The Assistant Rector of the Institute for Indonesian Arts (ISI) in Denpasar, Drs. I Ketut Murdana, has called on the Government to require Indonesian tour operators to include handicraft manufacturing centers in their island tour packages.

Such a requirement, according to Murdana, would increase sales of local handicrafts while at the same time giving visitors a greater appreciation of the effort and processes required to produce native goods. Not content with sales through local art shops, the educator thinks visitors will only truly appreciate the quality of locally-made products when they can see first hand the actual production process.

Murdana points to Japan as a positive example of local handicraft promotion where a special handicraft manufacturing zone has been established in Iwate that is a required stop of tours of the that area. Also cited was Malaysia where Murdana claims tour companies are required to show visitors chocolate and bread being produced.

Meetings, incentive, conference and exhibition (MICE) participants are expected to represent 20% of all foreign visitors to Indonesia and Bali, according to the Director General of Marketing for the Ministry of Culture and Tourism. Thamrin B. Bachri.

Although total foreign tourist arrivals through the end of July totaled only 2.5 million, Bachri remains optimistic that the targeted 6 million visitors for the entire year can still be achieved because of a surge in MICE visitors attending major conferences in Bali in the last quarter of 2007.

According to Bachri, the Government has designated ten areas of Indonesia as official MICE destinations, namely: Bali, Jakarta, Yogyakarta, Batam, Medan, Bandung, Surabaya, Makassar, Padang and Semarang. He said that each of these destination areas were capable of hosting meetings of between 2,000-3,000 participants, with Bali able to handle "six times those numbers."

Bachri's comments were made in Bali at a ceremony formally installing the Board of the Bali Chapter of the Indonesian Conference and Conventions Association (INCCA) and its new Chairman, Ida bagus Lolec Surakusuma.

The Indonesian-language Bisnis Indonesia reports that Bali's Chief of Police, Inspector General Paulus Purwoko is unhappy with the less than whole-hearted response from Ubud's villa owners to his efforts to enhance security in the areas surrounding the Island's popular hill resort area.

Speaking at the inauguration of a new police post in Petitenget, Chief Purwoko complained, "until now, they (the villa owners in Ubud) have yet to materialize a coordinated security system." Purwoko's comments were prompted, perhaps in part, by the contrasting excellent support demonstrated by the Bali Villa Association (BVA) whose initiative created the new community police post at Petitenget, near Seminyak, a popular center for villa development in Bali.

In his remarks quoted by the press, Purwoko pointed to recent armed robberies at Ubud villas and the failure of owners to take decisive remedial steps to prevent similar crimes in the future. The Chief, who is a champion of an integrated, community-based approach to enhancing security - is adamant in rewminding Bali's tourism industry that safety and security will always remain Bali's best marketing tool.

Also speaking at the community police post opening in Petitenget, Imoyo S. Soemarlin, the Chairman of the BVA said, "we hope the presence of this post will improve reporting (and communications) and is able to create an integrated system of security in this area."

Garuda Indonesia have announced that they will add 29,475 additional seats on flights to 9 of their international and domestic destinations to handle the added business demand over the coming Lebaran Holidays.

The Chief of Communication for the Airline, Pujobroto, said additional capacity for the period 9-21 October would be introduced on routes to Bali (Denpasar), Yogyakarta, Padang, Solo, Singapore, Kuala Lumpur, Hong Kong, Guangzhou and Shanghai. The additional seat capacity on these routes would be accomplished through either the use of larger aircraft or increasing flight frequencies.

Travel industry workers are expecting Indonesia's travel network to be running at full steam as religious and state holidays coincide, providing an extended nation-wide holiday period from October 12-16, 2007.

Special operational teams from the Airline's head office will be deployed across Garuda's network to provide instant remedies to any traffic bottlenecks that may occur.

On the Jakarta-Denpasar-Jakarta route Garuda will add 64 additional flights representing 13,406 more seats available over the peak holiday travel period.

Raffles Hotels & Resorts have signed an agreement with PT Asia Pasifik Properti, a subsidiary of the Rekso Group, to manage a luxury villa resort on Bali's Jimbaran Bay.

The 90 villas and 25 privately-owned residences are scheduled to open in 2010 and will be known as the Raffles Amartha. Set on a spacious 11 hectare site, the property will reportedly adopt the theme of a water palace inspired by Javanese-Hindu architectural styles. Set on a cliff at Bali's Dreamland Beach, the new resort will border an 18-hole golf course.

All villas will feature private plunge pools and sun deck providing ocean views. The Resort's plans also call for a 2,000 meter Raffles Amrita Spa - the signature Spa brand of Raffles Hotels & Resorts.

The resort is located only 15 minutes away from Bali's international airport, Denpasar.

"Raffles Amartha, with its iconic location and unique concept, will be the preferred home-away-from-home for privileged travelers in Bali. Raffles Hotels & Resorts is renowned for peerless service, creative cuisine concepts and gracious hospitality and we are very pleased to be working with them on this project," commented Mr Sukowati Sosrodjojo, Chief Executive Officer, Rekso Group.

Mrs Diana Ee-Tan, Managing Director of Raffles Hotels & Resorts, added: "Bali is an island of incredible beauty, steeped in heritage, art and culture. Raffles has long wanted to have a resort here and we are thrilled that PT Asia Pasifik Properti has entrusted Raffles to operate this spectacular development. We are simply delighted to be able to bring the Raffles difference to this much sought after destination."

Ripples of waves in a dream, sunlight on the water, faces carved out of stone. These are some of the inspirations behind the handmade batik designs of Simon Marks, a British national and part-time resident of Bali. Alila Ubud Gallery will showcase Simon's works in an exhibition titled "waxed. stitched. dipped." which opened on Friday, September 14, 2007, and will continue until October 1, 2007.

The exhibition is an exploration of how stitch, wax and color combine and contrast, becoming transformed into something to be worn, draped or simply admired. Simon is particularly drawn to the handspun and hand-woven cotton of Tuban, its roughness providing a counterpoint to the crisp lines that can be achieved from batik and the fluidity of silk. He is as passionate, though, about the process as he is about the end result. The beautiful colors of natural dyes and the alchemy involved in coaxing color from root, leaf or bark, the magic pungency of indigo, the wonder and elusive satisfaction of the color red, the unmistakable warm and cinnamon smell of released wax on cloth. It's the process itself that always leads to further ideas and possibilities.

Simon's love affair with traditional textiles began soon after he journeyed to the East. Having studied theatre design at London's Central St Martin's School of Art and Design, he spent many years working on costumes for productions at Shakespeare's Globe Theatre and Cirque du Soleil, among others. Touring with productions gave him a taste for the nomadic life and, in 2002, he traveled to Asia for the first time, where he became fascinated by the amazing array of costumes and clothing he saw in India, Thailand, Laos and Indonesia, and the textiles they were made from.



This fascination turned into an 'addiction' to learn all he could about the way these textiles were produced and the techniques involved. He traveled repeatedly to India to learn about block printing, embroidery and natural dyes, working with local artisans he met along the way. But it was on a trip to Indonesia that he discovered batik and everything he had learnt to date began to take shape from that point.

In Bali, he came into contact with Threads of Life, a fair-trade organization that is devoted to the continuation of Indonesia's traditional textile arts and the welfare of the archipelago's indigenous weavers. Under the guidance of its master of indigo and other natural dyes, Simon was inspired to start creating his own designs, finally finding expression for all of his different strands of interest.

waxed. stitched. Dipped - an exhibition of batiks and textiles by Simon Marks

Alila Ubud Gallery - September 14 - October 1, 2007 at the Alila Ubud Resort.

According to the Indonesian-language Bisnis Indonesia, the Indonesian Ministry of Culture and Tourism is optimistic that the Pacific Asia Travel Association (PATA) Travel Mart, set for Bali September 25-28, 2007, will attract 433 buyers from 352 companies in 50 countries.

Tatang Rukhiyat, Director of International Promotions at the Indonesian Ministry of Culture and Tourism, said the Bali event is on course to break the record-setting number of participants who attended last year's Mart in Hong Kong.

Rukhiyat said he hoped the Badung Regional Government in Bali would lend its full support to making the event a success.

Meanwhile, an estimated 870 "sellers" from 38 countries will be on hand in Bali offering tourism products and services to the registered sellers.

In addition to several days of back-to-back business meetings, the more than 1,200 buyers and sellers will be feted at numerous dinners and sponsored social gatherings.

As reported in TBSC-Strategic Communication's Indonesian Digest, the ASEAN Tourism Investment Forum (ATIF) will be held in Bali September 20-22, 2007. Organized back to back with the PATA Travel Mart, the Forum will be followed by the ASEAN Task Force Meeting before the commencement of the PATA Travel Mart September 25-28, 2007.

"The strategic importance of the tourism industry to support sustainable socio-economic growth of ASEAN Member States and the diversity in cultures, economy, and the complementary advantages across the region, will benefit tourism development in ASEAN in the pursuit of improved regional quality of life, peace and prosperity", says an ATIF brochure.

Despite having faced a number of drawbacks, ASEAN tourism has continued to grow at an impressive rate. ASEAN as a region is determined to look ahead and to build on its competitive advantages which entails new investments both in 'soft' as well as 'hard' tourism infrastructure, as well as improving existing tourism attractions, products and destinations.

The goals of the ASEAN Investment Forum are:

1. Raise awareness of investment opportunities in the tourism sector in ASEAN countries among the national and international investment community - banks, investment companies, and international financial institutions.

2. Promote potentials intra-regional tourism investment among ASEAN countries.

3. Give practical advice and assistance to tourism regions and destinations in ASEAN countries seeking investment from the international investment community on how to best prepare and present their investment proposals.

4. Hold a "Tourism Investment Opportunities" Expo to publicize to investors, media and delegates the many opportunities to invest in the tourism sector in Indonesia and ASEAN countries.

ATIF will be attended by NTO members, investors, governors & regional government representative, destination manager, related sectors, ministry of culture and Tourism, media, associations, academician, consultants, bankers and NGOs.

Among those slated to speak at the conference are:

. Mr. Jero Wacik, Minister of Culture and Tourism, Republic of Indonesia.

. Mr. Aburizal Bakri, Coordinating Minister for People's Welfare, Republic of Indonesia

. Mr. Sambudjo Parikesit, Director General of Tourism Development, Ministry of Culture and Tourism, Republic of Indonesia

. Mrs. Sasithara Pichaichannarong, Deputy Secretary of the Ministry of Tourism and Sports, Kingdom of Thailand

. Mr. Anthony Davis, President & CEO of Tiger Airways Ltd. (Singapore)

. Mr. Sapta Nirwandar, Secretary General, Ministry of Culture and Tourism, Republic of Indonesia

. Mr. Muhammad Lufti, head of the Investment Coordinating Board (BKPM), Republic of Indonesia on the "Challenges of Harmonizing National & Local Investment Regulations"

. Mr. John M. Daniels, President Director Bali Discovery Tours (Indonesia) on "Cruise Industry: Ultimate Cross-Border ASEAN Tourism Investment."

. Dr. Tresita D. Del Rosario, Capacity Development Expert, Asian Development Bank (Thailand) on "Capacity Development for Tourism Investment Promotion."

. Mr. Alfredo Perdiguero, Senior Economist of the Social Sector Division, Asian Development Bank (Philippines) on "ASEAN Partners - Leveraging Investment Opportunities Across Boarders: The Great Mehong Sub-region Case Study."

. Y. Bhg. Datuk Dr. Victor Wee Eng Lye, Secretary General, Minister of Tourism (Malaysia) on "Domestic versus Foreign Investment: Plusses and Minuses."

. Mr. Rusdi Kirana, President Director, Lion Air (Indonesia) on "Low-Cost Carriers: Drivers of Future ASEAN Tourism Investment Opportunities."

. Mr. Pamelia Lee, Managing Director, Singapore Tourism Promotion Board on "One Stop Shopping: Putting Together the Perfect Investor Friendly Investment Office."

. Dr. Milagros Espina, Chair of the Tourism Committee of the Cebu Chamber of Commerce and Industry (Philippines) on "Challenges of Dealing with Local Communities in Tourism Development."

. Mr. James Murray, executive Vice President South and Southeast Asia, Visa International Asia Pacific (Singapore) on "Top Ten Smart Tips from the Investment Community for Destinations Seeking Investments."

Temp Interaktif reports that Bali's Chief of Police, Inspector General Paulus Purwoko, has ordered anti-narcotic raids at all of Bali's prisons. The order follows the recent capture and arrest of Muhammad Sudrajad, the Chief of Security at Bali's Kerobokan for his alleged involvement a narcotics transaction and further reports of his involvement in a large drug ring at the prison.

Chief Purwoko said that the raids would be carried out without prior notice at sporadic intervals at all Bali's prisons to paralyze the illegal drug trade being carried out behind prison walls.

Sudrajad is now being held at Bali's police headquarters following his arrest while in possession of 2.45 grams of heroin that he was trying to sell to an undercover cop. The "sting" operation was launched by police following reports of Sudrajad's involvement in narcotics dealing at the Kerobokan prison and the issuance of repeated warnings by Warden Ilham Jaya to prison guards to avoid any involvement with narcotics.

In related news, the Government has secured a 12 hectare site in West Sumatra on which to build a special prison solely for the incarceration of narcotics offenders. When completed, the special needs prison facility will house between 800-1,000 prisoners.

On Wednesday, September 12, 2007, the West Sumatran provinces of Benkulu and Padang was shaken by a powerful 8.4 magnitude earthquake, followed by more than 60 significant aftershocks that continue to rattle the area. Hundreds of homes were destoyed on Sumatra's coast and the nearby Mentawai islands with the death toll now standing at 14 and expected to rise. Several tsunami warnings were issued in connection with the quakes and later rescinded by the National Metereological Agency.

Quakes Far From Bali

The epicenters of the seismic activity from the recent series of earthquakes are located some 1,000 kilometers from Bali which was completely isolated from tremors that were felt as far away as Jakarta and Singapore. When monitoring natural disasters in Indonesia it is importantant to remember that the Republic is equal in geographical breadth to the United States and that the distance from the West Sumatran quake-afected area to Bali is roughly equivalent to the distance from Chicago to Miami.

In short, with the exception of concerned p[auses to monitor televised newscasts of recovery efforts underway in Western Sumtra, it's business as usual in Bali following the earthquakes in Indonesia's western regions.

Dr. Anak Agung Made Djelantik passed away on the 4th September, 2007, in Denpasar, Bali at a hospital he helped to found, following a long illness. His death is mourned throughout the island of Bali and around the world as he was a beloved figure over generations.

A son of the last King of Karangasem, and born in 1919, he was the first of the Balinese Princes to leave the privileges of a royal life to study abroad, in Holland, where, during WW11, he gained his degrees in medicine at Amsterdam University. By the end of WW II, he had fallen in love with a brilliant Dutch girl, Astri Henriete Zwart, and they married in Holland.

Dr Djelantik and Astrid traveled to many countries to suppress malaria and other infectious diseases, becoming the World Health Organization's malaria expert. During the course of their married life, which ended with the death of Astrid in 1997, the couple raised 5 children who survive together with 13 grand children.

On his return to Bali, in 1980, he continued his medical practice and involved himself in many community projects: a public library in Renon; support for performing arts; co-founded the Indonesian Dance Academy in Denpasar and wrote several books. His published works include: Balinese Paintings (Estetika); and two autobiographies Memoirs of a Balinese Prince (Periplus), and Against All Odds (Saritaksu) - illustrated with his own paintings.

Dr. Djelantik was the Director of the Sanglah General Hospital from 1961-1968; founding Dean of the Udayana University Medical School from 1962-1965; Head of the Bali Health Department from 1958-1968 and a lecturer at Indonesian Arts Institute (ASTI) from 1966-1968. Working with the World Health Organization, he served in a variety of overseas posts from the late 1960s until his retirement in 1980.

On August 15, 2006, President Susilo Bambang Yudhoyono bestowed a gold star with the Bintang Budaya Pramana Award - the highest honor for contributions to art and culture from the Republic of Indonesia.

In a country known for its non-confrontasi, Dr. Djelantik fought the abasement of Balinese religion and tradition engendered by touristic stereotypes, winning the status of elder statesman for his televised denouncement of the sham Balinese wedding ceremony of Mick and Bianca Jaggar.

In a lifetime spanning 88 years, I Made Djelantik saw his country jump from that of an isolated medieval culture to that of the 21st century of the World Wide Web. He quietly absorbed such tremendous changes without damage to his central vision.

Dr Djelantik combined a luminous innocence that informed a profound wisdom, and his dedication and capacity for healing was remarkable.

On Thursday, September 13, 2007, the remains of Dr. Djelantik were cremated in a makingsan di gni ceremony at a cemetery in Amlapura attended by family and 11 Balinese priests.

Requiescat In Pace - Dr. Anak Agung Made Djelantik, 1919-2007

Balidiscovery.comthanks James Murdoch, an author and long-time resident of Bali, for contributing to this article.

A recent article in balidiscovery.com [Freehold Land Title for Foreigners in Bali: Caveat Emptor] generated many comments from readers seeking to clarify the confusion that surrounds foreign land ownership in Bali, particularly as relates to freehold land ownership. To shed more light on the subject, we recently caught up with a leading Sanur-based Notary, Rainy Hendriany, for the following interview.

Rainy Hendriany: The Interview

balidiscovery.com: With the recent surge in property developments in Bali, there has been much discussion regarding the ownership of freehold property by foreigners. Can you clarify?

Rainy Hendriany: Under no circumstances can foreigners own property under Hak Milik (Freehold) title in Indonesia. There is only one semi-exception. If a foreign investor is married to an Indonesian citizen, providing that a Pre-nuptial agreement was entered into prior to the marriage being registered, the Indonesian spouse may hold Hak Milik land title.

balidiscovery.com: If a foreigner wants to invest in a property in Bali, how can this be done in compliance with Indonesian law?

Rainy Hendriany: There are several possibilities. Firstly, the lease of land under Hak Sewa (Leasehold) is perfectly legal and requires only a simple contract between lessee and lessor. Such a contract cannot be longer than 25 years but through various renewal clauses, the lease can be put in place for periods of time which are adequate for the needs of most investors. In this vehicle, the land title remains with the Indonesian owner of the land.

Secondly, as a result of Government Regulation 41 of 1996 (PP41) and several other subsequent changes in other regulations, it is now possible for most foreigners to own Hak Pakai title - the right to use and build a residence on the land. In this case, essentially the land title is returned to the Government and the foreigner would be issued with a Hak Pakai land certificate in his/her name for 25 years which with one extension of 20 years would therefore be valid in total for 45 years.

Thirdly, all Companies in Indonesia, both local and Foreign Direct Investment (PMA), can hold Hak Guna Bangunan (HGB) land title - the right to use and build for commercial purposes. This can also include the use of land under a structure of HGB atas Hak Milik whereby the investor receives a HGB land certificate with an Indonesian land owner retaining the Hak Milik land title. Various side agreements may be entered into between the two parties which can include pre-agreed extensions. A Hak Tanggungan - essentially a mortgage/loan agreement, would also normally be employed between the parties.

Until recently, foreigners were able to register a PMA Company as a vehicle for ownership of a single villa or a small number of dwellings. Some PMA/HGB structures have been very sophisticated and employed back-to-back ownership by an SPV (Special Purpose Vehicle) registered in an offshore tax haven such that the sale of a property in Bali required only the sale of a share in the SPV which, as an offshore transaction, has no tax consequence in Indonesia.

However, having become increasingly aware of the loss of various tax revenues, the Foreign Investment Coordinating Board (BKPM) is no longer issuing such licenses for small scale developments. It should also be noted that the creation of a PMA Company also attracts the attention of the tax authorities and carries other reporting and administrative responsibilities.

Finally, the Hak Pakai atas Hak Milik structure has more recently been widely used. In this structure, the foreign investor is essentially using the Hak Pakai structure mentioned earlier and has the comfort of being issued with a Hak Pakai land title in his/her name for 25 years whilst the Hak Milik certificate remains in the name of an Indonesian citizen not the Indonesian State as in the case of the Hak Pakai structure alone. As a civil law jurisdiction, Indonesia recognizes the right of its citizens to enter into contracts between consenting parties and this provides the basis for the various side agreements to support such a structure, including pre-agreed automatic extensions which must be applied for at least 3 years prior to the expiry of the current certificate.. A Hak Tanggungan is normally also employed between the parties.

It should be noted that in a very recent development, Hak Pakai atas Hak Milik land title has become mortgageable and there are already several banks which will now provide loans against such title.

balidiscovery.com: What about so-called "Nominee" arrangements?

Rainy Hendriany: It should be clearly understood that Indonesian law does not recognize any rights of beneficial land ownership. Many of these nominee arrangements come with a series of side agreements which usually include a Kuasa Mutlak (An irrevocable Power of Attorney) giving the foreign "Purchaser" the right to sell the land at any time. However, as a result of a 1982 regulation of the Ministry of Home Affairs put in place specifically to deter such arrangements, Indonesian law does not recognize the use of irrevocable POA's in respect of land transactions and the POA may therefore be revoked at any time by the Indonesian "Nominee" owner of the Hak Milik land title.

Such basic nominee structures usually employ a Hak Tanggungan as one of the side agreements and this is shown as an encumbrance on the land certificate in the name of the foreign investor. This serves the purpose of making it difficult for the Indonesian Hak Milik owner of the land to sell it, especially if the foreign investor holds the original land certificate, which is essential. However, as land values increase, there remains the risk that the "Nominee" wishes to settle the mortgage and claim back the property. There are other complications involved in such a structure, including taxation on the "Interest" income on the loan.

It should be understood that the use of nominee arrangements does have risks. Even if not strictly contrary to the law it is conceivable that in the event of a Court challenge by an Indonesian "Nominee", the Courts might rule that the sole purpose of such agreements was to circumvent higher Indonesian law and provisions of the Constitution, thereby contravening both the spirit and the intention of the law and making the Agreements invalid.

As the value of property in Indonesia increases toward International levels and if young Balinese find that they can no longer afford land on their own Island, it is possible that such disputes will become much more widespread than has been the case to date.

As a general rule, it is not advisable for foreigners to enter into legal disputes in Indonesian courts.

In advising clients, I often ask if, in their own country, they would entrust the ownership of their house or apartment to someone they did not know and, if not, why would they do so in a country they don't know?

balidiscovery.com: So what structure do you usually recommend to your clients?

Rainy Hendriany: There is not really any one ideal solution for all investors. Different investors have different circumstances and different levels of tolerance to risk and ambiguity.

What I do recommend, however, is that all potential investors should seek independent advice before committing to a property investment in Bali. I have been amazed by how easily normally rational people - who would be very careful about buying a used car in their own country, can commit to a substantial real estate transaction in Bali without having a true understanding of the facts. It is also important that the advisor selected should be truly impartial and obviously should not have any financial interests in or from the recommendations made.

It is also very important that potential problems with the selected structure are anticipated and that various "Backup" provisions are included in the legal documentation to protect the interests of the investor in the event of a dispute. Potential future changes in the law, both positive and negative, should also be anticipated.

Professional due diligence on the particular property selected is also very important to check the legal land ownership, which can be very complicated in Bali where frequently multiple children may inherit land under local law usually without a will and often without any documentation. There are also conventions to be considered, including local law or Adat. Just as important in Bali are local customs, such as communal water usage - which need careful consideration to avoid later problems.

balidiscovery.com: Does maintaining a property in Bali have any benefits in terms of residence?

Rainy Hendriany: No. Irrespective of the structure of property interest, the immigration rules apply as normal, except to the extent that the creation of a PMA Company could allow the Company to sponsor a one year KITAS (temporary resident permit) for the investor.

balidiscovery.com: Does the new 2007 Foreign Investment law change anything?

Rainy Hendriany: Not directly on the rights of foreigners to own land but there might be some indirect impact. The new investment law does, for instance, extend the period of HGB land usage for foreign investors to 80 years. My husband, as a member of the Board of the International Business Chamber, was able to get a question onto the list of official questions for clarification by the Government. This question was whether these new limits applied only to a PMA Company or did they also apply to foreigners wishing to invest in a property in Indonesia outside a PMA? Also, under the new law all investors, local and foreign direct investment will be treated the same. This means that the minimum capital investment required for a PMA should reduce to IDR 50 Million, the existing limit for a local PT Company.

I stress that the new Investment law is still not complete and awaits various clarifications and extensive implementing regulations.

balidiscovery.com: Any other final thoughts?

Rainy Hendriany: I strongly believe it is important to balance investment decisions with an understanding of and sensitivity to the local culture which is what has, after all has attracted people to Bali over the generations from all over the world.

Balidiscovery.com: thanks Ms. Rainy Hendriany for granting us this interview. Married to a prominent retired British businessman, she has over 20 years of legal experience and operates an independent practice providing impartial advice to foreigners on land and property matters. She can be contacted by telephone at ++62-(0)361-7800532 or ++62-(0)361-780051.

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