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Nano hazard symbols announced

Wednesday, January 24, 2007

ETC group has just announced the winner of nano hazard symbol contest. I like this symbol a lot:


The problem is, it only represents nanoparticles but does not seem to represent nanostructures and molecular manufacturing. You can see the rest if the symbols and the winners here.

Misunderstanding Indonesia's Legal System?

Tuesday, January 23, 2007

Since corruption is still a hot issue, let's talk more of it. I came across with a blog post quoting Tim Lindsey's lecture in Unimelb. I cannot confirm if it is really his writing as the link is dead. Here's the quote:
However, although the Indonesian legal system provides the sorts of rights and protections for the accused that might be expected in Australian courts, they are not always upheld in the same way in practice.

The institutionalised bribery of the Soeharto period left its mark on the judiciary. Corruption is common in many courts around the country, partly because salaries are very low and facilities poor. As money became more persuasive than legal argument in some Indonesian courtrooms, the skills base of many judges and other law enforcement officials also plummeted.


Hmmm, hear-hear. Needless to say more. Sometimes I find it futile to give reasonings and to draft neat contracts when in the end of the day, its Uncle Benjie who speaks.

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Be careful when signing a lease agreement

Sunday, January 21, 2007

A few days ago a friend of mine emailed me telling that he was in some kind of trouble after signing a lease agreement. He had paid a very large amount of money to someone for the purpose of renting a house to be turned into his office. Later it turned out that the person is not the real owner of the house. Voila!

So, here's a few simple tips when you want to rent a house:
  1. Make sure you are dealing with the lawful owner of the house/land, or a person accorded with a sufficient proxy to lease the house/land
  2. Check with the true copy of the certificate (better with the original) and make sure that they are the owners. If the land/house is an inheritance and it has not been splitted, make sure every heir/successor who receives the inheritance approves the lease. Better way: make them all sign the agreement
  3. Check with the land register if the land is subjected to mortgage
  4. Is modification/renovation allowed? At who's expense?
  5. What happen if there is damages? Who covers the insurance?
  6. Who pays the tax and bills?
  7. Rest are the standard positive/negative covenants and warranties/indemnities by both parties

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How to set up a company in Indonesia

The process of establishing a limited liability company is actually too complicated to be explained in a blog post, so I'll just give you a summary:
  1. Minimum Two shareholders are required
  2. Minimum authorized capital is IDR 20 million
  3. You need to reserve the Company's name (trade ministry), obtain a domicile license (local authority), obtain the company tax number (tax office), and re register everything at the ministry of trade.
A notary can do all those task for you, for a fee. There is no specific time period for the whole process so it depends in each case.

But, if the company is a Foreign Direct Investment (FDI) Company, then there are some other procedure that must be followed such as acquiring foreign capital license from the Central Bank and BKPM licenses. For that, you might need to either hire a lawyer or use investment consultancy services.

There are so many licensing services in Indonesia, each has their own rate. Okusi associates charges 2,550 USD. Healy Consultants charge up to 9,000 USD for 1st year for FDI. But, I also know that there are also consulting firms who charges only 800-1000 USD.

To get a broader view on investment in Indonesia and the judicial protection granted to investors, I suggest you to read this article from the US Embassy. The types of foreign investment licenses is discussed here. Please pay attention that I do not guarantee that both sites I've mentioned earlier contained an up to date information. If you want the latest information, use the search box in the right panel and search for foreign investment licenses. It should bring you to BKPM's (Coordinating Agency for Foreign Investment) website which should contained the latest info.

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Labor Strike Procedure in Indonesia

Saturday, January 20, 2007

In essence, every dispute arising out of Industrial Relation must be settled through deliberation of the involved parties. In this regard, prior to conducting a strike, a negotitation among Labor Union and the Company is mandatory. For the purpose of legal-evidentiary formalities, a sealed notes of meeting of the above negotiation process signed by authorized representative of the Labor Union and authorized representative of the company (if it is a limited liability company, then it shall be signed by members of the board of director or any one authorized to negotiate under a proxy signed by one of the company’s Board of Directors) shall be prepared. Only after the negotiation failed can the labors perform its right to strike.

Labors can perform their right to strike without getting through a process of negotiation. This can only be performed however, if the company refuses to negotiate. Decision of the Labor Minister, Kepmenakertrans No. KEP. 232/MEN/2003 Year 2003 on the Consequences of Illegal Strike (“Kepmenakertrans”) obligated workers to request the employer to enter into negotiation, at least 2 (twice) within 14 days. It would be important for the Labor Union to accept receipt from the employer that such notification has been given to the employers.

If the company refuses to negotiate after being properly notified as explained in the above paragraph or if the nagotiation have taken place but no resolution is achieved, Labors can perform their right to strike. Performance on the right to strike must comply with prevailing regulations, otherwise it can be categorized as an “illegal strike”.

At least within 7 (seven) business days prior to the strike, labor or its union must notify in written, the company and local ministry of manpower (labor dispute resolution institution should also be notified, and presumably, the police too). The ministry of manpower is obligated to give receipt of such notification under the law.

The notification must contain at least (a) timing (day, date, and hours) where the strike begins and will end, (b) the place where the strike will be held, (c) reasons and causes of the strike; and (d) signature of the chairman and secretary and/or each of chairmans and secretaries of the labor union responsible for the strike. If the strike is not performed in such procedure, the employer may take temporary action in secyring its company and its production facility by (a) prohibiting the labors striking at its production site or, (b) if necessary prohibits the strike to be held in the company’s locations. (Article 140 Law No. 13 Year 2003 on Labor, “Labor Law”).

In giving the notification to the ministry of manpower, Labor or the Labor union must enclose (1) notes of meeting signed by authorized representative of the company and authorized representative of the Labor Union, (2) a notification of strike to the employer and a receipt from the employer indicating that such notification has been accepted. All receipt and notifications must be signed by authorized parties.

In cases where no negotiation is possible, the enclosure must contain a letter of requesting negotiation to the employer and its receipt, and the letter notifying a strike with its receipt. As the law obligates the ministry of manpower to give receipt in return of those notifications, it would be better tomake sure that in the receipt, the ministry of manpower has clarified that the strike procedure has been fulfilled by the labors, in accordance with Article 140 of the Labor Law.

Legal Protection on The Right to Strike

The Law guarantee the right of labors to perform the Strike. Article 143 of the Labor Law stated that no one shall impede the labor and labor union to use its right to strike and no one shall be permitted to arrest labors which perform strike that are peaceful and in accordance to the prevailing regulations. Elucidation of Article 143 of the Labor Law gives examples that giving punishment, intimidating in any of its forms and determining work mutations to the labor is an example of “impeding the right to strike”.

In addition to that, Article 144 of the Labor Law forbids employer to replace the striking worker with another labor from outside the company or to give sanctions or any other form of retaliatory action to labors or the labor unions as a result of the strike. It needs to be underlined that the protection given by Article 144 will only be applied toward strikes that are in accordance with the procedure. In practice, the “evidence” that a certain strike has complied with prevailing regulations are:
  1. Signed notes of meeting between labor union and the employer, if no negotiation is possible, then the receipt of letter requesting for negotiation
  2. Receipt of strike notification from the local ministry of manpower alltogether with a statement that the strike preparation has fulfilled Article 140 of the Labor Law
  3. Receipt of strike notification from the company

Legal Consequences of Strikes

If a strike is not performed in regards to the prevailing regulation, then it can be deemed as an “illegal strike”. Article 16 of the Kepmenakertrans stated that illegal strike may count as absence from work. The company must call upon the labors – properly through a written notification -- twice in a seven days period. If such proper notification has been conducted, workers which are ignorant to the notification will be deemed to resign from its employment.

Toward a strike which are not caused by normative problems (problems caused by non fulfillment of certain provision in a regulation) the company may refuse to give payment to labors. Company may perform lock-out as a consequence of the strike but this must also be conducted in regards to prevailing regulations.





Disclaimer:

This article is not intended as a legal opinion.

Click here for a link to the Labor Law

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Sousveillance in new york

Friday, January 19, 2007

NY Mayor Bloomberg announced opening 911 emergency call for on the spot video transmission to the authorities on ongoing criminal activities.

Sounds like a you tube version for crime, at least for the Court. Bloomberg said:

"If you see a crime in progress or a dangerous building condition, you'll be able to transmit images to 911," Bloomberg said in disclosing the proposal yesterday during his annual State of the City speech.

The mayor said the high-tech initiative is "something no other city in the world is doing" and would be extended to 311, the city's non-emergency hot line.


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Can foreigners own land in Indonesia?

This is a quite common question being asked to lawyers. The answer is "no". Under the 1945 Constitution Article 33 land and water, and the natural resources found therein, shall be controlled by the state and shall be exploited for the maximum benefit of the people. Thus, foreigners are barred from having Right of Ownership/Hak Milik (somewhat equal to the common law's freehold title) to land.

But, of course there is always a way to get around it.

The first way is to purchase and indirectly 'own' land through nominee agreement. This way the foreigner gives an amount of money to an Indonesian citizen (the "nominee") to buy a land, through a power of attorney (PoA). The PoA must clearly and specifically elaborates that the money belongs to the foreigner and that the nominee is a mere executor. It must also specify that the foreigner has the rights to enjoy and execute all rights commonly attached to the land -- including but not limited to -- lease, sale, rent, etc without the consent with the nominee. The nominee must waives all of its rights normally accorded by land titles.

The second way is by establishing an Indonesian company, and the company owns the land through the right to build title/HGB. Foreigners can own up to 100 per cent of shares in a company provided that the initial share distribution has to be 95:5 (5% to be owned by the Indonesian Partner). Owning through a company is relatively safer as all liabilities are protected by a shield of legal entity. Through this scheme the company can own the land for an initial 30 years and it is extendable up to 20 years.

All transactions above must be conducted by notarial deeds and to be executed before a land deed official. Right to use land, right to build and right to exploit land is regulated through Government Regulation No. 40 Year 1999, available here (in Bahasa).