By Indrawan D. Yuriutomo
Indonesia's Financial Services Authority (Otoritas Jasa Keuangan, or OJK) has introduced a new concept, known as Primary Parties in Non- Banking Finance Institutions, along with certain requirements that such Primary Parties must fulfill.
Primary Parties, according to recent OJK regulations, are those who manage or supervise and have significant influence over Non-Banking Finance Institutions i.e., insurance companies, pension funds, finance companies, and credit guarantee companies.
The OJK requires that all Boards of Directors of Non-Banking Finance Institutions submit a list of Primary Parties to the OJK before March 23, 2014. Failure to do so will result in such Primary Parties being required to retake the fit and proper test.
SSEK Legal Consultants acted as Indonesian counsel to Woori Bank of South Korea in its purchase of a 33 percent stake in Indonesia's Bank Himpunan Saudara 1906 for 713.1 billion Rupiah, about US$60 million.
Securing approval from Indonesia's central bank, Bank Indonesia, for the purchase took about 18 months amid an evolving regulatory environment for bank acquisitions in the country. Singapore's DBS Group last year cancelled the planned acquisition of an Indonesian bank after it failed to receive Bank Indonesia approval for the deal.
Bank Saudara is listed on the Indonesia Stock Exchange, so this complex deal also required the navigation of capital market rules for bringing in a foreign bank as a significant shareholder.
Woori Bank has had a presence in Indonesia since 1992 through Bank Woori Indonesia, which deals mainly with Korean companies operating in Indonesia. With this purchase of a 33 percent stake in Bank Saudara, the Korean lender hopes to increase its presence in the dynamic Indonesian market.
Bank Saudara is part of the Medco Group, a business conglomerate involved mainly in the energy sector.
Partner Fahrul S. Yusuf and senior associate Bezaliel E. Basuki led the SSEK Team handling the deal.
Indrawan Dwi Yuriutomo, a senior associate at SSEK Legal Consultants and an employment law specialist, is participating in the 2nd Annual Indonesia HR & Employment Law Executive Program organized by Clariden Global.
Indrawan is speaking on March 27, the second day of the two-day conference at the Shangri-La Hotel in Jakarta. His sessions will cover Alarming Trends Regarding Employment of Expatriates in Indonesia and Secondment Arrangements and Handling Employment Disputes, Termination, Dismissal and Redundancy in Indonesia.
By Indrawan Dwi Yuriutomo
Starting this year, companies in Indonesia are required to register employees in the Indonesian Governmentâs health and employment social security programs. This is part of an effort by the Government to expand social security benefits to more of the population, but questions remain about the implementation of the new programs and their effect on business.
What is BPJS?
Indonesia's Law on National Social Security System (System Jaminan Sosial Nasional or SJSN) was passed in October 2004 and marked a major milestone in the reform of the countryâs social security system.
As part of the law the Indonesian Government established the Social Security Organizing Body (Badan Penyelenggara Jaminan Sosial or BPJS). There are two separate BPJS in Indonesia, one managing health care and the other overseeing employment social security.
Since January 1, 2014, Health Security is managed by the BPJS of Health, while the BPJS of Employment oversees (i) Work Accident Security, (ii) Old Age Security, (iii) Pension Security, and (iv) Death Security. Under the new regime, the BPJS of Employment is similar to the current Jamsostek scheme, with the added benefit of Pension Security.
Are Foreign Employees Required to Register for the BPJS Programs?
By Ira A. Eddymurthy
Indonesia's House of Representatives (Dewan Perwakilan Rakyat or DPR) recently passed into law the trade bill. The new Trade Law is still awaiting the signature of the President.
There are several points of the new Trade Law in particular that should be highlighted and could affect companies in Indonesia. These points are related to (i) domestic and international trade activities, (ii) labeling, (iii) the standardization of trade goods, (iv) e-commerce transactions, (v) international trade security for exports and imports, (vi) export business facilities, (vii) warehouse registration, and (viii) the requirement for business service providers to have competent technical personnel.
The new Trade Law does not provide specific requirements or detailed information on the above key points. We will have to wait for the implementing regulations to be issued by the relevant government institutions for such detailed information.
By Florence Gracia Santoso
After a long and contentious discussion involving many interested parties, the Government of Indonesia issued a regulation that bans the export of raw minerals/ores. Government Regulation No. 1 of 2014 (GR 1/2014) was issued on January 11th, 2014, one day before the deadline for the domestic processing and refining of raw minerals/ores as mandated by the 2009 Mining Law. GR 1/2014 requires mining companies to process and refine raw minerals/ores in Indonesia.
Processing and Refining
The same day GR 1/2014 was issued, the Minister of Energy and Mineral Resources (MEMR) issued MEMR Regulation No. 1 of 2014 (MEMR 1/2014), stipulating the minimum standards of processing and refining before minerals can be exported. MEMR 1/2014 differentiates between processing and refining, which is important in determining those exports that are, at least temporarily, allowed and those that are strictly prohibited.
Processing is required for all types of minerals, either metal, nonmetal or rock, while refining is required only for metal minerals, including the associated minerals, by-products and residual minerals.
SSEK Legal Consultants was again ranked as one of the best firms in Indonesia in the 2014 Chambers Asia-Pacific guide to the region's leading firms and lawyers.
SSEK was recognized in all the major practice areas, including in the key practice areas of Corporate/M&A and Real Estate, where SSEK received the highest ranking.
Chambers researchers also placed SSEK among the leading firms in Indonesia for Banking and Finance, Employment, Projects and Natural Resources, Dispute Resolution, and Capital Markets.
SSEK was short-listed for Indonesian National Firm of the Year, and honor that SSEK received from Chambers in 2013 and 2011.
In discussing the lawyers at SSEK, one of the firmâs clients told Chambers researchers, They have an extraordinary understanding of Indonesian legislation and give good guidance.
By Richard D. Emmerson and Dicky Tanjung
On December 30, 2013, the Indonesian Minister of Manpower and Transmigration (MOMT) issued MOMT Regulation No. 12 of 2013 regarding Procedures for Employing Foreign Manpower (MOMT Reg 12). This new regulation revokes the 2008 MOMT Regulation (No.PER.02/MEN/III/2008) on the same subject.
The new regulation contemplates several changes to the previous 2008 regulation and introduces a useful new mechanism on the temporary hiring of a foreign worker. The more salient points of the new regulation are as follows:
Requirements to Hire a Foreign Worker
MOMT Reg 12 provides that a foreign candidate must meet several requirements: (i) possess educational qualifications suitable for the intended position (ii) possess competency certificates or work experience of at least five years suitable for the intended position (iii) sign an undertaking to transfer knowledge to the Indonesian counterpart and (iv) be able to communicate in the Indonesian language.
Previously, the 2008 regulation merely required either point (i) or (ii), whereas the new regulation requires that both requirements be met. The language requirement is not new and there is no indication that there will be any change of policy in that regard.