Client Alert

Capital Investment Coordinating Board (“BKPM”): Investment on Food Sector Becomes A Priority

 Investment, Trade and Industry

August 11, 2016

Capital Investment Coordinating Board (“BKPM”):

Investment on Food Sector Becomes A Priority

 

 

Food industry has been one of the attractive business sectors in Indonesia, considering the country has abundant resources from land and sea. However, investment  in food sector is still minuscule and needs to be expanded. Seeing the huge investment opportunity for food industries and the needs to enhance national food security, the recently appointed Head of BKPM, Thomas Lembong, stated his intention and focus to boosting investment in food sector by attracting investments from both domestic and foreign investors.

 

Contact :

 

Wahyuni Bahar
Managing Partner

 

BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com

 

 

 

On Wednesday, 27 July 2016, President Joko Widodo announced the new composition of his cabinet for period 2014-2019.[1]One of the positions that have been changed is the Head of the BKPM. Thomas Trikasih Lembong has been selected to replace Franky Sibarani to administer investments in Indonesia.[2]

 

Indonesia is a lucrative food industry market, surrounded by tropical forests, fruitful lands, and rich ocean. The Government sees the open opportunity for food sector, hence agricultural and marine sectors are included in the Presidential Regulation No. 3 of Year 2016 on National Strategic Project. Food estate, quarantine facility in Bangka Belitung (2,170 ha), and establishment of integrated cold storage in 20 locations would be the main projects that the Indonesian Government aims to conclude.

 

In the first half of 2016, the top sector for domestic investment  is food industry, amounting to 16.64 trillion Rupiah, putting food industry as one of the top five foreign direct investment destinations. Domestic investment on food and plantation accounts for 12.24 trillion Rupiah. Pursuant to that data, Thomas Lembong will continuously focus to expand the investment in food sector. [3] This action is taken in accordance with the directives of the President Joko Widodo at the plenary session of the first cabinet that instructed to solve the food issues and encourage investment in food sector within the next three months. [4]

 

Issues that have been hampering food industry are issues on food supply chain, food production, and food distribution due to limited infrastructure and technology, which relates to food security. The government is not satisfied with the current food’s trends, prices, and limited supplies. Further, Thomas Lembong sees that there are still a big opportunities to improve our food industry[5] and safeguard food security in Indonesia through sufficient supplies and stable prices.

 

Related to that matter, Thomas Lembong intends to increase the particular food productivity of agriculture and livestock. He encourages investors for doing modernization in the agricultural and livestock sectors, such as modernizing the abattoir, the rice mill, and others.[6]This method is aimed to improve food industry’s efficiency and profitability.[7]To realize such goals, the government further liberalized certain sectors through the new Negative Investment List published in May 2016. Cold storage and restaurants business are now opened 100% to foreign ownership, while distribution and warehousing are increased to 67% from the previous 33% foreign ownership. [8]

 

The government has also issued regulations to provide ease of doing business to the investors, particularly related to the licensing procedures.[9]Licensing procedures has been reformed at the end of 2014, and now centralized under BKPM.  Online monitoring service has also been introduced to simplify the registration and as a possibility for the investors to monitor the progress.[10]With such improvements, investments are expected to increase and distributed well across Indonesia, particularly on food sector.

 

_______________________

[1]       https://m.tempo.co/read/news/2016/07/27/078790887/ini-susunan-menteri-baru-hasil-reshuffle.
     Accessed on 1 Augusts 2016.

[2]      http://www.thejakartapost.com/news/2016/07/27/jokowis-new-cabinet-announced.html.

     Accessed on1 Augusts 2016.

[3]      http://jambi.tribunnews.com/2016/07/31/pemerintah-menggenjot-investasi-di-sektor-pangan.
     Accessed on 1 Augusts 2016.

[4]      http://www.cnnindonesia.com/ekonomi/20160729075613-92-147809/thomas-lembong-fokus-kejar-
     investasi-sektor-pangan/. Accessed on 1 Augusts 2016.

[5]       http://www.antaranews.com/berita/575786/tom-lembong-genjot-investasi-sektor-pangan-untuk-
     turunkan-harga-pangan. Accessed on 1 Augusts 2016.

[6]       http://jambi.tribunnews.com/2016/07/31/pemerintah-menggenjot-investasi-di-sektor-pangan.
     Accessed on 1 Augusts 2016.

[7]    http://www.antaranews.com/berita/575786/tom-lembong-genjot-investasi-sektor-pangan-untuk-
     turunkan-harga-pangan. Accessed on 1 Augusts 2016.

[8]      http://www.euind-tcf.com/dni-and-reforms/. Accessed on 1 Augusts 2016.

[9]       http://www.jitunews.com/read/38728/langkah-merevisi-regulasi-mampu-tarik-investor-di-sektor-
     pangan. Accessed on 1 Augusts 2016.

[10] http://www.indosight.com/blog/new-regulations-make-investments-indonesia-faster-clearer/.
      Accessed on 1 Augusts 2016
     

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

 

New Regulation Concerning About Manpower Wage

LABOR, COMMERCIAL DISPUTE RESOLUTION

January 20, 2016

New Regulation Concerning About Manpower Wage

The Indonesian Government has issued a new regulation to protect the Indonesian manpower due to the economic regression in Indonesia. Main new provisions are, among others: (i) new formula to calculate the minimum wage workers, (ii) obligation of the employer to fulfill the rights of workers, and (iii) employers’ sanction for any incompliance to this regulation.   

 

Contact :

 

WAHYUNI BAHAR
Managing Partner




BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com

 

 

 

 

 

In October 23rd 2015, the Government issued Government Regulation No. 78 of 2015 on Manpower Wage (“GR 78/2015”) which revoked the Government Regulation No. 8 of 1981 on Protection of Wages. The aim of such regulation is improving the manpower’s welfare. The main new provisions are, among others (i) new formula for determining the minimum wage and (ii) obligation and administrative sanction for the employer.

 

According to GR 78/2015, the minimum wage shall be established on the basis of proper standard of living with due observance to the productivity and economic growth including inflation. The component of proper standard living is reviewed once in every 5 (five) years.

 

Furthermore, obligations for the employer are also regulated. Those are, among others the obligation to: (i) provide allowances for the worker, (ii) the obligation to give an overtime pay, (iii) make available the structure and scale of wages, and (iv) pay the wages to worker on time.

 

Another highlight is administrative sanction for any violation done by the employer. Such sanction are in the form of (i) written warning, (ii) restriction of business activities, (iii) temporary termination of part or all of production facilities, and (iv) termination of business activities.

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

Mid-Year Brief Regulations Update: Maritime

 

TRANSPORTATION

September 2, 2015

Mid-Year Brief Regulations Update: Maritime

 

By mid-year of 2015, we have seen regulatory developments in the port services. In May 2015, The Minister of Transportation has issued Minister Regulation No. 95 of 2015 on The Guidelines of  Port Services Selling Price Fixing which Managed by Port Operator (“MoT Reg 95/2015”). The MoT Reg 95/2015 is aimed for giving more clarity to the company in the implementation of port affairs services selling price fixing, which shall enter into force as of 25 May 2016.1

 

Contact :

 

WAHYUNI BAHAR
Managing Partner


ANGGIA RUKMASARI
Head of Group



BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com



 

 

PORT SERVICES

 

The regulation shall apply for provision and/or port services commercially managed by port operator, provision and/or service of ship and/or goods and/or passenger.2 Those port services and terminal port services charge shall be determined by port operator, based on type, structure, tariff category and mechanism stipulated by the MoT.3

 

COMPONENT AND FORMULATION OF PORT SERVICES PRODUCTION FEE CALCULATION

 

Port operator shall compose the amount of fee calculation in the provision and/or services of ship, goods service, passenger service in terminal by calculating production fee component as follows: direct operation fee (employee fee, material fee, maintenance fee, depreciation fee, insurance fee, charter fee, administration fee, general fee, concession fee, energy fee and capital fee), indirect operation fee (employee fee, materials fee, maintenance fee, depreciation fee, insurance fee, charter fee, administration fee, general fee, and management fee) and profit margin.4

Total production fee shall be calculated based on full costing such as summation of direct operation fee and indirect operation fee.5 The maximum amount of indirect operation fee is in the amount of 30% (thirty percent) from total production fee.6 The production of primary fee service is the production primary fee per unit (production primary fee is the division between total production fee and total production for each port affairs service type).7

 

LIMITATION OF PORT AFFAIRS SERVICES SELLING PRICE

 

Port operator can implement the selling price towards port service at maximum amount of production primary fee + 25% (twenty five percent) profit margin at maximum of port service which is provided from fee per unit.8

 

ADMINISTRATION SANCTION

 

1.       Warning Letter

Port operator who does not fulfill the requirements of  guideline of  port services selling price fixing, shall be imposed with the maximum 3 (three) times warning letter, with each warning letter in each period of 30 (thirty) calendar days.9

 

2.       Port Enterprise License Suspension.

Port operator who does not fulfill the requirements of  guideline of  port services selling price fixing after the end period of the third warning letters shall have its port operator license suspended.10

 

3.       Revocation of Port Enterprise License 

Port enterprise who does not fulfill the requirements of guideline of  port services selling price fixing after the end period of port operator license suspension shall have its license to be revoked.11

 

______________________________________________________________

1   MoT Reg 95/2015, Article 11

2   MoT Reg 95/2015, Article 2

3   MoT Reg 95/2015, Article 4

4   MoT Reg 95/2015, Article 5 paragraph 1, paragraph 2 and paragraph 3

5   MoT Reg 95/2015, Article 5 paragraph 4

6   MoT Reg 95/2015, Article 5 paragraph 5

7   MoT Reg 95/2015, Article 5 paragraph 6

8   MoT Reg 95/2015, Article 7

9   MoT Reg 95/2015, Article 9 paragraph 4

10  MoT Reg 95/2015, Article 9 paragraph 5 and paragraph 6

11 MoT Reg 95/2015, Article 9 paragraph 7

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

 

GTDT - Aviation Finance & Leasing

 

TRANSPORTATION

August 27, 2015

GTDT - Aviation Finance & Leasing

 

Contact :

 

WAHYUNI BAHAR
Managing Partner

ANGGIA RUKMASARI
Head of Group



BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com



 

Dear esteemed clients, colleagues, and friends,

 

To meet the high demand of the air transport industry, leasing or purchasing new aircraft is inevitably important for Indonesian airlines and/or private jet/charter operators. In that regard, Bahar & Partners is pleased to provide a highlight of aircraft finance and leasing framework under the Indonesian laws and practices as your reference and guidance (as attached). This highlight is part of our newest publication, Getting The Deal Through – Aviation Finance & Leasing, which represents our contribution and commitment to aviation industry in Indonesia.

 

Bahar & Partners Transportation practice area, is a specific legal area under Infrastructure & Transportation Practice Group. This practice area by its experience and background is well equipped to provide the full spectrum of aviation industry and compliance assistance and support to our various clients. Our team has in depth knowledge of the industry, such as in the area of aircraft financing, airport development, insurance, litigation, etc.

 

For your reference you can learn more about our profile from our website at www.baharandpartners.com

 

Should you have any questions that need to be discussed further, or if you need our firm’s legal  services, please do not hesitate to contact:

 

Managing Partner – Wahyuni Bahar (wbahar@baharandpartners.com)

Group Head – Anggia Rukmasari ( anggia@baharandpartners.com)

 

It is our sincere hope that we will be able to work together with you in the near future.

 

 

 

Best regards,

Wahyuni Bahar / Anggia Rukmasari

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

 

Mid-Year Brief Regulations Update [Part II]

 

 

TRANSPORTATION

August 20, 2015

Mid-Year Brief Regulations Update [Part II]

 

By mid-year of 2015, we have seen some regulatory developments in the aviation sector. The enactment of Civil Aviation Safety Regulations (“CASR”) by the Ministry of Transportation (“MoT”) featured in new regulations. MoT has also issued several new regulations focused on the exemption from obligation on safety, security, and civil aviation services, delay management, drone, and guidelines on the aircraft ownership.

 

This section focuses on the Exemption from Obligation on Safety, Security and Civil Aviation Services and Delay Management of Scheduled Commercial Air Transport Enterprise in Indonesia. Please refer to our Mid Year Brief Regulation Updates part I for the Enactment of CASR and Mid Year Brief Regulation Updates part III for Drone and Guidelines on the Aircraft Ownership.

 

Contact :

 

WAHYUNI BAHAR
Managing Partner


ANGGIA RUKMASARI
Head of Group



BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com


 



 

 

THE EXEMPTION FROM OBLIGATION ON SAFETY, SECURITY, AND CIVIL AVIATION SERVICES

 

1.       REQUIRED CONDITIONS TO OBTAIN THE EXEMPTION.

In particular conditions, aviation service providers may be granted exemption from the obligation on safety, security, and civil aviation services which shall be given in writing from the Director General of Civil Aviation.1 The required condition to obtain the exemption, among others: (a) geographical issues, (b) facilities or equipment malfunction in accordance with the required conditions, (c) unavailability of personnel who have the competence, adequate facilities or equipment, (d) emergency, and (e) air transport activities which are not in accordance with the specifications of operation.2

 

2.       APPLICATION.

Aviation service providers shall apply to Director General of Civil Aviation to obtain the exemption with the requirements by submitting the application in writing and attaching the supporting data which containing: (a) the proposed issue of laws and regulations being requested for the exemption, (b) justification, and (c) risk assessment and risk mitigation.3

 

DELAY MANAGEMENT OF SCHEDULED COMMERCIAL AIR TRANSPORT OPERATOR IN INDONESIA

 

1.       SCOPE OF FLIGHT DELAYS.

Flight delays of scheduled commercial air transport operators consisting of flight delayed, denied boarding passenger, and cancelation of flight.4 Flight delays are classified into 6 (six) categories, namely:5

a.       Category 1, delays which last from 30 minutes up to 60 minutes;

b.      Category 2, delays which last from 61 minutes up to 120 minutes;

c.       Category 3, delays which last from 121 minutes up to 180 minutes;

d.      Category 4, delays which last from 181 minutes up to 240 minutes;

e.      Category 5, delays which last more than 240 minutes; and

f.        Category 6, cancelation of flight.

 

2.       COMPENSATION.

Factors that are led to delays are consisting of airline management factors, operational technical factor, weather factors, and other factors.6 Air transport operator shall only be responsible for delays which are caused by the airlines management factor and the airlines management shall give the compensation to passengers, according to the category of delay in the form of:7

a)      Soft drink for Category 1;

b)      Snack box and drink for Category 2;

c)       Heavy meal and drink for Category 3;

d)      Snack box, heavy meal, and drink for Category 4;

e)      Compensation in the amount of IDR 300.000,- (three hundred thousand Rupiah) for Category 5;

f)       Transfer to the next flight or refund ticket for Category 6; and

g)      Delays on Category 2 up to Category 5, the passenger may be transferred to the next flight or refund ticket.

 

3.       STANDARD OPERATING PROCEDURE (SOP) AND SANCTION.

Scheduled commercial air transport operator shall have an SOP on delay management in Indonesian version and shall be approved by Director General.8 Director General shall conduct monitoring and assessment upon the air transport operator with the components of: (i) the compliance to report the implementation of SOP on delay management which has been submitted to the Director General, (ii) number of findings in monitoring related to delay management by Inspector of Air Transport, and (iii) the handling or resolution of complaints by the user of air transport to the flight delay.9 According to the assessment by Director General, the air transport operator may subject to sanction such as written warning, suspension of new route, reduction of route, and suspension of license.10

 

___________________

1  MoT Reg 82/2015, Article 3 paragraph (1-2).

2  MoT Reg 82/2015, Article 4.

3  MoT Reg 82/2015, Article 5.

4  MoT Reg 89/2015, Article 2.

5  MoT Reg 89/2015, Article 3.

6  MoT Reg 89/2015, Article 5 paragraph (1).

7  MoT Reg 89/2015, Article 6 paragraph (1) jo. Article 9 paragraph (1).

8  MoT Reg 89/2015, Article 11 paragraph (1-2).

9  MoT Reg 89/2015, Article 13 paragraph (2).

10 MoT Reg 89/2015, Article 16.

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

Limitation for Private Entities in Water Resources Business after the award of the Constitutional Court Decision No. 85/PUU-XI/2013

LABOR & COMMERCIAL DISPUTE RESOLUTION

Juli 31, 2015

Limitation for Private Entities in Water Resources Business after the award of the Constitutional Court Decision No. 85/PUU-XI/2013

Private entities in water resources business are haunted by the fear that they could be vulnerable to prosecution while operating their business in the water resources due to the decision of the Constitutional Court which revoked the operation of Law No. 7 of 2004 on Water Resources, including its implementation regulations and re-enforced Law No. 11 of 1974. The recent verdict has limited the authorization of private entities for conducting cultivation on water by stating that the primary priority for cultivating the water resources are state owned enterprises or regional government owned enterprises. Meanwhile, private entities may cultivate the water only if the water resources are still available by taking into account some limitations and strict conditions.

 

Contact :

WAHYUNI BAHAR
Managing Partner




BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com

 

 

 

 

 

On February 18th, 2015, the Indonesian Constitutional Court vitiated the operation of Law No. 7 of 2004 on Water Resources (“Law 7/2004”) through its ruling No. 85/PUU-XI/2013. The judicial review on Law 7/2004 was petitioned by 4 (four) organizations namely: (i) Pimpinan Pusat Muhammadiyah; (ii) Al Jami’yatul Washliyah; (iii) Solidaritas Juru Parkir, Pedagang Kaki Lima, Pengusaha, dan Karyawan (SOJUPEK); and (iv) Perkumpulan Vanaprastha, and 6 (six) persons. The petitioned was granted by the court on the ground that the law has yet guaranteed the limitation of water management by private sector and therefore was deemed to contradict Article 33 of the Constitution. The court further prescribed that in order to avoid the legal vacuum in the management of water resource in the country, the court reinstated Law No. 11 of 1974 on Irrigation Law.

 

In this regard, the Constitutional Court ruled the 6 (six) limitations for the cultivation on water resources which in principle stipulates that the water resources shall be controlled by the state and the state must prioritize the state or regional owned enterprises in the utilization of water resources. Meanwhile, private entities may be granted a right to utilize water so long the limitation ascertained by the court are satisfied and there is availability of water. Unfortunately, to date the government still has not issued any regulation regarding the implementation of 6 (six) limitations, yet in particular those certain and strict conditions are for private entities.

 

As a result, the fear of operating water resources business has raised among the private entities, in particular for the private entities which already obtained the water abstraction permit (surat izin pengambilan air) and/or engaged in the contract on piping drinking water supply with the government. This circumstance encourages the Ministry of Public Works and Housing for issuing the Circular Letter No. 04/SE/M/2015 dated 19 March 2015 stating that all water resources utilization licenses which have been issued prior the Constitutional Court Verdict are still valid and will be evaluated by the government in accordance with the 6 (six) limitations. Whereas, for the request and extension of water resources utilization license shall be processed based on the 6 (six) limitations. In addition, contracts on piping drinking water supply between private entities and government shall be evaluated and/or re-negotiated in accordance with the 6 (six) limitations.

 

From the above, a regulation which stipulates the implementation of 6 (six) limitations is necessary in order to avoid any uncertainty for private entities in conducting its water resources business. Hopefully, the conditions will be in the favor of the private entities considering that the private entities have been provided many impacts on water resources business. In addition a re-negotiation including review of the existing piping drinking water supply agreement between private entities and government is highly advisable.

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

The Manpower Social Security

LABOR 7 COMMERCIAL DISPUTE RESOLUTION

Juli 30, 2015

The Manpower Social Security

The manpower social security has seen some dynamic developments in the distant past few years in Indonesia. In June 2015, the Government issued 3 (three) Government Regulations on Occupational Accident Security and Death Security, Pension Security and Old Age Security. Those Government Regulations are aimed for giving more clarity and obligation to the company and employee in the implementation of manpower social security.

 

Contact :

WAHYUNI BAHAR
Managing Partner




BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com


 

 

 

 

 

Referring back to Law No. 40 of 2004 on The National Security System and Government Regulation No. 14 of 1993 on The Implementation of The Manpower Social Security, in June 2015, the Government issued 3 (three) Government Regulations as the new implementation regulation of the manpower social security program, i.e Government Regulation No. 44 of 2015 on The Implementation of Occupational Accident Security and Death Security Programs, Government Regulation No. 45 of 2015 on The Implementation of Pension Security Program, and Government Regulation No. 46 of 2015 on The Implementation of Old Age Security Program of which those securities are conducted by Manpower Social Security (“BPJS Ketenagakerjaan”) as the transformation of which formerly called PT Jaminan Sosial Tenaga Kerja.

 

Occupational Accident Security and Death Security Programs (Jaminan Kecelakaan Kerja dan Jaminan Kematian)

 

In regard with the participant of occupational accident and death securities, the Government Regulation divides the participant into 2 (two) kinds, i.e: participant who receive the wage (employee in the company, employee in the personal company, and expatriate who works in Indonesia at least for 6 months) and participant who does not receive the wage (employer, independent employee, and employee exclude the independent employee and does not receive the wage).

 

The amount of dues for occupational accident security is still divided into 5 (five) groups which depends on the work environment risk. In this regard, there are some kinds of business which are added or transferred into another group, among others: (i) for group 1: security services, profession services, and cinema; (ii) for group 2:  food and beverage, house and hotel, housing and room rent; (iii) for group 3: fuel station; and (iv) for group 4: steam industry for power, electricity company/power plant, transferring and distribution of electricity, and gas distribution factory for housing and fabrics. This means that the companies which are engaged in those types of business shall adjust its dues for occupational accident security. Further, with regard to the death security, the latest Government Regulation added new obligation for the employee as the participant who does not receive the wage to pay the death security dues amounting to Rp 6,800.00 (six thousand eight hundred Rupiah) per month.

 

Pension Security Program (Jaminan Pensiun)

 

The latest Government Regulation added new security program for BPJS’ participant called pension security program. The benefit of pension security is divided into 5 kinds, i.e old age pension, disability pension, widow or widower pension, children pension, or parent pension. The beneficiary is the employee (for old age and disability pension), while if the employee passes away, the beneficiary is the employee’s husband or wife, his/her children (maximum 2 children), or one of his/her parents. In regard with the pension age, until 2019, the pension age is determined at 56 years old, then since 2019 the pension age is changed into 57 years old, and will add 1 year for every 3 years until it reaches 65 years old. In the event that the participant has reached the pension age but is still working, the participant has the opt to take the pension benefit either when he/she has reached the pension age or when he/she has stopped working which is not later than 3 years after he/she has reached the pension age. The amount of dues for pension security program is 3% of the wage, the employer is obliged to pay for 2%, while the employee is obliged to pay 1%.

 

Old Age Security Program (Jaminan Hari Tua)

 

Unlike its previous stipulation, which stipulates that the participant may take the old age security benefit if the employee’s age has reached 55 years or becomes a participant for at least 5 years, the new Government Regulation stipulates that the participant may take old age security benefit if she/he has reached 56 years old, passes away, becomes permanently disable, or becomes a participant for at least 10 years. However, there is a limitation for taking the old age security benefit if the employee becomes a participant for at least 10 years. The limitation depends on those reasons, i.e: (i) for housing ownership program, maximum for 30%; or (ii) for other reason maximum 10% (ten percent) in accordance with the preparation for pension. On the other hand, in fact, this limitation raises some pros and cons from the employee and there is a plan from the government to revise this stipulation. 

 

From the above, a review of the existing employment agreement regarding manpower security program is highly advisable. Companies are also welcome to develop an internal policy on the implementation of this manpower security program to ensure their compliance with those new regulations. Please also note that these securities are applied to every expatriate who works in Indonesia for at least 6 (six) months.

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

Mid-Year Brief Regulations Update [Part III]

 

 

TECHNOLOGY, MEDIA, TELECOMMUNICATION

 

July 13, 2015

Mid-Year Brief Regulations Update [Part III]

 

By mid-year of 2015, we have seen some regulatory developments in the industry. Acceleration of licensing and assignment of telecommunications licensing authority by the Ministry of Communication and Information Technology (“MoCIT”) are featured in new regulations.  MoCIT has also issued several new regulations focused on the implementation and optimization of the electronic system, devices, and equipment usage in various sector, such as e-payment.

 

This section focuses on the changes seen in Electronic System area. Please refer to our Mid Year Brief Regulation Updates part I for changes in Telecommunication Network and Mid Year Brief Regulation Updates part II for changes in Resources and Equipment of Post and Information Technology.

 

Contact :

 

WAHYUNI BAHAR
Managing Partner



BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com


 

Our TMT practice group has extensive experience in advising businesses in the practice area of TMT. We are familiar with the regulatory environment in relevance to TMT, as well as dealing with the relevant authorities. Our TMT team works closely on a wide range of transactions in providing advice to our clients who are prominent names in TMT both locally and internationally. We continuously keep up to date with developments in TMT as well as developments in regulations. Our information, communication and technology services group mainly includes the following: telecoms, outsourcing and technology contracts, e-business, data protection and IT security, broadcasting and media, regulatory advice and corporate general matters.

 

ELECTRONIC SYSTEM

 

1.       ELECTRONIC SYSTEM OPERATED BY STATE INSTITUTIONS.

a.    A further step to regulate the use of domain name has finally been taken by the government. An organized used of domain name by state  institutions is promoted under MoCIT Regulation No. 5 of 2015 where DG PPI is appointed as the registrar of domain name for state institutions. Other matters regulated under this new law are (a) domain name registration, (b) utilization, (c) non-activation, and (d) extension, (e) appointment of domain name official, (f) changes to domain name, user data, and domain name official, as well as (g) domain name server.

 

b.   MoCIT Regulation No. 10 of 2015 serves as the implementing regulation of registration requirement for the operation of electronic system. The law, however, focuses only on electronic systems operated by state institutions. The law sets the procedures and requirements for registering electronic system.

 

2.       NEGATIVE CONTENT.

Good governance in the controlling of internet websites free from negative content is now enhanced through an establishment ofForum on Controlling of Internet Websites Containing Negative Content.[1] To this end, MoCIT has formed Forum on Controlling of Internet Websites Containing Negative Content, which consists of 4 (four) assessor panels. The assessor panels are mandated to assess the content in websites and give recommendation to the MoCIT regarding treatment to websites alleged to contain negative content.

 

3.       REGULATION ON TRADING TRANSACTION THROUGH ELECTRONIC SYSTEM IS AWAITED.

Draft of regulation on trading transaction through electronic system has now become a hot topic of discussion in e-commerce business. The draft is currently in the public assessment phase and has gained a lot of debates. Concerns are mostly centered on the following issues:

·         the requirements to input the identity of each party (buyers and seller) and registration obligation;

·         the scope of beneficiary in which obligation to own special registration mark will be imposed;

·         the maximum shares ownership to operate the business,

·         security clearance;

·         the absence of reliability certification institution.

 

 

_____________________________________

 

[1] MoCIT Decree 290/2015.

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

 

 

 

 

Mid-Year Brief Regulations Update [Part II]

 

 

TECHNOLOGY, MEDIA, TELECOMMUNICATION

July 10, 2015

Mid-Year Brief Regulations Update [Part II]

 

By mid-year of 2015, we have seen some regulatory developments in the industry. Acceleration of licensing and assignment of telecommunications licensing authority by the Ministry of Communication and Information Technology (“MoCIT”) are featured in new regulations.  MoCIT has also issued several new regulations focused on the implementation and optimization of the electronic system, devices, and equipment usage in various sector, such as e-payment.

 

This section focuses on the changes seen in Resources and Equipment of Post and Information Technology area. Please refer to our Mid Year Brief Regulation Updates part I for changes in Telecommunication Network and Mid Year Brief Regulation Updates part III for changes in Electronic System.

 

Contact :

 

WAHYUNI BAHAR
Managing Partner




BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com


 

Our TMT practice group has extensive experience in advising businesses in the practice area of TMT. We are familiar with the regulatory environment in relevance to TMT, as well as dealing with the relevant authorities. Our TMT team works closely on a wide range of transactions in providing advice to our clients who are prominent names in TMT both locally and internationally. We continuously keep up to date with developments in TMT as well as developments in regulations. Our information, communication and technology services group mainly includes the following: telecoms, outsourcing and technology contracts, e-business, data protection and IT security, broadcasting and media, regulatory advice and corporate general matters.

 

RESOURCES AND EQUIPMENT OF POST AND INFORMATION TECHNOLOGY

 

1.       SHORTENED LICENSE APPLICATION PERIOD.

In an effort to support businesses in the industry, some licenses can now be issued earlier.

  1. The issuance period of Recommendation Letter of Equipment Testing (Surat Pengantar Pengujian Perangkat/ “SP3”), from 3 (three) working days to 1 (one) working day[1];
  2. The period of document evaluation of certification of electronic devices and equipments from 10 (ten) working days to 7 (seven) working days since the documents of application completely received by certification institution;[2]
  3. The issuance period of Amateur Radio License (Izin Amatir Radio/ “IAR”), from 14 (fourteen) working days to 10 (ten) working days since the documents of application completely received by Director General of Resources and Equipment of Post and Information Technology (“DG SDPPI”)[3];
  4. The issuance period of Inter-Citizen Radio Communication License (Izin Komunikasi Antar Penduduk/ IKRAP), previously unregulated to 10 (ten) working days since the documents of application completely received by DG SDPPI[4];

 

2.       RADIO FREQUENCY UPDATES.

  1. To boost up penetration of mobile broadband in Indonesia, the government has decided to refarm the use of 1800 MHz by existing operators.MoCIT Regulation No. 19 of 2015 on arrangement of 1800 MHz radio frequency band for the operation of cellular mobile network sets transition stages in which existing 1800 MHz radio frequency band licensee shall gradually reallocate their usage.

 

  1. The usage of 350-438 MHz radio frequency band has now been updated under MoCIT Regulation No. 18 of 2015 on Plan of Usage of Radio Frequency Spectrum On 350-438 Mhz Radio Frequency Band. The 350-438 Mhz Radio Frequency Band is to be primarily used for conventional radio communication system, universal service obligation, trunking radio communication system, and radiolocation service. On secondary basis, the band is to be used for amateur service and earth exploration satellite service. The existing license holders shall comply with this regulation in no later than 2 (two) months since the regulation comes into effect.

 

3.       FORMULATION OF NEW TECHNICAL REQUIREMENTS.

Tofurther stipulate the technical requirement of each telecommunication devices and equipments, MoCIT has issued the new regulation as well as amendment to the previous provisions.

 

a.       MoCIT Reg No. 16 of 2015 on Technical Requirements of Next Generation – Synchronous Digital Hierarchy Equipment

MoCIT makes changes and additions to the previous technical requirement,   
    among others:

ü  amends the definition of Next Generation – Synchronous Digital Hierarchy (“NG-SDH”);

ü  removes order wire provision from general requirement;

ü  adds type of tributary interface;

ü  adds type of aggregate interface;

ü  adds electricity, health and electromagnetic compatibility requirements;

ü  changes some blocks functional characteristics of NG-SDH equipments.

 

b.      MoCIT Reg 17/2015 on Technical Requirement of Contactless Smart Card Reader

The technical requirement of contactless smart card reader need to be regulated by considering the potential of electronic instrument utilization as non-cash payment devices. Under this regulation, the producer of contactless smart card reader shall comply with physical characteristics, electronic and communication characteristics, and additional characteristics of contactless smart card reader, by which the compliance of such requirements shall be proven through series of testing procedures.

 

[1] MoCIT Reg 1/2015, Article 9 paragraph 3.

2 MoCIT Reg 1/2015, Article 19 paragraph 1.

3 MoCIT Reg 2/2015, Article 7 paragraph (1).

4 MoCIT Reg 3/2015, Article 11A.

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

 

Mid-Year Brief Regulations Update [Part 1]

 

TECHNOLOGY, MEDIA, TELECOMMUNICATION

July 09, 2015

Mid-Year Brief Regulations Update [Part 1]

 

By mid-year of 2015, we have seen some regulatory developments in the industry. Acceleration of licensing and assignment of telecommunications licensing authority by the Ministry of Communication and Information Technology (“MoCIT”) are featured in new regulations.  MoCIT has also issued several new regulations focused on the implementation and optimization of the electronic system, devices, and equipment usage in various sector, such as e-payment.

 

This section focuses on the changes seen in telecommunication networks area. Changes in (i) Resources and Equipment of Post and Information Technology and (ii) Electronic System will be sent separately.

 

 

Contact :

 

WAHYUNI BAHAR
Managing Partner




BAHAR & PARTNERS
Menara Prima 18th Floor,
Jl. DR. Ide Agung Anak Gde Agung,
Blok 6.2, Jakarta 12950, Indonesia
Tel: +62 21 5794 7880
Fax: +62 21 5794 7881
Email: busdev@baharandpartners.com

 

Our TMT practice group has extensive experience in advising businesses in the practice area of TMT. We are familiar with the regulatory environment in relevance to TMT, as well as dealing with the relevant authorities. Our TMT team works closely on a wide range of transactions in providing advice to our clients who are prominent names in TMT both locally and internationally. We continuously keep up to date with developments in TMT as well as developments in regulations. Our information, communication and technology services group mainly includes the following: telecoms, outsourcing and technology contracts, e-business, data protection and IT security, broadcasting and media, regulatory advice and corporate general matters.

 

TELECOMMUNICATION NETWORKS

 

1.       SHORTENED LICENSE APPLICATION PERIOD.

The evaluation period of telecommunication network operation licenses given through selection procedure is shortened from 60 (sixty) calendar days to a maximum of 14 (fourteen) working days[1].

 

2.       DELEGATION OF AUTHORITY TO DIRECTOR GENERAL OF OPERATION OF POST AND INFORMATION TECHNOLOGY (“DG PPI”). 

Telecommunication network licenses granted by evaluation procedure will now be issued by DG PPI (previously by MoCIT).[2] The authority to issue telecommunication network operation licenses granted by selection procedure remains in MoCIT’s hand.

 

TELECOMMUNICATION SERVICES

 

1.       SHORTENED LICENSE APPLICATION PERIOD

In an effort to support businesses in the industry, some licenses can now be issued earlier.

  1. The evaluation period of telecommunication service operation principle licenses, from 60 (sixty) calendar days to 14 (fourteen) working days after the complete requirements are received by DG PPI[3];
  2. The issuance period of principle license for content service provision, from 60 (sixty) working days to 10 (ten) working days at maximum since the application completely received by DG PPI[4].

 

2.       DELEGATION OF AUTHORITY TO DG PPI. 

To reduce bureaucracy process in issuing license, MoCIT changes the authorized institution to issue telecommunication service licenses. Telecommunication service principle license and operation license, and Post Operational License, which previously were under the authority of MoCIT, is now delegated to DG PPI.[5]

 

POST

 

SHORTENED LICENSE APPLICATION PERIOD. The issuance period of Post Operation License (Izin Penyelenggaraan Pos) is cut from 14 (fourteen) working days to 10 (ten) working days at maximum since the application is received by DG PPI.[6]

 



______________________

1 MoCIT Reg 7/2015, Article 69 paragraph 1.

2 MoCIT Reg 7/2015, Article 67 paragraph (65) jo. Article 70 paragraph (1).

3 MoCIT Reg 8/2015, Article 64 paragraph 1.

4 MoCIT Reg 6/2015, Article 27 paragraph 1.

5 MoCIT Reg 8/2015, Article 65 paragraph 1 and MoCIT Reg 9/2015.

6 MoCIT Reg 9/2015, Article 15 paragraph 1.

 

This material has been prepared by Bahar & Partners (“B&P”) and provided on a confidential basis, and shall not be reproduced in whole or in part, nor disclosed to any other person, without B&P’s prior written consent. This material is for general information only, and is not intended to provide legal advice. The recipient acknowledges that circumstances may change and that this material may become outdated as a result. B&P is under no obligation to update or correct this material. This material should not be relied upon by the recipient in considering the merits of any particular transaction. If you would like to be unsubscribed from our mailing list, please email to busdev@baharandpartners.com.

 

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