Legal Updates for November 2020

OMNIBUS LAW 2020: Introducing the Land Bank and Other Changes in the Real Estate Sector

This is the seventh edition of “Omnibus Law 2020: Overview Series”, which highlights changes in the real estate sector. This alert is the second alert on real estate.

In its first Update on real estate, AHP tackled changes to the spatial utilisation permit, building permits, and amendments under the Housing Law and Apartment Law, among others. This second Update focuses on other critical changes to the real estate sector, including those that relate to land procurement for public purposes, and the establishment of the Land Bank. The Government will be issuing regulations to implement these changes.

KPPU Announces Relaxing of Competition Law Enforcement

In light of the current health crisis and as detailed in our previous client update (click here to read), the Chairman of the Indonesia Competition Commission ("KPPU") has expressed his support for businesses to collaborate. Subsequently, on 9 November 2020, the KPPU published KPPU Regulation No. 3 of 2020 on the Relaxation of Legal Enforcement of Monopoly Practices and Unfair Business Competition and Monitoring of Partnership Implementation to Support the National Economic Recovery to specify the criteria and form of relaxation in its enforcement.

Under the new regulation, businesses can now benefit from the following relaxation:

  1. procurement using State Budget or Regional Budget can be done to: (i) fulfil medical needs or provide supporting facilities to handle Covid-19, e.g. the procurement of medicine, vaccine, construction of emergency hospitals, the appointment of hotels or buildings for isolation, and other medical needs and supporting facilities to handle Covid-19; and (ii) distribute social assistance and social safety net from the government to the public;;
  2. approval of an agreement, activity, and/or the use of dominant position to handle Covid-19 and/or to increase the economic ability of a business;
  3. extension of the deadline to submit the mandatory post-closing notification to the KPPU from 30 to 60 business days as of the effective date; and
  4. extension of the period of written warning in the partnership monitoring procedure from 14 to 30 business days.
Signing of the Regional Comprehensive Economic Partnership Agreement by 15 Asia-Pacific Countries

On 15 November 2020, the ten member states of the Association of Southeast Asian Nations ("ASEAN") – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, the Philippines, Thailand, and Vietnam – in conjunction with Australia, China, Japan, South Korea, and New Zealand, signed the world's largest free trade agreement to date, known as the Regional Comprehensive Economic Partnership ("RCEP") Agreement.

Representing the culmination of eight years of negotiations, the RCEP builds on existing bilateral FTAs among the 15 RCEP Participating Countries ("RPCs"). Together, the RPCs account for about 30% of global gross domestic product and close to a third of the world's population. It signals the RPCs' strong commitment to maintaining open and connected supply chains; broadens individual RPCs' economic linkages and connectivity with the region; and gives them preferential access to the region's growing markets.

We provide an overview of the features of the RCEP below, which improves on the existing ASEAN Plus One agreement in four key areas:

1. comprehensive trade facilitation measures;

2. improved market access for Trade in Services;

3. enhanced investment rules and disciplines; and

4. expanded scope and commitments.

OMNIBUS LAW 2020: The Omnibus Law: What’s Next for the Real Estate Market?

This is the sixth edition of “Omnibus Law 2020: Overview Series”, which highlights changes in the real estate sector. This alert is the first alert on real estate.

The Omnibus Law launches massive changes in the real estate sector. As with the other sectors, it is expected that the government will issue implementing regulations to clarify the requirements for each of the changes introduced.

The changes introduced by the Omnibus Law relate to the following:

(i) Zoning Conformity Instead of Permits

(ii) Streamlined Building Permitting Process

(iii) New Building Service Providers

(iv) Foreigners Owning Apartments

OMNIBUS LAW 2020: Government Centralises Power and Maintains Status Quo in the Shipping Industry

This is the fifth edition of “Omnibus Law 2020: Overview Series”, which highlights changes in the shipping sector.

With a major overhaul in sectors such as investment and employment, the Omnibus Law does not make significant changes to shipping law in Indonesia.  AHP’s initial analysis seems to show that there are no major controversies surrounding this sector.

Business licenses for shipping activities and shipping-related services will still be issued by the relevant government authorities (i.e. the Minister of Transportation, Governor and/or Head of Regent/Mayor). However, the authority to issue such license will be based on the norms, standards and requirements to be determined by the central government. 

Contrary to the rumours/opinions formed prior to the enactment of the Omnibus Law that this law would revoke the cabotage rule, the Omnibus Law did not revoke or amend Article 8 of the Shipping Law, which implements the cabotage rule in Indonesia. 

Additionally, there has been no change in relation to the provision in foreign entities’ ownership under Article 158 of the Shipping Law.

OMNIBUS LAW 2020: Your Omnibus Law Guide

After the submission by the House of Representatives of the Republic of Indonesia of the Job Creation Law to the President on 14 October 2020, the Job Creation Law was finally enacted as Law No. 11 of 2020 on Job Creation (“Omnibus Law”) on 2 November 2020.

The Omnibus Law contains its own provisions, as well as amends, deletes, or enacts new provisions in 78 laws. AHP has put together the attached regulatory booklet titled “Your Omnibus Guide” which sets outs the laws and the sectors that are affected by the Omnibus Law. The guide also provides the link to the full text of the Omnibus Law.