Stay up to date with legal developments in Indonesia.
What's New
Time to Reflect on Indonesia’s Local Content Requirement for Renewable Energy
By 2025, the Indonesian government aims to achieve a minimum of 23% renewable energy in the national energy mix and 31% by 2050. Despite the ambitious target, the Electricity Law (Law No. 30 of 2009 as amended by Government Regulation in lieu of Law No. 2 of 2022) requires independent power producers (“IPP”) to prioritise the use of domestic products in developing power generation projects, including renewable energy projects. This means that IPPs must comply with the minimum local content requirements (Tingkat Komponen Dalam Negeri), which apply for goods and services, in the development of electricity infrastructure. Failure to comply with these local content requirements may result in administrative and financial sanctions.
The local content requirements are stipulated under Minister of Industry Regulation No. 54/M-IND/PER/3/2012 on Guidelines for the Use of Domestic Products for the Development of Electrical Infrastructure and its amendment from time to time (“Regulation 54/2012”). Regulation No. 54/2012 has undergone several amendments, with the most recent in 2023, encompassing local content requirement for the module of solar power plants (pembangkit listrik tenaga surya or “PLTS”) and exemptions on local content requirements for PLTS in Ibu Kota Nusantara. It is imperative to note that most of the local content threshold under Regulation 54/2012 dates to 2012, and consequently, the threshold does not reflect the current market condition for renewable energy power plants.
Drawing from past transactions and experience, we will discuss the imperative need to revise the calculation and stipulation of the local content requirements for renewable energy projects.
Ready, Set, Go! Updates to Indonesia’s Gaming Industry
The Indonesian government enacted two regulations for the gaming industry in early 2024. These regulations, which we will discuss in this alert, put the gaming industry under the spotlight and solidify the government’s commitment in revitalising Indonesia’s gaming industry. The first regulation, Presidential Regulation No. 19 of 2024 on the Accelerated Development of the National Gaming Industry ("Presidential Regulation") establishes a national development roadmap for the gaming industry. It is quite common for the government to issue regulations on national development roadmap, and in the past, we have seen similar roadmaps for the e-commerce and digital industry. A common theme of these roadmaps is that they address internal and external issues and/or challenges faced by the relevant industry. Meanwhile, the second regulation, Ministry of Communication and Information Technology Regulation No. 2 of 2024 on Game Classification ("Regulation 2/2024") renews the age classification for games and provides new requirements for game publishers.
The two regulations complement each other and propel Indonesia's gaming industry to new heights by fostering a dynamic ecosystem where foreign investment and local innovation can converge synergistically.
Shift in Responsibility as Digital Service Platforms Become Responsible for Copyright Infringement in User-Generated Content
In February 2024, the Constitutional Court handed down a decision that extended the meaning of “business premises” (tempat perdagangan) in Article 10 of the Copyright Law (Law No. 28 of 2014). Previously, such term commonly referred to physical business premises, and Article 10 itself prohibits operators of business premises from allowing the sale and/or reproduction of goods resulting from copyright and/or related rights infringement in locations under their management. Now, as a result of the decision, the term “business premises” include digital service platforms that facilitate user-generated content (“UGC”).
In this Update, we take a closer look at the decision.