DahanaRekan ~Lawyers~

Government of Egypt: 40% anti dumping measure dropped to Indonesian Tire Products. The initial complaint in August 2006 then was reduces into “a slight margin of dumping by the Indonesian exporters” after the WTO agreements the allegation and tax was recently lifted. During the investigations period, Indonesian tire export to Egypt hit US$ 70-80 million per year. Bit with dumping duties cut, the Indonesian tire exports to could easily reach US$ 1 billion mark. The new policy is expected to further enhance the bilateral cooperation and create new opportunities in a better environment for mutual businesses to develop and flourish. Bilateral trade between both countries over the last six years increased by more than 150 percent. With its 80 million people and promising economy, Egypt is an attractive market for Indonesia. The archipelago’s exports to Egypt reached $484.48 million in the first 10 month of 2007 and imports hit $40.57 million in 2006 during the same period.

[February 2008]

Indonesian Industrial Court seen as Ineffective. The ineffectiveness in settling business-related disputes are caused by of a lack of technical guidance, according to Indonesian employers Association (ApindoAprindo pointed out numbers of ineffectiveness are those many essential points regulated in the law for the settlement of industrial relations disputes were neglected, unclear schedule of trials, uncomfortable working equipment, inadequate court buildings, improper remuneration and allowances received by ad-hoc judges and lastly unproven judges of knowledge of industrial relations, unavailable judges from district court as a presiding judge, an ad-hoc judge and a court minuter also had caused delays in case rulings then in turn would affect business people and their companies and adversely affected the investment environment. There were about 2.008 reports registered with the court since it took effect in January 2006.

Govt to pursue privatization despite global economy. The government plans to privatize 44 state companies this year, including 10 companies initially planned to be privatized last year. The plan raised critics from the House, where it concerns over current global economic conditions, particularly turbulence in global capital markets led by the US mortgage crisis is unfavorable for the privatization plan, and that the government would be unable to secure the best share prices. Member of the house also indicated that it was aimed merely at generating money to cover the government’s growing budget deficit, which is likely to reach Rp. 87.3 triliun in 2008, or about 2% og GDP. The divestment is expected to raise about Rp.15 triliun. Member of the house suggested the administration take a specific control mechanism to avoid state losses and also to maintain majority ownership in SOEs which fall under strategic national interests

2007

[December 2007]

Indonesia-Italy Cooperation in Building Corvette Ships. The cooperation covers the initial building of two corvette worth 400 Million Euro to be built in PT PAL shipyard in Surabaya. The Italian company Orizzonte Sistem Navali will also involve an Indonesia electronic state enterprise based in Bandung, West Java, Indonesia, where transfer of technology and design copy rights will then be under the proprietary of Indonesia. The corvettes will be utilized by the Indonesian Navy.

[September 2007]

Indonesia and Russia Concluded Set of Mutual Cooperation Agreements. The 8 sectors of cooperation in sport, energy, mining (USD 4 billion), infrastructure, telecommunication, aviation and defense are expected soon to increase Russia' investment from USD 600 million to USD 1 billion. Indonesia has become a potential country in the region to develop war crafts since the availability of technologies and human resources since 1980, such as PT INTI (telecommunication), PT PAL (shipyard, PT PINDAD (war devices and machines) and PT Nurtanio (aircraft). The signing by both Presidents took place in Jakarta during the official state visit of the President of the Federation of Russia Vladimir Putin, early this month.

[July 2007]

Indonesia to stop importing food and medicine originating from China. The release by the Indonesian Food and Drugs Inspections Body (Badan POM), found that 7 candies brands and 1 toothpaste products contains human-hazardous chemical substance. Formalin in candy and diethylene glycol in toothpaste are two dangerous ingredients contained withn the products, may cause health fatality and death. The director of Food Certification and Inspection of POM strongly urge the authorities to withdraw the products from market.

Minister of Trade Fight against Foreign Illegal IPR Registrars. The plan was established by the minister of trade, following a number of illegal claims of patents by illegal foreign registers of a number of products. The products has been known bearing special, geographical and cultural characteristics of places in Indonesia, covering foods, clothing, wood products and various cultural products. Singapore (wood crafts) and Malaysia (for batik) are those on top of the list who are confidently claim such illegal rights. However, Japan government has dismissed a number of registered products known to be bearing Indonesian characteristics.

48 Sectors are Open to Domestic Investment. The Indonesian Government has decided those sectors must be 100% owned by Indonesians, where nominee scheme are not allowed and become null and void accordingly. The said new regulation of President' Decision are number 76/2007 and 77/2007, were just released early this month.

Reformation of System at the Indonesian Anti Dumping Committee (KADI). The reformation will cover the system and the Government Regulation 34 year 1996 on Anti Dumping Duty and Safeguards. This is in respond to entrepreneurs' and domestic industries' request for KADI to be more protective and proactive in response to the dumped products of electronics, steel and foods from various sources, mostly from China, following its rejection from the market in the US and Europe. KADI should also reform its public legal certainty during investigation, period of investigation, parties' company secrecy, fairness, in-depth knowledge and to be more professional. KADI promised the reform will be completed in October 2007.

Foreign Investment Increased at 18.21%The above figure from the Indonesian Coordination Board of Investment (BKPM) is for the January-May 2007 period, which reached USD 3,7 billion of 401 projects. In 2006 it reached only USD 3,13 billion of 377 projects, respectively. In 2007 BKPM expects the investment will reach USD 19,79 billion.

[June 2007]

Reformation of Tanjung Priok Port Authority Increased additional Rp200 billion/month State Revenue. The new so-called Office of Public Services for Port Custom and Clearance now employed full Electronic Data Interchange where contact between the on-site users and the data officers at the port are maintained, electronically. The new system is effective and efficient, cutting-off smuggling, false data, fraud and collusion. Previous 1,300 employees were replaced and 848 new well-trained, educated and professional staffs are securely recruited from all over Indonesia. The new system will officially take place on 1 July 2007, where the state revenue is expected higher than it is now.

Indonesia - Japan Finalized Economic Partnership Agreement (EPA). The Discussion Record was signed in Tokyo on 22 June 2007, official agreement is expected to be signed in August by both Presidents. Indonesia will play the role for production centre not only for Japan market, but also the region through establishment of Manufacturing Industrial Development Center for the component manufacturing for automotive, electronic and engines to meet Japan' standards. Zero percent tariffs applied to 91% of Indonesian export to Japan, where in turn Indonesia reduce them at 30%. In labor issues, internship of 3-4 years in Japan will be open for hospitality industries. The trade between Japan-Indonesia in 2006 reached USD 12,2 billion for oil & gas to Japan, where in turn USD5,4 billion for non-oil and gas to Indonesia.

Malaysia come to Agree on Migrant Workers new Employment Terms. Following strong international critism and its reputation for Human Trafficking and Violation, Malaysian officials come to Jakarta to agree Indonesia's new terms to protect better Indonesian migrant workers in Malaysia. Indonesian embassy in Kuala Lumpur has now a number of lawyers to increase their legal position in anticipating common abuses by Malaysian employers. Recently, a phenomenal picture in a number of international newspapers shows an Indonesian domestic workers in Malaysia, Ceriyati, stucked at the outside at level 12 building apartment for attempt to escape after receiving several physical abuses by the employer, Ivone Siew, a mistress. Ceriyati was compelled to work 20 hours a day, one day feed and unpaid for 4 months. Ivone Siew and husband, now faces criminal charges. Last April, also two Indonesian domestic workers in Long Island , New York, the US, escaped for the same reasons. They were employed by an American family, Varsha Mahender Sabhani and Mahender Murlidhar Sabhnani for two years, compelled to work for 21 hours a day, unpaid, and abused. The couple now facing serious criminal charges.

Timor Leste President visited Indonesia. Ramos Horta, the direct-elected president meets President of Indonesia Susilo Bambang Yudhoyono in Jakarta, expects to increase economy relation since Indonesia are the main importer into Timor Leste market, through reducing border problems between two countries. Ramos Horta also planning to establish Bahasa Indonesia Faculty in Timor Leste, where Bahasa Indonesia serve as one of the official language in Timor Leste.

New President Instruction number 6 year 2007. The regulation called 'the Policy on the Acceleration of Real Sectors and the Empowerment of Micro Small and Medium Enterprises', aimed at to increase growth and reduce unemployment and poverty. Of 141 guidance for direct actions, over 60 will be handled by the Finance Ministers. The said regulation 6/2007is expected to reach 6,3% growth this year, following 6% growth the first quarter of 2007.

[May 2007]

Indonesian Competiton Committee Found Breach by Temasek. The initial investigation held by the Indonesian Anti Competition Committee found, the article 27 Law 5/1999 was breached through the ownership by Temasek as one entity in two equal business in the same area in Indonesia, that is the cellular providers Telkomsel (35%) and Indosat (42%). Temasek then set out high price for cellular air time, where consumers have no option.

Indonesia-China Trade will Reach USD 30 Billion in 2010. According to the Indonesian Chamber of Trade and Industry, both countries trade and investments growth reached 18,6 % annually (2001-2006), where mostly are in oil and gas and infrastructure. Major export from Indonesia are chemical products, wood products, pulp and papers, fertilizer and rubber. From China, Indonesia imported iron and steel, spare parts, motorcycle, electronics, data processor and fruits. China has become the fifth export market from Indonesia with volume totaling USD 19,6 billion in 2006. China's investment in Indonesia in 84 projects with value of USD 205 million, are at the 8th position after Singapore, Britain, Japan, Malaysia, Canada, Australia and the Nederland.

[April 2007]

33 Memorandum of Understanding by 42 Indonesian State Enterprises. The 33 MOUs through synergies between state enterprises are expecting to increase state revenue up to Rp 70 trillion, annually. The cooperation will empower each enterprise in government projects, such as aircraft manufacturer will utilize steels, electrical devices, and use of gas and all other product manufactured by the state enterprises.

[March 2007]

Bill of Foreign Investment Soon Released. The final summit meeting of the house on 29 March will decide to or delay the release of the 39 article laws. A number fraction in the house objects the soft laws on the issue of foreign corporation crime, as proven by current number of cases on trial under various laws, committed by foreign investors. The law will now provide single entry for licensing at the BKPM, which is now shall directly responsible to the president instead the minister of trade. The law will provide facilities for those investing in remote areas and able to employ more workers, to enjoy land title, import license, and special fiscal rights.

Japan Government Provide Soft Loan to the Government of Indonesia. The untied loan for 30 years at 1,5% interest p.a of Rp 1,875 trillion (USD205million) are aimed at the development of social and economy sectors in Indonesia. The ExcellencyJapan Ambassador for Indonesia, Shin Ebihara, signed the said loan in Jakarta, recently.

Advance Micro Devices establish its Representative Office. AMD, the world class micro processor manufacturer, establish its office in Jakarta, the first in Indonesia. The office is aimed at getting closer with the Indonesian market, which is seen prospective. In 2005 AMD' global market share reach 5 percent, where 2006 reach almost 12 percent.

PT Freeport Indonesia willing to Contract Renegotiation. The said agreement is made with the House' Working Committee. A number of the contract has been identified unfair for the Indonesian government, also where the company is compelled to take precautions of environment and state revenues. A good progress made is, that a number of process of raw materials are now conducted in Indonesia instead abroad.

[January 2007]

The Government of Indonesia dismissed the CGI donor group (Consultative Group on Indonesia). The group consist of a number of developed countries to provide financial support was established in 1992. In turn, through tough terms and conditions, CGI had the authority in setting up economy and financial policy for Indonesia. The dismissal of CGI are based on the set of failure by CGI's advices implementation in economy and financial, particularly in settling Indonesian government debt in 2000-2002.

2006,2005,2004:

[December 2006]

Investment to Indonesia from Switzerland increased. The figure of 2005 to 2006 comparisons released from the Indonesian Investment Board, shows that Switzerland, Thailand, Malaysia and Italy increase of investment in Indonesia are of 1,637% (USD 447 millions), 528%, 401,4% (USD2,21 billion) and 102,88% ( USD 216 million), respectively. The decrease are from Japan and China of -61,13% and -43,22% respectively, which favor destinations are to Vietnam and Chine itself. On the other hand, KPK released the corruption index in Indonesia in 2006 is at 130 (out of 163 countries) compared to year 2005 at 143 (out of 158 countries).

[November 2006]

US-ASEAN to Cooperate in 8 Sectors in 2007. The Cooperation also pivoting 30 years of relations between both, a subsequent of plan action to implement Enhanced Partnership 2007-2011. 8 major sector will soon be implemented, such as good governance, combating corruption, IPR, SME's, reducing HIV/other diseases, and cooperation in IT, communication, technology, energy, disaster management and environmental management.

President Director of PT Newmont Charged for Environmental Detrimental. The said person Richard Ness, an American, is charged for 3 years in prison plus fine of Rp500million (USD 55.000) and Rp 1 billion (USD 120,000). He is held responsible for serious environment detrimental in the area of Buyat Bay in Sulawesi, caused by disposal mercury and unorganic arsen 100 times beyond other bays during the operational of the PT Newmont Minahasa Raya (PT NMR) gold-mining company,. Such method of disposal has been banned in the US and that the company did not have the proper permit to dispose of its waste. The disposal has caused villagers near the mine complained of tumors, skin rashes and dizziness. The court after at least 20 sessions ruled, that under the Indonesian corporate law, the chief or chairman of the company is held responsible for any company legal actions. Earlier, PT NMR has signed a good will agreement with the Indonesian Government to recover the environment and their strict liability responsibility under the environmental law, adopted internationally, where USD 12 million has been allocated by NMR and USD 30 million in the next 5 years. Newmont stopped mining in 2002 at the Sulawesi site, 2,000 kilometers (1,300 miles) northeast of the capital, Jakarta, after extracting all the gold it could, but kept processing ore there until Aug. 31, 2004, when the mine was permanently shut.

[October 2006]

The Indonesian Government Settled its Debt to IMF. The USD 4 billion debt was paid in full, covering also the interest. In comparison to other foreign loans, IMF' loan was known with full of terms related to politics rather than to improve economic development.

[September 2006]

RI -Malaysia Talks Over the Movement of People. Malaysia now employed many Indonesian workers, from domestic /construction workers to university lecturers, due to Malaysia's progressive development and Malaysia's lack of qualified Malaysian human resources. Indonesia warns Malaysia to protect them better. Up to now there are 1,75 millions Indonesian legal workers, where 2,5 percent are Indonesian intellectuals.

[August 2006]

Indonesian Minister of Trade Mari Elka Pangestu meets Australian Minister of Trade Mark Vaile. The meeting agenda held in Canberra and Brisbane are to discuss over several issues such as the Terms of Reference for the Expert Group, revitalize last years' Action Agenda Trade and Investment Framework, optimizing AUSAID Program for the Indonesia' BPEN (National Development for Export Program), and business meetings between private companies. The major aim are to strengthen economic ties between Indonesia and Australia.

[July 2006]

New Banking Regulation on Single Presence Policy. The policy will be in force in August 2006, expecting adoption by all banks by the end of 2008. The policy are based on bad experiences of high non-performing loan, unfortunately occurred mostly at bank with Single Presence ownership. The policy applies to private and government ownership, to allow the central bank to effective monitor and encourage bank consolidation.

Indonesia-Singapore establish SEZ. The said SEZ, Special Economic Zone covers Batam Island, Bintan Island and Karimun Island (called BBK) in the territory Indonesia, adjacent to Singapore. The SEZ, managed by a Joint Steering Committee, will allow both countries in managing investment, tax, services, to attract more investment and employment. Investment at BBK was US$4 billion, expected doubled in 2011. Currently, Honeywell successfully manufactured cockpit of Boeing 777 civil airplanes in Bintan.

[April 2006]

Nuclear Reactors in Indonesia. IAEA, the International Atomic and Energy Agency, formally allows Indonesia to build nuclear reactors in year 2016, at the latest. It is expected that Indonesia will finalize building 4 reactors with 1,000 MW capacities. Indonesia is considered having the human resources capacity to build nuclear projects.

Foreing Visitors to Indonesia, Increased. Foreign Visitors to Indonesia 50.7% are for leisure, 33.83% for businesses purposes. The said researches are based on the Passenger Exit Survey (PES) in 2005 to 10.000 respondents, where most are professionals and business managers groups. Jakarta is the most place to visit (47,48%) following Bali (35,37%).

Intellectual Property Rights Ratifications. The Government of Indonesia had ratified a number of international conventions since 1995, such as the Paris Convention for Protection of Industrial Property, Paten Cooperation Treaty (PCT), Trademark Law Treaty, Berne Convention, WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty. These had been adopted into national laws, such as the Patent Law, Trademark Law, Copyrights Law, Trade Secrets Law, Industrial Design Law, Integrated Circuit Design Law and Plant Variety Law. All are based on the WTO TRIPs, ratified under Law no. 7 year 1994.

Russian Investment in Indonesia. KaMaz (Kama Automotive Plant) a Russian heavy equipment manufacturer together with an Indonesian company in heavy equipment tools and armors manufacturer PT Pindad, will joint in manufacturing trucks and heavy equipments for mining and construction. Both companies have long track in the said business line and technology.

[March 2006]

Indonesian and Russia on Space Rocket Laucher Spot. Following the negotiation between Indonesia and Russia, it was agreed that both countries will establish a rocket space launcher at Biak, Papua west part of Indonesia territory. Indonesia has the experience in air and space technology for 25 years as proven by the international civil aviation license obtained for civil aircraft manufacturing and technically involvement in manufacturing wing parts of Boeing A380 in 2005.

Bank mediation Dispute Settlement. This entity soon will be established , where the mediation mechanism will provide rooms for bank customers from various disputes with the bank products.

[February 2006]

Banking Consolidation. The Indonesian Central Banks will soon release new regulation to allow more foreign banks to conduct its business in Indonesia. Currently, out of 131 banks in Indonesia, 41 are foreign shares dominated, with 48,51% ownership of total industry asset compared to 37,45 by the Indonesian government ownership. 12 foreign banks are owned by ultimate shareholders.

[January 2006]

Indonesian Labor Court, established. Under the law 2 year 2004, this court will replace the Committee of Labor Dispute Settlement. The Labor Court consist of 99 career judges and 160 ad hoc judges, having office at 33 places. This court will run on the Civil Procedure Law instead of the previous procedure law under the labor law. This court will provide more room for argumentation and a firm judgement both for disputing parties in rights, interests and termination.

[December 2005]

Nokia will establish its Technology Center. According to Nokia' Country Director of PT Nokia Networks, the center is situated in Bandung, Indonesia, established on the first semester 2006. The center will serve as a center for competence development and technology transfer for custodian, staffs, and Indonesian local partners.

750 Foreign Investment Companies from 6 Countries Suspected for False Tax Assesment. The companies are also suspected for money laundering and transfer pricing. This is the government report based on Tax Directorate research. The name of the companies soon will be released.

[July 2005]

PT Microsoft Indonesia collaborate research with Indonesian Universities. The collaboration of 9 research focuses are with the Indonesian engineers at two universities are, Institut Teknologi Bandung in Bandung and Institut Teknologi Sepuluh November in Surabaya. This is part of Microsoft budget on research at the amount of USD 2 billion.

PT Dirgantara Indonesia new contract to manufacture parts of the new Airbus A380. PT Dirgantara Indonesia, an Indonesian national airplane manufacturer (previously known as PT IPTN), concluded a contract with British Aerospace to manufacture wing parts of the new Airbus A380, called as the Inboard Outer Fixed Leading Edge. The contract is valued of USD 60,2 millions for 318 units of the said passenger airplane.

[June 2005]

Indonesia and Japan signed the EPA - Economic Partnership Agreement. Following the visit of President Susilo Bambang Yudhoyono to Japan last May, both countries agree to cooperate in an Free Trade Arrangement (FTA) Plus in the form of EPA. Sectors covered are trade of goods, services, government procurement, freedom of movement of persons, investment, intellectual property rights, investment and dispute settlement. Indonesia is the last country dealing with FTA in the region, ASEAN in particular.

Microsoft will establish its 5th Software Center in Indonesia. Following the visit of President Susilo Bambang Yudhoyono in the US and meet with the founder of Microsoft Company Bill Gates, Microsoft will start to cooperate with Indonesian government, private entities, and academics to set up its software business in Indonesia for Indonesia and the region. Other Software Centers are in the US, Great Britain, China and India. Infrastructure are now under preparation.

[May 2005]

New Chairman of BKPM. The President of the Republic Indonesia has appointed new chairman for the Indonesian Investment Coordinating Board (BKPM), Mr. Muhammad Lutfi, who was the chairman of the Indonesian Young Entrepreneur Association (HIPMI). Mr. Lutfi is also member of the Forum WTO Indonesia.

Draft of Foreign Investment Law. The Minister of Finance of the Republic of Indonesia has send the draft of foreign investment law (RUU PMA) to the Indonesian parliament for review and approval. Some issue for the new bill will are, to reduce investment application process into 30 days, assurance that foreign investment will not be nationalized (except through passing new laws by the parliament), and more access for foreign businessmen on working permit and immigration. The bill is expected to pass this year.

[April 2005]

Telecommunication. New investment in telecommunication services regulation will be released, that foreign investor ownership will be limited to 49% only. However, the government still prefer to keep up to 95% foreign ownership to investments with high technology and high investment in infrastructure content only, under the PP 20/1995.

Deficit Grows. Trade between Indonesia and China has grown significantly, where the figure for China export to Indonesia in 2003 was USD 2,39 billion increase to USD USD 3,4 billion for oil and gas and non-oil and gas products in 2004. Indonesia suffered from loss of USD 261 million from non-oil and gas export to China. Guangzhou contribute 40% of total export, followed by Shanghai (30%) and Beijing (20%).

[January 2005]

55 Draft of Bills. The Indonesian parliament and government will release 55 new bills consisting of laws (Undang-undang), 22 amendment of laws, and 6 ratification of international conventions in 2005. The total number of the proposed new laws for 2005-2009 are 284.

Foreign Lawyers. New RI-MLHR regulation issued on the requirement of the use of foreign lawyers in Indonesia, which requires recommendation from Indonesian Advocate Organization, prove of individual Indonesian tax file number (NPWP), obligation to teach law for 10 hours per month within 12 months, limited to deliver legal services of foreign laws (other than Indonesian laws) or international laws, and will only act as an expert or staff in an Indonesian Law Firm.

Monsanto Case. the Indonesian Committee to Exterminate Corruption (KPK) is now evaluating and will take serious action based on a report from the United States Department of Justice (US DOJ) for the report of bribery by US based Monsanto Company through the subsidiary company PT Monagro Kimia, who bribed 140 Indonesian public high officials at least USD 700,000 during 1997-2002. The public officials are subject to law PP number 30/1980. The US DOJ based on the US Foreign Corrupt Practices Act fined Monagro Company at the amount of USD 1,5 million payable to the Indonesian Capital Market Supervisory Board (BAPEPAM) and US DOJ.

Buyat Case. The Indonesian government is preparing to file civil and criminal case against PT Newmont Minahasa Raya for environmental degradation in North Sulawesi, through poisonous material disbursement to Buyat Bay. Some foreign nationals of the board of the company are arrested and are subject to criminal charges.

[November 2004]

Investment. Coordinating Minister of Economy Aburizal Bakrie said, that BKPM (Investment Coor-dinating Board) will play its new role mainly as a promotional entity for investment and a single-entry for all licensing for investment. This new role differs from past bureaucratic single- roof where licensing will take 150 days compared to single- entry system that slash down bureaucracy and license will be obtained within 20 days.

[October 2004]

Employment. Minimum Provincial Wage - MPW (UMP) is set at Rp 711.843 (USD 80,00) per month applied in Special District Jakarta in 2005, challenged refusals from 7 Labor Associations, which compeled to raise it to the minimum of Rp 759.953 per month, which earlier requested the number of Rp1,2 millon (USD 133) per month to accommodate high living cost in Jakarta for 55 life components compared to 43 life components. This Provincial Government Decision no 2515/2004 was signed earlier by Governor Sutiyoso. The MPW is adjusted annually. In 2006 new Sectoral Minimum Wage will be applied for labor prosperity.

[June 2004]

Environmental Law. The Parliament of the Republic of Indonesia passed the draft bill to legislate the Kyoto Protocol, a protocol within the UN Framework Convention on Climate Change. Indonesia was the 124th member ratifying the said protocol.