DEVELOPMENT FINANCING FACILITY EDFF ECONOMIC for sustainable economic development
Nilam Aceh: A Study of the Patchouli Oil Industry in Aceh, Indonesia
Prepared by:
Caritas Czech Republic
Table of Contents Table of Contents ................................................................................................... i List of Tables ........................................................................................................ ii List of Charts ....................................................................................................... ii List of Maps ......................................................................................................... iii List of Photos ....................................................................................................... iii Glossary and Abbreviations ................................................................................. v Introduction ............................................................................................................. 1. Brief Background on Aceh ................................................................................ Population ............................................................................................................ Growth .................................................................................................................. Inflation ................................................................................................................. Trade and Banking ............................................................................................. The Workforce .................................................................................................... Poverty ................................................................................................................... What Does This Mean? ..................................................................................... 2. Why Invest in Aceh? .......................................................................................... Business Support Facilities .............................................................................. Government Strategies and Initiatives ......................................................... How to Invest in Aceh?....................................................................................... Is This Enough to Invest? .................................................................................. 3. The Patchouli Sector in Indonesia ................................................................. World Trade in Essential Oils ........................................................................ The Global Demand for Patchouli .................................................................. The Price of Patchouli Oil ................................................................................. 4. The Patchouli Sector in Aceh .......................................................................... History ................................................................................................................... Quality of Acehnese Patchouli Oil ................................................................. Productivity of the Patchouli Industry in Aceh .......................................... The Patchouli Value Chain in Aceh ............................................................... The Patchouli Sector in Java: A Model Value Chain ................................. Environmental Issues ........................................................................................ Is There Room for Expansion? ........................................................................ 5. Analysis of the Patchouli Industry in Aceh ................................................. 6. Recommendations .............................................................................................. References and Appendices ................................................................................. Books, Journal Articles and Theses ................................................................ News Articles, Websites and Blogs ............................................................... Interviews ............................................................................................................. Appendix 1. Map of Aceh ..................................................................................
1 5 6 11 16 17 20 25 28 29 30 33 38 40 43 44 50 54 59 61 64 68 70 77 79 84 87 95 99 100 102 103 104
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Appendix 2. List of Laws and Regulations Related to Investment ..... Appendix 3. Summary of Application Procedures .................................. Appendix 4. Checklist of Forms and Letters ............................................ Appendix 5. Seaports and Airports in Aceh .............................................. Appendix 6. Gayo Coffee: A Case Study on the Benefits of Certification .................. Appendix 7. List of Contacts .........................................................................
107 110 130 132 135 136
List of Tables Table 1: Gross Domestic Product of Aceh per Sector Including Oil, Gas and Mining (%) .............................................................................................. Table 2: Economic Growth in Aceh (%) ........................................................... Table 3: Export From and Import To Aceh (Excluding Oil and Gas) ...... Table 4: Demand for Essential Oils in the European Fragrance Industry in 2006 ............................................................................................................... Table 5: Global Market for Fragrances by Application in 2006 ................ Table 6: Comparisons of Standards of Quality for Patchouli Oil .............. Table 7: Production Capacity in Patchouli Oil in Aceh ................................ Table 8: Value Chain of Patchouli Production in Aceh ................................
12 13 17 44 45 64 88 92
ii List of Charts Chart 1: The Population of Aceh 1930-2010 with Growth Projections Up To 2020 (Millions) ................................................................................... Chart 2: Gross Domestic Product of Aceh......................................................... Chart 3: Inflation Rate of Two Main Cities in Aceh (%, CPI yoy DecDec) ..................................................................................................................... Chart 4: Banking Activities in Aceh (IDR Trillions) ..................................... Chart 5: Educational Background of Job Seekers Registered in 2008/2009 at the Department of Workforce and Transmigration, Aceh (Thousands) .......................................................................................... Chart 6: Population by Age Group in Aceh Province in 2009...................... Chart 7: Employment Status of Workers Over The Age of 15 In Main Industry Sectors In 2009................................................................................ Chart 8: Regional Minimum Wage (UMR) in Three Provinces (IDR/Month)..................................................................................................... Chart 9: Poverty Rate in Aceh (%)...................................................................... Chart 10: Urban and Rural Poverty Rate in Post-Disaster Aceh (%)........ Chart 11: Annual Government Budget and Expenditure (IDR Trillions).. Chart 12: Diagram for Application for Investment..........................................
9 14 16 18 21 22 23 24 25 27 37 39
Chart 13: Indonesia Imports and Exports of Essential Oils (USD billions)................................................................................................... Chart 14: Worldwide Flavor and Fragrance Market in 1999........................ Chart 15: Estimated Sales Volume of Essential Oils to the Main Buyers in the Flavor and Fragrance Industry (USD billions)............................. Chart 16: Volume Range of Demand for Patchouli Oil from the Top 6 Largest Importing Countries in 2006 (ton/year)..................................... Chart 17: Regional Price Difference of Patchouli in Indonesia (USD/kg). Chart 18: International Price of Patchouli (USD/kg) According to Payan Bertrand and DAI ............................................................................... Chart 19: Share of Region in Patchouli Production in Indonesia................ Chart 20: Acehnese Patchouli Grade Based on Olfactory Range................ Chart 21: Area Used for Patchouli Plantations in Aceh (Ha)....................... Chart 22: Volume of Patchouli Oil Produced in Aceh (Ton)........................ Chart 23: Productivity of Patchouli Oil Production in Aceh (Kg/Ha)....... Chart 24: Value Chain of Patchouli Oil in Aceh.............................................. Chart 25: Value Chain of Patchouli Oil in Java................................................ Chart 26: Cost of Different Fuel Used for Distillation (USD/kg)............... Chart 27: Efficiency of Different Fuel Used for Distillation (kg/hour)......
46 47 49 52 55 56 63 66 69 69 70 71 77 82 82
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List of Maps Map 1: Distribution of Settlements in Aceh......................................................... 10 Map 2: Transport Routes in Aceh.......................................................................... 31
List of Photos Patchouli oil being tested........................................................................................ A patchouli distillery in Tapaktuan, Aceh Selatan (c. 1930) .......................... Patchouli oil samples .............................................................................................. Land transport in early 20th century and today................................................ The Sultan Iskandar Muda airport (formerly Blang Bintang)........................ The port of Sabang in early 20th century and today.......................................... Patchouli cultivation............................................................................................... Drying patchouli leaves and stem.......................................................................... An old Dutch patchouli distillery in Tapaktuan, Aceh Selatan (c.1921)....... Patchouli main varieties in Aceh........................................................................... Patchouli harvesting in Teunom, Aceh Jaya (c.1930s)...................................... An iron distillation unit........................................................................................... Patchouli distillation equipments........................................................................
1 5 29 30 32 35 43 59 62 65 72 73 87
Patchouli plantation in Aceh ................................................................................ 95 Patchouli Leaves ....................................................................................................... 99
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Glossary and Abbreviations AFEP Amdal APBD APBN API API-M API-P APIT API-U
Analisa Dampak Lingkungan Anggaran Pendapatan Dan Belanja Daerah Anggaran Pendapatan Dan Belanja Negara Angka Pengenal Impor Angka Pengenal Impor Angka Pengenal Impor Produsen Angka Pengenal Importir Terbatas Angka Pengenal Impor Umum
BALITTRO
Balai Penelitian Tanaman Obat dan Aromatik
Bappeda BKPM BLT BPS BRA BRR DAK DAU DPRD FGD GAM HAM HPH IDP IMB IMTA INALUM
Badan Perencanaan Pembangunan Daerah Badan Koordinasi Penanaman Modal Bantuan Langsung Tunai Badan Pusat Statistik Badan Reintegrasi-Damai Aceh Badan Rehabilitasi Dan Rekonstruksi Dana Alokasi Khusus Dana Alokasi Umum Dewan Perwakilan Rakyat Daerah
KK KP KPA
Kontrak Karya Kuasa Pertambangan Komite Peralihan Aceh
KPPA KSU KTP LHP LKPM LSM NAD NGO NIK NPWP P2DTK
Kantor Perwakilan Perusahaan Asing Koperasi Serba Usaha Kartu Tanda Penduduk Laporan Hasil Pemeriksaan Laporan Kegiatan Penanaman Modal Lembaga Swadaya Masyarakat Nanggroe Aceh Darussalam
PA PAD Pajak Nanggroe PDKPM PDPPM PDRB Pemda PIB PKP2B
Gerakan Aceh Merdeka Hak Azasi Manusia Hak Penguasaan Hutan Izin Mendirikan Bangunan Izin Mempekerjakan Tenaga Kerja Asing Pt. Indonesia Asahan Aluminium
Nomor Induk Kepabeanan Nomor Pokok Wajib Pajak Program Percepatan Daerah Tertinggal Dan Khusus Pendapatan Asli Daerah
Perangkat Daerah Kota Penanaman Modal Perangkat Daerah Provinsi Penanaman Modal Produk Domestik Regional Bruto Pemerintah Daerah Pemberitahuan Impor Barang Perjanjian Karya Pengusahaan Pertambangan Batubara
Aceh Forest Environment Project Environmental impact assessment Regional Government budget Central Government budget Import identification number Import identification number Producer’s import identification number Limited importer identification number General import identification number Research Center of Spices and Medicinal Plants Regional development planning board Investment coordinating body Direct cash transfer program Central bureau of statistics Agency for peace and reintegration Reconstruction and rehabilitation agency Special allocation funds General allocation funds Regional people’s representative council Focus group discussion Free Aceh movement Human rights Forest concession Internally displaced person License to build property License to employ foreign nationals A Government-run mining company in Asahan, North Sumatra Contract of work Mining license Committee for Aceh in transition. Umbrella group for former GAM members Foreign company representative office Business Cooperative Identification card Inspection results report Investment activity report NonGovernment organization Official name for Aceh from 2002 to 2007 Non-Government organization Customs identification number Tax identification number Disadvantaged and special regions development program Patchouli alcohol Locally-generated revenues Illegal ‘state tax’ (Acehnese) Township Government apparatus on investment Provincial Government apparatus on investment Regional gross domestic product Regional Government Item import notification Mining of coal contract
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PNS PP PPAT PPh PPI PPL PT PTSP Puskesmas Pustu Raskin RKPD RPJMD RPJPD RPTKA RUPS SITU SK SME SP SPPP TDP TKA TKI UKL UKM UPL Uroe Peukan UU WNA WNI
Pegawai Negeri Sipil Peraturan Pemerintah Pejabat Pembuat Akte Tanah Pajak Penghasilan Pelabuhan Pendaratan Ikan Penyuluh Pertanian Lapangan Perusahaan Terbatas Pelayanan Terpadu Satu Pintu Pusat Kesehatan Masyarakat Puskesmas Pembantu Beras Untuk Penduduk Miskin Rencana Kerja Pemerintah Daerah Rencana Pembangunan Jangka Menengah Daerah Rencana Pembangunan Jangka Panjang Daerah Rencana Penggunaan Tenaga Kerja Asing Rapat Umum Pemegang Saham Surat Izin Tempat Usaha Surat Keputusan Surat Persetujuan Surat Pemberitahuan Persetujuan Presiden Tanda Daftar Perusahaan Tenaga Kerja Asing Tenaga Kerja Indonesia Uji Kelayakan Lingkungan Usaha Kecil dan Menengah Upaya Pengelolaan Lingkungan Undang-Undang Warga Negara Asing Warga Negara Indonesia
Civil servant Government regulation Notary Income tax Fish landing port Agriculture field trainers Limited company The one stop service providers Community healthcare center Secondary healthcare center Rice for the poor program Regional Government work plan Regional medium-term development plan Regional long-term development plan Workplan to employ foreign nationals General meeting of shareholders Place of business license Letter of decree Small to medium enterprises (see UKM) Letter of agreement Presidential letter of approval Company registration code Foreign staff Indonesian staff Environmental suitability test Small to medium enterprises Environmental management effort Market day (Acehnese) The national law of Indonesia Foreign nationals Indonesian citizen
