Review of termination decision - Biaxially oriented polypropylene from Indonesia

13 April 2007


Biaxially Oriented Polypropylene imported from Indonesia – Review of Termination Decision

  1. Shorko Australia Pty Ltd (Shorko) lodged an application requesting that the Minister for Justice and Customs publish a dumping duty notice in respect of transparent biaxially oriented polypropylene (BOPP) imported from Indonesia. The Australian Customs Service (Customs) commenced an investigation on 24 August 2006. The investigation was terminated on 23 January 2007 on the basis that Customs was satisfied that there had been no dumping of the goods in question, and also on the basis that the total volume of goods exported to Australia from Indonesia over the investigation period between 1 July 2005 and 30 June 2006 were less than 3% of the total Australian import volume – a negligible volume of dumped goods.
  2. On 16 February 2007, Shorko made an application under section 269ZZQ of the Customs Act 1901 (the Act) for a review of this termination decision. The application contains no information that is confidential and so no requirement arises under section 269ZZR relating to rejection of the application.
  3. The issue in this review is in short compass. Shorko claim that in their like goods determination, Customs considered a range of BOPP products that were not like goods to the goods under consideration, manufactured by Shorko.
  4. In its original application for a dumping duty notice, Shorko described the goods under consideration as follows:
    • Biaxially Oriented Polypropylene (BOPP) of 3 layer co extrusion manufacture.
    • Thickness from 15 – 50 microns (0.015 – 0.050mm)
    • Transparent in quality (Physical density = 0.91g/cm3)
    • Treated one side, 2 side heat sealable
    • Supplied in reel form of varying widths from 150mm to 2100mm for domestic packaging market
  5. Australian Customs Dumping Notice No 2006/36 states that the goods the subject of the application (the goods) are transparent biaxially oriented polypropylene (BOPP) between 0.015mm and 0.050mm in thickness. Shorko say that this broad classification covers a range of transparent BOPP products, some of which do not fit the description of the goods under consideration in their application.
  6. As part of the dumping investigation, Customs visited PT Trias Sentosa Tbk, (Trias), an Indonesian exporter of BOPP, in November 2006. Customs’ calculations of normal value were based on the domestic prices for Trias’ products. By far the greatest proportion of this domestic market is comprised of so-called ‘plain’ BOPP films, which are not two-side heat sealable, such as Trias’ ‘PL’ and ‘PLB’ films. Trias’ specification sheets make this distinction quite clear. It is also apparent from a perusal of the specification sheets that were included both in Shorko’s application for a dumping duty notice and was also referred to in the exporter questionnaire submitted by Trias1.
  7. In mid December 2006, one of Customs’ investigation officers raised with reviewing officers the question whether for the purposes of visit reports, the definition of the goods under consideration ought to be narrowed, because it had become clear during the course of the investigation that the description of the goods in the ACDN was broader than the goods the subject of the application. Despite this being raised as an issue, it does not appear that any guidance was provided by the reviewing officers, and the description of the goods for the purposes of the visit report remained the same2.
  8. Shorko agitated the matters raised in this application in correspondence with Customs. By letter dated 11 January 2007, Shorko wrote to Customs concerning the public file version of the exporter visit report in relation to Trias. They claimed that the analysis of Indonesian domestic price focussed primarily on plain BOPP film, meaning Trias’ non heat sealable PL and PLB film, whereas the comparable products to the Australian produced BOPP were the Trias categories of PSI, PSL and PSLB film. They indicated that non heat sealable film is the product most likely to be used in Asia and accounted for more than 90% of the sales of transparent BOPP film. Shorko also claimed that industry data showed a price difference between heat sealable and non heat sealable film of around 15%.
  9. These claims were subject to detailed consideration within Customs3, based on verified data obtained during the visit report to Trias. The information being commercial-in-confidence, I am able only to refer to it in this report in general terms. Customs noted that the product exported to Australia differed from the plain film sold on the Indonesian domestic market in that the former was heat sealable and the latter not, and further that the films were treated differently to accommodate the use of vinyl inks in Asia and alcohol based inks in Australia. They noted that Shorko had provided no direct evidence of a 15% price differential between heat sealable and non heat sealable film, other than information from an industry journal that did not relate to relevant pricing during the investigation period.
  10. Customs noted that verified financial data from Trias indicated that Shorko in its application had significantly overestimated the cost to make and sell the film 4, and consequently the dumping margin remained de minimis.
  11. I have nevertheless decided that CEO’s termination decision should be revoked. The principal reason for this is that the investigation dealt with a wider range of goods than the goods in relation to which Shorko sought imposition of dumping duties. Customs noted that plain film sold domestically in Indonesia is the most closely matching type to the film exported to Australia. However, plain film is not substitutable for heat sealable film and would probably be incapable of use in Australia in food packaging applications because of food packaging standards and relevant legislative requirements. In my view there are significant differences between the two types of film, and in any event, the investigation should have focused on the narrower category of goods in respect of which Shorko made the application. 12. It may be that at the end of the day Customs will again find that Shorko has overestimated the cost to produce the relevant film and that there is a minimal dumping margin or no margin at all. However, it would be most appropriate if that decision were reached in the context of an investigation that focuses precisely on the goods in relation to which the application for issue of a dumping duty notice was made.

Mark A Zanker
Trade Measures Review Officer

Telephone: 62506647
Facsimile: 62505931


  1. see folio 173 on file C06/15158.
  2. see folios 118 and 119 on file C07/01565.
  3. see folios 46 to 53 and 59 to 61 on file C07/00897.
  4. ibid


Review of termination decision - Biaxially oriented polypropylene from Indonesia - 13 April 2007