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The Indonesian government announced that it will revise the current Negative Investment List (Dafter Investasi Negatif / "DNI") to permit foreign direct investment ("FDI") in a number of sectors and increase FDI limits in others. The proposed changes are influenced by the need to attract greater FDI inflows to counter the current economic slowdown and to boost the country's competitiveness in the ASEAN Economic Community ("AEC"). According to the ministerial release, several sectors that are conditionally open under the current DNI will be completely removed from the list, including crumb rubber, cold storage, tourism (restaurants, cafes, recreation, arts, entertainment, sports facilities), film industry, e-commerce, telecommunications equipment testing, tolled expressways, processing and disposal of hazardous wastes and pharmaceutical raw materials.
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The Indonesian Financial Services Authority (Otoritas Jasa Keuangan / "OJK") issued several regulations in December 2015 on rights issues, disclosure of material information, utilisation of public offerings proceeds, issuers and public companies exempted from reposting requirements, and code of conduct for investment managers. These regulations come into operation on various dates in 2016.
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After a widespread discussion in the media and property circles last year, the Indonesian government issued Government Regulation No. 103 of 2015 on the Ownership of Residential Homes or Housing by Foreign Citizens Resident in Indonesia, superseding the previous regulation governing this matter ("Old Regulation").
The Regulation, which came into operation on 28 December 2015, clarifies the property rights extended to foreign citizens, as well as inheritance and property rights in transnational marriages where one of the parties is an Indonesian national.
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After intense debate following last year's devastating land and peat fires in various parts of Indonesia, a new body, the Peatland Restoration Agency, has been established by Presidential Regulation No. 1 of 2016 to coordinate and promote peatland restoration measures in seven of the worst-hit provinces, including Riau, Jambi, and South Sumatra. Haze from out-of-control fires in these provinces often adversely affects neighbouring countries. The Regulation came into effect on 6 January 2016.
Presidential Regulation No. 4 of 2016 on the Acceleration of Power Infrastructure Development strives to set in place a framework that is capable of speeding up infrastructure development in the power sector so as to overcome the country's yawning electricity-supply deficit. The chief responsibility for accelerating the pace of development is placed on the shoulders of cash-strapped state power monopoly Perusahaan Listrik Negara ("PLN"). Given the manifold constraints facing PLN, whether or not this regulation will prove to be any more successful than many similar regulations issued in the past remains to be seen.
Presidential Regulation No. 3 of 2016, which entered into effect on 12 January 2016, simplifies the procedures for the construction of strategic infrastructure projects. These include tolled expressways and other strategic highways; intercity railways; airports and oil rigs. The procedures that are simplified concern: (i) licensing and other related procedures; (ii) spatial planning; (iii) land-procurement; (iv) mandatory local content; (v) government guarantees; (vi) the role of state enterprises; (vii) procurement of goods and services; and (viii) dispute resolution.
The Indonesia Government has issued Government Regulation No. 121 of 2015 (which came into effect on 28 December 2015) to restore order to the water sector in the aftermath of a 2015 Constitutional Court decision that struck down the 2014 Water Resources Law as being repugnant to the Constitution, and reinstated the previous legislation on water resources (the 1974 Water Resources Law). The decision cast a question mark over the status of the water exploitation / extraction licenses issued to private companies operating in a wide range of sectors, ranging from water bottlers and food and beverage producers to textile manufacturers.
Government Regulation No. 121 essentially adopts the same scheme of water-sector regulation as that applied by the 2014 Water Resources Law, but changes the terminology used and incorporates various new safeguards to take into account the Constitutional Court's concerns. Given the lack of substantive change, it will be interesting to see whether those who challenged the 2014 legislation will now also take aim at the 1974 Water Resources Law.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Assegaf Hamzah & Partners
Jakarta Office
Level 36 & 37, Capital Place
Jalan Jenderal Gatot Subroto Kav 18
Jakarta 12710, Indonesia
Surabaya Office
Pakuwon Center, Superblok Tunjungan City
Lantai 11, Unit 08
Jalan Embong Malang No. 1, 3, 5,
Surabaya 60261, Indonesia
http://id.rajahtannasia.com
Contacts: Ahmad Fikri AssegafSenior Partner/Co-FounderD +62 21 2555 7800 F +62 21 2555 7899 ahmad.assegaf@ahp.co.idBono Daru AdjiManaging PartnerD +62 21 2555 7800 F +62 21 2555 7899 bono.adji@ahp.co.idChandra M HamzahPartnerD +62 21 2555 7800 F +62 21 2555 7899 chandra.hamzah@ahp.co.idEri HertiawanPartnerD +62 21 2555 7800 F +62 21 2555 7899 eri.hertiawan@ahp.co.idIbrahim Sjarief AssegafPartnerD +62 21 2555 7800 F +62 21 2555 7899 ibrahim.assegaf@ahp.co.id
Rajah & Tann Singapore LLPContacts: Hamidul HaqPartnerD +65 62320398hamidul.haq@rajahtann.comPaul NgPartnerD +65 62320429paul.ng@rajahtann.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client. |
This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update. |
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