Indonesia Quarterly Regulatory Updates

Minister of Law and Human Rights Regulation of the No. 38 of 2021 on Procedures on Prevention and Prohibition ("MoLHR Regulation 38/2021")

Enforcement Date: 31 December 2021

• MoLHR Regulation 38/2021 provides several immigration-related provisions, which address 1) the enforcement of temporary suspensions of individuals in Indonesia's territory ("Prevention") and 2) the prohibition for foreign citizens from entering Indonesia's territory ("Prohibition").
• MoLHR Regulation 38/2021 enforces preventive policies for both Indonesian citizens and foreign nationals, subject to the parties concerned, based on a number of reasons, including 1) Supervision of Immigration Officials and Decrees on Administrative Measures related to Immigration; 2) Decrees of the Minister of Finance and the Attorney General, in relation to their respective assignments; 3) Requests of the Chief of the Indonesian Police Force or the Head of the National Narcotics Board of the Republic of Indonesia; 4) Orders of the Head Corruption Eradication Commission; and/or 5) Decisions or orders or requests of the authorized ministries or agencies.
• The regulation is imposed by the Minister of Law and Human Rights, subject to requests of the following parties: 1) Representatives of the Republic of Indonesia, through the Minister of Foreign Affairs; 2) Other countries, to prevent the foreign nationals from avoiding the legal proceeding in their countries of origin; and/or 3) the International Court of Justice as a result of the parties' crimes against humanity or organized cross-border crimes.

Constitutional Court Decision No. 23/PUU-XIX/2021 on Judicial Review of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligation ("CC Decision 23/2021")

Enforcement Date: 1 December 2021

• PT Sarana Yeoman Sembada ("Petitioner") appealed to the Constitutional Court ("MK") stating that Article 235 (1), Article 293 (1), and Article 295 (1) of Law Number 37 of 2004 on Bankruptcy and Postponement of Debt Payment Obligation ("Law 37/2004") were unconstitutional and should not be legally binding. The Petitioner claimed that these provisions were not in line with Article 28D (1) of the 1945 Constitution of the Republic of Indonesia ("UUD 1945") and, as a result, causing injustice and legal uncertainty.
• MK considered the petition for Suspension of Debt Payment Obligation ("PKPU") submitted by the creditor and the reconciliation proposed by the debtor that was later rejected by the creditor potentially create conflict of interest, as well as possible errors with regard to the application of the law by the Judge. Thus, a legal action must be taken. MK concluded that the appropriate legal remedy is an appeal without the right to file a review.
• The Court then decided that Article 235 (1) and Article 293 (1) of Law 37/2004 contradict the 1945 Constitution if the interpretation is not adjusted: "It is permissible to take cassation against the PKPU decision submitted by the creditor and the rejection of settlements of the debtor."

Constitutional Court Decision No. 91/PUU-XVIII/2020 on Formal Judicial Review of Law No.11 of 2020 on Job Creation ("Job Creation Law") ("CC Decision 91/2020")

Enforcement date: 25 November 2021

• Based on this decision, the Job Creation Law is deemed conditionally unconstitutional. However, it will remain effective for two-years of the grace period. The Constitutional Court has also ordered the respective authority to revise the Job-Creation Law and failure to do so will make the law permanently unconstitutional.
• CC Decision 91/2020 also rules that all strategic and widespread measures and policies under the Job Creation Law shall be suspended. Moreover, no new implementing related-rules for the Job Creation Law shall be issued. On the contrary, the Coordinating Minister of Economic Affairs ("CMoEA") has issued a statement that all existing provisions of the Job Creation Law shall continue to be effective until the issuance of the revisions.

Minister of State-Owned Enterprises ("MoSOE") Regulation No. PER-14/MBU/10/2021 on the Second Amendment to MoSOE Regulation No. PER-12/MBU/2012 on Supporting Bodies of the Board of Commissioners/ Board of Supervisors of State-Owned Enterprises ("MoSOE Regulation 14/2021")

Enforcement Date: 29 October 2021

• MoSOE Regulation 14/2021 provides that secretaries of the Board of Commissioners ("BoC") or Board of Supervisors ("BoS") of State-Owned Enterprises (Badan Usaha Milik Negara or "BUMN") are given a post-service facility (fasilitas purna jabatan) worth the maximum amount of 25% of their honorariums. This provision would be effective starting the 2022 fiscal year.
• MoSOE Regulation 14/2021 also stipulates that the honorarium for a member of the audit or other committees is a maximum of 20% of the salary of the president director of the relevant company. However, MoSOE may require certain BUMN companies to provide honorarium for a member of the audit or other committees worth 25% of the president director's salary of the relevant company.
• Other committees must be formed by BUMN companies if ordered by MoSOE through a Ministerial Decree that must contain the following provisions: 1) the list of BUMN companies that are obliged to form such committees; 2) duties of said committees; 3) number of members; 4) terms of service; 5) membership requirements; and 6) incomes and facilities.