An Eye on PPP in Indonesia

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By Syahdan Z. Aziz

Public-private partnerships (“PPPs”) interest infrastructure investors in Indonesia for a number of reasons. PPP sets forth the arrangement for cooperation between the Government and private business entities in infrastructure procurement to accelerate the development of adequate and needed infrastructure. There are advantages to the PPP scheme, including the availability of government support and guarantees for the relevant infrastructure project.

With the intention to improve the development of PPP projects in Indonesia and to make PPP arrangements more appealing to investors, the Government recently issued Presidential Regulation No. 38 of 2015 regarding Cooperation Between the Government and Enterprises in Infrastructure Procurement (March 20, 2015) (“PR 38″). This new regulation revokes previous regulations on PPP, namely Presidential Regulation No. 67 of 2005, as lastly amended by Presidential Regulation No. 66 of 2013 (“PR 67″).

PR 38 introduces a number of new types of infrastructure to the list set out in PR 67 of infrastructure that can be developed through PPP. These new types of infrastructure under PR 38 are energy conservation, city facilities, educational facilities, sports and arts facilities, public infrastructure, tourism facilities, correctional facilities and public housing infrastructure. Read more »

Indonesian Rules on E-Signatures

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By Bezaliel B. Erlan and Soefiendra Soedarman

Continued growth in electronic transactions has resulted in electronic signatures, or e-signatures, becoming more common in daily transactions. In this article we discuss the use and applicability of e-signatures in Indonesia and the relevant regulations under Indonesian law.

Introduction and definition

E-signatures were unregulated in Indonesia until the enactment of Law No. 11 of 2008 regarding Electronic Information and Transac­tions (“Law No. 11/2008”). E-signatures were further regulated by Government Regulation No. 82 of 2012 regarding the Implementa­tion of Electronic Systems and Transactions (“GR No. 82/2012”).

Under the relevant regulations, an e-signature is defined as containing electronic information that is attached to, associated with, or linked to other electronic information that is used as a verification and authentication tool.

E-signatures in Indonesian law will have lawful legal force and legal effect as long as they meet the following requirements:

  • E-signature creation data is associated only with the signer;
  • E-signature creation data at the time of the electronic signing process shall be only in the authorization of the signer;
  • Any alteration to e-signatures that occurs after the time of the signing is traceable;
  • Any alteration to electronic information associated with the e-signature after the time of the signing is traceable;
  • Certain methods are adopted to identify the signer; and
  • Certain methods are adopted to demonstrate that the signer has given his or her consent to the associated elec­tronic information.

The said regulations do not stipulate the qualifications of ‘cer­tain methods’ as mentioned in point e and f. However, we believe that these methods are those that have the ability to secure origi­nality and may be traced back to signers for authentication pur­poses. In view of this, we believe that these methods also relate to encryption technology. Read more »

Indonesian Labor Law and the Hospitality Industry

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By Richard D. Emmerson

Indonesia’s hospitality industry is enjoying strong growth. Both domestic and foreign operators are opening new hotels and Indonesia’s National Statistics Board reported that foreign tourist arrivals to Indonesia between January and November 2014 reached 8.52 million, an increase of 7.29 percent from the same period in 2013. There were 251 million trips by domestic tourists during that same period.

As hospitality companies enter the Indonesian market, it is important that they understand the employment law regime and how it applies to the hospitality industry. Below is a primer on Indonesian labor law and the hospitality industry.

If a company wants to bring employees to a new hotel chain located in Indonesia, how are job titles, type of work performed, length of assignment and nationality relevant to the immigration process?

Foreigners are eligible to obtain work permits to perform certain specified types of jobs in the hospitality industry subject to certain time limits. The work actually performed must be consistent with the job title specified in the work permit. Nationality is not relevant provided that the candidate is a citizen of a country having diplomatic relations with Indonesia.

The Stay Permit is issued by the immigration division of the Ministry of Law, and the Work Permit is issued by the Ministry of Manpower. An additional Recommendation Letter from the Ministry of Tourism may be required. Read more »

SSEK Adviser to Speak at China Nickel Conference

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Michael S. Carl, a foreign legal adviser at SSEK Indonesian Legal Consultants, is a scheduled speaker at the 12th Annual China Nickel Conference taking place May 27-28 in Shanghai.

Michael will offer a legal perspective on building smelters in Indonesia, touching on topics such as foreign investment policies, licensing and dealing with the government and the community. His session is scheduled for Thursday, May 28.

For more information on the conference and to register, click here. Read more »

Compliance Road Map for Companies in Indonesia

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By Andini H. Dewi and Christina N. Soela

Compliance is an important issue for foreign investment companies doing business in Indonesia. As international organizations, foreign investment companies are not only required to comply with the laws and regulations of the country of origin of their parent companies but also with relevant laws and regulations in Indonesia. Due to the Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM), which supervises all foreign investment activities in Indonesia, foreign investment companies are often more strictly scrutinized than wholly owned Indonesian companies in terms of compliance with Indonesian laws and regulations.

Foreign investment companies are required to obtain BKPM approval before carrying out certain actions such as share transfers, capital increases and business expansions. Foreign investment companies must also submit an investment activities report to the BKPM. This report must be submitted quarterly for companies that have not obtained a Business License (i.e., they have not yet commenced commercial production or operations) and each semester for companies that have obtained a Business License (i.e., they have commenced commercial production or operations). Read more »

SSEK Partner Speaks at Petromindo Oil and Gas Seminar

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Ira A. Eddymurthy, a founding partner at SSEK Indonesian Legal Consultants, was a featured speaker at an oil and gas seminar organized by Petromindo.com.

The seminar, “Minister of Trade Regulation on the Export of Oil and Gas and the Use of Letter of Credit: Opportunities and Challenges for Business Actors,” was held on Tuesday, March 10.

Ira was on a panel exploring commercial strategies for oil and gas business actors. Her presentation examined the Legal Consequences of the Minister of Trade Regulation on the Export of Oil and Gas.

Ira has three decades of experience advising multinationals and domestic companies on Indonesia’s regulatory environment and helping them achieve their business and investment goals. She is praised for her “comprehensive knowledge and understanding of the commercial aims of clients” (Chambers & Partners).

For more information on Petromindo.com and upcoming events, please click here.

SSEK and Deloitte Welcome the Year of the Goat

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SSEK Legal Consultants and Deloitte hosted a Lunar New Year Gathering on Friday, March 6, for members of the Chinese business community in Indonesia.

SSEK’s managing partner, Rusmaini Lenggogeni, and Fahrul Yusuf, a partner at the firm, spoke at the event. They offered a legal perspective on foreign direct investment in Indonesia, looked at some of the priority sectors under the new administration, discussed licensing at the Capital Investment Coordinating Board (“BKPM”) and touched on a number of other issues of importance to Chinese companies doing business in Indonesia.

SSEK has extensive experience working with Chinese companies and helping them realize their business goals in Indonesia. We work with Chinese companies across all sectors, including mining and natural resources, infrastructure and project finance, and banking and finance.

For more information, please contact Rusmaini Lenggogeni at rusmainilenggogeni@ssek.com.

Defamation under Indonesian Law

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By Michael S. Carl, Andini Dewi and Bambang Dhanisworo

Defamation under Indonesian law involves the issuance of a defamatory statement that causes a person to suffer harm. The term “defamation” is often used to encompass both slander (penistaan) and libel (penistaan dengan surat). Defamation is governed in the Indonesian Criminal Code under Chapter XVI, which covers six types of defamation.

Defamation under the Indonesian Criminal Code

1. Slander or defamation (Article 310 (1) of the Criminal Code).

2. Libel or defamation in writing (Article 310 (2) of the Criminal Code).

The elements that need to be fulfilled under Article 310 (1) and (2) are:

  • the defamation is made intentionally to harm a person’s honor or reputation;
  • the defamation is addressed to an individual, not a government institution, official or association, community, etc.;
  • the defamation needs to contain an accusation about a specific matter (e.g., deception, embezzlement, etc.), as long as it disgraces the related person; and
  • the defamation is made publicly.

Read more »

SSEK Ranked in 2015 Chambers Asia-Pacific

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SSEK Indonesian Legal Consultants earned seven firm rankings in the 2015 Chambers Asia-Pacific directory of the leading law firms in the region. Six SSEK lawyers received individual rankings across five practice areas.

SSEK was recognized as a leading firm in Indonesia in Banking & Finance, Corporate/M&A, Dispute Resolution, Employment, Projects & Energy, Real Estate, and Telecommunications. These rankings underline SSEK’s standing as one of Indonesia’s leading full-service corporate and commercial law firms.

The following lawyers received individual rankings in the following practice areas:

Ira A. Eddymurthy – Corporate/M&A

Darrell R. Johnson – Corporate/M&A, Projects & Energy

Michael D. Twomey – Projects & Energy, Real Estate

Richard D. Emmerson – Employment, Real Estate

Michael S. Carl – Banking & Finance, Corporate/M&A, Projects & Energy

Bezaliel Basuki Erlan – Banking & Finance (Associates to Watch) Read more »

SSEK to Speak at Webinar on Protecting Company Rights and Confidential Information

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Richard D. Emmerson, a senior foreign legal advisor at SSEK Legal Consultants, will take part in a free Employment Law Alliance webinar on Wednesday, March 11 titled, “What Employers in Asia Need to Know about Protecting Company Rights and Confidential Information.”

You can click here to register.

Webinar Description

Employers in Asia are increasingly facing questions of how best to protect confidential information and IP rights when an employee leaves the company. Restrictive covenants sometimes help, but provisions that are not well-drafted may not be enforceable.

This webinar, featuring employment lawyers from across Asia, will use a case scenario to offer guidance and practical insight into how employers can address these key issues, specifically:

  • How can employers prevent terminated employees from competing with their former company?
  • If there is a post-termination non-compete, what remedies are available to the employer?
  • What course of action can employers take when faced with a breach of a confidentiality obligation and IP rights?
  • What are the myriad considerations if the confidentiality breach involves cross-borders?

Guidance for Companies in Indonesia

Richard Emmerson, of SSEK Legal Consultants, will address these issues for companies operating in Indonesia. Mr. Emmerson has extensive experience in Indonesia and is recognized by leading legal publications including Chambers Asia Pacific, Who’s Who Legal and Asialaw as a leading employment law practitioner. Read more »