Indonesian Shipping Law: Marine Casualty

DS SIW

By Dyah Soewito and Stephen Igor Warokka

In the event of a ship collision, grounding or other major casualty, there are a number of key provisions in Indonesia that will impact upon the liability and response of interested parties.

Collision

With regard to liability in a collision, the Indonesian Commercial Code (“ICC”), which was enacted in the 19th century, provides that:

  1. If the collision is caused by force majeure, or if there are doubts as to the cause of the collision, the damages shall be borne by those who have suffered them.
  2. If the collision is caused by the fault of one of the colliding vessels, liability to remedy the damages shall be borne by the vessel that committed the fault. Wirjono Prodjodikoro, an Indonesian scholar, stated that a collision caused by a defect (unseaworthiness) of the vessel shall also be considered as the fault of the vessel.
  3. If the collision is caused by the fault of two or more vessels, the liability of each vessel is in proportion to the degree of their respective faults.  Prodjodikoro stated that the test of fault is the impact of the fault on the damage suffered, irrespective of the intention (culpa) of the vessel.
  4. If a vessel being towed collides due to the fault of the towing vessel, the owners of both the towed and the towing vessel shall be jointly and severally responsible for the damage.

Upon declaring independence in 1945, Indonesia decided that the articles of the ICC would continue to be followed unless they were contrary to the Constitution.

Under Law No. 17 of 2008 regarding Shipping (“Shipping Law”), unless it can be proven otherwise, the master of the vessel shall be held liable in a vessel accident. Read more »

Employment Law Alliance Global Client Newsletter for July 2018

Employment Law Alliance

The Employment Law Alliance (ELA) client newsletter is a monthly publication by which ELA members can provide the latest employment law developments to global clients.

You can find the ELA Global Client Newsletter for July 2018 here.

The ELA is the largest network of labor and employment lawyers in the world. ELA members provide employment, labor and immigration expertise in more than 135 countries around the globe and all 50 U.S. states.

SSEK Legal Consultants is the ELA’s member firm for Indonesia. Read more »

Shareholder Activism in Indonesia

IEA-TAA

By Ira A Eddymurthy and Tengku Almira Adlinisa

While there is no specific definition of shareholder activism in Indonesia, and Indonesia does not recognize shareholder activism, the Indonesian Company Law (Law No. 40 of 2007 regarding Limited Liability Companies) gives certain rights to each shareholder and minority shareholder that allow them to influence the company’s actions.

  • Each share grants its owner the right to attend and cast one vote in the general meeting of shareholders (GMS) and perform other rights under the Company Law. Actions that require shareholder approval include:
    • amendments to the articles of association (AOA) must be approved by a resolution at a GMS at which at least two-thirds of the company’s voting shares are represented and at least two-thirds of the shares in attendance approve the resolution;
    • merger, consolidation, acquisition, bankruptcy and/or dissolution of the company, as well as the transfer or pledge of the company’s assets as security for a loan, which comprise more than 50% of the company’s net assets in one or more related or unrelated transactions, must be approved by a resolution at a GMS at which at least three-quarters of the company’s voting shares are represented and at least three-quarters of the shares in attendance approve the resolution.

In all cases, the Company Law permits the AOA to require a greater percentage of votes to approve resolutions for these and any other matters. Read more »

SSEK Partner Recognized in 2018 Benchmark Litigation Rankings for Indonesia

Dewi Savitri Reni

SSEK partner Dewi Savitri Reni was named a Future Star for Indonesia in the Benchmark Litigation 2018 rankings.

Vitri is a supervising partner of SSEK’s arbitration and dispute resolution practice. Her recent projects include assisting a multinational automaker with its exit from Indonesia, advising a multinational banking group on insolvency proceedings against a Singapore shipping company, and assisting a Russian industrial conglomerate in a dispute related to a joint venture in Indonesia.

In addition to the individual recognition for Vitri, SSEK was named a leading litigation and dispute resolution firm for Indonesia in the Benchmark Litigation 2018 rankings. Read more »

Employee Data Privacy in Indonesia

Labor & Employment

There is no law or regulation in Indonesia that specifically regulates the collection, use or handling of an applicant’s personal data, including protection of the privacy of an employee’s particulars. The Indonesian Minister of Communication and Informatics (MOCI) relatively recently issued MOCI Regulation No. 20 of 2016 regarding the Protection of Personal Data in Electronic Systems (MOCI Reg 20), which stipulates the protections afforded to personal data stored in an electronic system.

While there is no regulation that stipulates the protection of non-electronic personal data, generally, all persons have a general right to privacy under the Indonesian Human Rights Law.

Retaining Personal Data of Employees

Manpower laws and regulations do not expressly deal with employee data privacy. In light of such paucity, reference shall be made to MOCI Reg 20 as well as Law No. 8 of 1997 regarding Corporate Documents (Law No. 8). Read more »

SSEK Leads Training on Indonesian Land and Building Law

DR-SIW

SSEK managing partner Denny Rahmansyah and senior associate Stephen Igor Warokka recently led a training session on Indonesian land and building law for the legal division of Badan Penyelenggara Jaminan Sosial (BPJS) Ketenagakerjaan, Indonesia’s social security administration agency for workers.

The training included the types of land rights in Indonesia, land purchases and the disposal of land assets, and licensing issues to optimize land banks. Denny and Stephen also discussed the procedures and requirements for building construction. Finally, they touched on best practices to avoid land disputes.

Denny leads SSEK’s real estate practice, which is recognized by legal directories including Chambers & Partners, The Legal 500 and Asialaw as a market leader.

Indonesia: What Licenses Can Still Be Processed at BKPM Post-OSS?

SSEK Deal News

With the introduction of the Online Single Submission (OSS) system, as regulated under Government Regulation Number 24 of 2018 on Integrated Business Licensing Services through Electronic System (GR 24/2018), the issuance and supervision of a significant portion of capital investment licensing has been transferred from the Capital Investment Coordinating Board (BKPM) and several other government agencies to the OSS system. At the moment, the OSS system is under the supervision of the Coordinating Ministry for Economic Affairs.

However, based on a list provided by the BKPM on June 10, several licenses and approvals are still processed at the BKPM. These include: Read more »

Indonesia Looks to Simplify Business Licensing With OSS System

SSEK Deal News

By Raoul Aldy Muskitta

As part of the push by the administration of President Joko Widodo to improve the ease of doing business in Indonesia and increase investment, the government has issued Government Regulation Number 24 of 2018 regarding Online Business Licensing Services (GR 24), which was signed and came into effect on June 21, 2018.

GR 24 introduces major changes to every aspect of business regulation and supervision in Indonesia. Most notably, a significant portion of capital investment licensing is transferred from the Capital Investment Coordinating Board (BKPM) and other government agencies to the Online Single Submission (OSS) system, which for the time being is overseen by the Coordinating Ministry for Economic Affairs.

A stated aim of the OSS system is to simplify the licensing process and make it paperless. Licenses and registrations will be issued “in reverse,” meaning the OSS system will issue a “temporary” license after the submission of the required information, and the license will only become effective once post-issuance requirements are met.

The following is a summary of the biggest changes under GR 24. Read more »

SSEK Leads Legal Training on Data Protection

DR & SPT

SSEK’s managing partner, Denny Rahmansyah, assisted by Saprita Tahir, an associate of the firm, led a legal training session on data protection for the board of PT Indocement Tunggal Prakarsa Tbk, one of the largest cement producers in Indonesia.

The training included Indonesian regulations on handling and transferring personal data, including the personal data of employees, and data localization requirements for companies in Indonesia. Denny also discussed the draft law on personal data protection, which will be the first comprehensive law in Indonesia that specifically deals with the protection of personal data once it is passed.

Denny and Saprita also examined the General Data Protection Regulation (GDPR), a legal framework that sets guidelines for the collection of and processing of personal information within the European Union (EU) and which covers all companies that deal with the data of EU citizens, including non-EU companies. They discussed what actions companies in Indonesia should take in response to the GDPR.

Belt and Road: Indonesia

Map of Indonesia

By Michael S. Carl and Charvia Tjhai

Indonesia has the largest economy in Southeast Asia, predicted to be the fifth-largest economy in the world by 2030, and is the fourth-most populous country in the world, with a young, energetic workforce and a large and growing middle class. Indonesia has made deregulating its economy a focus and the country jumped 19 places to 72 in the World Bank’s 2018 Ease of Doing Business index.

Belt & Road: The natural resource-rich island nation of Indonesia is located between the Indian and Pacific oceans and is a vital sea transport hub on the 21st Century Maritime Silk Road. China was among the top five sources of FDI in Indonesia in 2017 and the country’s investment service agency has established a China Desk.

Entering the Market

Regulations

The Capital Investment Coordinating Board (BKPM) is responsible for regulating, approving, and supervising the implementation of foreign and domestic investment in Indonesia. It is, in essence, the gatekeeper for companies investing in Indonesia and is likely the main institution investors will deal with. Investment licensing and investment facilities in Indonesia are regulated under BKPM Regulation No. 13 of 2017.

Foreign direct investment in Indonesia must be in the form of a foreign investment limited liability company, or PT PMA, in most industries. Upstream oil and gas activities are a notable exception. Read more »