Transparency in Fundraising: Government Regulates Money/Item Collection Activities for Social Purposes
In order to implement a more organized and transparent system for Money and Items Collection (the “Collection”) within the context of social aid/welfare, the Minister of Social Affairs (the “MOSA”) issued Regulation No. 8 of 2021 dated September 24, 2021 on the Implementation of Collection of Money or Items (“Reg. 8/2021”). Despite being a new regulation, MOSA Reg. 8/2021 is not the state’s first attempt in governing the Collection mechanisms for social welfare. In 1980, the government issued Government Regulation 29 of 2018 on Donation Collection dated August 28, 1980 (“GR 29/1980”) which governs similar matters. However, GR 29/1980 does not explicitly define what is meant by “donations”. It is also important to that GR 29/1980 remains effective, meaning that MOSA Reg. 8/2021 and GR 29/1980 are complementary to each other.
MOSA Reg. 8/2021 revoked MOSA Decree No. 1/HUK/1995 dated January 6, 1995 on Collection of Donations for Disaster Victims and MOSA Decree No. 56/HUK/1996 dated September 19, 1996 on Collection of Donations by the Public. Further, MOSA Reg. 8/2021 itself contains provisions which details the requirements and procedures to carry out the Collection activities, which we summarize below.
- Scope and Types
Collection under MOSA Reg. 8/2021 only refers to Collection that is aimed for social welfare, mental/religious/spiritual, wellbeing and cultural development, and shall be conducted through a Mass Organization that has a legal entity status. The Mass Organizations that may conduct the Collection are only in the form of (i) an association (perkumpulan), or (ii) a foundation (yayasan).
The type of Collection is divided into two: (i) Collection that requires a permit (the “Unexempted Collection”) and (ii) Collection that does not require a permit (the “Exempted Collection”). In general, all Collection activities require permits, unless expressly exempted under Reg. 8/2021, namely those that are:
- for zakat;
- done in places of worship;
- done in emergency situations within a closed community;
- for mutual cooperation (gotong royong) done within schools, offices, neighborhood communities, wards, villages, or other communities; and
- done spontaneously within limited meetings.
- Requirements and Procedures
As mentioned above, the Unexempted Collections require a permit from either the Minister, the relevant Governor or the relevant Regent/Mayor. Mass Organizations that intend to conduct the Collection activities may apply for the permit by submitting an application to the relevant institution, complete with all the necessary administrative documents. Among the required documents, the notable ones include a proposal for the activity and also examples for the advertisements/other promotional materials that will be used. Essentially, Mass Organizations must disclose the details, specifications, and purpose of the programs they wish to hold to the relevant institutions for further approval. If approved, the Collection permit is valid for 3 months and may be extended one time for no longer than 1 month.
While these licensing requirements are only applicable to the Unexempted Collections, both types of the Collection activities may be carried out through a number of methods/programs mentioned in Reg. 8/2021, such as holding shows, bazaars, auctions and a number of other programs that are in accordance with existing laws and regulations. It may be worth noting that these programs under Reg. 8/2021 are similar to the approved programs for Donations under GR 29/1980, although Reg. 8/2021 does include several more modern programs/methods such as social media programs, digital applications, electronic money services, etc.
Funds/items obtained through the Collection activities must then be channeled or distributed for development purposes, with the relevant Mass Organization having to bear the costs of the distribution. Furthermore, Mass Organizations that hold the unexempted Collecting Activities must submit an accountability report to the institution that issues their license. For the Collection activities that exceed Rp500 million, the report must be audited by a public accountant.
- Sanctions
Unlike GR 29/1980, Reg. 8/2021 does prescribe several administrative and criminal sanctions for violations of Reg. 8/2021. For the Unexempted Collections these sanctions include written warning, permit suspension, and/or permit revocation. On the other hand, administrative sanctions for the Exempted Collections are limited to written warning and/or publication of the violation in mass media. For the criminal sanctions, Reg. 8/2021 refers to the prevailing criminal law provisions.
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November 26, 2021
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or Caleb K. N. Sitorus (csitorus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Addresses Industrial Relation Problems Caused by the Pandemic
With the Covid-19 pandemic that has yet to show signs of abating anytime soon, the Government continues to implement the Micro Scale Public Activity Restriction (Pembatasan Kegiatan Masyarakat Berbasis Mikro or PPKM) at different levels. The pandemic has caused many employers to implement the work-from-home policies, if not reducing employees’ wages or laying off employees to closure.
In an effort to shed light on the public’s perception on determining the fair labor relation decisions at the workforce due to the pandemic, the Government has issued several regulations aimed at addressing these labor problems, such as the Minister of Manpower (the “MOM”) Regulation No. 2 of 2021 dated February 15, 2021 on Implementation of Remuneration in Certain Labor-Intensive Industries during the Corona Virus Disease 2019 (Covid-19) Pandemic (“Regulation 2/2021”) which governs wage adjustment in certain industries affected by Covid-19.
More recently, the MOM issued Decree No. 104 of 2021 dated August 13, 2021 on Guidelines on the Implementation of Industrial Relations During the Covid-19 Pandemic (“Decree 104/2021”). Decree 104/2021 is a guideline as to how business policies should be carried out in the industrial relations setting. With this decree in place, it is hoped that both employers and employees have more clarity in understanding their rights and obligations, as well as in implementing internal workforce arrangements to stay in accordance with government policies practice.
In our view, Decree 104, unfortunately, offers no new matters for employers as whatever employers wish to carry out, the consents of the employees are required. In general, employers are actually looking for the ability to determine certain matters without any consent from their employees.
We set out below the key provisions of Decree 104/2021.
- Work Models During the Covid-19 Pandemic
As preventive measures to avoid face-to-face contact as ordered through the government’s Covid-19 restriction policies, two work models are now recognized — the Work From Office (“WFO”) model where employees work from their offices as usual or the Work From Home (“WFH”) model where employees carry out their work remotely, from their houses. As the Government will have varying iterations of the WFO and WFH policies depending on the situation at present, Decree 104/2021 requires that business entities should always refer and adapt to the latest Governmental policies, and recommends internal discretions covering on the (i) the maximum capacity for the WFO model; (ii) the reduced office hours; and (iii) alternation between the WFO and the WFH.
- Remuneration or Other Rights of Employees
Remuneration and income protection for employees is another key matter regulated in Decree 104/2021. This issue was also addressed in Regulation 2/2021. However, Regulation 2/2021 is only applicable for certain industries. Decree 104/2021 sets out the provisions on remuneration adjustments. As a general rule, any adjustment made to an employee’s remuneration or other rights must be based on a mutual agreement between the employer and the employee, with details as follows.
- Remuneration for Employees Carrying Out the WFO/WFH Model
Employees facilitating the WFO, WFH or a combination of both models are still entitled to their pay. However, employers who are unable to fully pay the remuneration to their employees due to financial conditions may make adjustment to the employee’s pay. This adjustment must be based on an agreement between the employer and employee and must be conducted fairly and proportionately by considering the livelihood of the employees and the going concern of the business. However, Decree 104/2021 does not stipulate further regarding the calculation or examples on what constitutes ‘fair and proportionate’ adjustments.
- Remuneration for Temporarily Furloughed Employees
Temporarily furloughed employees are still to be paid normally. However, if a furloughed employee’s employment contract or company regulation specifically governs furlough payment, the remuneration shall refer to such contract or regulation. If the employer is financially unable to pay the remuneration to their employees, then an adjustment to the wages based on mutual agreement can be made with the caveat that the employee shall still receive wages for the relevant month.
- Adjustment on Remuneration/Other Rights of Employees
As stated above, any wage adjustment during the Covid-19 pandemic must be made based on a mutual agreement achieved from a family-like, good-faith, and transparent dialogue between an employer and its employees. The output of such agreement shall be stated in writing to be submitted to the employees, and reported to the Labor Office at the provincial level online, containing the following items:
- amount of wages;
- payment of wages (whether wages are to be paid directly or in stages); and
- duration of the agreement.
There is currently no further elaboration on this reporting procedure to the Labor Office.
It also is to be noted for employers, however, that the wage that will be used to calculate the social security premium and benefits, the termination benefits, and other rights shall be the wage before the mutually agreed adjustment and not after. This is again another unfavorable provision for employers.
- Prevention of Employment Termination
Aimed at also preventing termination of employment by employers, Decree 104/2021 requires every employer, employees, employee’s associations, and the Government itself to work together in prioritizing an alternative solution in order to avoid termination of employment. Decree 104/2021 provides the following steps that may be taken by an employer to prevent employment termination:
- Adjusting workplace settings to cut production or operation costs of the company;
- Adjusting working hours by regulating work shifts, removing/reducing overtime, and reducing working hours or working days;
- Implementing temporary furloughing employees alternatively;
- Adjusting the amount of wages or payment method of wages;
- Gradually reducing employees’ facilities and/or benefits;
- Not extending a definite term employment contract that expires; and/or
- Granting pension for employees that have fulfilled the criteria or offering early pension.
Similar to wage adjustments, the abovementioned preventive steps must also be based on a bipartite dialogue through mutual consent. Only if all necessary actions have been taken but employment termination is still unavoidable, then employment termination may be sought and taken in accordance with the prevailing laws and regulations.
All in all, in our view Decree 104/2021 does not provide any new provision for employers that face difficulties due to the pandemic as any action taken by an employer requires the consent of its employees.
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August 23, 2021
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Clara Anastasia So (canastasia@aksetlaw.com), or Caleb K. N. Sitorus (csitorus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Addresses Industrial Relation Problems Caused by the Pandemic
Government Pushes Back Risk-based OSS System Launch
Following up on the Ministry of Investment or Capital Investment Coordinating Board’s (“BKPM”) decision to launch the Risk-based Licensing Online Single Submission System (“Risk-based OSS System”) through its Circular Letter No. 17 of 2021 on the Shift of Business Licensing System to Risk-based Business Licensing through the OSS System dated July 27, 2021 (“CL 17/2021”), the government has decided to postpone the implementation of the Risk Based OSS system as stipulated in Circular Letter No. 18 of 2021 on Amendment to CL 17/2021 (“CL 18/2021”) dated July 29, 2021 and BKPM Announcement No. 8 of 2021 dated August 2, 2021 (the “Announcement”).
The initial plan was to launch the Risk-based OSS System with a majority of the KBLI Codes under Government Regulation No. 5 of 2021 on the Implementation of Risk-based Licensing dated February 2, 2021 (“GR 5/2021”) while relying temporarily on a BKPM Decree for the 353 KBLI codes not yet accounted for in the system. However, there are several changes and revisions to the list of 353 KBLI codes as can be seen in CL 18/2021, such as Account and Audit Activities being placed under the Ministry of Finance (previously under Ministry of Tourism and Creative Economy), Toll Road Activities being under the Ministry of Public Works and Public Housing (previously under Ministry of Transport) and various other changes. The Announcement then explains that since there are revisions to the KBLI codes, the system must be updated accordingly.
As the current OSS system has already been suspended in preparation for the initial launch, the BKPM has decided that business licensing will be temporarily suspended until the system is up and running. Currently, there is no detail as to when the Risk-based OSS will launch.
We expect to hear more about the hopefully imminent launch of the Risk-based OSS System in the near future.
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August 3, 2021
Please contact Inka Kirana (ikirana@aksetlaw.com), N. Sekar Lestari (nlestari@aksetlaw.com) or Caleb K. N. Sitorus (csitorus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Pushes Back Risk-based OSS System Launch
Government Implements More Stringent Limitations Through Emergency PPKM
In an effort to curb the continued substantial rise of Covid-19 cases across the country, the Government has decided to implement the Entry into Force of Emergency Public Activity Restriction (Pemberlakuan Pembatasan Kegiatan Masyarakat Darurat or the “Emergency PPKM”) starting from July 3, 2021 which will be in place until July 20, 2021. DKI Jakarta’s Emergency PPKM policies are enacted through Governor of DKI Jakarta Decree No. 875 of 2021 dated July 2, 2021 on Emergency PPKM (“Decree 875/2021”). This round of restrictions introduces more stringent activity limitations compared to the Micro-Scale Public Activity Restriction (Pemberlakuan Pembatasan Kegiatan Masyarakat Berbasis Mikro or the “Micro PPKM”) that was effective for the past few months, last updated in DKI Jakarta Governor No. 759 of 2021 dated June 14, 2021 on Micro PPKM. The key changes found in Decree 875/2021 are as follows.
Activities in Workplaces/Offices
Previously, offices (barring those in the essential sector) had to implement a 75% or 50% Work From Home (“WFH”) order, for red and orange/yellow zones respectively. Now, all non-essential sectors must carry out a 100% WFH policy. Meanwhile, essential/critical sectors have the capacity for Work From Office (“WFO”) as follows:
- Essential Government Sectors: essential public services that may not be delayed are allowed 25% WFO;
- Essential Sectors: financial services, banks, capital markets, payment systems, information technology, non Covid-19 quarantine hotels, and export industries are allowed 50% WFO;
- Critical Sectors: energy, health, safety, logistics and transportation, food and beverage along with its supporting activities, petrochemicals, cement, vital national objects, disaster management, national strategic projects, construction, basic utilities (electricity and water) and basic needs industries are allowed 100% WFO.
In relation to these restrictions in the office environment, Head of the Manpower, Transmigration and Energy Office of DKI Jakarta issued Decree No. 1881 of 2021 dated July 2, 2021 on the Protocol for the Prevention and Control of Covid-19 in Private, State-Owned Business Entity, Regional-Owned Business Entity Offices/Workplaces (the “Manpower Office Covid-19 Protocols”). In essence, the Manpower Office Covid-19 Protocols provide the guidelines on what offices should do in light of the enactment of the Emergency PPKM. Generally, private/state-owned/regionally owned offices are expected to form a Covid-19 unit to handle matters related to Covid-19 management in the offices. This Covid-19 team must ensure that the office restrictions and health protocols (e.g., the 25%/50%/75% WFO, physical distancing, regular sanitation, availability of hand sanitizers, etc.) are being duly implemented in the offices. Further, these Covid-19 teams must aid the government in terms of reporting and tracing of Covid-19 cases in the offices.
Education Activities
All schools, higher education, academies, places of education/training must carry out their activities fully remotely/online, whereas previously they may do offline learning based on instructions from the Ministry of Education, Culture, Research and Technology.
Dining Activities/Restaurants
All restaurants, eateries, cafes, food stalls/vendors may only be opened for take-away. Dine-in is fully prohibited.
Activities in Malls/Shopping Centers
Malls and shopping centers are temporarily closed. However, accesses to restaurants and supermarkets inside the malls are still open, with the restrictions on restaurants still apply.
Religious Activities
Mosques, musholas, churches, pagodas, monasteries and other public places designated for religious activities are temporarily closed.
Activities in Public/Other Areas that May Attract Masses
All public areas, parks, tourist attractions, art/culture venues, sports facilities and other social activities are temporarily closed/suspended. Wedding receptions have a maximum attendance of 30 people and are not allowed to serve food, food may still be given out to be taken home in sealed containers.
Similar to the Micro PPKM, the Emergency PPKM also applies country-wide based on Minister of Home Affairs (the “Minister”) Instruction No. 15 of 2021 dated July 2, 2021 on Emergency PPKM and Establishment of Posts for Covid-19 Management in Villages and Urban Villages to Manage the Spread of Covid. Although the exact terms of the Emergency PPKM of each province may differ, governors and regents across Indonesia must comply with the limitations laid out in the Minister’s Instruction.
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July 5, 2021
Please contact Johanes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Caleb K. N. Sitorus (csitorus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Implements More Stringent Limitations Through Emergency PPKM
Government Amends PR 10/2021—Certain Business Lines Relating to Alcoholic Beverages Now Closed for Investment
The issuance of Presidential No. 10 of 2021 dated February 2, 2021 on Capital Investment Activities (the “PR 10/2021”) sparked major backlash from the Indonesian public due to the regulation opening the alcoholic beverage industry for investment. After listening to the people’s concerns, the government promised to reconsider its stance on opening the alcoholic beverage industry—as conveyed by President Joko Widodo in a public address on March 2, 2021, which is then followed up with the issuance of Presidential Regulation No. 49 of 2021 dated May 24, 2021 (the “PR 49/2021”) on the Amendment of PR 10/2021.
While PR 10/2021 states that all business lines (save for those that are closed or reserved for the Central Government) are open for investment, PR 49/2021 further elaborates that the business lines that are open are those that are commercial in nature. Additionally, PR 49/2021 adds Alcoholic Beverage Industry (KBLI 11010), Wine Industry (KBLI 11020), and Beverages Containing Malt Industry (KBLI 11031) to the list of industries that are closed off for investment.
As stipulated under PR 10/2021, businesses that are open for investment are divided into four categories: (i) priority business lines; (ii) business lines that are allocated or required for partnership with cooperatives and Micro, Small and Medium Enterprises (“UMKM”); (iii) business lines open with certain requirements; and (iv) other business lines not included in the foregoing, which shall be open for all investors. Previously, the “certain requirements” as mentioned in number (iii) are as follows:
- closed for foreign investors (only open for Indonesian Investors);
- has a cap on its foreign investment; or
- requires special license.
Under PR 49/2021 a new requirement is added: “Business lines that are monitored and stringently regulated and are also subject to other regulations in the field of the management and monitoring of alcoholic beverages.” Business lines that fall under this category are Wholesale Trade of Alcoholic Beverage (KBLI 46333), Retail Trade of Alcoholic Beverages (472221), and Small-scale (Kaki Lima) Retail Trade of Alcoholic Beverages (KBLI 47826).
Besides the addition of provisions relating to the alcohol industry, PR 49/2021 also contains some amendments to its Annexes, which list out all business lines and KBLI that falls under 4 categories of businesses opened for investment as mentioned above. These amendments include the additions of some provisions for certain business lines to qualify for government incentives, the re-allocation of certain business lines that were previously placed in Annex 3 (open for investment with certain requirement) to Annex 2 (allocation for or partnership with UMKM), such as the batik industry, traditional medicine industry, etc., along with the addition and/or removal of some business lines from the Annexes.
We believe that the amendments of PR 10/2021 introduced in PR 49/2021 will still achieve its goal of attracting potential investors, despite the fact that some business fields relating to the alcohol industry are now closed for investment.
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June 14, 2021
Please contact Inka Kirana (ikirana@aksetlaw.com), N. Sekar Lestari (nlestari@aksetlaw.com), or Caleb K. N. Sitorus (csitorus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Further Extends Micro PPKM
On May 31, 2021, the Governor of DKI Jakarta issued Decree No. 671 (“Decree 671/2021”) on the Extension of the Entry into force of Micro-Scale Public Activity Restriction (Pemberlakuan Pembatasan Kegiatan Masyarakat Berbasis Mikro or the “Micro PPKM”). Decree 671/2021 marks the 9th stage of Micro PPKM, which was first enacted on February 9, 2021 and was lastly extended under Governor of DKI Jakarta Decree No. 615 of 2021 dated May 17, 2021 on the Extension of the Entry into Force of Micro PPKM (“Decree 615/2021”).
While there is virtually no change in terms of the provisions between Decree 671/2021 and Decree 615/2021, the government intends to upgrade testing, tracing and treatment processes in order to curb the pandemic.
Due to the Micro PPKM, certain tourism, recreational, and social activities in Jakarta are also limited. Based on the most recently available Decision of the Head of Tourism and Creative Economy Office of DKI Jakarta No. 343 of 2021 dated April 21, 2021 on the Extension of Micro PPKM in the Tourism Industry (“Decision No. 343”), several activities and places have certain maximum capacity, as follows:
| Maximum Capacity | Activity/Places |
| 25% | (Authorized) Wedding Reception in Hotels/Function Buildings, (Authorized) Bowling/Billiard/Surfing Places, (Authorized) Waterparks, (Authorized) Children’s Game Arena |
| 50% | Salons/Barbershops, Golf/Driving Ranges, (Authorized) Meetings/Seminars/Workshops in Hotels/Function Buildings, Recreational Parks/Tourism Areas, Museums and Galleries, Water Tourism (water sports and recreation in lakes, seas, or beaches), Gyms/Fitness Centers, Cinemas, Pools |
| Others (Max. 30 attendees) | (Authorized) Marriage Ceremonies or Other Meetings |
While the abovementioned details are applicable only in Jakarta, the Micro PPKM itself is enacted countrywide. The previous Micro PPKM order under the Minister of Home Affairs (the “Minister”) Instruction No. 11 of 2021 dated May 17, 2021, was directed to 30 provinces. Now, the Minister, under his Instruction No. 12 of 2021 dated May 31, 2021 on the Extension of the Entry into Force of the Micro PPKM and the Establishment of Posts for Covid-19 Management in Villages and Urban Villages to Manage the Spread of Covid-19, has extended this coverage to encompass the entire country (i.e., 34 provinces).
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June 8, 2021
Please contact Johanes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Caleb K. N. Sitorus (csitorus@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Further Extends Micro PPKM
Government Bans Home-Town Bound Trips for Eid al-Fitr 2021
On April 7, 2021, the Indonesian Covid-19 Task Force issued Circular Letter No. 13 of 2021 on the Restrictions of Home-town Bound Traveling for Eid al-Fitr 1442 Hijri and Efforts to Control the Spread of Covid-19 During the Holy Month of Ramadhan 1442 Hijri (the “Circular Letter”). The Circular Letter is issued in relation to the Government’s effort to limit and discontinue the spread of Covid-19 that will potentially increase due to trips of the public for religious, family-related, or tourism activities during the Holy Month of Ramadhan, especially homeward bound traveling (locally known as “mudik”).
The Circular Letter will be effective from May 6, 2021 until May 17, 2021 (both dates inclusive, the “Restricted Period”) and will be adjusted with the needs and/or recent developments.
We set out below the key points under the Circular Letter that the public will be subject to.
- Protocols for Restrictions of Mudik and Prevention of Covid-19 Spread
During the Restricted Period, mudik, including all forms of travels in and out of their respective regions (“perjalanan orang”), is temporarily restricted for public using all cross-town/district/province/country modes of transportation (land, train, sea, and air) as an effort to limit human mobilities during the Holy Month of Ramadhan and Eid al-Fitr.
Perjalanan orang is allowed for logistic distribution services and traveling, in forced circumstances, for non-mudik purposes, which are: business trips, visiting an unwell family member, attending a family member’s funeral, a pregnant woman accompanied by 1 family member, and childbirth-related matters accompanied by maximum 2 people. In such conditions, travelers must attain a print-out of a written travel permit or entry and exit permit (Surat Izin Keluar Masuk, an “SIKM”), with the following requirements:
- For employees of government institutions/state apparatus (ASN), employees of state-owned or regional-owned enterprises (BUMN or BUMD), Militaries, and Police members, they must attach a print-out of a written travel permit signed or e-signed by officials equivalent as Echelon II and the traveler’s identity;
- For employees of private-sector companies, they must attach a print-out of a written travel permit signed or e-signed by the leaders of the company and the traveler’s identity;
- For informal sector workers, they must attach a print-out of a written travel permit signed or e-signed by Head of the Village (Kepala Desa) or Lurah and the traveler’s identity;
- For non-working individuals, they must attach a print-out of a written travel permit signed or e-signed by Head of the Village (Kepala Desa) or Lurah and the traveler’s identity;
Such a written travel permit or an SIKM only applies individually, valid for one round trip, and is mandatory for travelers who are 17 years of age or older.
In addition, all travelers are subject to the protocols for domestic travelers based on the Indonesian Covid-19 Task Force Circular Letter No. 12 of 2021 on Provisions for Domestic Travelers during the Covid-19 Pandemic, as explained in our previous newsflash: Updated Protocols and Guidance for Domestic Travelers - AKSET Law, in which document screenings for negative Covid-19 test results will be carried out in rest areas, borders of major cities, checkpoints, and agglomeration area sealing points, by the members of military/police and regional government.
Indonesian citizens who are currently abroad and wish to return to Indonesia or repatriate are encouraged to postpone their return until after the Restricted Period.
- Sanctions
Forgery of negative Covid-19 test results using RT-PCR/antigen rapid test/GeNose C19 or written travel permits/SIKMs for non-mudik purposes will be subject to sanctions in accordance with the applicable laws.
In addition, violations of the Circular Letter will be subject to fines, social sanctions, confinement and/or other criminal sanctions in accordance with the applicable laws.
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April 12, 2021
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com) or Satria Kasmaliputra (mkasmaliputra@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Bans Home-Town Bound Trips for Eid al-Fitr 2021
Norms, Standards, Procedures, and Criteria for Risk-Based Business Licensing Clarified
In addition to stipulating the types of license applicable for each risk level of business activities that we discussed in our previous newsflash, Government Regulation No. 5 of 2021 dated February 2, 2021 on the Administration of Risk-Based Business Licensing (“GR 5/2021”) also sets out other provisions, including the norms, standards, procedures, and criteria (norma, standar, prosedur, dan kriteria or “NSPK”) of the risk-based business licensing (the “Risk-Based Business Licensing”).
We set out below key provisions on NSPK as well as other notable provisions stipulated under GR 5/2021.
- NSPK of Risk-Based Business Licensing
Under GR 5/2021, the Central Government formulates and stipulates the NSPK for the Risk-Based Business Licensing for each of the following sectors:
- marine and fishery;
- agriculture;
- environment and forestry;
- energy and mineral resources;
- nuclear energy;
- industry;
- trade;
- public works and public housing;
- transportation;
- heath, medicine, and food;
- education and culture;
- tourism;
- religious affairs;
- post, telecommunications, broadcasting and electronic system and transactions;
- defense and security; and
- employment.
The NSPK shall be the sole guideline for the implementation of the Risk-Based Business Licensing by the Central and Regional Government. The NSPK for Risk-Based Business Licensing in each sector are stipulated in Chapter III of GR 5/2021.
Specifically for standards of business activities and standards of products for each sector shall be further stipulated in the regulation of the relevant minister of head of government institution that oversees such sector. GR 5/2021 sets out a guideline for the ministers and heads of government institutions for the drafting of such standards under its Appendix IV.
Business actors shall pay attention to the NSPK applicable for their relevant business activities as sets out under GR 5/2021. As an example, for marine and fishery sector, GR 5/2021 sets out the tonnage criteria for fishing boats.
- Supervision and Sanction for Risk-Based Business Licensing
The Risk-Based Licensing implementation is supervised by the Central Government, Regional Government, and/or other relevant authorized officials. Supervision is conducted by way of routine supervision and incidental supervision. Routine supervision shall be based on periodical reports submitted by the business actors and field inspection by the relevant officials. The periodical reports include the investment activities report (laporan kegiatan penanaman modal or LKPM) and relevant reports applicable for each sector.
GR 5/2021 also sets out administrative sanction provisions, both applicable to government officials and business actors who violate the provisions thereunder. Sanctions for business actors are stipulated for each sector.
- Minimum Foreign investment Value
GR 5/2021 stipulates the application of the Risk-Based Business Licensing through the OSS system, such as the process to obtain NIB, utilization of foreign employees, and minimum investment requirement for foreign investment. Similar to the Presidential Regulation No. 10 of 2021 dated February 2, 2021 on Capital Investment Business Lines (“PR 10/2021”), GR 5/2021 also stipulates that the foreign investment shall have a minimum investment of more than Rp10 billion, excluding the value of land and building. GR 5/2021 clarifies that such minimum investment is applicable for each business line based on 5-digit KBLI code per project location.
GR 5/2021 sets out exception to the general rule of minimum foreign investment, which was previously provided under the Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”) Regulation No. 1 of 2020 dated April 1, 2020 on Guidelines for the Implementation of Electronically Integrated Business Licensing Services (“BKPM Reg 1/2020”). We set out below a comparison of such exception.
| Business Line | GR 5/2021 | BKPM Reg 1/2020 |
| Wholesale trading | Minimum investment shall be more than Rp10 billion, excluding land and building, per 4 (four) first digits of the KBLI code. | Minimum investment shall be more than Rp10 billion, excluding land and building, per 2 (two) first digits of the KBLI code. |
| Food and beverages services | Minimum investment shall be more than Rp10 billion, excluding land and building, per 2 (two) first digits of the KBLI code per 1 (one) point of location. | Minimum investment shall be more than Rp10 billion, excluding land and building, in one regency/city. |
| Construction | Minimum investment shall be more than Rp10 billion, excluding land and building, per 4 (four) first digits of the KBLI code. | Minimum investment shall be more than Rp10 billion, excluding land and building, for one activity. |
| Industry | Minimum investment shall be more than Rp10 billion, excluding land and building, for the manufacturing of products categorized under different 5 (five) digits of KBLI, provided that it is conducted in one production line. | - |
Although GR 5/2021 does not revoke BKPM Reg 1/2020, the exception to the minimum investment value for foreign investment stipulated under GR 5/2021 above shall supersede the exception under BKPM Reg 1/2020.
- Other Notable Provisions
GR 5/2021 stipulates that disputes and hindrances for the implementation of the Risk-Based Business Licensing are to be settled in accordance with the relevant laws and regulations. In the event the laws and regulations do not stipulate the settlement of disputes and hindrances, the relevant authorized officials may stipulate a decree and/or carry out actions required to settle such dispute or hindrance provided that it is in accordance with the good governance principles (asas umum pemerintahan yang baik).
In addition to the authority to settle disputes and hindrances, GR 5/2021 stipulates that in the event there is a lack of, incomplete, unclear and/or stagnation in regulations, the ministers, head of institutions, or other relevant authorized officials may execute their discretion to solve concrete issues in the implementation of governmental matters related to the Risk-Based Business Licensing. There is no further elucidation to this provision. We hope that the authority to execute such discretion would not lead to legal uncertainty in the implementation of the Risk-Based Business Licensing.
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March 5, 2021
Please contact Inka Kirana (ikirana@aksetlaw.com), Alfa Dewi Setiawati (asetiawati@aksetlaw.com), Nurana Sekar Lestari (nlestari@aksetlaw.com), or Faiz Naufaldo (fnaufaldo@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Clarifies Risk-Based Business Licensing
Following the issuance of Law No. 11 of 2020 dated November 2, 2020 on Job Creation (the “Job Creation Law”) that introduces risk-based business licensing (the “Risk-Based Business Licensing”), on February 2, 2021, the government issued Government Regulation No. 5 of 2021 on the Administration of Risk-Based Business Licensing (“GR 5/2021”). GR 5/2021 replaces and revokes Government Regulation No. 24 of 2018 dated June 21, 2018 on Electronically Integrated Business Licensing Service (“GR 24/2018”) which governs the licensing system through the Online Singe Submission (the “OSS”). GR 5/2021 entered into force as of February 2, 2021.
Through the Job Creation Law, the government introduces the Risk-Based Business Licensing system in the hope of implementing a simpler and more effective licensing system as well as ensuring a transparent, structured and accountable supervisory system. GR 5/2021 itself stipulates matters on the general provisions of Risk-Based Business Licensing; the norms, standard, procedures and criteria (norma, standar, prosedur, dan kriteria or “NSPK”) of Risk-Based Business Licensing; the OSS system implementation; guidelines on supervision; evaluation and policy reformation; funding; dispute settlement; and sanctions.
In this newsflash, we will focus on key provisions on Risk-Based Business Licensing under GR 5/2021.
- Risk-Based Business Licensing
Under GR 5/2021, for a business actor to conduct its business, one must fulfill basic requirements of business licensing and/or obtain Risk-Based Business Licensing that include the utilization of space, environmental approval, building approval (persetujuan bangungan gedung, previously building permit or IMB), and certificate of worthiness (sertifikat laik fungsi or SLF).
The Central Government carries out the risk analysis to determine the risk level for each business activity in the following sectors:
- marine and fishery;
- agriculture;
- environment and forestry;
- energy and mineral resources;
- nuclear energy;
- industry;
- trade;
- public works and public housing;
- transportation;
- health, medicine, and food;
- education and culture;
- tourism;
- religious affairs;
- post, telecommunications, broadcasting and electronic system and transactions;
- defense and security; and
- employment
Such risk analysis is conducted through the identification of the business activity, assessment of hazard level, assessment on potential hazard, determination of risk levels and scale of business, and the type of Business Licensing. Through this risk analysis, business activities are categorized into:
- low risk business activities;
- medium-low risk business activities;
- medium-high risk business activities; and
- high risk business activity.
The risk category for each business activity is listed under Appendix I of GR 5/2021. GR 5/2021 also stipulates the scope and scale of the activity; whereby different scopes and scales of the same business activity may be categorized into different risks. Business actors shall identify their business activities under Appendix I of GR 5/2021 to determine the risk category of their business activities.
The table below illustrates an example of risk categorization under Appendix I of GR 5/2021.
| KBLI Code | KBLI Title | Business Scale | Land Area | Risk Level |
| 5510
55110 |
Hotel, with less than 61 rooms or less than 41 employees | Micro, small, and medium | Less than 4,000 m2 | Low |
| Hotel, with 61-100 rooms or 41-99 employees | Micro, small, medium, and large | 4,000-6,000 m2 | Medium-low | |
| Hotel, with 101-200 rooms or 100-200 employees | Micro, small, medium, and large | More than 6,000 m2 to less than 10,000 m2 | Medium-high | |
| Hotel, with more than 200 rooms or more than 200 employees | Micro, small, medium, and large | More than 10,000 m2 | High |
Each risk level will require different Risk-Based Business Licensing. We set out below the summary of Business Licensing for each risk.
| Risk | NIB | Certificate of Standards | License |
| Low risk | |||
| Medium-low risk | Self-statement | ||
| Medium-high risk | Verified certificate | ||
| High risk | *) Only if required |
The requirements for the Risk-Based Business Licensing in each sector are stipulated under Appendix II of GR 5/2021.
- Low Risk Business Activities
Low risk business activities will only require the Business Identification Number (Nomor Induk Berusaha or “NIB”) which shall also serve as the Statement Letter on Environmental Management and Monitoring Undertaking (Surat Pernyataan Kesanggupan Pengelolaan dan Pemangauan Lingkungan Hidup or “SPPL”). For low risk business activities carried out by micro and small enterprises, the NIB also serves as the Indonesian National Standard (Standar Nasional Indonesia or “SNI”) and statement of halal guarantee.
The NIB shall be the identity of the business actor as well as the legal basis to carry out the business activities.
- Medium-Low Risk Business Activities
The business licensing for medium-low risk business activities consist of an NIB and a certificate of standards that shall be in the form of a statement by the business actor to fulfill business standards that shall be submitted through the OSS. Although the certificate of standards is in the form of self-statement, the business actor shall fulfill such standards when it conducts the business activities.
Further, if the business activity is required to fulfill the Environment Management Efforts and Environment Monitoring Efforts (Upaya Pengelolaan Lingkungan Hidup dan Upaya Pemantauan Lingkungan Hidup or “UKL-UPL”) standards, the business actor shall fill in the UKL-UPL form in the OSS system in order to obtain the NIB and the certificate of standard. Otherwise, the business actor shall fill in the SPPL form in the OSS system.
The NIB and the certificate of standard shall be the legal basis for the business actors to conduct the business activities, both in the preparation and the operation/commercial stages.
- Medium-High Risk Business Activities
Similar to medium-low risk business, businesses categorized as medium-high risk also require an NIB and a certificate of standards. However, the certificate of standards for medium-high risk businesses shall be issued by the Central or Regional Government based on verification of the fulfillment of standards by the business actor. The Central or Regional Government (based on their respective authority) shall verify the fulfillment of standards or assign the verification to certified or accredited institution or expert profession.
Once the unverified certificate of standards has been issued, the business actor may perform actions relating to the preparation stage of the business. The NIB and the verified certificate of standards shall be the legal basis for the business actor to conduct the operation/commercial stage of the business.
- High Risk Business Activities
Under the Risk-Based Business Licensing scheme, only high risk business activities are required to obtain licenses (in addition to the NIB). In the event the high risk business activities require fulfillment of business and/or product standards, the Central or Regional Government will also issue the certificate of standards based on verification of fulfillment of standards.
Prior to the issuance of license, business actors may use the NIB for the preparation stage of the business. Only after obtaining the license, the business actors may commence the operation/commercial stage of the business.
GR 5/2021 provides that the preparation stage consists of (i) land acquisition, (ii) construction of building, (iii) procurement of equipment or facilities, (iv) procurement of human resources, (v) fulfillment of business standards, and/or (vi) other activities including feasibility studies and operational funding during construction stage. As for the operational/commercial stage, it consists of (i) production of goods/services, (ii) logistics and distribution of goods/services, (iii) marketing of goods/services, and/or (iv) other activities in the framework of operational/commercial activities.
- Transitional Provisions
The implementation of the Risk-Based Business Licensing under GR 5/2021 is exempted for business actors that have obtained business licensing that have been approved and effective prior to the enactment of GR 5/2021, except if the terms of GR 5/2021 is more beneficial for the business actor. As for business actors that have obtained business licensing but are not yet effective, the business licensing will be processed in accordance with GR 5/2021.
GR 5/2021 also requires business actors that have obtained access rights to the OSS to update their data at the OSS system. However, the implementation of the Risk-Based Licensing in the OSS system will only be effective 4 (four) months after the promulgation of GR 5/2021 (or by June 2, 2021).
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March 5, 2021
Please contact Inka Kirana (ikirana@aksetlaw.com), Alfa Dewi Setiawati (asetiawati@aksetlaw.com), Nurana Sekar Lestari (nlestari@aksetlaw.com), or Faiz Naufaldo (fnaufaldo@aksetlaw.com) for further information.
Disclaimer:
The foregoing material is the property of AKSET and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
Any links contained in this document are for informational purposes and are available and relevant at time this publication is made. We provide no liability whatsoever in respect of any information or content in such links.
Government Clarifies Risk-Based Business Licensing
Jakarta Applies More Stringent PSBB for Two Weeks
The Governor of DKI Jakarta decided to implement stricter large-scale social restrictions (Pembatasan Sosial Berskala Besar – “PSBB”) in Jakarta for the next two weeks, effective as of January 11 to January 25, 2020. This policy is based on the Governor of DKI Jakarta Decree No. 19 of 2021 dated January 7, 2021 on the Entry into Force, Period and Outdoor Activities Limitation of Large-Scale Social Restrictions (the “Decree”). The Decree stipulates that for any outdoor activities, Jakarta residents must adhere to health protocols as governed under Governor of DKI Jakarta Regulation No. 3 of 2021 dated January 7, 2021 on Implementing Regulation of Regional Regulation No. 2 of 2020 on the Prevention of Corona Virus Disease 2019 (the “Regulation”).
The Governor of DKI Jakarta applies this stringent PSBB due to the significantly increasing number of Corona Virus Disease 2019 (“Covid-19”) cases in Indonesia. On January 10, 2021, Indonesia recorded 9,640 new Covid-19 cases, 2,711 of which cases were recorded in Jakarta alone.
The Decree and the Regulation require Jakarta residents to comply with the following provisions:
- Activities at Workplaces
Private offices and state-owned enterprises are required to limit “work from office” policy to 25% (twenty five percent) from the full capacity of the workplace. If any employee is confirmed Covid-19 positive, the workplace shall be closed for at least 3x24 (three times twenty-four) hours and must be thoroughly disinfected.
- Activities of Essential Sectors
Any activities in the sector of energy, communication and IT, finance, logistics, hotels, industrial, basic necessities, public utilities, and national vital objects are allowed to fully operate while also following the health protocols. Places to fulfill the public needs, such as traditional markets, convenience stores, grocery shops, minimarkets, supermarkets, and hypermarkets are also permitted to fully operate.
- Construction Activities
The Decree allows construction activities to fully operate while also following the health protocols. This includes providing hand sanitizer and checking the workers’ body temperature before they enter the construction place.
- Educational Activities
All educational activities must be conducted online.
- Restaurants Activities
Restaurants and cafes may open for dine-in for only up to 25% (twenty five percent) from the full capacity. Dine-in service is permissible only until 7:00 p.m. (Jakarta time).
- Activities at Shopping Malls
Shopping centers or malls may only operate until 7:00 p.m. (Jakarta time). The standard health protocols must be applied during the operational hours, including providing hand sanitizer and the verification of visitors’ body temperature before they enter the building.
- Religious Activities at Places of Worship
For any religious activities carried out in places of worship, the maximum attendance shall be 50% (fifty percent) from the full capacity.
- Activities at Health Facilities
Any activities at healthcare providers may be carried out at 100% (hundred percent) capacity while following the health protocols.
- Activities at Public Places and Other Places which may Lead to Crowds
Any activities held at public places and other places which may lead to crowds must have relevant permits and the capacity shall be limited to 50% (fifty percent) of the full capacity.
- People Movement Using Public and/or Private Transportations
For mass public transportations, taxis, and rented vehicles, the maximum capacity would be 50% (fifty percent) of the full capacity of such vehicles. Meanwhile, for motorcycle taxis (ojek), the Decree allows a full capacity.
Although the Decree and the Regulation are only applicable in Jakarta, it is expected that other regions will also apply more stringent PSBB policies. The Minister of Home Affairs (“MOHA”) issued the MOHA Instruction No. 1 of 2021 dated January 6, 2021 on the Entry Into Force of Activities Limitation to Manage the Spread of Covid-19 to order Governors and Mayors/Regents of specific cities/regencies in Jawa and Bali to apply stricter PSBB policies.
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January 11, 2021
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