ASEAN activities in the Industry, Minerals and Energy sector during the year under review were concentrated in preparing for the Third ASEAN Summit which was held on 14 - 15 December 1987 in Manila.

The Summit Meeting gave the sector more than a major boost when a Revised Basic Agreement on the ASEAN Industrial Joint Venture and an Agreement on the Promotion and Protection of Investments in ASEAN were signed during the Third ASEAN Summit.

The Heads of Government also approved a Programme of Action for the sector that reaffirmed their commitment to ASEAN cooperation.

The Programme of Action seeks to accelerate sound industrial development as a long- term goal for the region. It also seeks to increase the flow of investments in the region and to raise intra-ASEAN investments to at least 10% of total foreign investments by the turn of the century. Furthermore, it is hoped that manufacturing value added will increase at a rate of growth of 8% yearly.

To support these goals, the Programme of Action calls for: the improvement of the AIJV Scheme; the promotion and protection of intra- ASEAN investments through an ASEAN investment guarantee agreement; the adoption of measures that would encourage the increased flow Of technology, know-how and investments into the ASEAN region; and continuation, on a regular basis, of the existing practice of exchanging information on national industrial policies and Plans. With respect to the energy sector, regional energy cooperation shall be pursued in, among other fields, energy planning, exchange of information, transfer of technology, research and development, manpower training, conservation and efficiency and the exploration, production and supply of energy resources.


ASEAN Industrial Projects (AIPs)

a) ASEAN Urea Project (Indonesia)

Production of urea by the Project Company during the first five months of 1987 totalled 217,039MT or about 38.07% of the designed capacity. Sales registered a total volume of 205,595 MT as of May 1987 with the following breakdown of country destination:




 Indonesia	: 27.0%
 Malaysia	:  3.6%
 Philippines	: 14.0%
 Singapore	:  5.0%
 Thailand	: 36.0%
 Others		: 14.3%




b) ASEAN Urea Project (Malaysia)

For the coming 1988 - 1989 period, the Project has set production targets of 495,000 MT of urea and 330,000 MT of ammonia which represent 100% of plant capacity.

The Project's production of ammonia and urea in 1987 were 352,330 MT and 558,675 MT respectively. Sales of both products in 1987 were 25,179 MT and 543,015 MT respectively.

The Project was able to dispose its production at competitive prices. Marketing efforts were concentrated on the Malaysian and ASEAN markets and the premium urea markets in Europe, the USA, Japan and Australia. The Project is also making penetrative moves into the markets of Canada and Latin America.

c) ASEAN Copper Fabrication Project (Philippines)

The Annual Stockholders' and Board of Directors' Meetings of the Project Company were held on 3 June 1987 in Manila. The Company's Board of Directors has agreed that the Project will be undertaken in phases with the first phase con- centrating only on the production of flat products amounting to about 30,000 MT.

d) A SEAN 'Hepatitis B Vaccine Project (Singapore)

It was no longer possible to proceed with the Hepatitis B Vaccine Project because of changes in the economies of the Project. Another project is being identified to replace the Hepatitis B Vaccine Project.

e) ASEAN Industrial Project(Thailand)

The Thai government is still in the process of identifying a new AIP.

ASEAN Industrial Joint Venture

A Revised Basic Agreement on the ASEAN Industrial Joint Venture (AIJV) was signed during the Meeting of the Heads of ASEAN Government held in Manila on 15 December 1987 which would render the Scheme more flexible, quicker to implement and more attractive to private investors. The revised basic agreement would:

a) facilitate the setting-up of AIJVs through the submission of individual member countries list of import pro- ducts with value of more than US$5 million per each item and those pro- ducts are not locally manufactured so as to form a pre-approved list of AIJV products;

b) in any approved AIJV projects, there must be at least 5% equity from each participating ASEAN country;

c) liberalize the non-ASEAN equity in AIJVs from 49 percent to 60 percent provided that applications to undertake such industrial joint ventures be received before 31 December 1990 and subsequently approved for AIJV status

d) expand/deepen incentives and privileges under the scheme as follows:


- deepening of the margin of tariff preference from a minimum of 75 percent to a minimum of 90 percent. Binding of a zero of duty shall be regarded as fulfilling the requirement of extending the minimum 90 percent margin of tariff preference;

- providing for the waiver period of the Margin of Preference (MOP) to be extended from four years to a maximum of eight years for those non-participating countries which are unable to offer reciprocal mops;

- granting of local content accreditation to an AIJV product if it is a component for the manufacture of any product in the participating countries which have total content programmes;

- the participating countries shall not lower their tariff rates for products similar to the AIJV product below the level prevailing at the time of approval of the AIJV product for four years from the start of commercial operations; and

- protection to AIJV products by participating countries in cases of dumping, unfair trade practices or any other form of unreasonable pricing of similar products obtained from sources outside the participating countries as if the AIJV products were located in the participating countries. Implementation of the above measures is subject to negotiations on the mechanism.

To date, there are 15 approved AIJVS consisting of:

a) Constant Velocity Joints;

b) Mechanical and Power Rack and Pinion Steering including tierods, ballpoints and linkages and/or semi-finished; finished parts and sub-assemblies thereof;

c) Frit;

d) Motorcycle Electrical Parts ( as approved by the 16th AEM in Jakarta, May 1984):

e) Potast Feldspar, Quartz;

f) Slaughtered Meat;

g) Security Paper;

h) Automotive Lamps;

j) Motorcycle Electrical Parts ( as approved by the 18th AEM in Manila, August 1986);

j) Ball Joints for Motor Vehicles;

k) Steering Columns including shafts and linkages;

l) Ethoxylates;

m) Multi-stage, High Powered Centrifugal Pumps;

n) Fatty Acid Methyl Esters, Coco Alcohols, Phosphates, and Amide; and

o) Wet-Laid Non-Woven Fabrics.

Furthermore, to implement the pre-approval concept under the revised BAAIJV, member countries have submitted preliminary offer lists totalling 106 products for possible consideration as AIJV products. The country lists, which consist of products with import value of above US$ 5 million and not locally manufactured as well as products with export potential, will be updated every six months for consideration into a pre-approved AIJV product list.


ASEAN Industrial Complementation (AIC)

The Experts Group Meeting was mandated by the ASEAN Economic Ministers to be convened in early 1988 to implement the Brand-to-Brand approach to Industrial Complementation, by improving on the AIJV and AIC schemes or by formulating an entirely new scheme taking into account the terms of reference on brand-to-brand complementation approved by the AEM in 1983.


ASEAN Industrial Standardization Programme

The implementation of the programme has been subsumed under the ASEAN - EC Industrial Standards and Quality Assurance Programme. The Project on Industrial Standardization for the iron and steel industry was earlier being implemented with UNDP assistance.


ASEAN Minerals Cooperation

A follow-up to the ASEAN - EC Minerals Legislation Meeting has been requested by ASEAN to be held in conjunction with the ASEAN - EC Workshop on Industrial Minerals and the Asia Pacific Conference of the ASEAN Federation of Mining Association (AFMA) to be held in Bangkok in February 1988. The ASEAN - EC Workshop on Industrial Minerals was held in Bangkok prior to the Asia Pacific Conference of the AFMA and both the Workshop and Conference were a success.


ASEAN Cooperation in Energy

The Seventh Meeting of the ASEAN Economic Ministers on Energy Cooperation was held in Brunei Darussalam on 7 - 9 April 1988.

The Ministers noted the decisions of the Third Meeting of the ASEAN Heads of Government held in Manila on 14 - 15 December 1987 on ASEAN energy cooperation and directed the Senior Officials on Energy .,Cooperation to formulate a programme of action to implement the Manila Declaration of 1987 relating to energy matters. The Ministers also reviewed the cooperation activities being undertaken in the areas of Coal, Power Utilities and New and Renewable Sources of Energy and expressed satisfaction on the progress of these activities.

In the area of New and Renewable Sources of Energy (NRSE), the Ministers noted the significant progress achieved in the development of NRSE technologies in the individual ASEAN countries and that it would be desirable to undertake cooperatives in the commercial application of NRSE technologies in the region. For this purpose, the Ministers requested the ASEAN Experts Group on NRSE to undertake the task of pursuing cooperation on the commercial application of NRSE technologies at the regional level, including the formulation of a plan of action for this purpose.

The Ministers also reviewed the follow- up actions being taken to implement the ASEAN Petroleum Security Agreement and agreed that the meeting of the Executing Agencies of member countries for the Agreement, signed by the ASEAN Foreign Ministers in Manila on 24 June 1986, be held in Malaysia in June 1988 to formulate standing procedures and action programmes necessary for the implementation of the Agreement.

For more information, please refer to the project details