Indonesia, Makarim & Taira S updates

Arbitration & ADR

Contributed by Makarim & Taira S
Commercial dispute resolution: an overview
  • Indonesia
  • 03 October 2019

In general, the methods used to resolve commercial disputes in Indonesia are litigation, arbitration and alternative dispute resolution (ADR). The resolution of commercial disputes through arbitration or ADR (eg, mediation) is generally governed by the Law Concerning Arbitration and ADR, which recognises the principle of competence under which the district courts have no jurisdiction to try disputes between parties bound by an arbitration agreement.

New Regulation on the Settlement of Disharmony between Laws and Regulations through Mediation
  • Indonesia
  • 04 July 2019

The Ministry of Laws and Human Rights Regulation on the Settlement of Disharmony between Laws and Regulations through Mediation recently took effect. The regulation reinstates the possibility to settle disputes concerning laws and regulations outside the courts through the introduction of mediation, including disputes over ministerial regulations, non-ministerial government institution regulations, non-structural institution regulations and regional laws and regulations.

BANI legal status up in the air
  • Indonesia
  • 11 April 2019

The Indonesia National Board of Arbitration (BANI) was established in 1977. In 2016 the Ministry of Law and Human Rights created BANI Pembaharuan (ie, the Renewed BANI), which claims that it is a revised version of the original BANI. However, the original BANI does not recognise the Renewed BANI and claims that it has been using the BANI name unlawfully. This duality could create uncertainty when commercial parties wish to appoint BANI as their dispute settlement forum.


Employment & Immigration

Contributed by Makarim & Taira S
Government simplifies outsourcing requirements
  • Indonesia
  • 23 October 2019

The minister of manpower recently amended the Minister of Manpower and Transmigration Regulation on the Requirements for Outsourcing, simplifying manpower outsourcing requirements to reflect current needs. The main highlight of the changes is that the required Manpower Office approval can now be obtained online and transferred using the online single submission system. Further, the time limit for registering a manpower outsourcing agreement with the Manpower Office has been removed.

Ministry of Manpower issues codified list of businesses which may employ foreign employees
  • Indonesia
  • 27 September 2019

The Ministry of Manpower recently issued Decree 228/2019 on Certain Positions Permissible for Foreign Employees, which came into effect on 27 August 2019 and revoked all prior relevant decrees on this matter. The appendix to Decree 228/2019 provides a list of positions and business fields in which foreign employees can be employed. The list will be evaluated every two years (or as needed).

New regime for hiring foreign employees
  • Indonesia
  • 21 December 2018

Indonesian entities must comply with certain requirements and follow a specific procedure when hiring foreign employees. The requirements and procedure used to be provided for in Minister of Manpower (MOM) Regulation 16/2015, as amended by MOM Regulation 35/2015. However, in 2018 the MOM issued a new regulation, which introduced a requirement to obtain a notification from the MOM when hiring foreign employees.

Partnership agreements in view of Manpower Law
  • Indonesia
  • 10 October 2018

One of the most common ways in which a company can use a person's services is by entering into a partnership agreement and thereby treating them as a partner instead of an employee. However, partnership agreements often give rise to disputes, especially if they are terminated. There have been many cases in which the Manpower Office or the Industrial Relations Court have deemed poorly drafted partnership agreements to be employment agreements.

Uncertainty surrounding legal status of foreign employees
  • Indonesia
  • 17 August 2018

The employment of foreign citizens in Indonesia is subject to various restrictions, including with regard to employment terms. Foreign employees can be employed only on a temporary basis and thus cannot be considered permanent employees. However, they also cannot be considered fixed-term employees under Articles 56 and 59 of the Manpower Law. Despite this framework, mediators and the Industrial Relations Court have expressed inconsistent views on the legal status of foreign employees.


Real Estate

Contributed by Makarim & Taira S
Regulation on integrated mortgage services through electronic systems
  • Indonesia
  • 01 November 2019

A new regulation on integrated mortgage services through electronic systems recently came into effect. The regulation aims to improve mortgage services by improving disclosure, punctuality, simplicity and affordability (among other things) and adapting mortgages to reflect changes in law, technology and the public's needs.

Five issues commonly encountered in commercial building leases
  • Indonesia
  • 01 March 2019

Leasing is an easy way for businesses to acquire office space in a prime location and helps them to free up working capital. Thus, a carefully prepared lease agreement is invaluable for the lessee and lessor. As a number of issues may be encountered when leasing a building for office space, it is important to consider these ahead of time.


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