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Dumping and Countervailing Duties Act 1988

Trade Remedies Group
Ministry of Commerce
February 1999

  ABBREVIATIONS

The following abbreviations are used in this Report:

1.     PROCEEDINGS

1.1     PROCEEDINGS

On 28 August 1998, the Ministry of Commerce accepted a properly documented application from the sole New Zealand producer of plasterboard, Winstone Wallboards Ltd ("Winstone"), alleging that imports of plasterboard from Indonesia were being dumped and by reason thereof threatening to cause material injury to the New Zealand industry.

In accordance with section 10(9) of the Act, the Government of Indonesia was advised of the application on 28 August 1998.

On 13 October 1998, the Secretary of Commerce formally initiated an investigation into the dumping of plasterboard from Indonesia, pursuant to section 10 of the Act, on being satisfied that sufficient evidence had been provided that:

(a) the goods imported or intended to be imported into New Zealand were being dumped; and

(b) by reason thereof material injury to an industry had been or was being caused or threatened or the establishment of an industry had been or was being materially retarded.

In accordance with section 10 of the Act, the Ministry’s investigation is to determine both the existence and effect of the alleged dumping of plasterboard from Indonesia.

Winstone claimed that as a result of the alleged dumping, there was a threat of material injury resulting from:

• a significant rate of increase in the volume of imports of the allegedly dumped goods, and the likelihood of substantially increased imports from Indonesia; and
• likely price undercutting, price depression, and price suppression,

that would cause a:

• decline in output and sales
• decline in market share;
• decline in profits;
• decline in productivity;
• decline in return on investments;
• decline in utilisation of production capacity; and
• adverse effects on employment.

In submitting its application, Winstone requested that provisional measures be imposed.

It should be noted that the Ministry approaches investigations on the basis that injury and threat of injury are alternatives, i.e. an industry is either injured or threatened with injury, but both cannot apply at the same time.

Article 3:8 of the WTO Anti-Dumping Agreement states:

The purpose of this Report is to provide notice of termination to the parties to the investigation, in accordance with section 11(1)(g) of the Act.

1.2     INTERESTED PARTIES

New Zealand Industry

The application was submitted by Winstone Wallboards Ltd, the sole producer of plasterboard in New Zealand. The Secretary of Commerce was satisfied that the application was made by or on behalf of the New Zealand industry producing like goods, and had the amount of support required by section 10(3) of the Act. Additional information was sought from the industry to assist the investigation and a verification visit was carried out at Winstone’s premises on 16 December 1998 (see Public File document #80).

Importers and Exporters

New Zealand Customs Service data shows that the importer and exporter of the plasterboard subject of the investigation are:

The Indonesian manufacturer of the goods subject to investigation is PT Siam-Indo Gypsum Industry ("SIGI"). SIGI is a joint venture between Cementhai Gypsum (Singapore) Pte Ltd (Siam Cement Trading Co Ltd ("SCT") is the parent of this company) and PT Satyawada MitraUsaha. SCT acts as the exporter of SIGI products. Sigma Agencies Ltd ("Sigma"), which has the same common shareholders as Rikki Merchants Ltd ("Rikki"), acts as the export selling agent for sales by SCT to the North Island.

SIGI has submitted a response to the manufacturer’s questionnaire (Public File Document #58). A verification team visited Rikki on 7 December (see Public File document # 52).

1.3     IMPORTED GOODS

The goods which are the subject of the application, hereinafter referred to as plasterboard, or "subject goods", are:

The New Zealand Customs Department has stated that the plasterboard enters under the following tariff classification:

Applicable duty rates are:

Because Indonesia is an LDC, plasterboard from Indonesia currently attracts a tariff of 6 percent.

Section 3(6) of the Act provides as follows:

and section 5(5) provides:

In the current investigation, goods were imported from Indonesia.

1.4     INVESTIGATION DETAILS

In this report, unless otherwise stated, years are August years. In tables, column totals may differ from individual figures because of rounding.

The period for considering claims of dumping is 1 September 1997 to 31 August 1998. Because the application is based on a threat of injury, the consideration of injury involves evaluation of information relating to the likely effect of the allegedly dumped imports. Historical financial information for the period 1 July 1995 to 30 June 1998 was considered in the analysis injury.

1.5     DISCLOSURE OF INFORMATION

The Ministry of Commerce makes available all non-confidential information to any interested party through its Public File system.

2.    NEW ZEALAND INDUSTRY

Section 3a provides the definition of "industry":

3a. Meaning of "industry"—For the purposes of this Act, the term ‘industry’, in relation to any goods, means—
(a) The New Zealand producers of like goods; or

(b) Such New Zealand producers of like goods whose collective output constitutes a major proportion of the New Zealand production of like goods.

"Like goods" is defined in section 3 of the Act:

"Like goods", in relation to any goods, means—
(a) Other goods that are like those goods in all respects; or

(b) In the absence of goods referred to in paragraph (a) of this definition, goods which have characteristics closely resembling those goods:

2.1    LIKE GOODS

In order to establish the existence and extent of the New Zealand industry for the purposes of an investigation into injury, and having identified the subject goods, it is necessary to determine whether there are New Zealand producers of goods which are like those goods in all respects, and if not, whether there are New Zealand producers of other goods which have characteristics closely resembling the subject goods.

The subject goods have been identified in section 1.3 of this Report as:

Standard plasterboard of a thickness between 8.75mm to 10.25mm, of any length or width

Winstone produces standard plasterboard of a thickness of 9.5mm in multiple widths and lengths. The manufacturing process used in the production of plasterboard is a relatively standard process. The primary materials used in the manufacturing process are gypsum and paper. There may be minor differences in thickness, surface texture or colour between the domestically produced plasterboard and the imported product. Such differences are not considered to be significant.

On the basis of the information available, the Ministry considers that the plasterboard produced by Winstone, while not alike in all respects, has characteristics closely resembling the imported plasterboard, and is therefore like goods to the subject goods.

2.2     NEW ZEALAND INDUSTRY

The New Zealand producer of like goods by or on whose behalf the application was made, is listed in paragraph 1.2.1 above.

The investigation was initiated on the basis that the application met the requirements of section 10(3) with regard to required levels of support, and that the applicant had standing to make an application.

3.    IMPORTS OF PLASTERBOARD

3.1     BASIS FOR INITIATION

The following table shows the import volumes for the subject goods:

Source: INFOS data, Statistics New Zealand

In its application, Winstone provided evidence that suggested that a first shipment of at least 40,000 square metres of plasterboard was expected to be imported into New Zealand from Indonesia. At the time of initiation, one importation of 12,902 square metres of the subject goods had been made.

As the parties involved in the shipment identified were those involved in importing plasterboard from Thailand, for initiation purposes, the Ministry referred to the pattern of imports of plasterboard from Thailand known from previous investigations, reviews and reassessments involving that country. There had been a regular pattern of imports from Thailand of at least two shipments per month. Given that the Siam Cement Group is one of the joint venture partners in SIGI, it was considered reasonable to assume that there could be one shipment of plasterboard per month from Indonesia, substituting imports of Thai plasterboard.

Accordingly, the Ministry assessed the percentage that the potential volume of imports of the subject goods would represent of all imports on the basis of INFOS data provided by Statistics New Zealand for imports of plasterboard in August 1998. This assessment showed that Indonesian imports represented 22 percent of total imports in August 1998. The Ministry was satisfied that, on the basis of the information available at that point in time and for the purposes of initiation, there was sufficient evidence to suggest that potential imports of the subject goods from Indonesia would not be negligible, if so assessed.

3.2     ACTUAL IMPORTS

Only one importation of plasterboard from Indonesia was made in the period of investigation, 1 September 1997 to 31 August 1998. To date, no further shipments of plasterboard from Indonesia have been imported into New Zealand. This indicates that the expectation with regard to the negligibility of imports, on which the initiation was based, was not met.

The Anti-Dumping Committee of Indonesia (see Public File document #57) has expressed concern that exports of the subject goods to New Zealand during the period of investigation represent "far less" than the three percent of total imports negligibility threshold provided for in Article 5.8 of the WTO Anti-Dumping Agreement.

During the investigation, information has been gathered from the manufacturer, exporter and the importer of plasterboard from Indonesia. The importer, Rikki, has advised that it has no contractual arrangements and no forward orders for the supply of plasterboard from Indonesia. The Indonesian manufacturer, SIGI, has also confirmed that it has no contractual arrangements and no forward orders for the supply of plasterboard to New Zealand.

On an annual basis over the period for the investigation of dumping, 1 September 1997 to 31 August 1998, allegedly dumped imports of plasterboard from Indonesia represented 1.32 percent of total imports. It should be noted that, because the tariff item and statistical key 6809.11.00 10D covers a wider range of plasterboard than the plasterboard falling within the description of the subject goods, the total imports figure was adjusted. This adjustment was made using ______________________ _________________________________ represented by goods falling within the description of subject goods (_______ ).

The percentage of total imports represented by the single import of 12,902 square metres of subject goods from Indonesia did not reach the 3 percent threshold set down in Article 5:8 of the WTO Anti-dumping Agreement.

4.     TERMINATION

4.1     NEGLIGIBLE IMPORTS

Section 11(1) of the Act provides that:

As there have been no further imports of the subject goods from Indonesia, the investigating team has considered whether or not there is sufficient evidence of dumping to justify proceeding with the investigation, as required by section 11(1) of the Act.

Section 11(2) of the Act sets out the principle for determining when the evidence of dumping is insufficient, stating that:

For the purposes of subsection (1)(a) of this section, evidence of dumping and subsidising shall be deemed to be insufficient where—

(a) In the case of dumping, the margin of dumping is less than 2 percent (expressed as a percentage of the export price); or

(b) In the case of subsidisation, the amount of the subsidy is less than 1 percent of the value of the goods at the time of import; or

(c) In the case of either dumping or subsidisation, the volume of imports of dumped or subsidised goods, expressed as a percentage of total imports of the goods into New Zealand, is negligible, having regard to New Zealand’s obligations as a party to the WTO Agreement.

The relevant part of the WTO Anti-Dumping Agreement is Article 5:8, which states that:

Thus, New Zealand’s obligation under the WTO Anti-Dumping Agreement is to immediately terminate the investigation as soon as the New Zealand authority is satisfied that the volume of dumped imports is less than 3 percent of imports of a like product, unless the aggregate threshold of 7 percent is met. (The latter threshold does not apply in this case).

The volume of dumped imports from Indonesia is considerably less than 3 percent of the imports of like goods. Accordingly, having regard to New Zealand’s obligations under the WTO Anti-Dumping Agreement, as section 11(2)(c) of the Act provides, the volume of dumped goods is negligible. This provides sufficient grounds, for the purposes of section 11(1)(a) of the Act, for the Minister to be satisfied that there is insufficient evidence of dumping to justify proceeding with the investigation.

In such a situation, by virtue of the wording of section 11(1) of the Act, the Minister is bound to terminate the investigation.

It should be noted that section 11(3)(a) provides that the Secretary may initiate a further investigation, subsequent to termination if it is ascertained that information supplied the investigation was incorrect or did not disclose material facts, and that the information is of such nature as materially to affect the decision to terminate the investigation.

5.     CONCLUSIONS

On the basis of the information available, it is concluded that: The volume of allegedly dumped subject goods from Indonesia is negligible. (b) Consequently, there is insufficient evidence that the goods under investigation are being dumped, such that the termination provisions of section 11 of the Act should apply.

6.     RECOMMENDATIONS

It is recommended, on the basis of the information obtained during the course of the investigation into the dumping of plasterboard from Indonesia: That pursuant to section 11(1) of the Act, the Minister terminate the investigation on the basis that there is insufficient evidence of dumping to justify proceeding with the investigation. That the Minister sign the attached New Zealand Gazette Notice, and give notice of the termination to interested parties in accordance with sections 9 and 11 of the Act.