O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

American-led military campaigns in Afghanistan and Iraq. Although these demonstrations have generally been
peaceful, some have been violent. Political and related social developments in Indonesia have been unpredictable
in the past, and social and civil disturbances may occur in the future and on a wider scale. We cannot
assure you that any such disturbances will not have a direct or indirect material adverse effect on our business,
financial condition, results of operations and prospects.
Destabilising events such as terrorist attacks could disrupt our business.
The terrorist attacks in the United States on 11 September 2001, together with the military response by
the United States and its allies in Afghanistan and continuing military activities in Iraq, have resulted in
substantial and continuing economic volatility and social unrests in South-east Asia. Any additional significant
military or other action by the United States and its allies or any further terrorist activities could also have a
material adverse effect on international financial markets and the Indonesian economy.
During the last five years in Indonesia, there have been various bombing incidents directed towards the
Indonesian and foreign governments and public and commercial buildings frequented by foreigners, including
the Jakarta Stock Exchange Building and Jakarta’s Soekarno-Hatta International Airport. On 1 October 2005,
bomb blasts in Bali killed 23 people and injured over 100 others. Indonesian, Australian and US government
officials have indicated that these bombings may be linked to an international terrorist organisation.
Demonstrations have also taken place in Indonesia in response to United States, British and Australian military
action in Iraq.
There can be no assurance that terrorist acts may not occur in the future. Following the military
involvement of the United States and its allies in Iraq, a number of governments issued warnings to their
citizens in relation to a perceived increase in the possibility of terrorist activities in Indonesia, targeting foreign
and particularly, US interests. Terrorist acts could destabilise Indonesia and increase internal divisions within
the Indonesian government as it considers responses to such instability and unrests, thereby adversely affecting
investors’ confidence in Indonesia and the Indonesian economy. Violent acts arising from, and leading to,
instability and unrests have in the past, and could continue to have, a material adverse effect on investment
and confidence in, and the performance of, the Indonesian economy and, in turn, on our business, financial
condition, results of operations and prospects.
We operate in a legal and regulatory system in which the application and enforcement of various laws
and regulations may be uncertain.
As Indonesia is a developing market, its legal and regulatory regime may be less certain than more
developed markets and may be more susceptible to unforeseen changes. At times, the interpretation,
application or enforcement of laws and regulations in Indonesia may be unclear and the content of applicable
laws and regulations may not be immediately available to the public. Under such circumstances, consultation
with the relevant authority in Indonesia may be necessary to obtain a better understanding or clarification of
applicable laws and regulations.
Indonesia’s legal system is a civil law system based on written statutes. Judicial decisions in Indonesia, in
particular those rendered by its Supreme Court, are persuasive but they do not constitute binding precedents.
They are also not as systematically and publicly available as in developed countries. Many of Indonesia’s
commercial and civil laws and rules on judicial process are based on pre-independence Dutch law and have
not been revised to reflect the complexities of modern financial transactions and instruments. Indonesian courts
are often unfamiliar with sophisticated commercial or financial transactions, leading, in practice, to uncertainty
in the interpretation and application of Indonesian legal principles. The application of many Indonesian laws
and regulations depends, in large part, upon subjective criteria such as the good faith of the parties to the
transaction and principles of public policy. Indonesian judges operate in an inquisitorial legal system and have
very broad fact-finding powers and a high level of discretion in relation to the manner in which those powers
are exercised. In practice, Indonesian court decisions may omit, or may not decide upon, a legal and factual
analysis of the issues presented in a case. As a result, administration and enforcement of laws and regulations
by Indonesian courts and governmental agencies may be subject to uncertainty and considerable discretion.
Uncertainty regarding the application and enforcement of various laws and regulations to our business, our
entitlement to the various licenses we require to operate our business, our entitlement to various land rights, or
other legal or regulatory matters relating to our business could have a material adverse effect on our business,
financial condition, results of operations and prospects.
25