Indonesian Law Digest

Licensing Policy for Upstream and Downstream Oil-and-Gas Business Activities Simplified
In April 2017, the Ministry of Energy and Mineral Resources was responsible for a milestone within the industrial oil-and-gas sector by issuing Regulation No. 29 of 2017 on the Licensing of Oil-and-Gas Business Activities. This regulation basically simplifies a number of provisions which address licensing within the oil-and-gas sector and which were formerly addressed under several different regulations. By issuing this regulation, the government is hoping that the investment climate within the oil-and-gas sector will soon show signs of improvement.
Indonesian Health Industries 101
What requirements have to be met in order to establish a hospital in Indonesia? Can pharmaceutical manufacturers and distributors become single companies under a single license? This edition of Indonesian Law Digest will address these and other questions, as it tackles the legal framework that covers Indonesia’s health industries and the anatomy of the country’s health sector.
Indonesian Fisheries Business 101
What types of fisheries businesses operate within Indonesia? Is the Indonesian fisheries sector open to foreign capital? How many layers of licenses are required before a business can commence operations? This edition of ILD will examine the basics of Indonesia’s fisheries sector and hopefully help you to negotiate any imminent business decisions.
Three New OJK Regulations on the Prevention and Control of Financial Crises
In response to the issuance of Law No. 9 of 2016 on the Prevention and Control of Financial-System Crises, the Financial Services Authority (OJK) has just issued three new regulations simultaneously, specifically (1) OJK Regulation No. 14/POJK.03/2017 on Recovery Planning for Systemically Important Banks; (2) OJK Regulation No. 15/POJK.03/2017 on the Stipulation and Follow-Up of Commercial-Bank Supervision; and finally (3) OJK Regulation No. 16/POJK.03/2017 on Intermediary Banks. The above three regulations have been introduced in a bid to ensure the stability of the Indonesian financial system by specifically regulating the supervision of commercial banks, mandatory recovery planning and also intermediary banks.
Non-Fixed-Route Public-Transportation Service Regulation Revised: Striking a Balance Between Conventional and Application-Based Transportation Services
As we reached the end of this first quarter in 2017, the Ministry of Transportation has issued the highly contentious Regulation No. PM 26 of 2017 on the Organization of Non-Fixed-Route Public-Transportation Services, which becomes the new framework for the organization of said transportation services, including application-based transportation services. This regulation repeals and replaces the previous framework originally set out under Ministry Regulation No.PM 32 of 2016 on the same matter and is attempting to offering greater legal certainty for the organizers of both non-fixed-route, public-transportation services in general, and application-based transportation services in particular. In this context, the new framework incorporates a number of essential revisions which relate to at least 11 areas, including: the categorization of application-based transportation services, minimum engine capacities for vehicles which are utilized for the provision of said services, vehicle quotas, roadworthiness inspections and requirements for digital dashboards. This edition of ILD will elaborate upon the key provisions which are addressed throughout the 72 Articles which have been incorporated into Regulation 26/2017, specifically the inclusion of various categories and criteria for each type of non-fixed-route, public-transportation service and their vehicles, as well as the licensing requirements and procedures which have to be met by the organizers of said services. A number of other provisions which have to be met by online transportation application providers are also addressed by the regulation, as are sanctions for any violations relating to the organization of non-fixed-route transportation services.
P2P Lending: The New Banking Alternative
A wave of innovation took hold of the financial sector in the wake of the global financial crisis of 2008-2009 when previously time-consuming, lengthy and rigid banking procedures made way for more inventive lending and borrowing options. The result was the rise of so-called peer-to-peer (“P2P”) lending, which offered simplified and expedited procedures, speedy lending decisions and better interest-rate deals for borrowers, as well as lenders. In a bid to shed a little light on P2P lending, this week’s edition of Indonesian Law Digest (ILD) will analyze and address several of the key areas which relate to this field, including a general outline of P2P lending and P2P lending within Indonesia.
Draft Government Regulation on Food Labeling and Advertising
A new Draft Government Regulation on Food Labeling and Advertising is currently being cooked up in the government’s legislative kitchen in a bid to improve consumer protection. In essence, the Draft Regulation sets out in greater detail the information that both should and should not be listed on food labels or addressed by advertisements for food products, with public participation taking center stage as the primary key to achieving greater public awareness.
Draft Bill on Water Resources
The House of Representatives is currently in the process of discussing the Draft Bill on Water Resources in response to a landmark Constitutional Court decision, specifically Decision No. 85/PUU-XI/2013, which declared Law No. 7 of 2004 on Water Resources to be null and void. The Draft Bill is aiming to update the umbrella arrangement for the management of water resources and to provide greater legal certainty for the water industry, which currently falls under the obsolete Law No. 11 of 1974 on Water. This edition of ILD will analyze the Draft Bill, which contains a total of 50 articles, and elaborate upon its key provisions, which specifically address rights over water resources, water-resource management measures, financing for water-resource management rights, the obligations and roles of communities, coordination relating to water-resource management and the investigation of water-resource related crimes.
Diverted Profit Tax Schemes: Corporate Conscience and Reluctant Revenues
The taxing of multinational corporations is no easy task in this era of globalized capital, especially when national governments have to deal with corporate behemoths such as Google. However, as complicated as this issue can seem at first glance, the collection of such taxes is by no means an impossible task for Indonesia’s tax authorities. Taking its cue from the United Kingdom’s newly enacted diverted-profits tax scheme, the Indonesian government is optimistic that it can find a new solution to the thorny question of collecting taxes from corporations such as Google in ways that don't involve forcing them to register as permanent establishments within Indonesia. Can such schemes ultimately prove effective however? This edition of ILD will address this tangled question, as Indonesia considers incorporating its own diverted-profits tax scheme into its current tax regime.
Draft Bill on Tobacco
One of the most controversial draft bills in Indonesian legislative history has been incorporated into the 2017 national prioritized legislation program. Indeed, now that the Draft Bill on Tobacco has come to the attention of the general public after being officially initiated by the House of Representatives in mid-2016, the government just this week indicated its intention to suspend the House’s deliberations of the bill. Some believe that the Draft Bill is urgently needed in order to create a regulatory framework aimed at improving and boosting the national tobacco industry. However, others are of the view that the Draft Bill, in its current version at least, fails to address a number of important elements relating to the public interest, specifically health and poverty. This edition of ILD will analyze the Draft Bill and elaborate upon its key provisions.
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