Statute Book of 2000 No. 54, Supple ment to Statute Book No. 3952); 3. Presidential Decree No. 228/M/2001 (BN No. 6650 pages 29A - 30A) on the establishment of the Mutual Cooperation Cab(net; 4. Presidential Decree No. 102/2001 on tt1e status, tasks, functions, authority, organizational structures and working arrangements of ministries; 5. Presldcntia\ Decree No. 109/2001 on first-eche\on organizationaf unils and tasks of ministries; 6. Decree of the Minister of Industry and Trade No. 86/ MPP/Kep/3/2001 on the organization and working ar, ranaement of the MinistN of lr.dustl'V and Trade: DECIDES: To stipulate: THE DECREE OF THE MlNJSTEfl OF 1NDUSTRY ANI TRADE CONCERNING PROVISIONS ON THE OPERATIO/ OF FORWARD AUCTION MARKET OF AGRO COMMODI TIES. CHAPTER f GENERAL PROVISION Article 1 Referred to in this d0cree as: 1. Organizer of Forward Auction Morket is business en tity or provincial/regental/munrcipaJ service in charge of trade, which operates activities of forward auction morket. 2. Forward Auction Market is a mean where buyers and sellers met by using an auction system with forward delivery. 3. Members of Forward Auction M.Jrket an~ members of forward auction market of agro comrnodilics secur ing approval from the organizer of forward auction market. 4. Clearing nnd Underwriting lnstilution 'is business en tity registering and underwriting the settlement of transactions taking place on the forward auction mar ket. s. Delivery Period is a period of delivety of goods used as the basis in executing transactions on the forward auction market, which, by the transaction for a pe riod of settlement, means that the transacted con tracts must be realized in the period. 6. Sample ls sample of commodities with ce1tain spcc\ ficBtion, which are offered on the forward auction market. 1: Guarantee Fund is a certain amount of money placed bv members of forward auction market in clcarino and underwriting institution as guaranlee for settle ment of transaction of every quantity of commodilics traded by an auction system. 8. /\uction Days are working days stipulated specially by organiLer of forward auction market as days when the auction activitil:s are executed. 9. Working Days arc days other 1·hzin Sunday rmd other holidays stipulated by the government. 1 0./\uct1ori Hour 1s a period of tlmc when c1uction trans actions as stipulaled by organizer of forward auction markcl arc executed. l l .Commodilics arc commodities already stipulated by organizer of forward auction market as commodities traded on the forward auction rrr'rkcl. 1 J .Physical trade is phys\et.1i \rade of commodities by auction system with I.he promptly physical delivery {spot) arid/or some time later (forward). l 3. Delivery is delivery of commodities phys1ca\\y iri\o the power of any of the transacting parties as a consc qucr1cc o( ~Nlt!cmcnt of contract. 11,!r.Jdc broker 1s tncrnber of forward aucllori market, which based on the provisions, entitles to receive rnah-· date from the third party/principal by obtaining ser-· vice fee. /\rt.1clc 2 The Futures Cornmodity Trade Supervisory Board, hereinafter called Gappcbti fosters, regulates and super vise the implementation of <c1clivitics of forward auction inarkcl of aqro comrnodities. /\rtic!c J In executing the provision as meant 1n Article 2, Rappcbti 1s authorucd: a. to make further lcchn1cal provisions and explanation c1bo11t the 1mp!ementation of this decree; b. (o ~1pprovc orga11i;,cr of forward auction rmirkct and clearing and undcrwritin(J insl.itu\.ions; Business News 7155-7)56/)9-1)-2001 c. to direct organi/er of forward auction market to take ncn•ssury n1easures 1f certain cond1llons arc beli(•vcd polenliu! to rnakc the implc~mcntalion of forward auc lion market disorderly an(i irregular; d. t.o monitor and evaluate activities of organizer of for ward auction market, clearing and underwriting insti tutions and rnarkct players; c. lo <lpprovc stJncJurd opcraUng procedures stipulated by organi7cr of forward auction market and clcarinfJ <)nd underwriting institutions; r. lo take necessary rncasu,cs lo prevent v10\alion of this decree from inflicting lose; on communities. Article 4 Every party org,mi,ing activities of forward auc tion m;:irkct of agro cornmodiUes and clearing and un derwriting institutions are obliged to abide by \he provt· sions as regulated in this decree. CHAPTER fl lNSHflJTfON AND C:OMMfHEE Article 5 Forward c1uclion market 1s established to orga ni1c transactions of commodities through cm auct1ori sys tem with forward delivery orderly, reasonable, efficient and tran<;parent as well as just. /\rlidc 6 The forward auction market can be orqanl/l'd by busml!SS entity or provincial/rt:gcnta\/muniopal scr vice in charge of trade, after securinq approval from \3appcbti. /\rUde 7 ( l )Every organi1cr of the forward auction market rnust establist1 ;.1n orqani;,;1tion;il slruclurc minirnal!y con s1st1ng of: a. Cha1nnan of Auction; b. lransaction Opcr<1tion Division, c. Transaction Superv1s1on <1nd Sctllcmcnl D1v1s1on; d. /\drninistm\ion and Membc:rship Division ( ). ) Thc1 orcJanizc:r of I he fo1wc11·d auction markcl as meant 111 paraqrilph (1) is assigricd and authorued: ci. to . a. to prepare facilities and infrastructure for the op eration of forward auction market; b. to stipulate plqcc and date of implementation, specification of commodities and auction session; c. to evaluate and test qualification of candidates as well as accept or reject the candidates to become members of the forward auction market; d, to monitor price developments on the spot mar ket, together with clearing and underwriting insti tutions; e. to stipulate the amount of deposit of members and operational cost of service for auction; f. to superv'Ise the settlement of transaction contracts of members occurring on the forward auction mar ket periodically and any Ume, if necessary; g. to take necessary action to safeguard transactions of forward auction market, mduding to prevent the possibilities or manipulation of price and qual ity of commodiUes; h. lo stipulate the mechanism of settlement of com plaints and disputes in connection with transac tions of forward auction market; i. to take measures to guarantee the implementa tion of mechanism of transactions of forward auc ~ion market; and j. lo send record of data on daily transactions and dvta on sctUemcnl or transactions as well as trans action orders not yet matching to clearing and underwriting inslilutions and Bappebti. Article 8 (1)0rgJn\;crs of forward auction market are obliged to cooperate with clearing and underwriting institutions lo assure the settlement of transactions. (2)The clearing and underwriting institutions as meant in paragraph ( l) must: i.l. be business in the form of limited liability com pany and have secured approval from Bappebti; b. have an organi1atlonal structure minimally con sisting of the following divisions: 1. clearing and settlement; 2. risk control; 3. information t.cchno/ogy, accountancy and finan cial affairs; and 4. c:iudit and compliance. ['\l!SlnCSS News 7155- 71 ~)6/29-12-2004 Article 9 The clearing and underwriting institutions have the following tasks: a. to ascertain that daily clearing operational activities are implemented in accordance with the provisions in force; b. to stipulate requirements, accept or deny prospective members of underwriting; c. to stipulate requirements for underwriting members; d. t:o stipulate guarantee fund, clearing service fee and cost of underwriling of settlement of transacUons; c. to ask and obtain necessary information from orga niLers of forward auction market in connection with transactions carried out by underwriting members; f. to take measures to ensure the proper implementa tion of mechanism of clearing and underwriting of transactions of forward auction market; g. to take certain actions deemed necessary in connec tion with the failure of underwriting members in main taining the financial requirements already stipulated or fulfilling maturing liabilities to the clearing and un derwriting institutions; h. to take actions that they consider feasible or neces sary to ascertain and uphGld compliance to rules and disciplinary provisions of the clearing and underwrit ing institutions; and i. to undertake audit or ask other parties to audit, ex amine records of underwriting members any time and organi;-:e hearing with underwriting members in con nection with compliance of c!caring members to rules and disciplinary provisions of the clearing and under writing institutions; Article 10 [n order to help implement the forward auction market, organizers of forward auclion market can estab· lish: g. rnrnmot:ltty .• , . . a. con1rnodity cornmil:tcc; f-) c1ucllon cind mcmbt'r·ship co111Initll'c, and c. /\rbrtra\ion cornrnillec. l\rlide 11. ( 1) ! he comrnoci1ty rnInrn1U(~C as meant 1ri J\rlic:lc 10 let ter a is assigned lo help the organizerc; of forward ,-wclIon markd formulate standmd specificat1on'i or cvl'ry commodity al1·cr1dy ,ind to be traded on lhe forwurd auction market. (2.) ThC' member:> of the comrnodily committee ilS mCunt in paragrapf1 (1) consist of rmKtilioncrs understand ing the said commod1ly business. (J) Yh(' .standard spcnY1carions of the commocl"lty <JS meant in paragraph ( 1) 111dudc: a. kind; b. orirJ111; C. Si/e; d quahly; c. supNvisic.m; f. maximum deadline; and rJ. pince of delivery. A11.icle 12 { 1) The auction ; md membership committee <1s mmnl In Article 1 O letter b has the task of assisting in UK: auc tion operation, membership divisions as well as hdp Ing ;,dlle disputes arising from trading activities, \l)"l\ic: rncmbcr'.> o1 \.fll: cn1c\1on arn:'i mcrn\Jcrs\11p cnm mIUec as rrnsml lfl p;11uq1·;1ph ( t) consist of mcrntx~r'., of bus1ncs<; cornmu111t1cs undc(stai1dinq lhc syst.cm, operational 111ech;,mism, ruled ;rnd membership of fo1wc.1rd auction mnrket as well ilS the lilw in force. Article 13 rile arbiU-ution comrn1ttce ,is meant 111 Artrclc JO lellcr c is assigned to help organl/crs of forwcirct auction niarkct l<JC11itating the settlement of disputes b('twecn mernbc1·s of forward auction market, which cannot be settled by deliberation nnd/or mediation/conciliation. CHt,PTlR llI fv1l.MBERSHIP Article 14 {I) Mcmriers of the forward auction market conc,ist of· J. fam1crs/producers; b. farmer/business qroups; C. C0(1\X'.tCllW('.'.>; d. lrctdcrs, e rnanufJcturt)s; r. industries; 9. cJcpartrnent stores; h. exporters; or i. twdc brokt-r'.;. (2)Jn order lo secure mernt)crsh1p in the rorwarti auctio11 market, Uw following requirements must btc fulfilled: il. f3cmg 1nc.l1v1dual lndor1es1an citi1en, co1npanics m I.he form of limited IIability company, (1rms or na tional business cntiUes in the form of statutory body; b. Dorrncilcrl or located in lndoncs:a; c. HavIn9 good reputation and integrity in bus111css; and d. Rcm1tt111(J membership guarankc with the amount and procedures stipulated by organi;;cr of forward auction market in a ~;eparate requlJtion. (J)Bcs1dcs fulfillin\J the requirements as meant :n pilrd· grc1ph (2), individual LrildC brokers or 1..Jus1ncss cnU Ucs ml.1st have expcrl'.; in lhe agro comrnodily trade sector: /\rtic'.lc !S \)) i ri orclc1 to sl:e.urv mcrri!1c:1 :;\-"np m t Ile! \orvvrml <1un1or1 rnarkd, ; ipplicanh must ',ubmit appiiG1tions to urqrJ nl/NS or forward auction marh!t by usIn9. a. Form No. 1 and Forni No. 11\ as 111c,mt in /\t!ach ITl('nt l lo this decree, in the case of the dpµli cants being cornpanic';; b. Forni No. ) and I or111 No. )I\ as rncil1lt m Nlilr:h mcnt 11 to tl11s decree, in the CiY,l' c1f tlw cmp!i cants bcin\J individu;ils. {7:)Thc <1pplicants c1s meant rn parilgraph ( 1 ), com1n9 rmm. a. produc1n9 farmer·s (seller) must c:11clo<;t' ll'COffl nK'.ndution (rom ioe,1! rcqc11la!/1v,urnc1pal <1~Jncu\ ttirc service; IJ. traders, rnanufaclurers, exporters (buyers) rnust enclose recornnwndation from local regcnlaljrnu nicipJl industry and trade se.rvll'..£. (3)The auclion and membership commiltee examines ('Very application and stipulates day as well as dale of interview with the pl'Ospeclivc members. ( 1 )The organuer of the forward auction market conveys r1pproval or rejection of member of forward auction market Lo the applicants through a decision. Article 16 ( l) In the ecise of applicants fulfilling the requirements, organizers of forward auction market issues a deci sion on membership of the forward auction market by using \'orm No. 3 as meant ·in l\ttachment 111 to this decree. (2 )Applicants already receiving the membership decision as meant rn paragraph (I) arc given Membership Iden tity after the applicants sign statement of readiness to abide by the provisions in force. (])Certificate or the membership identity of the forward auction market as meant paragraph (2.) is effective nationally as long as the relevant is active in activities of forward auction market. ( 4 )If Lhe certificate of the membership identity being lost or damaging, the organizers of forWard auction mar ket 9ivc substitute. Article 17 Right.:.; and ob!igations of members of the for ward auction market are as follows: a mcmt>ers of forward auction market entitle: l. to obtain equal treatment and protection from or·· gamzers of forward auction market; 7.. • to obtain market information collected by organil ers of forward auclion market; 3. lo receive mandate from their principals in the country and abroad, in the case of members act mg as trade brokers; and 1 to appoint pclrties representing their companies lo execut:c transactions on lhe forWiJrd a1Jction miJr kd. [)d,;l'H",', [\JC\'/'; 11 SS-- 71 'j(i/') ( J-] ) .. / ()()II b. members of forward auction 1T1arket arc obliycd: I. to abide by Jnd upf1old disopline; rnde of conduct os ,.,Nie\\ o.s tl;,.e pn:Nisiow; '1fl force on tile forward auction market; 7.. to undcrtJk{~ orderly iJnd rc~Jular adminislriltion of the executed transactions; 3. lo meet financial obligation as members and re mit guarantee fund as underwriting members; 1, to give lestimony in settlement of disputes ansing from, if organi;crs of forward uuction market a'.,ks; 5. to hold responsibility for negligence, mistake and vio\ution of the provisions in force on the forward auction market; and 6. t.o implement mandate in accordance with orders of their principals, in the case of members acting as trade brokers. /\rticle 18 The membership of the forward auction market expires if: a. the relevant passes away, in the case of individuals; b. the relevant is declared by organi7ers of the forward auction market default; c. the relevant resigns by a wriltcn statement; d, the relevant is sentenced by lhe court for a crime that the organizers consider potential to affect the for" ward auction market; or e. the relevant does not undertake activity of forward auction market for one year. Article 19 ( 1 )The deposit and guarantee· money of members are returned if the membership expires on the basis of the provision in Article 18. (2)The return of the money as meant in paragraph ( 1) is paid to the relevant or legitimate heirs in the case of individual members passing away, after being sub tracted by liabilities becoming their responsibility. CHAPTl::R IV FINANCI/\I OBUGAllON Arlicle 2.0 Every member of the forward auction market is obliged to pay: a. Deposit of member and operational cost of service for the forward auction market with the amount stipu lated by the organizers; b. guarantee fund and clearing and underwriting ser vice fe~ with the amount stipulated by clearing and underwriting institutions. Article 21 ( 1 )The deposit of member as meant in Article 20 letter a is paid to the organi1er of forward auction market when the relevant is accepted as member and used for fu!filling liabilities of members not yet settled. (2)Thc management of the deposit of members as meant in parc.igroph (I) is done by organizers of the forward aucUon market separately frorn assets of the orga-· nizcrs and saved at banks i:lppointed by the orgiJ ni?er. Article 22 (1)The guarantee fund as meant in Article 20 letter bis p~i1d to the clearing and underwr·1ting ·1nsl"itut"1ons when the transaction contracts arc registered at the clear ing and underwriting institutions to obtain underwrit ing facilities. (/.)The management of the guarantee fund as mec.int in paragraph ( 1) is done by the clearing arnl underwrit ing institutions separately from assets of the clearing and underwriting institutions and saved at banks ap pointed by the clearing and underwriting institution. Cf lAPTER V MECHANISM OF TRANSACTION Article 23 Selling and buying bids on the forward auction market arc executed openly on the basis of samples and/ or specifications of quality. Article 21\ ( 1) Every member of the forward auction ma1·kct can: <L take p~irt directly as seller, buyer and/or tr;-1de bro Gusiness News 71SS-71'.i6/29-12·-2004 kcr with the provision that the relevant is still com mitt.ed to the provisions in force; and b. authorize other parties to undertake transactions on the forward auction market with the approval of the organi1er of the forward auction market. (2)The grantor of authority as meant in paragraph (1) letter b is responsible fully for every action of the proxy in executing transactions on the forward auc tion market. Article .?.5 ( 1) Members of the forward auction market register com" modilies to be auc:Lioned to officers in accordance with the form of registration provided for that, before the auction, not later than 3 (three) days before the auc tion. (2)Spccifications of commodities to be traded rnu.sl be specified completely und clearly in the provided form. (3)If sellers/buyers &tach samples of comrnodit1es1 the samples must be conveyed simultaneously upon the registration as many as 2. (two) units. (4)Thc regislraUon form already completed and signed is conveyed to auction udministration officer for ex amining and giving initial. (S)In accordance of with the registration as meant in paragraph (4), aucUon officer (operator) inserts data on buying/selling bids into the electronic system of the forward auction market. (6)Auction adrninistralion officer examines registration already inserted into the system in accordance with serial numbers of registration. (?)Auction is executed on the basis of serial numbers adjusted to the presence of auction members. (B)ln the case of several registrations having the same commodities, kinds/quality and delivery month, tf\e auction chairman organize auction in lump sum for all registrations. A tticlt! . . , Article 26 (1 )The auction chairrnan mentions ~1gain price, unil, quantity, kind, quality, origin of good and time and place of delivery, packaging and buying and selling bids, which are registered. (2)In the case of ttie repeated pronunciation as meant in paragraph ( 1) containing mistakes, the affected par ties can ask for re··checking. Article 27 ( l)Thc price, unit, quantity, kind, quality, origin of goods, time and place of delivery, packaging and buying and selling bids mentioned by bidders are repeated again by the auction chairman. (2)If the repeated pronunciation by the auction chair man as meant in paragraph (1) containing mistake, bidders can raise objection directly to the auction chairman for rectification. Article 28 Based on every transaction, the auction chair man re-affirms the occurring transaction by mentioning participant no of seller and buyer, price, commodity and the quantity of the occurring transactions. Article 29 Io the case of the electronic system not working or facing other technical failure, organi1.ers of forward cJuction market can suspend the implementation of for ward auction mcJrket or continue it manually. Article 30 Not later one hour after the transaction is de clared occurring, se!!er and buyer are obliged to sign transaction contract by referring the example as meant in Attachment IV to this decree and give it to the auction organizer. Article 31 (l)Auction organizer is obliged to register the transac tion contract of commodities as meant in Article 30 to clearing and underwriting institution by giving up a copy, not later than one working day after the trans action. 8usiness News 7-155-"7 ! 56/29-12--200'1 (2)The copy of the transaction contract as meant in para graph (1) has the ~ame legal power as the original one. Article 32 ( 1 )Auction day and hour are every working day or time already stipulated by organizer of forward auction market. (2)Every auction is organi?cd in 2 (two) sessions respec tively as follows: a. Morning Session : 09.00 - 12.00; b. Afternoon Session : 13.00 · 16.00 or c. Other time in accordance with the need stipulated by organizer of forward auction market. Article 13 (l}The offered price is recorded and denominated in the Rupiah. (2)The price mentioned in transaction contract of com modities, including variation of price is based on varia tion of quality and cannot be changed by seller or buyer until the settlement of transaction. Article 34 ( 1 )The delivery period of commodities in auction is weekly and monthly or other period agreed. (3)Thc delivery period of commodities as meant in para graph (l) is maximally 6 (six) months lo come. 'Article 35 (l)Commodities, which can be transacted on the for ward auction market are not limited. (2)Specifications of quality of the transacted commodi ties are specified in writing and part inseparable from the transacting contract. Article 36 The delivery can be done in warehouses of seller or buyer or place agreed by the seller and buyer. Article 37 Auction is executed as follows: p . auctio11, . . . . a. auction is led by auction cl1airman or illlernate auc·· lion chairman, c1ssistcd by auction officers; b. the auction chairman opens auction officially; c. based on the~ registration data appearing in screen, the auction cliairrnan ascertains sellers or buyt'rs about commodities, kinds/quality, ong111 of qoods, t1rnc and place of dclh1cry, quantity and price to be transacted; d. i.lftcr the auction chil1rman disclosed the datiJ as mC'ant in lc~ttcr c, auction particip;mls can submit the ex peeled buying or sellinu bids by mention mg the price and ()Uilntity, quality, lime and place of delivery etc; e. auction pat"licipants arc not permitted to mention the price and quantity of transaction before the! auction chairman completed the disclosure of lhc dal~1 as mrnnt in letter c; f. the auction chairman opens opportunity in three time~; counl, if the buying and selling bids not malching, the auction chainricm rnentin·"' lrdllSdction nil trans action and later c,;:rn open next opportunity; g. the auction chairman mentions transaction occurs if seller:, i)nd buyers reach agreement on all transacted mcltters; h. the auction chairman must open opportunity for sell· crs and buyers to barqain so as to result in the best lrc1nsoction; and 1. every transaclion occurs, sellers and buyers arc obliged lo sign transaction contract. Article 38 (I) Every selling or buying price and quantity occurring on the forward auction market is recorded by auction officer (op(-rator) by the available computer system. (:))Organizers of forw<ml auction market are obliged to keep the record as meant 111 paragraph ( l) for 1 O (ten) years at the minimum. /\rticle 39 Organizers of forward auction market me obliged: a. to convey confirmation i.lbout selling - buying trans· action of commodities already occurring on the for WiJrd auction market to sellers and buyers; <Hld b. to convey information on rights and obligations of every buyer and seller to transaction not yet setued. Business News 7155-7156/29-12-200'1 Article 40 Every seller and buyer is obliged to rqlort the rcali,:ation of seUlemc~nt of transaction to organi1ers of the forward auction market. Article 41 { 1 )l\ftc.1· the Guel ion is closed, auction officer prornplly rnakcs t.ransdction report on the basis of data ob· Lilincd wllen the auction tah~s place. (2)Thc transaction report as rnc;int in paragraph (!)con sists of 2 (two) sessions, namely morning crncJ uftcr noon sessions. (3)Thc transaction report iJS meant in parilgrapll (:,') 1s multiplied for distribution to every member mt ending to know and dissem111<1tio11 through mass, printed and electronic mcdiil. /\r!.iclc 4 2 ! he chairman of auction is obliged to report CV(~nls thilt he secs and asccrli1in during the a1iclion to tw, supc)nor. /\rliclc ,1 :3 OrtJani/Crs of forward auction market arc obl1~Jcd: a. to report in wntin~J the implementation and results of auction to Bappcbti not later than one day after the implernentation of the auction; b. to report the rcali1ahori of selling · buying tr,msac tion, be' it the settlement o( delivery of cornmodit1cs and purchase al lhc end of every rnonlh; and c. to report default. as soon as possible to f~appcbti. CHAPI rn Vl [Mf.F.C[.NCY CONDIT!ON /\ND fORCE MI\WURE Article 11 ( 1) J II an Clll(~rgcncy condil1on making auclion unable to implement, c.1uction organ\1ers can tal<.e necessary sctllemcnt steps. (2)Tlie emergency condition as meant in pilraqrapt1 ( 1) is · a. practict)S which can mflucncc the opcrat1on of the forward auction market that make tradt~ unable Lo 1·ca!ize in an ordedy m,mner and transp,ircntly; Q, situation ... b. situc1lion causing the delivery of- commodities to be postponed; or c. commodity price moving toward unreasonable level or uncontrollably. Article 15 ( 1) !n force majeure condition mak g auction unable to reali,,e, auction organit'ers can take settlement mea suws deemed necessilry, {2)Thc force majcure condition LJS meant in paragraph (7) includes flood, carthquate, war and country in slate of danger. Article 46 In the case of the occurrence of the conditions as meant in Articles '11 and 45, the settlement steps can be: a. postponing settlement of contract and/or extending the date of delivery and/or payment mentioned in contract to a specified period; b. permitting the replacement of maturing commodities and contracts with the same commodities of the dif fr~rent kind ilnd/or quality or other related commodi ties; c. suspending actIvil1es of forward auction market; or cl. providmg directives for members so as to be able to overcome the condition as well as taking other secu rity Hl('.u'.;ures that the organizers of forward auction market consider able to overcome the condition. CHAPTER VII SETTLEMENT OF DISPUTE Article 47 ( 1) Every dispute arising frorn the implementation or sell inq and buying transactions on the forward auction market is sell.led first through deliberation to reach consensus. (?) fn the case of the deliberation to reach consensus as meant 111 paragraph (1) being not achieved, parties use' msl.rumenls of mediation or conciliation provided by organi?ers of the forward auction market. l3usincss News llSS-7156/29· 12··2004 Article 48 {1 )If tl1e effort as meant in Article 17 failed, the dispute must be set.tied lhrouqh arbitration by establish111g an ,irt>itration committee. (2)The arbitration committee as meant in paragraph ( l) IS established by organizers of the forward auction markcl. (3)The arbitration committee i.lS mmnt in par,19raph (2) prepares a list of arbiters who will become member of the arbitration panel, /\rlicle 19 Requirements for the arbiters are as follows: a. understanding system ilnd operational mechanism of forward auction market; and b. understanding commodity affairs and settlement of their transactions. Article 50 (l)The number of every arbitration panel is odd, cJt lcc1st three arbiters with the provision that the respective parties in dispute choose one and the two elected arbiters choose the third arbiter as lhe chairman. (2)111 lhc case of in five days, the two arbiters nol yet agrccInt] to d10ost~ the U11rd arbiter as the cha1rrnan, orgi.lrn?cr of forward auction market entitle to appoint the third i.lrbiter. (3)In the case of any of the parties not appointing an arbiter, the relevant is deemed entrust111g the appoint· mcnt of arbiter to organizer of the forward auction market, (4)Unless the relevant parties Jppoint arbiter, the orga· l"lizcr or the lorward c1ucl.ion market c1ppo ls 3 (three) arbiters c.md any of them is appointed to become the chai1rnan. (5)111 the case of any of the parties raisincJ object1un to one arbiter or more as ITleant in paragraph ( 4 ), the relevant is obliged to disclose the reason and if Lhe reason is acceptable, the organizer of the forward auction rnzirket entitles to appoint other arbiter. Article~ ... .. ArlicJc, 51 ( I )The arbitration comrnittcc stipulates time-~ and place of urb1t1·at1on. (/)Fver-y application for seu-iemcnt through i.lrbitration is s11bmitted to the arb1t1·;1tion commiltec ,ind .~ub Jfx:tcd to adminislriltive cost with the amount stipu lated hy the arbitration committee. (J)ln the~ administrative cost as meant in pa1·awc1ph (2) bcin'.J alrCrJdy pil1d, the arbitration cornrrnttcc must promptly convey actions of the application t.o the op posite party to b(~ responded not later than 10 (len) working days by rncnl1oning arbiter cl(sctcd by lht~ party. /l..rt1cle S2 ( 1) Every applic;:it1on for scltlr:rnent of dispute must be ,;ubm1lll'd in writing to the arbitration rnrnmiU·ee not later than 7 (seven) days after rncdialion or concilia tion failed. ()) rhc arbitration committee examines the complete~ ncss of documents of application for settlement of dispute as meant in paragraph ( l ). (3) T( the documents as meant in par-agraph (2) have been complete wholly, the arbitration committee '.Jives up the documents of application for settlement of dis pute to the arbitration panel for further processing. Article 53 Arbitration decision is final and binding ;:ind ap pcc.11 t:ilnnot be requested. Article S-1 Every member of the forward auction market 1s deemed illready knowing cmd must bl~ abide by as well as obeys all regulations in ror-ce in connection with the operation of the forward auction market, mcluding their technici.ll rules. CH/\PTER VIII VIOLATION /1..NIJ SANCTION Article SS ( I )V1olallons by rncrnber·s of tl1e forward auction markel are class1!1cd into light and serious violc1t1011s. ()) fhc light violations <JS rrwant in parauraph ( J) are. il. actions not i.Kcording to common norms m the trade; b. underl,1king iicliv1\1cs lending to tarnish dignity or irnaqc of the forward ilUCt1on rnr1rkd; or c. violating admirli<;tral1on effective ur1 lh<' forwcnd auction rnarket. (3) !he serious violations as rncant in pmaqraph ( 1) an~: a. consoous)y in group lo excrnte transaction already agreed previously; b. mak11111 or reporting raise or fictitious transaction; c. exlortinq or tryinrJ to extort other memb(~rs of the forward auction milrkcl or their principals; d. milnipul;it.in<J prier:: or tryin(J lo manipulate price lo comer Hie m;cir-kct; c. 1r1!ent1onally conveymu untrue written statement or infonnalion to the organi;,cr of forward auction markcl or other ilgcncies related to \he fo1ward ,1uction market.; f. consciously disseminating false report on cone.Ji .. lion of stocks of commodities or market condition f\uennng or polcntial to inllucncc d cornmodily on the forward auction market; g. buying or selling c1 commodity with a view of mak ing buying or selling transaction chaotic on thl' forward auclion market; or h. committing light violation more than two times. Article 56 Procedures for determining the occurrence of violation are ;1s follows: a. organi1Ns of the fonNard auction market and/or other appomted part•ics cxarnine case ascertained or allcg · r:dly violutmg the provisions in force on the forward auction market on the basis of self initiative and/or report from interesting parties. b. In the case of dircclivc that violation has occurred, the organi1crs of forward auction market further invcsti gal(~ members comrnitling the violation by means of: l. summoning the mcmbc1· dnd/or other implicated members; 7. examining bookkecp1ng/rccords; J. asking necessary dornrncnts related to lhc prob 1cm; ilnd '1. subtrnlting question,,. c. making Jccount or results or examination as 1natters of decision making by Lhc organizer of the forward auction market. Article 57 ( l}Viol2ilions cuh,~Jorized a~, light violation are subjected to written warning maximally twice. (2)In Lhe case of lhc~ members of forward auction market not obeying the written warning as meant in paragraph {1), the relevant is subjected to sanction of frceLing of nwmbcrship for 6 (six) months and/or a fine of Rp '.J,000,000 (five million rupiahs) at the maximum. (])Jn the ca,;t' of violalions being categorized as serious vio lation'.;, every violation is subjected to sanction of termi nation by revoking membership identity and/or a fine of Rp 25,000,000 (twenty five million) at the mc1x1mum. ,'\rticle 58 Provisions on the imposition of sanction as meant in /\rlicle S7 ar·c regulated by a decision of the organizer of the forward auction market. Article 59 The imposition of sanction of written warning, freez ing of membership, revocation of membership identily and fine as meant in Article 58 1s done by the organizer of the forvvard auction market. Cl 1/\PfER IX Tf\/\NSrr·1ONAL PROVISION Article 60 With th£' enforcement of this decree, all pro visions regulating activil.ies of the forward auction ir1<1rket <'ll"t~ declared null and void. CHAPTER X CONCLUSION Article 61 The decree comes into fotn! as from thediltr. of slipu!cit"ion. f'or public cogniLance, the decree shall lx~ placed by pl;icinq it 1n State Gai'cttc of the Republic of lndoncsii:l. Stipulated in .Jakarta On October 18,2004 THE MINJ5TER OF INDUSTRY AND lR/\Df Sgd RINI M SUMARNO SOEWANDT E(Jilor's NO\:( : : The attachments are not obtained.