VZCZCXYZ0005
RR RUEHWEB

DE RUEHJA #1178 1950052
ZNR UUUUU ZZH
R 140052Z JUL 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 2811
INFO RUEHGP/AMEMBASSY SINGAPORE 6552
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEKJCS/SECDEF WASHDC

UNCLAS JAKARTA 001178 
 
SIPDIS 
 
DEPT FOR EAP/IET, PM/DTCC/BLUE LANTERN COORDINATOR - JUDD STITZIEL 
 
E.O. 12958: N/A 
TAGS: KOMC ETTC ECON SN ID
SUBJECT:  RESULTS of BLUE LANTERN LEVEL 3: PRE-LICENSE-USE CHECK ON 
LICENSE 050155869 
 
REF: A) STATE 58133 
B) 06 SINGAPORE 3391 
C) 06 JAKARTA 13362 
 
¶1. Summary: Embassy confirmed an order of spare parts consistent 
with the types in Ref A from the end-user, the Indonesian Air Force, 
via PT Mandira Jaya Abadi, the foreign consignee, from the U.S. 
supplier, Merex.  Though the license value in Ref A is USD 
1,000,000.00, the actual amount of the current order, according to 
foreign consignee is only USD 32,840.00.  Both the end-user and the 
foreign consignee identified Singapore-based Master Logistics as an 
intermediary shipping/receiving company which is necessary because 
there are no direct flights from the U.S. to Indonesia.  End 
Summary. 
 
¶2. On July 7 the Embassy contacted PT Mandira Jaya Abadi (Mandira) 
Director Hariyanto Adipratomo to verify the order in Ref A. 
Hariyanto provided a copy of a purchase order and contract to supply 
four spare parts for maintenance of IAF's Northrop F-5 (J85 Engine) 
worth USD 32,840.00 (supporting documentation will be sent via 
email).  The purchase order between Mandira and Merex Inc is dated 
March 3, 2009 and labeled No 0303/MJA/M/2009, Quote Number 804037 
and 803869.  The spare parts in the purchase order are:  "Main Spray 
Bar" PN:5040T18P01 (9 pcs); "Roller Ven" PN:3017T93P01 (14 pcs); "AB 
Plug" PN:3011T93P05 (10 pcs); and "Main Plug" PN:4066T34P01 (7 pcs). 
 The contract (number 183/1356/DA/DR/2005/AU, dated November 30, 
2005 and amended December 2, 2008) between the Indonesian Air Force 
(IAF) and CV Bina Pratama (a sister company of Mandira) indicates 
that the aforementioned parts are requested in lieu of another 
originally stipulated part ("R/H Horizontal Stab Assy" PN 
14-32000-6).  The IAF amended the contract to substitute PN 
14-32000-6 because the part was no longer in production and because 
the order had been idle for years. 
 
¶3. Mandira, as a designated supplier for the IAF, ordered the spare 
parts directly from the U.S. seller, Merex Inc, as mentioned in Ref 
A, on behalf of the Indonesian Air Force.  Master Logistic is an 
intermediary shipping/receiving company that has a relationship with 
Mandira.  According to Hariyanto, Merex and Mandira requested a 
blanket export license with a total value of USD 1,000,000.00.  The 
current transaction, however, is only for parts valued at USD 
32,840.00.  Mandira will use the same blanket export license in the 
future when the company receives other orders from IAF to procure 
spare parts from the U.S. company, Merex Inc.  In addition, 
Hariyanto said that his company held another blanket export license 
worth USD 6,000,000.00 from December 18, 2006 for multiple orders 
from U.S. seller Aeromax Industries valid for 48 months. 
 
¶4. PT. Mandira Jaya Abadi was established in 1982 as a publishing 
and general supply business in Semarang, Central Java.  In 2005, 
Mandira expanded their business to supply spare parts to the IAF. 
Post checked and verified a transaction involving this company back 
in 2006 (Ref C) when Mandira received an order from IAF to supply 
spare parts for maintenance of the Indonesian Air Force's F-5 and 
OV-10 aircrafts.  According to Mandira, their customers include the 
IAF and Ministry of Transportation, to whom they supply simulators. 
 
¶5. According to Hariyanto, once Master Logistic receives the goods 
from the U.S. supplier, Master Logistic will forward the spare parts 
to Mandira's warehouse located at Jalan Tanjung Duren Barat V/44 in 
Jakarta (as listed in Ref A) before the company sends the spare 
parts to the end-user.  Hariyanto noted that they usually store the 
goods for up to four working days while awaiting confirmation and 
coordination with the end-user for final delivery to the IAF. 
Hariyanto said that the company's Jakarta warehouse is protected by 
company staff who work there and a 24-hour security guard service. 
Hariyanto also noted that his company is aware of the restrictions 
on United States Munition List (USML) items, particularly the 
prohibition against unauthorized re-transfer and re-exports. 
 
¶6. We contacted the Indonesian Air Force Procurement Division Major 
Dani Herdiana on July 10 to verify the transaction in Para 2 in 
accordance with Ref A.  Major Dani confirmed that this transaction 
was part of their contract order to Mandira in 2005.  In 2008, the 
end-user amended this long awaited procurement and contracted 
Mandira to purchase the items listed in para 2 (same items listed in 
purchase order).  The original contract was to procure a horizontal 
stabilizer, however, since they waited for years with no item 
procured, the IAF decided to instead procure the aforementioned 
replacement items.  According to Major Dani, both the Air Force and 
Mandira agreed that they will use Master Logistic, the 
Singaporean-based intermediary shipping company, since there is no 
direct flight from the U.S. to Indonesia. 
 
HUME