TRADE AND ENVIRONMENT TRADE AND ENVIRONMENT DIMENSIONS IN TIMOR-LESTEDIMENSIONS IN TIMOR-LESTE

SUB-REGIONAL WORKSHOP ON THE TRADE AND ENVIRONMENT DIMENTIONS IN THE FOOD AND FOOD PROCESSING INDUSTRIES IN SOUTH –EAST AND NORTH-EAST ASIA 26-27 JULY 2006, JAKARTA INDONESIA

Afonso A.J. Candido

Mario F.C Ximenes

TIMOR-LESTE: A country to be discoveredTIMOR-LESTE: A country to be discoveredAt the Crossroads of Southeast Asia and South PacificAt the Crossroads of Southeast Asia and South Pacific

TIMOR-LESTE:TIMOR-LESTE: AreaArea

TIMOR-LESTE:TIMOR-LESTE: in brief, based on 2004 datain brief, based on 2004 data

Geographic Size: 15,007 km2. Population: 925,000 Currency: USD GDP: $339M GDP Grwoth 1.8% GDP per capita: $366 Commercial Imports: $113.5M Exports: $7M Inflation rate: 1.8%

TIMOR-LESTE:TIMOR-LESTE:GDP by Economic Sectors, 2004GDP by Economic Sectors, 2004

Sectors (% GDP)

Agriculture, Forestry & Fisheries 30% Public Administration and Defense 23% Civil Construction 16% Trade, Hotels & Restaurants 9% Transport & Communication 8% Finance, Rents & Services 7% Manufacturing 3% Mining 1% Electricity, Gas & Water 1% Other Services 1% TOTAL (*) 100% (*) Excludes Oil & Gas

TIMOR-LESTE:TIMOR-LESTE:Imports by Product Categories in 2004Imports by Product Categories in 2004

Categories (% Import) Petroleum Products 32.0% Machinery and Equipment 15.0% Vehicles and Spare Parts 13.0% Food Products & beverages 10.6% Construction Materials 5.0% Tabacco, etc. 1.9% Others 22.5% TOTAL 100%

TIMOR-LESTE:TIMOR-LESTE:PredictedPredicted Areas Of InvestmentAreas Of Investment

Oil and Gas Mineral Resources Agriculture and Agro-industry Forestry Fisheries Tourism Industry Economic Infrastructure

TIMOR-LESTE:TIMOR-LESTE:Top 10 Import Market in 2004Top 10 Import Market in 2004

Markets (% Import) Indonesia 53% Australia 18% Singapore 13% Viet Nam 4.6% Italy 1.8% Portugal 1.5% Denamark 1.4% Thailand 1,1% Japan 1,1% China 1.0%

TIMOR-LESTE:TIMOR-LESTE:Export by Product in 2004Export by Product in 2004

Category (% Export)

Coffee 100%

Summary of StrenghtsSummary of Strenghts

Natural Resources Endowment Stable Macro Political-Economy Low Rate of Inflation Strong and Stable Currency Government with Vision and Courage Sound National Petroleum Management Plan Suitable Climate for Agro-production and Tourism Strong Public-Private Leadership Rich Culture and Political History Well Known Public Personalities International Goodwill from Donors Democratic Society with Broad Political Participation Making Rapid Progress Toward Modern State Based on Rule of Law Favorable Location in a Fast Growing Sub-region

Summary of WeaknessesSummary of Weaknesses

• Weak and inadequate infrastructure • Enduring negative legacy of recent history• Small domestic market and limited purchasing power• High degree of centralization of government services• High rate of unemployment• High labor costs compared to competing countries• Lack of skilled labor & small labor pool• Weak business legal and regulatory framework • Incipient judicial and weak court system• High transportation, communication and power costs• Incipient financial sector with high interest rates• Lack of business support services

TRADE LAWS

•Government Decree Number 7/2005Of 27th of July 2005 on That created the Foreign Investment and Export Promotion Institute

•Government Decree Nº 6/200527th of July Procedural Regulation for External Investment

1. Indonesian Law (According to UNTAET Regulation nº 1/1999):

ENVIRONMENTAL LAWS FRAMEWORK (EXISTING)ENVIRONMENTAL LAWS FRAMEWORK (EXISTING)

Ministry of Environment Decree on Guidelines on Coastal Water Quality Standards (1988)

Regulation on the Control of Water Pollution (1990)

Regulation on Environmental Impact Assessment (1993)

Regulation on Hazardous and Toxic Waste Management (1994)

Environmental Management Act (1997)

Government Regulation on Marine Pollution and Degradation Control (1999)

2. UNTAET Regulations (Environment)

Regulation Nº 17/2000 – Illegal Logging

Regulation Nº 19/2000 – Protected Places

3. UNTAET Guidelines (Div.Environment)

GUIDELINE#1 - Environmental Requirements for Development Proposals

GUIDELINE #2 - Mechanised Sand and Gravel Extraction from Rivers and Borrow Pits

GUIDELINE #3 - Small Landfill Siting Guidelines (Environmental)

GUIDELINE #4 - Interim Tibar Landfill Operation Guidelines

GUIDELINE #5 - Prescribed Activities for Pollution

GUIDELINE #6 - Environmental Screening

GUIDELINE #7 - Storage of Fuel and Oil

GUIDELINE #8 - Ambient Noise from Stationary Sources

4. DSMA Guidelines (New)

GUIDELINE#1 – An overview of the Environmental Impact Assessment process and guidelines

GUIDELINE #2 – Development proposals and Pollution License application

GUIDELINE #3 – Screening of development proposals

GUIDELINE #4 – Scoping and preparation and Terms of Reference

GUIDELINE #5 – Public engagement

GUIDELINE #6 – Preparation of Environmental Impact Statements

GUIDELINE #7 - Preparation of Environmental Management Plans

GUIDELINE #8 – Issuance of Pollution Licenses

GUIDELINE #9 – Issuance of enforcement notice and legal proceedings

GUIDELINE #10 – Standards and best management practices

5. Timor Leste Environmental Law (New, for approval)Pollution Control

Environmental Impact Assessment

•Types of FOOD and FOOD PROCESSING ProductsTypes of FOOD and FOOD PROCESSING Products

CoffeeCoffeeRiceRiceCoconut Oil and sub-products Coconut Oil and sub-products Aquaculture and Fish processing (future)Aquaculture and Fish processing (future)

Environmental IssuesEnvironmental Issues

Work in field and project face

Problems :

Water Pollution

Waste (Wet and Dry Processing)

Solution:

Environmental management (team, database)

Environmental IssuesEnvironmental Issues

Relation Trade and Environment Relation Trade and Environment

Monitoring Policy

Conclusion Conclusion Timorese environment law is still not in effect so creates difficulties for

control Environmental prosecution not yet establish Technical expertise in the country is still small Equipment both for government entities and private sector is still scarce

BUT

Environment (DNSMA) is producing new Timor-Leste laws and forming guidelines with Prosecutor General

Environmental (DNSMA) team expanding to all districts with equipment Food and food processing growing but still in time to control from the

beginning, reflected by investment proposals evaluation also with environmental criteria.

Food and food processing part of Timor-Leste future but in sustainable manner

Bayu-Undan: Bayu-Undan: US $1.65bn, the Largest Investment in Timor-LesteUS $1.65bn, the Largest Investment in Timor-Leste

Thank You

OBRIGADOOBRIGADO