Indonesia: Omnibus Law – Draft regulations published setting new Anti-Monopoly Law sentencing standards
On 4 February 2021, the Government published its long-awaited draft implementing regulations on the job creation law (the "Omnibus Law"). Previously, the competition authority could impose an administrative fine for competition law infringements of up to IDR 25 billion. The new maximum penalty will be either 50% of the profit gained by the violating party in the period in which it was in violation or 10% of its revenue. The new regulations also introduce other factors to be considered in determining penalties, as well as amendments to the appeals procedure.It is unclear when this draft, which was to be issued within three months after enactment of the Omnibus Law, i.e. 2 February, will be signed and in force.
Indonesia: Constitutional Court confirms OTT services remain subject to the EIT Law; Broadcasting Law...
The Constitutional Court recently issued a judgment rejecting a request to include Over the Top (OTT) services under the scope of Law No. 32 of 2002 on Broadcasting as amended by Law No. 11 of 2020 on Job Creation ("Broadcasting Law"). The judgment saves OTT services operators from licensing and censorship requirements under the Broadcasting Law. If the court had granted the request, OTT services operators would have needed to be licensed as broadcasting institutions and be subject to censorship by the movie censorship board. The judgment confirms that OTT services are not subject to the Broadcasting Law and remain subject to Law No 19 of 2016 on Amendment of Law No. 11 of 2008 on Electronic Information and/or Transaction ("EIT Law").The Constitutional Court's judgment is final, binding, and not subject to appeal.The judgment was rendered following an application for constitutional review of the above provision by two conventional broadcasting operators who perceived that there is unequal treatment against them and OTT service operators.
Under Law No. 11 of 2020 on Job Creation (Omnibus Law), which came into force on 2 November 2020, the government is mandated to promptly issue implementing regulations of the Omnibus Law. To have Indonesia's sovereign wealth fund (Lembaga Pengelola Investasi or LPI) up and running, the government has issued two government regulations on LPI. The first one1 is on state participation in LPI's capital, and the other one regulates governance and operational matters of LPI.2With the required government regulations already in place, LPI, which may also use the name "Indonesia Investment Authority" or INA, is expected to commence its activities within Q1 2021.To see our previous client alert on LPI, please click here.
In a previous Client Alert (see here), we discussed a rule issued by the Financial Services Authority (Otoritas Jasa Keuangan - OJK) back in 2017 that requires all financial institutions and public and listed companies to prepare a sustainability report and submit it to OJK within a stipulated period. This obligation is set out under Rule No. 51/POJK.03/2017 on Implementation of Financial Sustainability for Financial Services Providers, Issuers and Public Companies ("OJK Rule 51").However, towards the end of 2020, OJK (i.e., the capital market division) issued a letter to all listed companies ("OJK Letter"), which effectively extends the deadline for certain types of listed companies to submit their sustainability report. This move is in response to a plea from the Indonesian Issuers Association for an extension and also in response to the ongoing COVID-19 pandemic crisis in Indonesia.
Indonesia's state-owned power utility, PT PLN (Persero) (PLN), recently issued two invitations for renewable developers who want to be included in the list of selected developers (DPT) for solar PV and bioenergy (biomass and biogas) projects. Developers that pass the prequalification process will be eligible to be invited to participate in future PLN bids for those types of IPP projects.
Happy New Year 2021! We hope that this year things will get better.Bank Indonesia has issued Regulation No.22/23/PBI/2020 on Payment Systems ("Payment System Regulation"), which is an "umbrella" regulation for the payment system industry. The issuance of this regulation is an implementation of the 2025 Indonesia Payment System Blueprint, which we outlined in our previous client alert. This "umbrella" regulation restructures the regulatory framework of payment systems, including the reclassification of activities of payment system operators. Bank Indonesia's approach in outlining the rules introduced in this regulation appears to be principle-based and strategic. The technical and operational details of how the rules are supposed to be observed will be outlined in future Bank Indonesia implementing regulations. We anticipate that those will be issued in the coming months, so keep an eye on this space.
Over the past year or so, the regulatory regime for merger control in Indonesia has seen significant changes. In October 2019, the Indonesian Business Competition Supervisory Commission ("KPPU") issued a new rule on assessments of M&A transactions ("2019 Rule"), which was further clarified by the guidelines issued in October 2020 ("2020 Merger Guide").We discussed these issues in the webinar on "Navigating Merger Control Rules in Cross-Border M&A Transactions" broadcasted on 17 December 2020.
In brief Indonesia's state-owned power utility, PT PLN (Persero) (PLN), recently issued two invitations for renewable developers who want to be included in the list...
On 22 October 2020, the Minister of Health (MOH) issued MOH Regulation No. 28 of 2020 on the Procurement of Vaccines for Corona Virus Disease 2019 ("COVID-19") ("MOH Regulation 28"). MOH Regulation 28 is an implementing regulation of the Presidential Regulation No. 99 on the Procurement of COVID-19 Vaccine and Vaccination of COVID-19 ("PR 99"). We have addressed some of the key takeaways under PR 99 in our previous client alert. You can find the link to the client alert here.MOH Regulation 28 regulates on four main themes of COVID-19 vaccine procurement: (i) types and amount of vaccine for procurement, (ii) procedure for procurement of vaccines, (iii) procedure for payment for vaccines and (iv) guidance and supervision on the procurement of vaccines.As stipulated under PR 99, MOH has appointed PT Bio Farma (Persero) ("Bio Farma") as the state-owned enterprise that will lead the procurement and distribution of COVID-19 vaccine in Indonesia. MOH Regulation 28 applies for all COVID-19 vaccines yet to come, not limited to the one that is being developed under the partnership between Government of Indonesia (GOI) (i.e., through Bio Farma) and Sinovac.
Up to now, there was not a clear position on the obligations (including registration obligation) for offshore or foreign private electronic system operators (“ESOs”).This has changed with the recent issuance of Minister of Communication and Informatics (“MOCI”) Regulation No. 5 of 2020 on Private Electronic System Operators (“MOCI Regulation 5”), which clarifies registration requirements and other obligations for foreign private ESOs.MOCI Regulation 5 is an implementing regulation of Government Regulation No. 71 of 2019 on the Implementation of Electronic Transactions and Systems ("GR 71"). The regulation became effective on 24 November (but it was only published on the MOCI’s website on 2 December).There is a six-month transitional period under the regulation, but this is only applicable for the requirement for private ESOs to register with the MOCI.