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.
The Indonesian Minister of Manpower and Transmigration ("MOMT") has issued MOMT Regulation No. 12 of 2013 regarding Procedures for Employing Foreign Manpower. This new regulation contemplates several changes to the previous 2008 regulation and introduces a useful new mechanism on the temporary hiring of foreign workers.
In its latest Indonesian Economic Quarterly report, the World Bank projects slowing growth in 2014 and says that risk remains high. To counter slowing growth, according to the report, additional and more focused policy responses are needed.
Bank Indonesia officially transferred its banking microprudential supervisory powers to the Financial Services Authority on December 31, 2013. The OJK now has the authority to monitor individual banks, including the supervision of licensing matters and the day-to-day operations of banks. Bank Indonesia will retain macroprudential supervisory powers and will monitor the banking system as a whole.
Indonesia's insurance industry has seen a number of important recent developments, and more are on the horizon. These include the enactment of Minister of Finance Regulation No. 152/PMK.010/2012 regarding Good Corporate Governance for Insurance Companies and the long-awaited new Insurance Law that is being discussed at the House of Representatives.
In a landmark decision on June 20, 2013, the West Jakarta District Court annulled a Loan Agreement entered into between a local borrower and an offshore lender because it was executed in English only. The decision is not controversial in our view since all agreements entered into by an Indonesian party with a foreign party must be executed in the Indonesian language or in a bilingual format, and the subject Loan Agreement was expressly governed by Indonesian law. Quite rightly, the court ordered the borrower to return the loan funds to the lender.
Microfinance Institutions ("MFIs") play an important role in Indonesia, dispensing financial support to people and small businesses that might not have qualified in the traditional banking system. Until recently MFIs largely operated without a comprehensive regulatory framework to guide their operations, and with little supervision. After a long wait the Government has issued a framework for MFIs, as provided by Law No. 1 of 2012 regarding Microfinance Institutions.
Indonesia's central bank, Bank Indonesia (BI), has issued a regulation designed to improve the competitiveness of the banking system by streamlining bank ownership through consolidation and enhancing supervision, particularly in the area of good corporate governance.
Bank Indonesia has issued a regulation to improve the competitiveness of local banks in providing trust services, basically the management of assets. In particular, the new regulation is addressed to oil and gas companies operating in Indonesia, which keep much of their foreign exchange proceeds outside of the country, utilizing trust services provided by foreign banks.