Indonesia Legal Articles
Law related articles writen by lawyers
and experts witnesses practicing in Indonesia
Maritime Labour Convention 2006 is a global milestone for the maritime industry. However Indonesia has not yet ratified this particular convention. Under this article we will see how the MLC 2006 contemplated a higher standards and more strict requirements for shipowners in comparison with the Indonesian Law No. 7 Year 2000 concerning Seafarers.
Bank Indonesia Regulation No. 17/3 /PBI/2015 on the Obligation of the Use of Indonesian Rupiah in the territory of the Republic of Indonesia (“PBI 17/3/PBI/2015“) is a new legislation enacted by Bank Indonesia which is based on the law that has been previously promulgated, namely Law No. 7 of 2011 on the Currency (“Law No. 7/2011“).
Law Number 28 of 2014 on Copyright (“New Copyright Law”) was issued on 16 October 2014, which revokes the Law Number 19 of 2002 on Copyright (“Old Copyright Law”). The New Copyright Law became effective since 16 October 2014. The New Copyright Law stipulates several terms which are more complex compared to the Old Copyright Law.
Law No. 20 of 2011 on Condominium (“Condominium Law“) requires a developer to separate the condominium with condominium unit, common equipment, common facility, and common land, when the developer constructs a condominium.
Right and obligation of property brokerage company is stipulated under the Minister of Trade Regulation Number 33/M-DAG/PER/8/2008 on Property Brokerage Company (“Permendag No. 33/M-DAG/PER/ 8/2008“). Property brokerage company is the entity that operates as a sale and purchase broker, lease broker, research and assessment, marketing, as well as consultancy and information dissemination relating to a property based on employer’s or client’s instruction under a written agreement (“Company”).
Provisions on company regulation is stipulated under Article 108 until Article 115 Law Number 13 of 2003 on Employment (“Law No.13/ 2003”) and Ministry of Manpower and Transmigration Regulation Number PER.16/MEN/XI/2011 on Procedures for the Establishment and Legalization of Company Regulation and Procedure for the Establishment and Registration of Collective Labor Agreement (“MOMTR 16/2011”).
Provisions of law concerning Management of Household Waste are regulated in Government Regulation Number 81 of 2012. To implement certain articles of that Regulation it is necessary to stipulate a new Regulation by the Minister, called Regulation of the Minister of Public Works 03/PRT/M/2013 (hereinafter referred to as: "Regulation 03/PRT/M/2013").
Procedures of Land Acquisition in the Framework of Investment – Land Acquisition Deriving in Indonesia
Land Acquisition in the framework of investment is particularly regulated by Decree of State Minister for Agrarian Affairs/ Head of the National Land Agency Number 21 of 1994 on Procedures of Land Acquisition for Company in the Framework of Investment (“Kepmenag No.21/1994”).
Early 2014, in February, the Regulation of the Minister of Public Works Number 01/PRT/M/2014 on Standard Minimum Service on Public Works and Space Layout (SPM) was promulgated. SPM means the terms on the type and quality of basic services on public works and space layout constituting obligatory affairs of the region that every individual has the right to obtain. This regulation revokes the previous regulation of 2010.
On March 26, 2014, the Minister of Law and Human Rights (“MoHLR” ) enacted the Regulation of MoHLR No. 4 of 2014 on Validating a Legal Entity, Approving an Amendment of Article of Association and Company’s Data (“Regulation of MoHLR No. 4/2014”).
Profit utilization of limited liability company is regulated under Article 70-73 Law Number 40 of 2007 on Limited Liability Company (“Company Law”).
Law Number 1 of 2011 on Housing and Settlement (“Housing and Settlement Law”) has already regulated the proportional occupancy. Under Article 34, every legal entity who intends to conduct development of housing and settlement has to implement proportional occupancy.
To bring into reality a living in Jakarta that is more orderly, peaceful, comfortable, clean and beautiful, a regulation relating public order is required to protect the citizens and infrastructure of the city including its accessories. Performing public order and peacefulness of the people is an obligation authorized to the provincial district government that has to be carried out in accordance with the legislation.
The increasing scarcity of land that can be used for commercial purposes in a city center such as Jakarta, requires efficient management of construction development in the city center. To realize sustainable development, and use the available land efficiently, a recently developed concept known as the superblock concept has been integrated in the urban area.
Companies’ authorized capital is divided into shares. Shares is a moveable goods which give rights to the owner to attend and to vote in the General Meeting of Shareholders (“GMS”), to receive the payment of dividends and the remaining asset as the result of liquidation, and also to perform other rights as set out under Law Number 40 of 2007 on Limited Liability Company (“Company Law”).
Under Article 1 number 9 of Law Number 40 of 2007 on Limited Liability Company (“Company Law”) merger means a legal action which is taken by one or more companies to merge with another existing company with the result that the assets and the liabilities of the merging company is transferred by the law to the surviving company and thereafter the merging companies’ status as legal entities is terminated by the law.
Exception, in Civil Procedural Law context, has the meaning as an objection. Exception can also be defined as a defense (plea) proposed by the defendant against the plaintiff’s claim.
Herzeine Inlandsch Reglement ("HIR") and Reglement Buiten Govesten ("RBg") do not regulate the provisions of changing of claim. The legal basis for changing of claim is regulated under Article 127 Reglement op de Rechsvordering ("Rv").
Financial Services Authority or commonly abbreviated as OJK, is an independent institution and free from the intervention of other party, which has the functions, duties, and authority to regulate, supervise, examine, and investigate against the activities in the financial services sector, which are the activities in banking, capital markets, insurance, pension funds, funding institutions and other financial service institutions.
Local Government of DKI Jakarta has issued the Governor Regulation of DKI Jakarta Number 38 of 2012 on Green Building (“Governor Regulation No.38/2012“) the regulation regulates the implementation of the concept of energy efficiency and environmentally buildings. Green building means a building that is responsible against environment and resource efficiency since the planning, construction, utilization, maintenance, until deconstruction (Article 1 number 11 of Governor Regulation No.38/2012).
Certificate of Feasible Function under Local Regulation of DKI Jakarta Number 7 of 2010 on Building - Indonesia
Building utilization is an activity of utilizing a building in accordance with the functions which is specified in the building construction license including maintenance, and periodic inspections activity. Building utilization can only be performed after the owner of the building obtains Certificate of Feasible Function.
Supreme Court Regulation No. 03 of 2012 on Process of Case Settlement Fees and Its Management in Supreme Court - Indonesia
Process Fee of Case Settlement (“Process Fee”) is a processing fee for civil case settlement, a state administrative case settlement, and a judicial review settlement at Supreme Court (Mahkamah Agung) and Judicial Body under the Supreme Court. The respective Process Fee is charged to the litigant.
Exception, in Civil Procedural Law context, is defined as objection. Exception can also be defined as defense (plea) proposed by the defendant against the plaintiff’s lawsuits material. However, the objection which is proposed in the form of exception is aimed on the formality requirement of a lawsuit, for example, if the lawsuit has a defect or formal violation which can cause the lawsuits tobe unlawful.
In a civil case, there are two parties as the plaintiff and defendant. If the plaintiff feels disadvantaged, then he/she would make the claim letter which is registered to the authorized local district court and by the district court, it would be sent to defendant. In the matter of the claim letter which has been registered by plaintiff, then the plaintiff may perform the amendment of claim.
Under Article 1 of Law Number 20 of 1961 on Revocation of Rights of Land and/or Objects Over the Land (“Law No.20/1961”), President in an urgent circumstance after hearing the Minister of Agrarian Affairs, Minister of Justice and the related Minister may revoke the rights of land and/or objects over the land.
Business sale and purchase of property has been demanded by many people. In performing the business sale and purchase of property, it does not only need an agreement between seller and buyer, but there are things that shall be performed by both parties as one of the obligations to State. The relevant obligation is payment of a tax in acquisition of property that should be performed by buyer and seller.
The general principle on dissolution of Limited Liability Company is stipulated under Article 143 paragraph (1) of Law No. 40 of 2007 regarding Limited Liability Company, which provides that the dissolution of company does not automatically erase the legal status of the company. The legal status would be lost at the end of the liquidation process and accountability of liquidator has been accepted by the General Meeting of Shareholder or District Court.
Background - The Province of DKI Jakarta is the one of the biggest city in Indonesia. As the capital city of Indonesia, DKI Jakarta provides various kinds of service to the public. One of its services is related with building development licenses. Along with the times, the Indonesia Government has set out regulation on Building, namely Law Number 28 of 2002 on Building ("Law No. 28/2002").
Background - The regulation on breaking, separation, and merging of land is contained in the Government Regulation Number 24 of 1997 on Land Registration (“GR No. 24/1997“) and the Agrarian State Minister Regulation/Head of National Land Agency Number 3 of 1997 on the Implementation of Government Regulation Number 24 of 1997 on Land Registration (“Agrarian State Minister Regulation No. 3/1997“).
Legal Aspect of the Grant of Right to Build or Right of Use Over the Right of Ownership Land - Indonesia
Under Article 35 paragraph (1) of Law Number 5 of 1960 on the Principle Provisions of Agrarian (“Agrarian Law”), it is stated as follows: “Right to Build is right to establish and to have buildings over land that is not his own, with a maximum period of 30 years.”
The purpose of the issuance of Government Regulation Number 33 of 2012 on Exclusive Breast Feeding (“GR No. 33/2012”) is to implement the provisions of Article 129 paragraph (2) of Law Number 36 of 2009 on Health (“Health Law”).
Background - The purpose of the issuance of Regulation No. 6 is to implement the provisions of Article 7 paragraph (2) and paragraph (3) of Presidential Regulation of the Republic Indonesia Number 27 of 2009 on One Stop Integrated Services.
Background - The application for transfer of ownership of foreign shares can be submitted either by foreign investment company or by domestic investment company. The transfer of ownership of foreign shares shall be conducted whenever there are changes in the company’s capital that cause some or all the company’s capital into a foreign capital or domestic capital.
Condominium is a multilevel building which is built in an area that is divided into sections which are structured functionally, whether horizontally or vertically that constitutes as units in which each can be owned and used separately, mainly for housing complemented with common equipment (bagian bersama), common facility (benda bersama) and common land (tanah bersama). Condominium is regulated in the Law Number 20 of 2011 on Condominium (“Law No. 20/2011”).
Government Regulation No. 47 of 2012 on Social and Environmental Responsibility of Limited Liability Company - Indonesia
Background - The purpose of the issuance of Government Regulation Number 47 of 2012 on Social and Environmental Responsibility of Limited Liability Company (“GR No. 47/2012") is to implement the provisions of Article 74 of Law Number 40 of 2007 on Limited Liability Company (“Company Law”) and Article 15 letter (b) of Law Number 25 of 2007 on Capital Investment (“Capital Investment Law”) on Corporate Social Responsibility (“CSR”).
Corporate Social Responsibility (“CSR”) in Bahasa is known as tanggung jawab sosial perusahaan. Chapter V of Article 74 of the Law Number 40 of 2007 on Limited Liability Companies (“Company Law”) regulates on Social and Environmental Responsibilities, where Companies which perform its business activities in sectors of and/or related to natural resources are required to undertake social and environmental responsibilities.
Definition of adjudication based on Article 1 point 8 of Government Regulation Number 24 of 1997 on Land Registration (“GR No.24/1997″) is “activity which is performed in the process of land registration for the first time, including collection and determination of the fact of the physical data and juridical data concerning one or more objects of land registration for the purposes of its registration”.
Share is a proof that shareholders have conducted a full deposit of capital in Limited Liability Companies (“Company”). Shares in Company are classified based on similar characteristics, it is called classification of shares. Article 53 paragraph (1) of Law Number 40 of 2007 on Limited Liability Companies (“Company Law”) states that the Articles of Association (“AOA”) specifies more than one class of shares.
Background - Definition of land registration in Government Regulation Number 24 of 1997 on Land Registration (“GR 24/1997”) constitutes perfection of scope of the land registration based on Article 19 paragraph (2) of Law Number 5 of 1960 on the Principles Provision of Agrarian (“Agrarian Law”) which includes; measurement, mapping, land records, registration and transfer of right of land and granting of evidence instrument of right as strong evidence.
Background - Background or purpose of the issuance of Government Regulation Number 43 of 2011 on Procedures for Filing and Use of Limited Liability Company Name (“GR No. 43/2011”) is to implement the provisions of Article 9 paragraph (4) and Article 16 paragraph (4) of Law Number 40 of 2007 on Limited Liability Company (“Company Law”).
Each member of association of owners and tenants of Condominium units (“PPPSRS“) has rights and obligations in relation to management of Condominium units. This membership is represented by householder and shall become effective since recorded in the list of tenants and/or have been domiciled in Condominium units which held by them in accordance with the applicable provisions.
Criminal provisions related to condominium is regulated in Article 21 until Article 23 of the Law Number 16 of 1985 (“Law 16/1985″) on Condominium. Article 21 paragraph (1) of Law 16/1985 regulates criminal sanction, that is stated:
Background - A Limited Liability Companies (“Company”) may gain their capital by increasing its capital, the process is performed based on General Meeting Shareholder’s (“GMS”) Resolution. According to Article 41 paragraph (2) of Law Number 40 of 2007 on Limited Liability Companies (“Company Law”),
Background - There are various subject of Applicant in Bankruptcy based on Law Number 37 of 2004 on Bankruptcy and Moratorium Obligation the “Indonesian Bankruptcy Law of Debt Payment. Article 2 of Indonesian Bankruptcy Law states that the request of bankruptcy stipulation may be applied by the Public Prosecutors, Bank of Indonesia, Capital Market Supervisory Board, insurance Company and Minister of Finance.
Background - International Center for Settlement of International Dispute (“ICSID”) was established on the basis of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1966 (“ICSID Convention“). This ICSID Convention regulates the settlement of dispute between a country with foreign individual or company who have invested their capital in the country, by peaceful means through conciliation or arbitration.
Background - Merger is a legal action conducted by one or more company to merge with another existing company causing the assets and liabilities of the merging company transferred by law to the surviving company. Moreover, the legal entity status of the merging company will be ended by law.
Law Number 40 of 2007 on Limited Liability Company (“Company Law”) only recognizes the classification of registered shares. However, Article 53 paragraph (1), (2) and (3) of Company Law states that, the Articles of Association may determine more than one classification of shares. If there is more than one classification of shares, then the Articles of Association determines one of them as common share.
Background - Mortgage regulated under the Law No. 4 of 1996 on Mortgage (“Mortgage Law”). Under the Mortgage Law, it is regulated that guarantee repayment of debt through mortgage provides a feature which is called the preferred creditor/ kreditur preferen. Preferred creditor is a creditor who has priority/ privilege right more than other creditor for the debt repayment of debtor in the case of failure events receivable.
Definition of Limited Liability Companies according Article 1 paragraph 1 of Law Number 40 of Year 2007 (“Company Law”), stated: Limited Liability Company (“Company”) means a legal entity which constitutes an alliance of capital established pursuant to a contract in order to carry on business activities with an authorized capital all of which is divided into shares and which fulfils the requirements stipulated in this law and its implementing regulations”
Background - Mechanism of the investment licenses that is applied by BKPM to the investor covers provisions concerning business sector and business entity that could be managed by the investor in the territory of Indonesia. Principally, provisions on the mechanism of the investment licenses apply the same treatment to all of the investors, either foreign investor or domestic investor.