VZCZCXRO3774
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0182/01 0291019
ZNR UUUUU ZZH
R 291019Z JAN 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 7784
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHKO/AMEMBASSY TOKYO 1464
RUEHPE/AMEMBASSY LIMA 0062
RUEHBJ/AMEMBASSY BEIJING 4680
RUEHBY/AMEMBASSY CANBERRA 1937
RUEHUL/AMEMBASSY SEOUL 4380
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 000182 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
AIDAC 
 
DEPT FOR EAP/EP, EAP/RSP AND EAP/MTS 
TREASURY FOR IA-SETH SEARLS 
USTR FOR WEISEL AND CUTLER 
SINGAPORE FOR SUSAN BAKER 
BANGKOK FOR SKIP KISSINGER 
COMMERCE FOR 4430-BERLINGUETTE 
DEPARTMENT PASS FEDERAL RESERVE SAN FRANCISCO FOR FINEMAN 
DEPARTMENT PASS EXIM BANK 
 
E.O. 12598: N/A 
TAGS: APEC ECON ETRD EINV EFIN ID
SUBJECT: APEC-ASEAN COOPERATION, CORPORATE SOCIAL RESPONSIBILITY - 
AMBASSADOR HASLACH VISITS JAKARTA 
 
¶1. (SBU) Summmary. Ambassador Haslach met with business and 
government leaders January 21-23 in Jakarta.  American business 
leaders noted that U.S. companies have a comparative advantage in 
the region on corporate social responsibility (CSR) programs.  ASEAN 
and APEC are seeking ways to work more closely, including on food 
and product safety, energy and tariff reduction.  The USG seeks 
greater Indonesian engagement in APEC.  End Summary. 
 
AmCham Meeting 
-------------- 
 
¶2. (SBU) In a meeting with American Chamber of Commerce (AmCham) 
leaders on January 21, Ambassador Haslach provided an overview of 
APEC and issues of interest to the business community.  Haslach 
noted the significance of APEC economies (40% of global population, 
50% of trade, 60% of GDP).  U.S.-ASEAN trade totaled $166 billion in 
2006 and expanded 7% per year between 2002-2006.  An important 
initiative is the Free Trade Area (not "agreement") of the Asia 
Pacific.  Haslach noted that of the recent four Free-Trade 
Agreements, Congress passed Peru, but Columbia, Panama and Korea are 
progressively more difficult.  Food safety is an area of great 
concern to the U.S. given the recent problems with imports from 
China. 
 
¶3. (SBU) The U.S. supports the Sydney Declaration on Climate Change 
to disseminate clean and energy efficient technologies.  APEC also 
completed a "Corporate Social Responsibility" report in 2005 and 
Peru, as current chair, is keen to focus on examples and best 
practices.  The USG hopes that Indonesia will play more of a 
leadership role in APEC. 
 
¶4. (SBU) AmCham leaders noted that while U.S. companies are actively 
engaged in the APEC region, we do not always communicate that 
effectively.  This often weakens the U.S. business position in 
dialogue with host governments.  By contrast, the Japan-ASEAN 
agreement is largely political, but many Asian nations focus on form 
as much as content.  The USG is often too focused on content over 
form.  Japan has effectively used its umbrella agreement, and the 
fact that President Yudhoyono signed it in Japan on a high-level 
visit, to leverage additional cooperation.  The AmCham is working 
closely with the Indonesian Chamber of Commerce (KADIN) and the 
International Business Chamber (IBC) on issues of concern to both 
the domestic and international business communities.  "Sometimes it 
is better if the GOI is not hearing it just from the U.S.," one 
AmCham leader stated. 
 
Corporate Social Responsibility: 
U.S. Firms' Comparative Advantage 
--------------------------------- 
 
¶5. (SBU) On CSR, one AmCham member noted that U.S. companies have a 
significant comparative advantage over other countries.  Even the 
next best competitors, Japanese firms, do not do nearly as much as 
U.S. companies.  AmCham leaders noted the rapid expansion of China's 
involvement in several sectors: from power generation, to extractive 
industries, to telecommunications.  U.S. companies are way ahead of 
China on CSR, especially in the extractive industries area.  The 
Parliament's inclusion of a CSR clause legislation in July 2007 may 
make Indonesia, the only nation in the world to legislate CSR 
according to the head of AmCham's CSR committee.  Ambassador Haslach 
said she would share the OECD guidelines with AmCham, which may help 
in outreach and communication efforts on the issue.  "We can't focus 
on trade liberalization and not consider the social aspects," she 
noted.  The fact that U.S. companies in Indonesia have been 
finalists three years running for the Secretary of State's Award for 
Corporate Excellence (including winner GE Indonesia in 2007), also 
helps to highlight U.S. firms' CSR activities. 
 
ASEAN - APEC Cooperation 
------------------------ 
 
 
JAKARTA 00000182  002 OF 002 
 
 
¶6. (SBU) Ambassador Haslach outlined U.S. priorities for APEC in 
meetings at the ASEAN Secretariat on January 21.  Lok Hwee Chong, 
Assistant Director for the Bureau of Economic Integration and 
Finance, emphasized that closer ASEAN-APEC cooperation depended on 
the APEC Secretariat moving from seconded member country officials 
to an institutionalized professional staff.  It is difficult to 
ensure continuity and maintain momentum on long-term projects, he 
said, with the current rate of staff turnover at the APEC 
Secretariat. 
 
SIPDIS 
 
¶7. (SBU) Dhannan Sunoto, Director of ASEAN's Bureau of External 
Relations and Coordination, echoed Lok's comments.  Because member 
country line agencies that work on a particular sector for ASEAN may 
not be the same as those that work on the same sector for APEC, a 
permanent staff at the APEC Secretariat would be crucial for closer 
coordination with ASEAN.  He added that ASEAN would likely pull back 
its participation as an observer in APEC meetings because of budget 
constraints.  Ambassador Haslach encouraged the Secretariat to 
continue to participate in higher-level meetings and agreed that a 
revamped APEC Secretariat could help facilitate information-sharing 
with ASEAN. 
 
¶8. (SBU) Responding to Ambassador Haslach's review of U.S. 
priorities for APEC, Lok outlined several potential areas for 
collaboration with ASEAN.  Under food and product safety, ASEAN is 
developing a product safety mutual recognition agreement with China. 
 He added that negotiations had been difficult, but that with the 
recent focus on the safety of Chinese-made products, there is a new 
momentum for the agreement.  On energy security, Lok proposed that 
the ASEAN Center for Energy, which explores energy conservation and 
alternative energy options, could be a forum for cooperation with 
APEC. 
 
¶9. (SBU) Lok explained that ASEAN is implementing regional tariff 
reductions by sector.  ASEAN has twelve priority sectors for tariff 
reduction, eight of which are product-specific, such as automobiles. 
 The Secretariat has contracted out visibility studies on the 
benefits of tariff reductions so that member countries have 
supporting materials to seek buy-in from their governments. He 
offered that ASEAN could potentially share its experiences with APEC 
as it rolls out these reductions. 
 
¶10. (SBU) When asked about ASEAN's plans to implement a single 
currency and market, Hwee Chong explained that ASEAN is looking at 
the implementation of regional monetary units as a first step. 
ASEAN is also planning to harmonize standards for listing stocks and 
bonds cross-border.  He said the Secretariat hopes to announce the 
plan following the ASEAN finance ministers' meeting in April. 
 
Trade Minister Pangestu on APEC 
------------------------------- 
 
¶11. (U) At the ABAC seminar on January 21, Indonesian Trade Minister 
Pangestu noted that APEC remains a useful forum for confidence 
building measures.  APEC, as a non-negotiating forum, helps tackle 
difficult and sensitive issues before they reach a more formal 
stage.  APEC can facilitate issues reaching critical mass before the 
World Trade Organization (WTO) rounds, for example.  APEC supports 
WTO goals by creating practical and incremental steps toward 
progress.  APEC can also enhance regional integration efforts.  In 
addition, APEC makes use of ASEAN's work as platforms for 
cooperation.  In one example, APEC seeks to replicate ASEAN's single 
window of customs standardization by 2010. 
 
¶12. (U) This cable was cleared by Ambassador Haslach. 
 
HUME