Govt. Limits Scope of Recoverable Upstream Investment Costs during Cooperation-Contract Transition Periods
The government has finally clarified the ongoing uncertainty which had prevailed over the exact investment costs which can be recovered at the end of cooperation contracts, as set out under Ministry of Energy and Mineral Resource Regulation No. 26 of 2017 on the Mechanism for the Recovery of Investment Costs for Upstream Oil-and-Gas Business Activities. This clarification takes the form of Ministry of Energy and Mineral Resource Regulation No. 47 of 2017, which has now limited the scope of the investment costs that can be recovered. The new Regulation also includes a provision for newly appointed contractors which describes their responsibility to cover any investment costs which were incurred by previous contractors.
Govt. Reregulates Methods of Payment and Handover of Imported and Exported Goods
In order to implement Article 40 (2) of Law No. 7 of 2014 on Trade, which required the government to further elaborate upon the means of payment and handing for imported and exported goods, the government has issued Regulation No. 29 of 2017 on Methods of Payment of Goods and Methods of Handover of Goods During Import and Export Activities. In essence, this new regulation sets out several provisions which pertain to the following matters: 1) Methods of payment; 2) Methods of handover; 3) Administrative sanctions; and 4) Enforceability of the previous regulations.
Provisions and Mechanism for Determinations of the Right to Cultivate
The Ministry of Agrarian Affairs and Spatial Planning/Head of the National Land Agency has issued Regulation No. 7 of 2017 on Provisions and Procedures for the Determination of the Right to Cultivate, with the aim of providing a comprehensive set of guidelines for determining this right. This area was previously addressed under a number of separate regulations. Due to the broad scope of this new regulation, this edition of Indonesian Legal Brief will limit its discussion to the following matters: 1) Land status for HGU; and 2) Procedures for securing HGU.
Mandatory Provisions for Power-Purchase Agreements Amended
The Ministry of Energy and Mineral Resources has issued Regulation No. 49 of 2017, which amends Ministry Regulation No. 10 of 2017 on Main Provisions for Power-Purchase Agreements, with the ultimate goal of offering greater certainty as regards the sale and purchase of electrical power by removing government force majeure from the list of risks which must be covered. In essence, the amendment alters two main provisions, specifically: 1) The scope of the risks that must be covered by sellers and buyers of electrical power (risk allocation); and 2) The scope of force-majeure events.
OJK Regulates Foreign Workers Within the Banking Sector
In order to accommodate the needs of experts across the banking sector, the Financial Services Authority has issued Regulation No. 37/POJK.03/2017 on the Employment of Foreign Workers and the Transfer-of-Knowledge Program Within the Banking Sector. This regulation basically makes no alteration to any of the provisions which were originally set out under Bank Indonesia Regulation No. 9/8/PBI/2007, which addressed the same matters. The new regulation addresses several provisions, including: 1) Eligible positions for foreign workers; 2) Employment of foreign workers; and 3) The Transfer-of-Knowledge program.
Draft Ministerial Regulation on Over-the-Top Services/Contents
In order to adjust to rapid growth in the world’s digital economy, the Ministry of Communication and Information Technology is currently deliberating a Draft Ministerial Regulation on the Provision of Application Services and/or Contents through the Internet. This Draft Regulation basically sets out several provisions which relate to the following matters: 1) Over-the-Top (OTT) Providers; 2) Registration of OTT providers; 3) Obligations of OTT providers; 4) Cooperation for the provision of OTT services; 5) Supervision and control; 6) National forum policy on OTT services; and 7) Bandwidth-management sanctions.
Ministry Relaxes Supervision of Businesses Operating within the Energy and Mineral-Resources Sectors
With the objective of maintaining a healthy investment climate, as well as implementing the principles of Good Corporate Governance, the Ministry of Energy and Mineral Resources has issued Regulation No. 48 of 2017 on Business Supervision within the Energy and Mineral-Resources Sectors, which repeals and replaces Ministry Regulation No. 42 of 2017. In essence, this new regulation eases procedures which relate to the transfer of participating interests or shares, as well as changes which are made to boards of directors (BoDs) and/or boards of commissioners (BoCs) by eliminating the obligation to first secure approval from the Ministry. Instead, relevant parties will now only be required to submit reports to the Ministry.
Sustainable Financing for Financial-Service Institutions, Issuers and Public Companies
In an attempt to achieve Indonesia’s sustainable-development goals, the OJK has issued Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Financing by Financial Services Institutions, Issuers and Public Companies. In essence, Regulation 51/2017 mandates that financial-service institutions, issuers and public companies to implement sustainable financing through the formulation of two documents: 1) An action plan; and 2) Sustainability reports. Moreover, incentives will be offered by the OJK for the effective implementation of sustainable financing.
Govt. Issues 2017-2019 E-Commerce Roadmap
To optimize Indonesia’s electronic-based economic potential, including the e-commerce sector, start-ups, business development and accelerated logistics processing, the government has finally issued Presidential Regulation No. 74 of 2017 on Roadmap for The National Electronic Commerce System for 2017 – 2019. In essence, this new Regulation sets out a roadmap for e-commerce which addresses eight major programs to be implemented between 2017-2019. Moreover, this regulation also mandates for the establishment of a steering committee which will be responsible for implementing the roadmap.
Scope and Procedures for the Granting of Government Guarantees within the Infrastructure Sector
The Ministry of Finance has issued Regulation No. 95/PMK.08/2017 on Scope and Procedures for the Granting of Government Guarantees in the Infrastructure Sector by the Infrastructure Guarantee Enterprise, which is an implementation of Article 2 (2) of Government Regulation No. 50 of 2016 on the Amendment to Government Regulation No. 35 of 2009 on State-Capital Participation in the Establishment of the Infrastructure Guarantee Enterprise. Essentially, this new regulation sets out numerous provisions which relate to government guarantees within the infrastructure sector, specifically: 1) Scope of guarantees; 2) Procedures for the securing of guarantees; 3) Guarantee governance; 4) Governmental support; and 5) Reporting obligations.