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Franchise Outlet Limitation for Food and Beverage Businesses

 

11 February 2013, Minister of Trade of Indonesia has issued Regulation No. 07/M-DAG/PER/2/2013 on Franchise Partnership Development for Food and Beverage Businesses (restaurants, diners, bars, and cafes ) (the “Regulation”). The Regulation intends to promote the involvement of small-medium enterprises in the franchise industry. To achieve such purpose, the Regulation sets a limitation for foreign investment on how many outlets a food and beverage business may own.

Company-Owned Outlet Limitation

One of the most notable provisions under the Regulation is the limitation of company-owned outlets that may be established by a food and beverage business (“business”). Under Article 4, a business may establish, at most, 250 company-owned outlets.

If a business wishes to establish more than 250 outlets, additional outlets must be franchised or established under an investment cooperation scheme. In doing so, a business must prioritize partnership with local small-medium enterprises, as a franchisee or an investor.

The minimum investment that must be made by an investor is as follows:

a.      40% of the total capital, if the investment value of an outlet is below IDR 10 billion;

b.     30% of the total capital, if the investment value of an outlet is above IDR 10 billion.

Domestic Goods

Another important provision set out under the Regulation is the obligation to use domestic goods. Pursuant to Article 7 the Regulation, 80% of business’ production materials and equipment must be produced domestically. This provision, however, can be exempted with the Minister’s approval based on a recommendation from an Assessment Team (An assessment team will be established by the Director General of Domestic Trade)

Other Obligations

Franchise businesses are responsible for their franchisee partners’ development by ways of providing training programs and guidelines on how to manage a franchise business.

It should be noted that franchisers and franchisees are obliged to submit a report to the Director General of Domestic Trade (“Director General”) if there is a change in the number of franchise outlets.

Sanctions

Franchisers and franchisees that fail to comply with the Regulation will be subject to administrative sanctions in the form of written warnings. Failure to comply with written warnings may lead to a 2 month (max) suspension of franchisers’ and franchisees’ Certificate of Franchise Registration (Surat Tanda Pendaftaran Waralaba – “STPW”).

Franchisers and franchisees that have more than 250 outlets prior to the Regulation must adjust their outlet ownership within 5 (five) years and they must submit an annual adjustment report to the Director General.

 

RESTRICTION POSITIONS FOR FOREIGN WORKERS IN INDONESIA

In 29 February 2012, Goverment Republic of Indonesia through The Minister of Labor and Transmigration has issued Decision Decree No. 40 of 2012 on Restricted Positions for Foreign Workers in Indonesia (“Decree No.40/2012”), this Decree were issued to implement Article 46 (2) of Law No. 13 of 2003 on Labor (“Labor Law”).

Under the appendix of this Decree, there are nineteen restricted positions for foreigners how worke in Indonesia, following are the restricted positions for foreign worker in Indonesia:

No

Position

1 Human Resources Director
2 Industrial Relationship Manager
3 Human Resources Manager
4 Personnel Development Supervisor
5 Personnel Recruitment Supervisor
6 Personnel Placement Supervisor
7 Employee Career Development Supervisor
8 Human Resources Administrator
9 Chief Executive Officer
10 Personnel and Career Specialist
11 Personnel Specialist
12 Career Advisor
13 Job Advisor
14 Job Advisor and Counseling
15 Employee Mediator
16 Job Training Administrator
17 Job Interviewer
18 Job Analyst
19 Occupational Safety Specialist

 

 

 

 

 

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Legalisasi Dokumen

Dalam Lampiran Peraturan Menteri Luar Negeri No. 09/A/KP/XII/2006/01, tanggal 28 Desember 2006 (poin 68), dijelaskan bahwa legalisasi artinya pengesahan terhadap dokumen danhanya dilakukan terhadap tanda tangan dan tidak mencakup kebenaran isi dokumenSetiap dokumen Indonesia yang akan dipergunakan di negara lain atau dokumen asing yang akan dipergunakan di Indonesia perlu dilegalisasi oleh instansi yang berwenang.

Hal ini juga pernah kami tuliskan dalam salah satu artikel Klinik sebelumnya mengenai Legalisasi Dokumen, legalisasi adalah mensahkan tanda tangan pejabat pemerintah atau pejabat umum yang diangkat oleh pemerintah (sumber: depkumham.go.id).

Dengan demikian, perlu diperhatikan bahwa legalisasi yang dilakukan oleh Perwakilan RI hanyalah merupakan pengesahan keaslian cap dan atau tanda tangan dan bukan menyatakan keabsahan isi dokumen yang dilegalisasi (sumber: laman resmi Kedutaan Besar Republik Indonesia di Canberra-Australia; http://www.kbri-canberra.org.au).

Dalam Lampiran Peraturan Menteri tersebut (poin 70) juga ditegaskan bahwa dokumen-dokumen asing yang diterbitkan di luar negeri dan ingin dipergunakan di wilayah Indonesia, harus pula melalui prosedur yang sama, yaitu dilegalisasi oleh Kementerian Kehakiman dan/atau Kementerian Luar Negeri negara dimaksud dan Perwakilan Republik Indonesia di negara setempat. Demikian pula terhadap dokumen-dokumen seperti surat kuasa, perjanjian dan pernyataan yang diterbitkan (dan ditandatangani) di luar negeri yang hendak dipergunakan di wilayah Indonesia harus dilegalisasi terlebih dahulu sesuai petunjuk yang kami jelaskan di atas.

 

Terkait surat kuasa yang dibuat di luar negeri harus dilegalisasi di KBRI ini pernah diputuskan oleh Mahkamah Agung dalam Putusan Mahkamah Agung R.I. tanggal 18 September 1986 Nomor: 3038 K/Pdt/1981 yang menyatakan antara lain bahwa:

 

keabsahan surat kuasa yang dibuat di luar negeri selain harus memenuhi persyaratan formil juga harus dilegalisir lebih dahulu oleh KBRI setempat.”

Putusan MA tersebut juga dijadikan landasan bagi Pengadilan Tinggi Agama Surabaya ketika memutus suatu perkara. Dalam pertimbangan Putusan Pengadilan Tinggi Agama Surabaya No. 60/Pdt.G/2008/PTA.Sby. Pengadilan Tinggi Agama Surabaya antara lain menyatakan:

untuk keabsahan surat kuasa yang dibuat di luar negeri ditambah lagi persyaratannya, yakni legalisasi pihak KBRI. Tidak menjadi soal apakah surat kuasa tersebut berbentuk di bawah tangan atau Otentik, mesti harus DILEGALISASI KBRI. Syarat ini bertujuan untuk memberi kepastian hukum Pengadilan tentang kebenaran pembuatan surat kuasa di negara yang bersangkutan. Dengan adanya legalisasi tidak ada lagi keraguan atas pemberian kuasa kepada kuasa.”

Berdasarkan penjelasan di atas, jadi sebenarnya tidak ada pengecualiannya bagi surat kuasa maupun dokumen lain yang ditandatangani di luar negeri jika hendak digunakan di Indonesia karena disebutkan “setiap dokumen”.

 

 
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Posted by on February 17, 2012 in Civil, Uncategorized

 

Beauty Contest Is Not The Same As Tender

Nindyo Pramono, a law professor at Universitas Gajah Mada, said using “beauty contests” for the procurement of goods and services is not the same as a tender process. However, beauty contests can increase efficiency.
“Companies can decide how to select their partners, including using a beauty contest. This complies with Government Regulation No. 12 of 1998 on Liability Companies,” he said in a seminar on Oil and Gas Business Competition, Tuesday (17/1).
Nindyo explained, choosing business partners through a beauty contest can be justified under the business judgement rule. However, Nindyo asserted that the business judgment rule should be stated in the company’s Standard Operating Procedures.
On the other hand, the Commission for the Supervision of Business Competition (KPPU) stated that beauty contests are identical to the tender process. Therefore, beauty contests are regulated by Law No. 5 of 1999 on the Prohibiton of Monopolistic Practices and Unfair Business Competition (“Business Competition Law”).
Anna Maria Tri Anggriani, one of the KPPU’s commissioners, explained that tenders are not restricted to the procuremement of goods and services. “A tender has a broader application. It applies to the procurement of goods or services as well as stock trades and selecting business partners,” she said at a same event.
She explained that there have been some interesting cases that expanded the definition of the tender process, since the KPPU was formed in 2000. For example, Indomobil’s stock trades, and Pertamina’s VLCC sale were considered tenders.
However, Ari Sumarno, the former President Director of Pertamina, disagreed with Anna’s opinion. “The process for selecting business partners can’t be generalized, especially for the oil and gas industry,” he said.
Ari explained that the oil and gas industry consists of three different areas: upstream, midstream, and downstream. Each area has unique difficulties and challenges. The upstream oil and gas industry focuses on exploration and mining activities. These activities are not cheap. “Natural resources can’t be explored easily. Companies must wait for 3-5 years before developing resources,” Ari said.
Ari also emphasized that midstream businesses can spend USD 4-5 billion for an oil rig, not to mention the cost of refining oil. Meanwhile, downstream businesses focus on retail and sales activites, which can be expensive. For example, Ari explained, Shell spent IDR 20-30 million for one gas station. Since oil and gas businesses require a large amount of capital, the industry is always oligopolistic, where only a few parties are involved.
 
 

Amendment to Government Investment Regulation

Regulation No. 49 of 2011 on the Amendment to Government Regulation No. 1 of 2008 on Government Investment (“Regulation”) has been issued to implement Article 41 (3) of Law No. 1 of 2004 on State Treasury (“Law 1 /2004”) and to improve the provisions of Government Regulation No. 1 of 2008 on Government Investment (“Regulation 1/2008”), which addressed the same issue.

The Regulation amends two articles, Article 1 and Article 4, and adds one new article, Article 13A.

Under Article 1 (4) of the Regulation, capital participation (penyertaan modal) is defined as government investment in a company by acquiring ownership rights. Previously, under Article 1 (4) of Regulation 1/2008, capital participation was defined as government investment in a company by acquiring ownership rights, including through the establishment of a limited liability company (perseroan terbatas) or by acquisition.

This amendment of Article 1 (4) potentially broadens the means by which the government can invest in a company because it removes the limitations included in the previous regulation. Under Regulation 1/2008 the government could obtain ownership rights by means of establishing a PT, merger, acquisition, or consolidation. These methods can be found in Law No. 40 of 2007 on Limited Liability Company.

Article 4 of the Regulation states that direct investment in the form of capital participation, as referenced in Article 3 (3)(a), can be organized by means of public private partnership or non-public private partnership. Previously, Article 4 of Regulation 1/2008, as referenced in Article 3 (1)(b), stated that direct investment included capital participation and credit methods (loan).

This amendment suggests that direct investment by means of public private partnership or non-public private partnership only applies to capital participation, and does not include credit methods (loan).

Article 11 (3)(a) states that the Minister of Finance is obliged to conduct a feasibility study before recommending government investment, while Article 11 (4)(b) states that the Minister of Finance has to conduct research on investment requests from companies, public service agencies, regional governments, regional public service agencies, and foreign companies.

The Minister of Finance has the final say in whether to approve or reject a request. Article 13A of the Regulation, the new article, states that a feasibility study or a recommendation to invest is not required as stated in Article 11 (3)(a) and (4)(b) when an investment is mandated by law or is needed to rescue

the national economy or to implement an urgent government program.

 

Delegation of Authority to Issue Investment Permits in Trade Sector

Minister of Trade Regulation No. 01/M-DAG/PER/1/2012 on Delegating the Authority to Issue Investment Permits to the Head of the Indonesia Investment Coordinating Board Under the One Stop Integrated Services Framework for Investment (“Regulation”) has been issued to implement Article 7 (2) and (3) of Presidential Regulation No. 27 of 2009 on One Stop Integrated Services for Investment (“Perpres 27/2009”). Article 7 (1) of Perpres 27/2009 states that the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal – BKPM) will organize one stop integrated services for investment.

Pursuant to Article 7 (2) of Perpres 27/2009, relevant ministers/heads of state institutions will delegate the authority to issue licenses and other documents (non-licenses) to the Head of BKPM. As stipulated in Article 7 (3) of Perpres 27/2009, the delegation of authority is regulated by a ministerial regulation.

Furthermore, pursuant to Article 1 (2) of the Regulation, authority delegation is the transfer of investment-related affairs from the Minister of Trade to the Head of BKPM. Meanwhile, Article 1 (3) of the Regulation states that one stop integrated service (pelayanan terpadu satu pintu – PTSP) is the handling of license and other document (non-license) requests in one place.

The Minister of Trade, as stipulated in Article 2 (1), delegates the authority to issue investment permits in trade to the Head of BKPM, who may delegate this authority to others (substitution rights). Pursuant to Article 2 (2), the delegated authority to issue licenses includes the authority to issue trade business licenses with foreign capital participation; survey service permits; property broker permits; and foreign trade representative permits. According to Article 7, the procedure for obtaining these licenses will be

regulated by the Head of BKPM. It should be noted that under Article 6, the Minister of Trade is allowed to revoke the delegated authority if BKPM asks the Minister for a full or partial revocation; or if BKPM is unable to exercise the delegated authority.

The Regulation repeals and replaces Minister of Trade Regulation No. 301A/KP/X/77 on Delegating the Authority to Issue Trade-related Investment Business Permits and Limited Trade Permits for Investment to the Head of the Indonesia Investment Coordinating Board.

 

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EMPLOYEE TERMINATION FOR SERIOUS MISCONDUCT

TERMINATION FOR SERIOUS MISCONDUCT

ENFORCEMENT AND RECENT DEVELOPMENTS

 

I. Introduction

It has been over 4 years since theConstitutional Court’s ruling on 26 October 2004 which declared that Article 158 and other relevant articles of the Manpower Law in relation to serious misconduct were against the Indonesia Constitution and therefore were not legally binding. The legal effect of the ruling was that an employer cannot immediately terminate an employee for serious misconduct. Instead an employer must report the act to the police and then follow the criminal proceedings under the Indonesian Criminal Procedure Law. Only upon receiving a criminal judgment of the district court that the employee is guilty (and if the decision is not appealed by the employee) can the employer terminate the employee.

Following the Constitutional Court’s decision, the Ministry of Manpower (“MOM”) issued 2 circular letters stating amongst other things:

a.            an employer can terminate an employee for “Urgent Reason” under Article 1603 (o) of the Indonesian Civil Code (“ICC”) (which specifies the types of employee’s actions which result in termination of employment by an employer for Urgent Reasons) without having to report the serious misconduct to the police etc; and

b.            the employer must follow the approval of termination procedure set out under Law No. 2 of 2004 regarding Settlement of Industrial Relations Disputes (“Law 2/2004”), namely, bipartite, mediation, court proceedings, etc.

There has been a lot of arguments and various interpretations from the judges of the Industrial Relations Court (“IR Court”), mediators, jurists and practitioners on the present legal situation, in particular, it is currently unclear whether an employer:

a.            is able to immediately terminate an employee for serious misconduct under Article 158 (and other relevant articles) of the Manpower Law; or

b.            must terminate an employee for Urgent Reasons under Article 1603(o) of the ICC; or

c.             must report the act to the police and then follow the criminal proceedings under the Indonesian Criminal Procedure Law.

 

II. Types of Serious Misconduct

Article 158 of the Manpower Law provides the following types of serious misconduct:

 

a.            deception, theft or embezzlement of money and/or goods belonging to the company;

b.            giving false information or information which has been falsified so that it harms the company;

c.             drunkenness, drinking liquor, using and/or distributing narcotics, psychotropic drugs, or other addictive substances in the workplace environment;

d.            gambling or immoral acts in the workplace environment;

e.            attacking, maltreating, menacing, or intimidating the employer or coworkers in the workplace environment;

f.             persuading the employer or coworkers to commit acts contrary to the laws and regulations;

g.            carelessly or intentionally destroying or leaving property of the company in a state of danger and thereby causing a loss to the company;

h.            carelessly or intentionally placing or leaving the employer or a coworker in a state of danger in the workplace;

i.             disclosing the company’s secret which ought to be kept confidential, except for the interests of the state; or

j.             committing other criminal acts in the company premises liable to a sentence of 5 years or more.

As previously explained, Article 1603(o) of the ICC also details types of actions which allow the employer to terminate its employment relationship with the employee. Article 1603(o) of the ICC regulates “Urgent Reasons” in the sense of the foregoing article will in the view of the employer consist of such acts or characteristics or behavior of the employee, that it cannot reasonably be demanded by the employer to continue such employment relationship.

Urgent reasons as such may be considered existing in the cases where the employee:

a.            upon concluding the employment agreement has deceived the employer by presenting false or counterfeit certificates or has intentionally given the employer false information on the manner in which his former job had ended;

b.            shows himself to be extremely unable or unfit to carry out the work that he has agreed to do;

c.             in spite of all warnings, indulges in drunkenness, opium abuse or other debauchery;

d.            commits theft, fraud, cheating or other misdemeanor, thus being unworthy of his employer’s trust;

e.            molests the employer, his relatives or inmates, or maltreats, grossly insults or seriously threatens his co-employees;

f.             tempts or endeavors to tempt the employer or his relatives or co-workers into acts in violation of the law or moral standards;

g.            intentionally or in spite of warnings recklessly causes damage to employer’s property or exposes it to serious danger; if he intentionally or in spite of warnings recklessly exposes himself or others to serious danger;

h.            discloses details regarding his employer’s household or businesses, which he should have kept secret; if the employee persistently refuses to comply with reasonable orders or duties, given to him by or in name of the employer;

i.             in another manner grossly neglects duties which he is obliged to undertake;

j.             if through intent or recklessness, he becomes unable to carry out the duties as conditioned;

 

III. Enforcement and Recent Developments

Notwithstanding the various views on the enforcement of the serious misconduct provision, recently, judges at the Supreme Court generally have 2 opinions in this regard:

a.            the majority of the judges believes that Article 158 and other relevant articles with respect to the serious misconduct are not legally binding. However, the employer can still terminate its employee relationship (without giving any warning letters but the employer cannot unilaterally terminate the employment relationship) based on serious misconduct as long as this is supported by the company regulation, collective labour agreement or employment agreement. In other words, types of serious misconduct should be specified in these documents so that they legally bind the employer and employees. The procedures for the termination of employment should comply with Law 2/2004. The company regulation, collective labour agreement or employment agreement constitutes a legal basis for the employer and employees to perform their rights and obligations. These documents may contain the types of serious misconduct which are stated in Article 158 of the Manpower Law.

b.            the minority of the judges also believes that Article 158 and other relevant articles are not legally binding. However, the employer should give a first and final warning letter to the employee who has committed a serious misconduct before terminating the relevant employee. Upon the issuance of and non-compliance with the final warning letter, the employer may proceed with the termination of employment under Law 2/2004. They also believe that types of serious misconduct should be regulated in a company regulation, collective labour agreement or employment agreement as a legal basis for termination of employment.

From the above, it appears that the employer does not have to bring criminal charges against an employee who has committed a serious misconduct and therefore, the criminal proceedings under the Indonesian Criminal Procedure Law do not need to be followed. Due to the absence of any law or regulation regarding this matter and the resulting legal uncertainties, the judges should themselves find a legal basis to examine manpower disputes which involve termination of employment due to a serious misconduct.

Despite the opinions from the Supreme Court judges, the attitude of the judges at theIR Courtlevel on the enforcement of the serious misconduct provision is still somewhat unclear. TheIR Courtis the first level institution authorized to examine manpower disputes which have been mediated unsuccessfully at the MOM level, while the Supreme Court is the final level institution which examines manpower disputes following theIR Court’s ruling.

Having reviewed some decisions issued by judges at theIR Courtlevel, we believe there to be 3 principal views on the enforcement of termination for serious misconduct, namely:

 

(i)           some judges believe that the Constitutional Court’s ruling should be followed, meaning that the employer and the employee should wait for criminal proceedings under the Indonesian Criminal Procedure Law prior to the employer terminating the relevant employee regardless of any serious misconduct provisions stated in a company regulation, collective labour agreement or employment agreement. Their reason is that these documents should not contradict the Manpower Law, otherwise they should be null and void. They use Article 124 of the Manpower Law which states that a collective labour agreement should not violate prevailing laws and regulations and they argue that this is also applicable to a company regulation and employment agreement;

(ii)          some judges follow the view of the Supreme Court judges as detailed in point a. above; and

 

(iii)         some judges agree with the view of the Supreme Court judges as detailed in point b. above.

 

IV. Conclusion

Whilst it is true to say that there is still no certainty on termination of employment for serious misconduct nor on the enforcement of the serious misconduct provisions, it does appear that from listening to the stated views of judges at both the IR Court and the Supreme Court level, there is scope for employers to terminate the employment of persons who are involved in serious misconduct. These views have at least given ‘guidance’ to employers to undertake relevant measures to certainly increase the chances that the termination action will be enforceable, particularly with regard to the preparation and drafting of company regulations, collective labour agreements and employment contracts.

Until there is further certainty emanating from laws and regulations, it is important for employers to now review their employment documents and company regulations/collective labour agreements, as well such other documents such as codes of conduct or ethical policies. Improving and updating those documents will significantly assist employers not only in employee termination actions but also in a number of other important areas relating to employment issues

 

 
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Posted by on November 7, 2011 in Civil, Uncategorized

 

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