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SSEK Legal Consultants

Indonesia and Covid-19 Legal Updates

As of August 28, 2020

SSEK Legal Consultants 1

1. Transportation

Indonesia Requires Swab Tests for Foreigners Arriving at Soekarno-Hatta Airport – August 28, 2020

Indonesia and the ‘New Normal’: Latest Transportation Control Regulation – June 27, 2020

DKI Jakarta Regulates Sanctions and Travel Restrictions for Handling COVID-19 – June 2, 2020

Homecoming Postponed by COVID-19: An Overview of Transport Restrictions in Indonesia During Idul Fitri – May 7, 2020

2. Capital Markets

Indonesian Capital Market Update During the Coronavirus Pandemic - March 30, 2020

3. Courts

Indonesia Introduces Criminal Court Trials by Teleconference in Response to COVID-19 – April, 27, 2020

4. Employment

COVID-19 and the Protection of Highest-Risk Employees in Indonesia - June 16, 2020

The New Normal – Indonesian Health Minister Issues COVID-19 Workplace Guidelines – May 27, 2020

Indonesia Suspends Foreign Manpower Work Permit Applications During Covid-19 Outbreak - April 24,

2020 Indonesian Employment Law and COVID-19 - March

27, 2020

5. Force Majeure

COVID-19 and Indonesia: Force Majeure and Other Considerations - April 7, 2020

FAQs on Force Majeure in Indonesia - March 26, 2020

6. Government Assistance

Indonesian Government to the Rescue: COVID-19 Economic Relief Packages - April 23, 2020


7. Imports

COVID-19: Indonesia Issues Regulations for Faster and Easier Import Licensing - May 12, 2020

Indonesian Government Relaxes Licensing Requirements for Medical Devices to Combat COVID-19 - April 16, 2020

8. Industry

BKPM Rule Expands the Number of Expats Who Can Apply for Indonesian Work Permits During COVID-19 - June 22, 2020

Indonesia to Accelerate Product Registration for Covid-19 Drugs - April 21, 2020

Update on License for Companies in Indonesia to Operate During Pandemic - April 17, 2020

Indonesia Provides Mechanism for Companies to Operate During Pandemic - April 14, 2020

9. Land and Property

Indonesian Land Office Regulations and Services

During the COVID-19 Pandemic – May 5, 2020

10. Oil & Gas Impact of COVID-19 Pandemic on Indonesian Oil and

Gas Upstream Activities – June 9, 2020

11. Restructuring & Insolvency

Indonesian Bankruptcy and PKPU Proceedings in a Time of COVID-19 - August 7,2020

COVID-19: KPPU and OJK Address Mergers Between Problematic Banks in Indonesia – June 24,2020

Indonesia’s OJK Issues Regulation on Quick Restructuring for Troubled Banks in Wake of COVID-

19 – April 30,2020

12. Shipping

Navigating Sea Transportation in Indonesia During COVID-19 - April 8, 2020


13. Social Restrictions

New Requirements on the Movement of People in

DKI Jakarta to Prevent the Spread of COVID-19 -

June 30, 2020

Jakarta Eases Restrictions as It Transitions from

Response to Recovery – June 11,2020

New Normal: Indonesian Trade and Religious

Ministries Issue Health Protocols for COVID-19

Pandemic – June 5, 2020

How DKI Jakarta Is Supervising Companies During

COVID-19 Restrictions – May 7, 2020

COVID-19 Social Distancing in Indonesia – Jakarta

and Bogor Put in Place PSBB – April 29,2020

DKI Jakarta Starts Limiting Large-Scale Social

Interactions - April 13, 2020

Indonesia and COVID-19: Government Issues

Regulation on Limiting Social Interactions - April 6,

2020

14. Tax

Indonesia Targets Taxation of Tech Companies to Boost Economy Amid Covid-19 – May 21, 2020

Indonesia and COVID-19: New Tax Policies Aim to Stimulate Economy - April 9, 2020

15. Technology

Electronic Signatures in Indonesia: New Focus on Not-So-New Innovation – May13, 2020

16. Visas

Latest Update on Indonesian Visas in the Time of COVID-19 - July 24, 2020

Latest Update on Indonesian Visas in the Time of COVID-19 - July 16, 2020

Latest Update on Indonesian Visas in the Time of COVID-19 - May 28, 2020 COVID-19 Legal Update: Foreigners to be required to

obtain COVID-19 tests to enter Indonesia – May 15, 2020

Latest Update on Indonesian Visas in the Time of COVID-19 - April 15, 2020

Update on Indonesian Visas in the Time of COVID-19 - April 2, 2020

Indonesian Visas in the Time of COVID-19 - March 30, 2020


Indonesia Requires Swab Tests for Foreigners Arriving at Soekarno-

Hatta Airport

By Zulfikar D. Winarno

In an effort to help restore the national economy, the Indonesian Government, through

the issuance of Director General of Immigration Letter No. IMI-UM.01.01-4047 (August

14, 2020), has relaxed the restrictions on the movement of foreigners into Indonesia,

especially for expert foreign expatriates and heads of companies for the purpose of

capital investment (hereinafter collectively referred to as “Foreigners”).

Due to the ongoing spread of COVID-19, the Government will continue to apply certain

preventive measures aimed at stopping the further spread of the virus from the entry of

such Foreigners. The Head of the Indonesian Investment Coordinating Board (Badan

Koordinasi Penanaman Modal or “BKPM”) recently issued Decree No. 185 of 2020

regarding Mitigation of the Spread of COVID-19 for Expert Foreign Expatriates and

Heads of Companies for the Purpose of Capital Investment (August 24, 2020) (“BKPM

Decree 185/2020”).

While BKPM Decree 185/2020 was enacted to mitigate the spread of COVID-19 through

the entry of Foreigners to Indonesia, it must be noted that this decree seems to be

applicable only to those Foreigners whose entry is supported by a Supporting Letter

issued by the BKPM pursuant to the procedures set forth in its Announcement No.

8/PENGUMUMAN/A.5/2020 regarding the Flow of Applications Issued to Support Visits

by Representatives of Foreign Investment Companies (PMA) and/or Expert Foreign

Expatriates during the COVID-19 Period (June 11,2020).

BKPM Decree 185/2020 was issued to ensure that Foreigners do not carry the COVID-

19 virus before allowing them to continue on to their respective work locations. The

following are the procedures stipulated under BKPM Decree 185/2020:

1. Companies that intend to bring in Foreigners must report the arrival dates of the

concerned Foreigners to the BKPM in accordance with the Supporting Letter for

the Utilization of Expert Foreign Expatriates and/or Heads of Companies.

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2. Following their arrival at Soekarno-Hatta International Airport, the Foreigners are

to immediately take a Polymerase Chain Reaction (PCR) swab test.

3. While waiting for the test results, the Foreigners shall self-isolate at a hotel pre-

determined by the BKPM.

4. Foreigners with a positive/reactive swab test will be required to undergo further

self-isolation/treatment at a hotel/hospital pre-determined by the BKPM until

subsequent testing shows a negative result.

5. Foreigners with a negative swab test will be allowed to continue on to their

respective destinations.

BKPM Decree 185/2020 does not revoke any other pre-existing policy and/or regulation.

Therefore, all other relevant obligations prior to entering Indonesia, including the

obligation to present a health certificate that is effective for seven days pursuant to

Minister of Health protocols, are still applicable despite of the swab testing requirement

under BKPM Decree 185/2020.

In addition, it remains to be seen how the above policy under BKPM Decree 185/2020

will be implemented in practice, e.g. whether the swab test at Soekarno-Hatta

International Airport is free of charge, as neither the BKPM nor any other relevant

government institution has issued further implementing guidelines. As such, this will be

subject to further confirmation by the BKPM and/or port health authorities at Soekarno-

Hatta International Airport. (August 28, 2020)

This publication is intended for informational purposes only and does not constitute legal

advice. Any reliance on the material contained herein is at the user’s own risk. All SSEK

publications are copyrighted and may not be reproduced without the express written

consent of SSEK.


Indonesian Bankruptcy and PKPU Proceedings in a Time of COVID-19

By Denny Rahmansyah and Mahareksha Singh Dillon

The COVID-19 pandemic has caused more economic harm to Indonesia than the

subprime mortgage crisis in 2008. As part of efforts to check the spread of the virus, the

Indonesian government has implemented a policy of Large-Scale Social Restrictions

(Pembatasan Sosial Berskala Besar or “PSBB”), requiring most businesses to cease or

at least pare down activities. The Indonesian Chamber of Commerce and Industry stated

on May 1, 2020, that the number of employee terminations due to the pandemic was

approximately 15 million, not the 2 million reported by the Indonesian Ministry of

Manpower and Transmigration.

To anticipate the effect of the pandemic on businesses, the government has issued

regulations to provide economic relief for businesses in need of help. Banks are urged to

provide debt relief and the Indonesian Financial Services Authority (Otoritas Jasa

Keuangan or “OJK”) has been equipped to supervise banks facing liquidity issues.

Indonesia and the New Normal

Indonesia has started the transition from the PSBB lockdowns to what is known as the

“new normal,” with businesses allowed to resume activities, on the condition that they

implement certain health and safety measures in respect of the virus.

With business resuming, parties that were in default during PSBB will now have to face

claims for payment of their obligations and debts. Banks will have to decide whether to

restructure debts and non-performing loans, and creditors may seek resolution of unpaid

debts through the available forums. Creditors ultimately may opt to pursue either

bankruptcy or suspension of debt payment obligation (Penundaan Kewajiban

Pembayaran Utang or “PKPU”) proceedings through the relevant Commercial Court for

the resolution of unpaid debts.

Bankruptcy and PKPU Proceedings

Bankruptcy and PKPU proceedings, as provided for in Law No. 37 of 2004 regarding

Bankruptcy and Suspension of Debt Payment Obligations (“Law 37/2004”), are

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preferable to creditors because such proceedings are subject to quicker examination

and adjudication than a civil lawsuit. A bankruptcy proceeding has to be resolved in 60

calendar days from the date the application is made, while a PKPU proceeding has to be

resolved at the most within 20 calendar days, depending on the applicant.

Given the statutory requirements under Law 37/2004 for the resolution of applications,

Indonesia’s five Commercial Courts, in Jakarta, Makassar, Medan, Surabaya and

Semarang, have not suspended any hearings during the PSBB. They have introduced

safety measures and have limited the number of people who can attend hearings.

Creditor meetings, which are convened after the bankruptcy or PKPU proceedings have

been granted, are also still being held, though some meetings have been moved online

using available digital meeting platforms.

After a PKPU application is granted, there is a maximum temporary PKPU period of 45

days from the date the temporary PKPU is granted. This can be extended to a

permanent PKPU, which can last a maximum 270 days from the date the temporary

PKPU is granted. During the temporary and permanent PKPU periods, the debtor can

present and negotiate a composition plan with its creditors, the success of which

determines whether the debtor goes into bankruptcy. If the creditors do not agree to the

composition plan offered by the debtor during the period of the PKPU, the court will

declare the debtor bankrupt.

Understand your Ranking

Before any creditor initiates a bankruptcy or PKPU proceeding, it is important to

understand what type of creditor you are and where you stand in terms of the pecking

order for repayment. There are three types of creditors recognized in any Indonesian

bankruptcy or PKPU proceeding, which are:

1. Preferred creditors, which have special rights conferred by law that grant these

creditors preference over other creditors;

2. Secured creditors, which hold specific security over specific assets/property from

the debtor as a guarantee for the repayment of the debtor’s debt. Secured

creditors are also known as separated creditors and they have the right to

execute the security they hold subject to Law 37/2004; and

3. Unsecured creditors, which is the category for all other creditors.


As mentioned above, preferred creditors hold preferential rights conferred by the law for

repayment in the event of the liquidation of the debtor’s assets. Unpaid salaries, taxes,

and severance pay for employees hold such preferential rights in the event a debtor is

declared bankrupt.

The right of secured creditors to execute their right over the secured property may be

suspended for a maximum of 90 days as of the bankruptcy decision. During the

suspension period, the receiver, as appointed by the court, can use or sell the

bankruptcy assets that are subject to a security interest in the framework of continuing

the debtor's business, provided the receiver has already provided sufficient protection for

the interests of the secured creditor(s). The suspension of the execution of secured

property shall legally end should the bankruptcy proceeding end earlier or at the time the

insolvency period commences.

Secured creditors whose rights have been suspended can submit a request to the

receiver for the lifting of the suspension or to change the terms of the suspension. If the

receiver rejects that request, the secured creditor can submit the same request to the

supervisory judge. The day after the supervisory judge receives the request from the

secured creditor, the supervisory judge shall order the receiver to summon the secured

creditor for a hearing and the supervisory judge will then issue a decision no later than

10 days following the hearing. The supervisory judge may decide to lift or retain the

suspension and/or confirm whether the secured creditor can execute its debt over the

bankruptcy asset.

If the debtor is then declared to be insolvent and its assets are to be liquidated, a

secured creditor has two months to execute its rights. After that period, the receiver can

request the supervisory judge to permit the assets subject to the security to be sold by

the receiver, without prejudice to the rights of the secured creditor to the sale proceeds.

The receiver will then determine the remaining assets of the debtor that will be disbursed

as repayment to the unsecured creditors after repayment to the preferred and secured

creditors.

Filing Bankruptcy or PKPU Application


The applications for a bankruptcy or PKPU proceeding are similar, depending on the

type of entity of the debtor. An application requires that the debtor have two or more

creditors, and at least one debt that is due and payable. It should be noted that Law

37/2004 requires simple substantiation of the debt being claimed, meaning that the

amount owed by the debtor shall not be subject to a complex evidentiary process.

The Indonesian Supreme Court recently issued Supreme Court Decree Number

3/KMA/SK/I/2020 regarding Guidelines for the Handling of Bankruptcy and Suspension

of Debt Payment Obligation Proceedings, dated January 14, 2020 (“Decree 3/2020”).

Decree 3/2020 provides technical and practical guidelines for the application of

bankruptcy and PKPU proceedings.

Restructuring the Obligations

We note that the number of bankruptcy and PKPU proceedings was increasing earlier

this year even before the COVID-19 outbreak. Now with more businesses in default due

to the pandemic, we can expect these proceedings to pick up again after businesses

resume activities.

Being in a bankruptcy or PKPU proceeding does not necessarily mean that the debtor

will have to be liquidated, as there are avenues for creditors to agree to the restructuring

of a debtor’s obligations. The debtor in a bankruptcy or PKPU proceeding can offer a

composition plan to its creditors, which is subject to a vote by the creditors before the

liquidation of assets is carried out. In consideration of current economic conditions,

where a debtor’s liquefied assets may yield a lower rate of return than might otherwise

be expected, creditors may be more willing to agree to a settlement on the debtor’s

obligations. This could be an opportunity for creditors to be more active in participating in

creditor meetings held as a result of a bankruptcy or PKPU decision.


advice. Any reliance on the material contained herein is at the user’s own risk. All SSEK


consent of SSEK.


Latest Update on Indonesian Visas in the Time of COVID-19

By Stephen Igor Warokka and Angky Banggaditya

As Indonesia moves into the so-called new normal phase of the COVID-19 pandemic,

the Directorate General of Immigration has introduced new procedures for the extension

of immigration permits.

In the earlier phases of the pandemic and the country’s response to COVID-19,

Indonesia introduced Emergency Stay Permits (Izin Tinggal Keadaan Terpaksa or

“ITKT”) for foreign nationals with expired immigration permits, whether they were

currently in Indonesia or outside the country. It also suspended stay permit extension

services at Indonesian immigration offices.

New procedures for immigration permit extension are now contained in Director General

of Immigration Circular Letter No. IMI-GR.01.01-1102 Year 2020 regarding Immigration

Stay Permit Services in the New Normal Order dated July 10, 2020 (“CL 1102”), as

further supplemented by Circular Letter No. IMI-GR.01.01-3558 dated July 22, 2020

(“CL 3558”). CL 1102 is effective from July 13, 2020, and supplements Circular Letter

No. IMI-GR.01.01-2325 Year 2020 and Circular Letter No. IMI-GR.01.01-2493 Year

2020. CL 3558 is effective from the date of its issuance.

Foreigners Must Extend Expired Stay Permits

CL 1102 provides that foreigners who hold an expired Limited Stay Permit (Izin Tinggal

Terbatas or “ITAS”) or Permanent Stay Permit (Izin Tinggal Tetap or “ITAP”) and/or Re-

entry Permit (Izin Masuk Kembali or “IMK”) and are overseas should return to Indonesia

to extend their stay permits at the local Immigration Office no later than 60 days as of

July 13, 2020. Failure to fulfil this requirement will result in having to apply for a new visa

before entering Indonesia.

The above also applies to foreigners who have obtained an “approval letter” from the

relevant ministry/institution, and in the context of family reunification. In practice, in

relation to expatriate employees, a valid work permit may serve as an approval letter.

Extension of Valid Immigration Permits

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Holders of a Visit Stay Permit (Izin Tinggal Kunjungan or “ITK”), ITAS or ITAP that is still

valid and who are in Indonesia may apply to extend their stay permits at the local

Immigration Office using the normal procedure under the applicable laws and

regulations.

Status of Emergency Stay Permit Holders

ITK Holders

Holders of an expired ITK who have been granted an ITKT can apply to extend their stay

permit as long as the pandemic has not been officially declared ended by a valid

authority and there are no means of transportation to leave Indonesia. Such extension

will be granted for a maximum period of 30 days for each extension and must be done

no later than 30 days as of July 13, 2020. ITK in this context includes ITK originating

from Multiple-Entry Visa and APEC Business Travel Card (ABTC).

Holders of an extended ITK may apply to convert their status to holders of ITAS after

fulfilling the requirements in the applicable laws and regulations.

ITAS and ITAP Holders

Holders of an expired ITAS or ITAP who have been granted an ITKT may apply to

extend their stay permit at the local Immigration Office. Holders of an ITAS or ITAP that

can no longer be extended or has reached its maximum period in accordance with

applicable laws and regulations may apply for a Visit Visa telex or Limited Stay Visa

(“VITAS”) telex without having to leave Indonesia. The Visit Visa telex and VITAS telex

will serve as the basis to apply for an ITK or ITAS. Foreigners who prefer to leave the

country must do so no later than 30 days as of July 22, 2020.

Visit Visa on Arrival (Visa Kunjungan Saat Kedatangan or “VKSK”) Holders

Holders of VKSK who have been granted an ITKT can extend their stay permit as long

as the pandemic has not been declared ended by the relevant authority and there are no

means of transportation to leave Indonesia. Such extension must be done no later than

30 days as of July 13, 2020, and each extension will be valid for no more than 30 days

as of the date of extension.


Visit Visa Free Facility (Bebas Visa Kunjungan or “BVK”) and Crew Visit Holders

BVK and Crew Visit holders who have been granted an ITKT may apply for a Visit Visa

telex and VITAS telex without having to leave Indonesia. The Visit Visa telex and the

VITAS telex will serve as the basis to apply for an ITK or ITAS. Otherwise, such holders

must leave Indonesia no later than 30 days as of July 13, 2020.

ITK and ITAS Holders Who Have a Telex Visa and Work Permit

ITK or ITAS holders who already have a telex visa as of December 1, 2019, and are

currently in Indonesia may apply for the issuance of their ITK and ITAS at the local

Immigration Office without leaving Indonesia and without applying to an Indonesian

Embassy overseas.

The above information is subject to clarification from the relevant institutions and to

future changes based on the situation with the COVID-19 pandemic. (July 24, 2020)


advice. Any reliance on the material contained herein is at the user’s own risk. You

should contact a lawyer in your jurisdiction if you require legal advice. All SSEK


consent of SSEK.



By Stephen Igor Warokka and Angky Banggaditya

As Indonesia moves into the so-called new normal phase of the COVID-19 pandemic,

the Directorate General of Immigration has introduced new procedures for the extension

of immigration permits.

In the earlier phases of the pandemic and the country’s response to COVID-19,

Indonesia introduced Emergency Stay Permits (Izin Tinggal Keadaan Terpaksa or

“ITKT”) for foreign nationals with expired immigration permits, whether they were

currently in Indonesia or outside the country. It also suspended stay permit extension

services at Indonesian immigration offices.

New procedures for immigration permit extension are now contained in Director General

of Immigration Circular Letter No. IMI-GR.01.01-1102 Year 2020 regarding Immigration

Stay Permit Services in the New Normal Order dated July 10, 2020 (“CL 1102”). CL

1102 is effective from July 13, 2020, and supplements Circular Letter No. IMI-GR.01.01-

2325 Year 2020 and Circular Letter No. IMI-GR.01.01-2493 Year 2020.

Foreigners Must Extend Expired Stay Permits

CL 1102 provides that foreigners who hold an expired Limited Stay Permit (Izin Tinggal

Terbatas or “ITAS”) or Permanent Stay Permit (Izin Tinggal Tetap or “ITAP”) and/or Re-

entry Permit (Izin Masuk Kembali or “IMK”) and are overseas should return to Indonesia

to extend their stay permits at the local Immigration Office no later than 60 days as of

July 10, 2020. Failure to fulfil this requirement will result in having to apply for a new visa

before entering Indonesia.

The above also applies to foreigners who have obtained an “approval letter” from the

relevant ministry/institution, and in the context of family reunification. In practice, in

relation to expatriate employees, a valid work permit may serve as an approval letter.

Extension of Valid Immigration Permits




Holders of a Visit Stay Permit (Izin Tinggal Kunjungan or “ITK”), ITAS or ITAP that is still

valid and who are in Indonesia may apply to extend their stay permits at the local

Immigration Office using the normal procedure under the applicable laws and

regulations.

Status of Emergency Stay Permit Holders

ITK Holders

Holders of an expired ITK who have been granted an ITKT can apply to extend their stay

permit as long as the pandemic has not been officially declared ended by a valid

authority and there are no means of transportation to leave Indonesia. Such extension

must be done no later than 30 days as of July 10, 2020.

ITAS and ITAP Holders

Holders of an expired ITAS or ITAP who have been granted an ITKT may apply to

extend their stay permit at the local Immigration Office. Holders of an ITAS or ITAP that

can no longer be extended or has reached its maximum period in accordance with

applicable laws and regulations must leave Indonesia no later than 30 days as of July

10, 2020.

Visit Visa on Arrival (Visa Kunjungan Saat Kedatangan or “VKSK”) Holders

Holders of VKSK who have been granted an ITKT can extend their stay permit as long

as the pandemic has not been declared ended by the relevant authority and there are no

means of transportation to leave Indonesia. Such extension must be done no later than

30 days as of July 10, 2020.

Visit Visa Free Facility (Bebas Visa Kunjungan or “BVK”) Holders

BVK holders who have been granted an ITKT must leave Indonesia no later than 30

days as of July 10, 2020.

ITK and ITAS Holders Who Have a Telex Visa and Work Permit


Holders of ITK and ITAS who already have a telex visa and are currently in Indonesia

may apply for the issuance of their ITK and ITAS at the local Immigration Office without

leaving Indonesia and without applying to an Indonesian Embassy overseas.

The above information is subject to clarification from the relevant institutions and to

future changes based on the situation with the COVID-19 pandemic. (July 16, 2020)





consent of SSEK.


New Requirements on the Movement of People in DKI Jakarta to Prevent

the Spread of COVID-19

By Sabrina Christabel M. Tobing

The Governor of DKI Jakarta has issued a new regulation to control the movement of

people into and out of DKI Jakarta province in an effort to prevent the spread of COVID-

19.

The new regulation is DKI Jakarta Regulation No. 60 of 2020 regarding Controls on

Travel in the Special Capital Region of Jakarta in an Effort to Prevent the Spread of

Corona Virus Disease 2019 (COVID-19) (June 23, 2020) (“Governor Reg. 60/2020”). It

revokes DKI Jakarta Regulation No. 47/2020 regarding Restrictions on Travel in Exiting

and/or Entering the Special Capital Region of Jakarta in the Handling of COVID-19 (May

14, 2020) (“Governor Reg. 47/2020”).

One of the highlights of the new regulation is the use of Exit/Entry Permits (Surat Izin

Keluar Masuk or “SIKM”) for persons traveling into and out of the Jakarta metropolitan

area, known as Jabodetabek. Similar to the previous regulation, Governor Reg. 60/2020

obligates every person or business that does not hold an electronic Indonesian identity

card, or e-KTP, for Jabodetabek, or in the case of foreign nationals, those without an e-

KTP/permanent stay permit/limited stay permit, to apply for an SIKM. These Exit/Entry

Permits serve as a dispensation letter to exit and/or enter DKI Jakarta province during

the stipulation of COVID-19 as a national disaster.

This article discusses the latest rules regarding procedures, supervision and sanctions

relating to SIKM.

Procedure to Obtain SIKM

Under the previous regulation, Governor Reg. 47/2020, applicants for an SIKM were

required to submit a set of documents, including letters of guarantee/statement from

family members, companies or workplaces in DKI Jakarta, depending on the applicant’s

intention in entering DKI Jakarta’s territory. Now, under Governor Reg. 60/2020,

applicants are required to upload the following documents to the corona.jakarta.go.id

website:

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e-KTP/permanent stay permit/limited stay permit;

photo of the applicant; and

Corona Likelihood Metric (“CLM”) result showing the holder is safe to travel or a

negative Reverse Transcription Polymerase Chain Reaction test result. Governor

Reg. 60/2020 defines CLM as a type of health screening using information

technology to assess the risk of someone being infected with COVID-19.

The previous regulation, Governor Reg. 47/2020, differentiated between two types of

SIKM, i.e. (i) repetitive travel SIKM and (ii) one-time travel SIKM. This new regulation no

longer provides such differentiation. Governor Reg. 60/2020 provides that an SIKM will

be valid as long as the holder’s CLM is still applicable. (A CLM is valid for seven days.)

Once a CLM is no longer valid, pass the seven-day window, the SIKM will be invalid and

can only be reactivated if the SIKM holder renews the CLM through the

corona.jakarta.go.id website.

A collective SIKM application can be submitted for state agencies, government

institutions, the Indonesian Armed Forces (“TNI”), the police, private institutions and

agencies, and international institutions and agencies. However, each person covered by

the collective application must provide the above documents. Once the application is

deemed complete, the Capital Investment and One-Stop Integrated Services Office

(“DPM and PTSP”) will issue the SIKM electronically using a QR code within one

working day. Additionally, consistent with the previous regulation, Governor Reg.

60/2020 provides that children who do not yet have a KTP will follow the SIKM of a

parent or family member.

Supervision and Enforcement of SIKM

Governor Reg. 60/2020 introduces a new set of obligations for public order officers,

known as Satpol PP, organizers/managers of places/activities, and Community Unit

COVID-19 Task Forces, giving them a role in SIKM screening at their respective

checkpoints, as follows:


Authority Checkpoints

Satpol PP, as accompanied by members

of the Transportation Service Office and

Health Service Office (they may also be

accompanied by the police and TNI)

a. Access roads into/out of DKI Jakarta

province, both highways or non-

highways;

b. Passenger bus terminals;

c. Entrances/exits at stations for intercity

trains;

d. Entrances/exits at airport passenger

terminals;

e. Entrances/exits at port passenger

terminals.

Organizers/Managers of activities and/or

places

a. Schools and/or educational

institutions;

b. Workplaces/offices;

c. Trade centers, shopping centers,

markets, entertainment places, hotels;

d. Public places/facilities, including parks

and social and cultural centers;

e. Public transportation facilities.

Community Unit COVID-19 Task Forces Their respective Community Units

An organizer/manager found to have not conducted SIKM screening at their checkpoint

is subject to administrative sanctions in the form of a written warning from Satpol PP. If

the violation occurs again, the DPM and PTSP, with a recommendation from Satpol PP,

may impose a sanction in the form of revoking their business/activity license.

Any person who is found to have entered DKI Jakarta, used public facilities or engaged

in public activities without a required SIKM shall be subject to the following measures:

a. Required to complete and submit an SIKM application and CLM through the

corona.jakarta/go.id website.

b. If the CLM finds it is not safe for the applicant to travel, that person will be

advised to return to their residence/place of origin.


c. Alternatively, Satpol PP and the relevant Community Unit COVID-19 Task Force

have the authority to instruct the person to (i) self-isolate in their residence for 14

days or (ii) self-quarantine in a location designated by the Covid-19 Task Force

for 14 days, with all expenses covered by the person in question.

Transitional Period and Sanctions

All SIKM issued prior to the issuance of Governor Reg. 60/2020 remain applicable,

provided the holder has completed a CLM as required under the current regulation. Any

person who has violated their obligation relating to the information provided in their SIKM

and CLM will be subject to criminal sanctions under the applicable provisions of laws

and regulations.

For clarity, Governor Reg. 60/2020 declares that all SIKM-related policies issued by the

provincial level COVID-19 Task Force prior to this regulation are deemed as revoked

and inapplicable. (June 30, 2020)





consent of SSEK.


Indonesia and the ‘New Normal’: Latest Transportation Control

Regulation


As part of the COVID-19 transitional period in Indonesia known as the “new normal,” the

Minister of Transportation (“MOT”) has enacted MOT Regulation No. 41 of 2020

regarding the Amendment of MOT Regulation No. 18 regarding Transportation Control

for the Purpose of Preventing the Spread of Corona Disease 2019 (“COVID-19”) (“MOT

Reg 18/2020, as amended”). This new regulation provides further provisions on controls

for (i) land, (ii) sea, (iii) air and (iv) rail transportation. It also contains administrative

sanctions for violations.

Generally, the MOT prohibits the transportation of passengers who are unhealthy/have a

temperature above 38 degrees Celsius, and requires transported goods to be sanitized

before and after their arrival. Both regulations stipulate basic obligations during COVID-

19. These obligations include the wearing of face masks by passengers/personnel, the

implementation of physical distancing, the periodic disinfection of vehicles, stations,

ports, terminals, etc., the provision of handwashing facilities/hand sanitizers, and

adequate medical screening at transportation facilities.

This article discusses the specific transportation control obligations and administrative

sanctions under MOT Reg 18/2020, as amended.

Transportation Control for Passengers and Transportation Operators

Parties subject to transportation controls are (i) passengers, (ii) operators of

transportation facilities for passengers/goods, (iii) operators of transportation

infrastructure, (iv) operational managers for the transportation of goods, and (iii) the

senders/recipients of goods.

In transporting passengers, the MOT requires passengers and operators of

transportation facilities to prioritize the online purchase/sale of tickets. If a passenger is

found to be unhealthy or has a fever, particularly if they show symptoms consistent with

COVID-19, they will be removed from the vehicle/vessel and referred to a health facility

for screening.



For the transportation of goods, the operational manager shall ensure that the vehicle

used is equipped with a special sticker to indicate the vehicle is transporting logistical

goods.

In areas of Indonesia under social distancing restrictions (“PSBB”), controls on the

transportation of goods are waived for essential goods such as:

Medical, health and sanitation necessities;

Primary goods;

Food and drinks;

Oil/gas fuel;

Raw materials for manufacturing and assembling industries; and

Necessities for export or import.

Operators of transportation facilities must monitor the health of their personnel and

require that they report any changes in their health. To maintain the health of personnel,

rest areas shall be set aside in transportation facilities.

Transportation operators must also take steps to prepare for emergency medical

situations when conducting transportation activities. For the transportation of

passengers, transportation facilities must provide health posts (with medical personnel)

in coordination with a COVID-19 referral hospital. For the transportation of goods, the

operators of transportation facilities and operational managers must prepare emergency

contacts in all regions along the transportation route to anticipate any emergency

situation.

Controls for Land, Rail, Sea and Air Transportation

1. Land Transportation Controls

In addition to limiting the number of passengers to 50% of the vehicle’s total capacity,

operational hours for public motorized vehicles may be limited by an official with the

authority to make such decision. For river, lake and water crossing transportation, the

operational hours of ports shall be limited and adjusted to ships’ schedules.


The MOT specifies that buses shall only transport passengers to places that are

permitted under the applicable provisions of laws and regulations. In addition, the

number of stops a bus is allowed before the destination terminal is limited to one stop,

for a maximum of 30 minutes, for distances of less than 500 kilometers. Buses can have

additional stops for distances of more than 500 kilometers.

In addition to the basic obligations for transportation activities during COVID-19,

motorbikes used for either personal or public transportation are permitted to carry

passengers only if they comply with specific health protocols, which include only carrying

out activities that are permitted during PSBB.

2. Rail Transportation Controls

Intercity trains (except for luxury trains), urban trains, local trains, prambanan express

trains, and airport rail links shall limit the number of passengers to 50% of the train’s total

number of seats. Physical distancing must be implemented in accordance with the

seating configuration and no standing passengers are allowed.

3. Sea Transportation Controls

Passenger ships, including those carrying economy-class passengers and pioneer

transport ships that serve the public interest, shall limit the number of passengers to

50% of the ship’s total capacity of seats or beds and implement physical distancing.

Ships are permitted to transport goods and materials needed for the handling and

prevention of COVID-19, as well as materials for primary needs and essential goods.

A passenger ship can transport cargo under the following conditions:

There is a shortage of cargo ships in a PSBB area necessitating the use of a

passenger ship to transport goods.

Passenger ship is used to transport goods/materials for the handling and

prevention of COVID-19, or materials for primary needs or essential goods.

The transportation of cargo on a passenger ship shall take into account the safety

and capabilities of the ship.


Port operations are permitted as follows:

Activities such as ship operation, stevedoring, cargodoring and delivery are

permitted with the implementation of physical distancing.

If the number of officials, workers and visitors is limited and physical distancing is

implemented.

For the loading and unloading of export/import goods, goods for primary needs

and essential goods.

For the loading and unloading of logistical support for the handling and

prevention of COVID-19.

4. Air Transportation Controls

Air transportation operators shall evaluate and adjust the slot-time capacity for airports

and limit the number of passengers to 50% of the air transportation’s total capacity

Air transportation passengers must submit a Health Alert Card (“HAC”) when arriving at

their destination. Operators of air transportation facilities must take steps to remind

passengers of the HAC requirement. In the event of a health emergency, air

transportation operators shall coordinate with the COVID-19 crisis center or air traffic

controller at the destination airport.

Similar to sea transportation, a configured passenger plane may be used to carry cargo

in the passenger compartment provided it is for the transportation of medical, health

and/or sanitation necessities, or foodstuffs.

Exemptions and Administrative Sanctions

Land, rail, sea and air transportation facilities are exempted from transportation controls

for:

Visits by the head of a high institution in Indonesia or state visits by foreign

dignitaries.

Operations of the Indonesian government, army or national police.

Operations by foreign embassies, consulates general and foreign consulates,

along with the representative of an international organization in Indonesia.

Operations by law enforcers and emergency services.


Violations of the transportation controls are subject to administrative sanctions in the

form of (i) warning letter, (ii) suspension of license, (iii) revocation of license and/or (iv)

administrative fine. Sanctions will be imposed in accordance with the provisions of laws

and regulations. (June 27, 2020)





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COVID-19: KPPU and OJK Address Mergers Between Problematic Banks

in Indonesia

By Ira A. Eddymurthy and Indrawan D. Yuriutomo

In response to the COVID-19 pandemic and its possible effect on the banking and

financial sectors, Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or

“OJK”) has issued a regulation to encourage mergers between problematic banks.

OJK Regulation No. 18/POJK/03/2020 regarding Written Order to Handle Problematic

Banks ("POJK 18/2020") is an implementing regulation for Article 23 of Government

Regulation in Lieu of Law No. 1/2020, which authorizes the OJK to issue a written order

to financial services providers to conduct a merger, consolidation, acquisition, integration

and/or conversion. Please see our earlier discussion of this matter here.

Indonesia’s Business Competition Supervisory Commission (Komisi Pengawas

Persaingan Usaha or “KPPU”), which oversees mergers in Indonesia, on June 5, 2020,

issued a press release on POJK 18/2020 (“KPPU Press Release”). In its release, the

KPPU requested that the OJK remind all banks of the obligation to notify the KPPU of a

merger, consolidation or acquisition when submitting its written order to the banks.

According to the KPPU Press Release, notification to the KPPU during the COVID-19

pandemic is continuing as usual, even though most KPPU employees are working from

home. It noted that between March 2020 and June 5, 2020, the KPPU had received 56

notifications of various types of transactions including mergers, share acquisitions, and

transfers of productive assets. This indicates that the KPPU notification process has not

been hampered by the pandemic.

It is important to note that the KPPU must be notified in writing of a merger and/or

consolidation of business entities or the acquisition of the shares of other companies

with an asset value and/or sale value exceeding a certain threshold. Written notification

must be given no later than 30 business days from the date on which the merger and/or

consolidation of business entities or the share acquisition takes legal effect. The

notification thresholds as intended above are:

1. asset value of at least IDR2.5 trillion; and/or

2. sale value of at least IDR5 trillion.

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For business entities in the banking sector, the obligation to provide written notice to the

KPPU shall be applicable in the event that the asset value exceeds IDR20 trillion. (June

24, 2020)





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BKPM Rule Expands the Number of Expats Who Can Apply for

Indonesian Work Permits During COVID-19

By Stephen Igor Warokka and Kevin Bonaparte Christopher

The Indonesian Capital Investment Coordinating Board ("BKPM") has issued rules that

will allow more foreign nationals to apply for work permits during the COVID-19

pandemic. The new rules are contained in BKPM announcement No.

8/PENGUMUMAN/A.5/2020 dated June 11, 2020, regarding the procedures to apply for

a support letter from the BKPM (“BKPM Support Letter”) in relation to the entrance of

expatriates into Indonesia during the pandemic (the “BKPM Announcement”).

Previously, following the issuance of Minister of Manpower Circular Letter No.

M/4/HK.04/IV/2020 dated April 8, 2020, only companies working on strategic national

projects or expatriates already holding Stay Permits and already in Indonesia could

apply for work permits during the COVID-19 emergency. Now, with the issuance of the

BKPM Announcement, companies other than those working on strategic national

projects may apply for work permits for their expatriate employees if they can provide the

required supporting documents.

A hard copy of the application letter for the BKPM Support Letter must be delivered to

the BKPM administration office (Tata Usaha BKPM). The application letter, addressed to

the Head of the BKPM, must contain the following:

1. Signature of the applicant company’s top executive (president

director/director/CEO);

2. Cellular phone number of the person in charge of the application;

3. The purpose of bringing in the relevant expatriate;

4. The value of the applicant company’s total investment in Indonesia and project

locations;

5. Hiring plan for Indonesian workers;

6. The relevant expatriate worker’s name, passport number, citizenship, job title;

and

7. Statement of willingness to comply with COVID-19 health protocols.



The BKPM will return the application letter to the applicant if any of the required

information is missing. If the application is approved, the BKPM will convey the Support

Letter to the relevant institutions, such as the Ministry of Manpower and the Directorate

General of Immigration, and the applicant can collect a hard copy of the Support Letter

at the BKPM administration office.

The BKPM Announcement does not provide how long it will take the BKPM to review an

application and issue the Support Letter. In practice, it could take about five business

days, depending on the number of applications being handled by the BKPM. (June 22,

2020)





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COVID-19 and the Protection of Highest-Risk Employees in Indonesia

By Indrawan D. Yuriutomo

After a significant number of employees in Indonesia were infected with COVID-19 in

their workplaces, the Ministry of Manpower has taken steps to improve protections for

workers.

On May 28, 2020, the Indonesian Ministry of Manpower issued Circular Letter No.

M/8/HK.04/V/2020 regarding the Protection of Employees Against Corona Virus Disease

2019 (COVID-19) through the Work Accident Social Security Program (“MOM Circular

Letter”). The ministry issued this circular letter to all governors in Indonesia to ensure

that high-risk employees receive work-related accident insurance (jaminan kecelakaan

kerja or “JKK”) coverage under the BPJS Employment national social security program.

The MOM Circular Letter categorizes employees at high risk of contracting COVID-19 as

those involved in caring for patients in hospitals, health facilities or other places

designated by the government to treat COVID-19 patients. Such employees include:

medical personnel and health personnel;

support personnel such as cleaning staff, laundry workers and other employees

who face risks; and

volunteers.

The MOM Circular Letter expects all governors in Indonesia to take the following steps:

1. Ensure that every employer takes preventive measures according to the

applicable rules, regulations and health protocols.

2. Ensure that every company/organization whose workers face a heightened risk of

contracting COVID-19 register their employees with BPJS Employment.

3. Ensure medical and health personnel, support personnel (cleaning staff, laundry

workers and other employees who face risks), and volunteers receive work-

related accident insurance benefits according to the applicable rules and

regulations.

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4. If the employer has not registered workers in the JKK program under BPJS

Employment, the employer must then provide JKK benefits in accordance with

the applicable rules and regulations for any employee who contracts COVID-19.

5. Instruct the heads of local manpower service offices to conduct inspections of

relevant workplaces.

While the intention of the circular letter is to ensure high-risk employees receive

coverage for COVID-19 under JKK, it remains to be seen how governors in Indonesia

will actually implement the provisions of MOM Circular Letter. (June 16, 2020)





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Jakarta Eases Restrictions as It Transitions from Response to Recovery

By Syarifah Reihana Fakhry

In response to the COVID-19 pandemic, Jakarta has been implementing Large-Scale

Social Restrictions (“PSBB”) since April. Schools, offices and public facilities have been

closed. Jakarta Governor Anies Baswedan recently extended PSBB in the province, but

said this would be a transition period toward recovery and a healthy, safe and productive

return to public activities.

During this transition period, Jakarta will ease restrictions put in place under PSBB and

allow activities to resume according to specific guidelines and health protocols.

What does this mean?

In the first phase of this transition, Jakarta will allow offices, shops, restaurants,

businesses and places of worship to gradually begin to reopen at 50% capacity.

At the end of June, officials will evaluate this first phase of the transition period and

determine whether public places included in the second phase, such as schools, salons

and cinemas, may reopen.

How will transmission of the virus be mitigated?

In an effort to maintain public health and safety and mitigate further transmission of the

virus, the governor has issued Governor Regulation No. 51 Year 2020 regarding the

Implementation of Large-Scale Social Restrictions during the Transition Period to a

Healthy, Safe and Productive Public (“Regulation”).

The Regulation calls for the implementation of a Clean and Healthy Lifestyle (“PHBS”)

by all communities and residents. It also outlines the measures that will be taken by the

government to improve public healthcare and implement strict controls for the

supervision and application of health protocols in public areas.

Clean and Healthy Lifestyle (PHBS)

To implement PHBS, residents are asked to follow these guidelines in their daily lives:

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a. Limit activities outside their home to important or urgent matters.

b. Maintain health and refrain from going outside when feeling unwell.

c. Refrain from going outside if at high risk of contracting the virus.

d. Maintain physical distancing with others.

e. Avoid crowds.

f. Avoid the communal use of personal objects.

g. Exercise regularly.

h. Regularly wash hands with clean water and soap.

i. Consume healthy and nutritious food.

Health Protocols

The Regulation also provides guidelines and health protocols to be followed by persons

in charge of public areas such as schools, places of worship, workplaces and public

facilities. They are obliged to provide the infrastructure and facilities to support PHBS

and the fight against COVID-19, and educate the general public about the PSHB policy.

They must also implement the following health protocols and provide sufficient

supervision to ensure the protocols are enforced:

a. Places shall only be opened at half capacity.

b. Masks are worn.

c. Body temperatures are screened before entry.

d. The area is regularly cleaned and disinfected.

e. Handwashing stations and sanitizers are provided for routine handwashing.

f. Physical distancing of at least one meter between persons.

g. Protocols to fight COVID-19 are prepared and implemented.

Workplace Health Protocols

Workplaces may resume activities during the transition period. The protocols for

workplaces are provided in the Regulation and the Head of the Manpower,

Transmigration and Energy Office of DKI Jakarta Decree No. 1363 Year 2020 regarding

COVID-19 Prevention and Control Protocols for Offices/Workplaces During the

Transition to a Healthy and Productive Community.

In resuming activities in workplaces, companies must take the following measures:


a. Appoint a COVID 19 Task Force.

b. Limit the number of workers inside the workplace to 50% of normal.

c. Arrange work days, hours, shifts and systems accordingly with point b above.

d. Ensure all workers always wear masks and other protective devices.

e. Ensure the entire workplace is hygienic and regularly disinfected.

f. Institute temperature screening for anyone wishing to enter the workplace.

g. Provide hand sanitizers and handwashing stations.

h. Management may not terminate workers who test positive for COVID-19 and/or

are self-isolating for health reasons.

i. Ensure that workers who enter the workplace have not contracted the virus.

j. Maintain physical distancing of at least one meter between workers.

k. Avoid activities that can create overcrowding.

l. Proactively monitor the health of workers.

m. Ensure that all workers complete a COVID-19 Risk Self-Assessment Form one

day before re-entering the workplace. All visitors and guests must also complete

a form before being allowed to enter the workplace.

n. Prioritize the use of technology to minimize physical interactions between

workers.

o. Encourage workers to use private vehicles to and from the office (including

walking and cycling) and provide supporting facilities for those cycling to work

such as a bicycle parking places and showers.

p. Install devices such as dividers/glass screens for workers who serve customers

to prevent transmission of the virus.

q. Provide a separate area/room to observe workers/visitors who show symptoms of

COVID-19.

r. Ensure management stays updated on the information, regulations and

instructions concerning COVID-19 in their area.

s. Implement COVID-19 prevention protocol in the workplace and report this

implementation by following the instructions at this website: bit.ly/bekerja-

kembali.

t. Prepare integrity pacts and protocols to prevent the transmission of COVID-19.


Sanctions

Parties who violate the Regulation will be subject to the following sanctions:

Violation Sanction

Residents who are caught not wearing a

mask outside of their home

a. Community service in the form of

cleaning public facilities while wearing

a vest; or

b. Administrative fine of up to IDR

250,000

Persons in charge of schools and houses

of worship who violate the health

protocols in their area

Written warning

Persons in charge of workplaces a. Written warning; or

b. Administrative fine of up to IDR 25

million

Persons in charge of public places /

facilities

a. Written warning; or


million

Persons in charge of social and cultural

activities

a. Written warning; or


million

Mobility of Vehicles

During the transition period, private vehicles, including cars and motorcycles, shall

adhere to the odd-even license plate policy. Public transportation may continue to

operate at 50% capacity with limited operational hours. Both private and public

transportation shall implement the proper health protocols.

Off-street parking control shall be maintained to prioritize space on the road for

pedestrians and cyclers.

Further provisions regarding transportation will be regulated in decrees issued by the

Head of the Jakarta Transportation Agency.


Supervision and Enforcement

Public order officers (“SATPOL PP”), with assistance from the relevant regional

apparatus, which may include the police and/or military, will supervise and enforce the

provisions of the Regulation, including the imposition of sanctions for violations.

Violations related to vehicles/transportation will be sanctioned by the Transportation

Agency, with assistance from the relevant regional apparatus, which may include the

police and/or military.

The Manpower and Transmigration Agency will supervise workplaces and their

implementation of the provisions of the Regulation and issue sanctions for any

violations, with assistance from the relevant regional apparatus, which may include the

police and/or military.

Emergency Brake Policy

During the transition period, an emergency brake policy will be put in place. If the

resumption of the above activities results in increased infection rates and a surge of

COVID-19 cases, the transition period may be temporarily halted and social distancing

restrictions put back in place.

If that occurs, the government will conduct strict monitoring and control at the local level,

which includes COVID-19 screenings, mapping of area with high incidence rates, tracing

of anyone who came in contact with infected parties, distribution of food to poor and

affected families, and social sanctions for residents who violate the self-quarantine

protocols. (June 11, 2020)





consent of SSEK.


Impact of COVID-19 Pandemic on Indonesian Oil and Gas Upstream

Activities

By Fitriana Mahiddin and Revaldi N. Wirabuana

Indonesia is one of the many countries experiencing major changes to their social and

economic structures due to the COVID-19 pandemic. People have been forced to

aggressively minimize social interactions in an attempt to prevent the spread of the virus.

Inevitably, these measures will have a major impact on various business sectors.

One of the sectors in Indonesia that has been forced to adapt to this unique situation is

the oil and gas sector. Indonesia is home to numerous oil and gas fields and upstream

oil and gas activities are integral to the country’s economic growth. Below are the key

regulatory changes in response to the COVID-19 pandemic affecting Indonesia’s oil and

gas sector.

Central Government Regulations

Health quarantines and other measures available to the government to address

pandemics or other national health emergencies are regulated under Law No. 6 of 2018

regarding Health Quarantine (“Health Quarantine Law”). Article 59 of the Health

Quarantine Law provides that in the event of a national health emergency, the

government may enact large-scale social distancing policies, including the closure of

workplaces.

In response to COVID-19, the Government of Indonesia enacted Presidential Decree

No. 7 of 2020 regarding the COVID-19 Mitigation Acceleration Task Force (“PD 7/2020”)

and Government Regulation No. 21 of 2020 regarding Large-Scale Social Distancing to

Accelerate the Response to COVID-19 (“GR 21/2020”), both of which help implement

the Health Quarantine Law. Article 4 of GR 21/2020 provides that in response to COVID-

19, regional governments may implement large-scale social distancing, which includes

the closure of schools and workplaces and restrictions on religious activities and other

activities in public places/facilities. However, these restrictions must take into account

the fulfillment of the basic needs of residents, including but not limited to health services,

food and drink, and other daily requirements.

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Subsequently, the Minister of Health (“MOH”) enacted MOH Regulation No. 9 of 2020

regarding Large-Scale Social Distancing to Accelerate the Response to COVID-19

(“MOH Reg 9/2020”) to provide further details on the implementation of large-scale

social distancing measures. Section D.2(b) of the Annex to MOH Reg 9/2020 exempts

several businesses/institutions providing essential goods and/or services from closure

under the large-scale social distancing programs. In particular, Section D.2(b)(3)(c) of

the Annex to MOH Reg 9/2020 provides that the production of oil and gas, coal and

minerals are among those businesses exempted from workplace closures under social

distancing restrictions.

Based on the above, oil and gas upstream activities are allowed to continue during the

COVID-19 pandemic.

Oil and Gas Upstream Activities

Indonesian upstream oil and gas activities fall under the jurisdiction of the Special Task

Force for Upstream Oil and Gas Business Activities (Satuan Kerja Khusus Pelaksana

Kegiatan Usaha Hulu Minyak dan Gas Bumi or “SKK Migas”). SKK Migas issued a

circular letter immediately following the enactment of PD 7/2020 to suggest that

Production Sharing Contract Contractors (“PSC Contractors”) continue production,

taking the necessary precautions and putting in place risk management measures for

workers and surrounding communities.

Work from home arrangements are allowed for upstream oil and gas workers outside of

oil fields, as long as such arrangements do not interfere with production. PSC

Contractors are advised to take precautionary measures such as avoiding activities

involving the gathering or large numbers of people, limiting and postponing all in-person

meetings/gatherings, checking the temperature of all visitors, reporting all people under

COVID-19 surveillance to the local public health office, and following all procedures and

policies implemented by public officials.

PSC Contractors are also encouraged to consider temporarily changing work schedules

at oil and gas fields to 21:21 (21 working days followed by 21 rest days) or 28:28 (28

working days followed by 28 rest days), or some similar schedule according to the

operational condition of the field. This is in order to give workers sufficient opportunity to

self-quarantine. All changes to work schedules must be reported to SKK Migas.


Lastly, PSC Contractors are expected to coordinate with SKK Migas to communicate

with the head of the relevant regional government (regent, mayor or governor) with

regard to the importance of oil and gas production, and the urgency of the regional

government providing support to facilitate production.

New Normal

The Government of Indonesia recently began the process of removing social distancing

restrictions, subject to various health protocols. This process of moving past social

distancing and returning to workplaces, schools and public activities is referred to as the

“new normal”. This process and the associated health protocols are found in MOH

Decree No. HK.01.07/MENKES/328/2020 regarding Guidelines for the Prevention and

Control of COVID-19 in the Office and Industrial Workplaces to Ensure Business

Continuity during Pandemic Situation (“MOH Decree 328/2020”). It appears the

government of Indonesia hopes the “new normal” can revitalize business activity while

maintaining some control over the pandemic.

As of this writing, neither the Minister of Energy and Mineral Resources nor SKK Migas

has issued a regulation to supplement MOH Decree 328/2020 for the upstream oil and

gas sector. We understand from various news sources that SKK Migas intends for PSC

Contractors to refer to the existing guidelines under MOH Decree 328/2020 in preparing

their own internal workplace guidelines for the “new normal”.

Conclusion

It appears that the Government of Indonesia is keen to maintain the continuity of

upstream oil and gas activities in the country. Not only is the sector exempted from

large-scale social distancing restrictions, SKK Migas has been willing to assist PSC

Contractors in communicating with regional governments on the importance of

maintaining oil and production activities. It also appears that PSC Contractors are

expected to follow existing guidelines for the “new normal” being implemented in

Indonesia. Note, however, that the government’s position on oil and gas production may

still change depending on the success of the new normal and how the COVID-19

pandemic develops in Indonesia. (June 9, 2020)






consent of SSEK.


New Normal: Indonesian Trade and Religious Ministries Issue Health

Protocols for COVID-19 Pandemic


DKI Jakarta Governor Anies Baswedan has announced that his administration will slowly

begin to lift the strict COVID-19 quarantine measures implemented in the province. June,

the governor said, will be a transition period as DKI Jakarta begins to enter the “new

normal”.

During this transition period, offices, restaurants, shops, factories, businesses and public

facilities such as places of worship will be allowed to open at up to half capacity

beginning the second week of June. Non-food businesses and shopping centers will be

allowed to open starting the third week of June. Other facilities such as parks, museums

and libraries will also slowly begin to reopen during the month.

With COVID-19 infection and death rates still rising, there is concern about the

consequences of easing social distancing restrictions. Is Indonesia ready to usher in the

new normal?

The Health Ministry, Trade Ministry and Religious Affairs Ministry have separately issued

policies to try and address these concerns. They have established health protocols for

workplaces, markets, shopping malls and places of worship to try and mitigate

transmission of the virus once they have reopened.

In this article, we will take a closer look at the policies issued by the Trade Ministry to

restore economic activities and the guidelines issued by the Religious Affairs Ministry to

facilitate religious activities.

Restoring Trade Activities

To help ensure that goods and services continue to be distributed and available to the

public during the pandemic, the Trade Ministry issued Circular Letter No. 12/2020 on

Restoring Trade Activities During COVID-19 and the New Normal. It lays

out guidelines and protocols required for centers of trade such as traditional markets,

convenience stores, restaurants, pharmacies, malls, salons and recreation sites such as



zoos, museums and galleries that plan to reopen once social distancing restrictions have

been eased or lifted.

I. Protocols

The operators of these locations must ensure that all of their merchants, managers,

clerks, waiters and other workers/support staff have taken a COVID-19 rapid test or

polymerase chain reaction (“PCR”) test and that their result was negative. While

working, they must wear masks, face shields and gloves, and maintain a distance of at

least 1.5 meters from each other. All workers must have their temperature taken daily

and they will only be allowed to enter the location if their temperature is below 37.3

degrees Celsius.

Visitors are also required to wear masks, maintain physical distancing of at least 1.5

meters and have their temperatures checked upon entering. The new protocols and

guidelines also set limits on the number of people allowed in retail locations and public

facilities at one time. Traditional markets are limited to 30% of normal capacity, 35% for

shopping malls, 40% for convenience stores and restaurants, and 50% for other

recreation sites. There also will be a limit on how long visitors are allowed inside. Once

their time inside has lapsed, another batch of visitors will be allowed inside. Visitors

waiting to be allowed inside shall queue outside while maintaining physical distancing of

at least 1.5 meters.

To ensure adherence and prevent crowding, the protocols require strict controls be put

in place at entry and exit points. People with respiratory symptoms such as coughing will

be prohibited from entering.

Retail areas and other public facilities will be required to maintain cleanliness and shall

be disinfected regularly/every two days, and handwashing stations with soap and hand

sanitizers must be provided.

Restaurants are encouraged to sell healthy foods and convenience stores shall prioritize

online orders and non-cash payments.


II. Reporting, Supervision and Sanctions

The management of these centers of trade must regularly report on their implementation

of the above protocols to the Head of the Local COVID-19 Task Force (Kepala Gugus

Tugas COVID-19 Setempat), copied to the local Trade Sector Office (Dinas

Perdagangan).

A joint team consisting of members of the regional government and associations will

oversee the dissemination of information on and the supervision and enforcement of the

protocols. The Circular Letter does not clarify to which associations it is referring.

Guards and inspection points shall be placed at all entry and exit points of the trading

locations.

All violations of the protocols shall be subject to sanctions in accordance with the

prevailing laws and regulations.

During the implementation of Limitations on Large-Scale Social Interactions

(Pembatasan Sosial Berskala Besar or “PSBB”) in Jakarta, sanctions for violations of

PSBB restrictions are regulated under Governor of DKI Jakarta Regulation No. 41 Year

2020 (“Regulation 41”). Article 7 paragraph 1 of Regulation 41 provides that restaurants

operating during PSBB that do not follow proper protocols to mitigate the transmission of

COVID-19 are subject to administrative sanctions in the form of temporary closure and

administrative fines of Rp 5 million to Rp 10 million.

Sanctions for failure to abide by proper protocols after PSBB has been lifted have not

been regulated.

Religious Activities in Places of Worship

The Ministry of Religious Affairs has issued Circular Letter No. 15 Year 2020, which

provides the health protocols necessary to reopen places of worship.

Places of worship that may be reopened to the public are those located in areas deemed

to have little risk of transmission of COVID-19. These places of worship will be given a

certificate/statement letter from the Head of the Local COVID-19 Task Force.


The management of places of worship may submit an application to the task force to

obtain certification. Large places of worship with sizeable congregations can apply

directly to the head of their region for a certificate.

The certificate/statement letter will be revoked if a case of COVID-19 infection arises in

the neighborhood around the place of worship or if the place of worship fails to abide by

the requirements established in the health protocols.

These protocols include obligations for the management or person in charge of the place

of worship and visitors/congregation members.

Management/person in charge of a place of worship shall:

a. Appoint a person to supervise the implementation of the health protocols in the

place of worship.

b. Perform regular cleaning and disinfecting of the place of worship.

c. Limit the number of entry and exit points to make it easier to supervise the

implementation of the health protocols.

d. Provide handwashing facilities at entrances and exits.

e. Provide temperature checkpoints. Visitors with a temperate above 37.5 degrees

Celsius (after two tries within five minutes) shall be prohibited from entering.

f. Implement physical distancing of at least one meter by marking the floor or

chairs.

g. Limit the number of visitors/worshipers inside the place of worship to ensure they

maintain proper physical distance.

h. Shorten the time of worship/religious activity without impacting proper ceremonial

etiquette.

i. Install signs to remind visitors/worshipers of the health protocols inside the place

of worship.

j. Prepare a letter indicating preparedness to implement the health protocols.

k. Ensure that visitors/worshipers follow the health protocols.

Visitors and congregation members must participate in the implementation of the health

protocols in places of worship. They must be healthy, ensure the place of worship they

are in has obtained the proper certification, wear a mask upon leaving their house and

while inside the place of worship, maintain cleanliness, avoid physical contact and


maintain physical distancing of at least one meter. They must avoid lingering and

gathering in the place of worship, and prohibit vulnerable children, the elderly and those

with underlying illnesses from entering as they are at greater risk from COVID-19.

Places of worship may host ceremonies such as marriages, but measures must be taken

to ensure the ceremony is conducted quickly and that the number of guests/attendees is

no more than 20% of the room capacity and does not exceed 30 people. Everyone

attending a ceremony in a place of worship must be healthy and free from COVID-19.

Failure to abide by the above protocols may result in the revocation of the certification

allowing the place of worship to open. (June 5, 2020)





consent of SSEK.


DKI Jakarta Regulates Sanctions and Travel Restrictions for Handling

COVID-19


On May 19, 2020, DKI Jakarta Governor Anies Baswedan announced that the province’s

implementation of Large-Scale Social Restrictions (Pembatasan Sosial Berskala

Besar or “PSBB”) was extended from May 22 to June 4, 2020, under Governor of DKI

Jakarta Decree No. 489 of 2020 regarding Extension of the Enforcement of the

Implementation of Large-Scale Social Restrictions in Handling the Coronavirus Disease

or COVID-19.

For this second extension of DKI Jakarta’s PSBB it is important to note that the

Governor introduced sanctions for violations of social distancing rules. These sanctions

are under Governor of DKI Jakarta Regulation No. 41 of 2020 regarding the Imposition

of Sanctions for Violations of the Implementation of Large-Scale Social Restrictions in

Handling COVID-19 in the Special Capital Region of Jakarta Province (“Governor Reg.

41/2020”).

Anies also issued Governor of DKI Jakarta Regulation No. 47 of 2020 regarding

Restrictions on Travel in Exiting and/or Entering the Special Capital Region of Jakarta

Province in the Handling of COVID-19 (“Governor Reg. 47/2020”). This regulation

provides mechanisms for travel in DKI Jakarta during the stipulation of the non-natural

disaster of COVID-19 as a national disaster.

This article discusses the measures and administrative sanctions provided under

Governor Reg. 41/2020 and the travel restrictions under Governor Reg. 47/2020.

I. Sanctions for Violating PSBB in DKI Jakarta

1. Sanctions for not Wearing a Mask Outside the House or Carrying Out

Activities in Public Places

Under Governor Reg. 41/2020, anyone who violates the obligation to wear a mask

outside of the house or the obligation to limit activities in public places to a

maximum of five people is subject to administrative sanctions. These sanctions are



(i) administrative written warning; (ii) being required to clean public facilities while

wearing a vest; and (iii) administrative fines between Rp100,000 and Rp 250,000.

Sanctions will be imposed by Municipal Police Units (Satuan Polisi Pamong

Praja or “Satpol PP”), which may be accompanied by officers from the police

force.

2. Sanctions Related to Learning Activities in Schools or Educational

Institutions and/or Religious Activities in Houses of Worship

Any person (i) organizing learning activities in schools and/or educational

institutions or (ii) carrying out religious activities in houses of worship and/or in

certain other places during PSBB is subject to administrative sanction in the form of

a written warning issued by Satpol PP, which may be accompanied by the police.

3. Sanctions for Workplaces not Restricting Work Activities of its

Employees/Workers

Governor Reg. 41/2020 stipulates administrative sanctions for:

a. heads of workplaces/offices that violate the obligation to temporarily suspend

activities at the workplace/office during PSBB;

b. heads of workplaces/offices allowed to operate during PSBB but which fail to

implement protocols for the prevention of COVID-19 in the workplace/office

during PSBB; and

c. workplace heads for restaurants/dining places/similar businesses, hotels

and/or construction sites that fail to comply with PSBB requirements for such

workplaces.

Administrative sanctions under points (a) and (c) are in the form of (i) sealing off of

the office/workplace, valid until the end of the PSBB enforcement, and (ii)

administrative fines between Rp 5 million and Rp 50 million, depending on the type

of violation. Administrative sanctions under point (b) are in the form of (i) warning

letter and (ii) administrative fines of at least Rp 25 million and a maximum of Rp 50

million.


4. Sanctions for Carrying Out Social and Cultural Activities

Governor Reg. 41/2020 provides administrative sanctions for persons or legal

entities that carry out non-permitted social and cultural activities during PSBB,

e.g. activities other than circumcisions, weddings, burials and/or funerals for

persons passing away due to causes other than COVID-19. Administrative

sanctions will be issued by Satpol PP, accompanied by the relevant Regional

Apparatus.

If the violation is committed by an individual, the administrative sanction will be in

the form of the requirement that they clean public facilities while wearing a vest.

For violations by a legal entity, the sanction will be in the form of administrative

fines of between Rp 5 million and Rp 10 million. In addition, persons in

charge/legal entities that carry out social or cultural activities in violation of PSBB

are subject to administrative sanctions in the form of the revocation of their

business license by the Capital Investment and One-Stop Integrated Services

Office.

5. Sanctions for Use of Transportation Modes for the Movement of People and

Goods

Governor Reg. 41/2020 stipulates specific administrative sanctions for the use of

personal cars, motorcycles and public motorized vehicles in violation of the PSBB

regime. These administrative sanctions are imposed by Satpol PP, accompanied

by members of the Transportation Service Office and/or the police.

Violations of obligations such as carrying a maximum 50% of the vehicle’s

capacity, limiting the carrying of passengers on motorcycles to people with the

same address/residence as proven by their (Kartu Tanda Penduduk or “KTP”)

and restricting operating hours for public motorized vehicles in accordance with

the regulations of the DKI Jakarta provincial government and/or related agencies

are subject to the following sanctions:

administrative fines from Rp 100,000 to a maximum Rp 1 million, depending

on the type of vehicle;

obligation to clean public facilities while wearing a vest; or


towing the motorized vehicle to a storage facility provided by the DKI Jakarta

provincial government.

When personal cars, motorcycles and/or public motorized vehicles are towed the

vehicle storage facility may be located at the sub-district office or the district

office. Governor Reg. 41/2020 further stipulates that Satpol PP and the

Transportation Service Office are not responsible for any damage to or loss of the

towed vehicle or its contents.

After the vehicle is towed, written notification will be delivered to the owner/driver

of the vehicle within 24 hours by Satpol PP or the Transportation Service Office

to retrieve the vehicle. If the vehicle is not retrieved within three days it will be

moved to the motorized vehicle storage facility of the Transportation Service

Office and will be processed in accordance with the provisions of laws and

regulations.

6. Procedure for Administrative Fines and Criminal Sanctions

When an offender is found to have violated PSBB, they will be issued a

Stipulation Letter of PSBB Administrative Sanction (“SKDA-PSBB”). The

offender, if subject to an administrative fine, will then be required to pay that fine

into the regional treasury through Bank DKI. The authority to issue the SKDA-

PSBAA and receive the receipt of deposit from Bank DKI differs based on the

type of violation committed by the offender. Governor Reg. 41/2020 also provides

that the police are authorized to impose criminal sanctions for violations of PSBB

in accordance with provisions of laws and regulations.

II. Sanctions for Violating Travel Restrictions in DKI Jakarta during COVID-19

Under Governor Reg. 47/2020, every person or business is prohibited from

exiting and/or entering DKI Jakarta unless they hold an Electronic KTP (‘KTP-el’)

for the Jakarta metropolitan area, or Jabodetabek, or if they are a foreigner with

an e-KTP/permanent stay permit/limited stay permit. However, the regulation

introduces the Exit/Entry Permit (Surat Izin Keluar Masuk or “SIKM”), which

serves as a dispensation letter given to exit and/or enter DKI Jakarta province

during the stipulation of COVID-19 as a national disaster.


A SIKM may be issued for (i) exempted persons, business actors or foreigners

because of their work duties; (ii) persons, business actors or foreigners who due

to their work duties and/or for emergency reasons travel into DKI Jakarta

province from outside Jabodetabek; and (iii) persons who do not have a DKI

Jakarta KTP-el or a DKI Jakarta Family Card. Governor Reg. 47/2020 also

provides that interprovincial land transportation providers are only permitted to

transport and/or rent out their motor vehicles to passengers to leave and/or enter

DKI Jakarta if such passengers hold a SIKM. SIKM requirements differ

depending on the type of applicant, as provided on

the corona.jakarta.go.id website, and are issued electronically by the Capital

Investment and One-Stop Integrated Services Office in the form of a QR Code.

There are two types of SIKM for people, employees/workers, business actors or

foreigners, i.e. a (i) repetitive travel SIKM and a (ii) one-time travel SIKM. A

repetitive travel SIKM is intended for those who are domiciled in DKI Jakarta

province but whose work/place of business is outside Jabodetabek, or vice versa.

A one-time travel SIKM is intended for those who travel outside Jabodetabek or

who are domiciled in Jabodetabek but have a place of residence or place of

business in DKI Jakarta province, or who have an urgent need, such as patients

in need of emergency health services or people who must travel because a core

family member is terminally ill or has passed away.

Any person, business actor or foreigner found to have exited and/or entered DKI

Jakarta in violation of PSBB will be (i) directed to return to their home/residence if

they originate from DKI Jakarta or (ii) directed to return to their place of origin or

put in quarantine for 14 days at a location designated by the Task Force for the

Acceleration of Handling COVID-19 at the provincial and/or city/regency level if

they originate from outside DKI Jakarta. These measures are carried out by

Satpol PP, with assistance from the Transportation Service Office and possibly

members of the police and/or the Indonesian military.

Interprovincial land transportation providers found to be transporting passengers

and/or renting out their motor vehicles to passengers without an SIKM are subject

to an administrative fine in the amount of Rp 10 million. The vehicle will also be

towed to a motor vehicle storage facility provided by the DKI Jakarta provincial


government. The Transportation Service Office may also issue a

recommendation to the Ministry of Transportation to revoke the business license

of interprovincial land transportation providers.

Additionally, Governor Reg. 47/2020 stipulates that persons or business actors

that create fake letters, manipulate information and/or electronic documents, or

make false statements for the administration of SIKM are subject to criminal

sanctions under the applicable laws and regulations. (June 2, 2020)





consent of SSEK.


The New Normal – Indonesian Health Minister Issues COVID-19

Workplace Guidelines


In an effort to break the chain of transmission of COVID-19 while supporting economic

sustainability, the Indonesian health minister has issued protocols for the management

of workplaces to mitigate the transmission of COVID-19 and protect workers as much as

possible, as well as protocols for workers themselves in the face of changes brought

about by the pandemic. In other words, these are guidelines for businesses and workers

in dealing with the new normal.

The workplace protocols are found in Minister of Health Decree No.

HK.01.07/MENKES/328/2020 dated May 20, 2020 regarding Guidance for the Mitigation

and Control of Coronavirus Disease (COVID-19) in Office and Industrial Workplace

Settings in an Effort to Support Business Continuation during a Pandemic. We will refer

to this decree hereinafter as the Guidelines. The Guidelines were issued to support the

sustainability of businesses during the pandemic.

In this article, we discuss the workplace protocols for businesses operating during and

after the period of large-scale social restrictions, or PSBB.

Workplace Protocols During PSBB

During the period of enforced large-scale social restrictions, the following protocols must

be implemented in the workplace:

a. Management Policies to Mitigate COVID-19 Transmission

During PSBB, the employer/office management shall continue to monitor the

development of COVID-19 cases in the area. This information can be accessed

at http://infeksiemerging.kemenkes.go.id. Employers must also continue to observe local

government policies regarding COVID-19.

Employers shall establish a COVID-19 Response Team/Task Force in the workplace

consisting of a chairperson and designated persons in charge of personnel, health and


http://infeksiemerging.kemenkes.go.id/


safety (K3), and a health worker. The management shall also (i) provide policies and

procedures for workers to report every case of suspected COVID-19 symptoms, (ii)

refrain from stigmatizing positive cases, and (iii) implement a work from home policy by

determining which workers are required to come to the office (“Essential Workers”) and

which may work from home.

b. Health Protocols in the Workplace for Essential Workers

To accommodate essential workers who are required to come into the office during the

PSBB period, the employer/management must ensure the following measures are

implemented:

i. All workers shall have their temperature taken and fill out a COVID-19 Risk Self-

Assessment form (attached in the Guidelines) before entering the workplace.

ii. Refrain from requiring overtime work.

iii. Late-night shifts should be avoided or only assigned to workers under the age of

50.

iv. Workers are obliged to wear protective face masks.

v. Ensure any food provided by the workplace is nutritious. If possible, workers shall

be given vitamin C supplements.

vi. Facilitate a safe and healthy workplace by maintaining hygiene, air quality and

providing handwashing facilities.

vii. Implement physical distancing in all activities.

viii. Implement the Healthy Living Community Movement (Gerakan Masyarakat Hidup

Sehat or “GERMAS”) through the Clean and Healthy Lifestyle Movement (Pola

Hidup Sehat dan Perilaku Hidup Sehat dan Bersih or “PHBS”) in the workplace.

This includes encouraging workers to routinely wash their hands and to cover

their mouths and noses with their upper arm or with a tissue, which they then

properly dispose of, when coughing. Workers should also be encouraged to

exercise together before work while maintaining a safe physical distance,

sunbathe during breaks, eat a nutritious and balanced diet, and avoid the

communal use of items such as prayer mats and cutlery.


c. Provide Information About COVID-19

Employers shall ensure that workers are given information on how to mitigate the

transmission of COVID 19 by learning how the virus is spread, how to identify the

symptoms, and how to implement the Clean and Healthy Lifestyle Movement. Employers

must also put in place a monitoring and reporting system for new COVID-19 cases. This

information can be provided by various measures, including putting up banners and

distributing pamphlets in the office. Materials can be found at www.covid19.go.id.

Worker Obligations During PSBB

While the large-scale social restrictions are in place, workers shall also abide by the

following protocols:

a. Workers who are not coming to work shall remain at home. If it is absolutely

necessary for them to go out, they shall maintain physical distancing of at least

one meter.

b. Facilitate a safe and healthy home environment by maintaining hygiene and air

quality.

c. Routinely wash their hands with soap and water.

d. Implement the proper coughing etiquette.

e. Use protective face masks.

f. Distance themselves from sick family members.

g. Workers experiencing COVID-19 symptoms must immediately consult with a

health worker using a telemedicine provider such as SehatPedia, Halodoc, Good

Doctor, the COVID-19 call center, etc.

h. Avoid visiting health service facilities during the pandemic, but if it is absolutely

necessary to go, wear a protective face mask.

i. Obtain information regarding COVID-19 from trusted sources such as

www.covid19.go.id.

Workplace Protocols After PSBB

After the large-scale social restrictions have been lifted, businesses shall maintain health

protocols in the workplace. An office’s management/COVID-19 Task Force shall:

http://www.covid19.go.id/

http://www.covid19.go.id/


a. Keep workers updated regarding COVID-19.

b. Obligate workers to use protective face masks.

c. Restrict sick workers from entering the workplace.

d. Give workers the right to self-quarantine/self-isolate (if necessary).

e. Provide a separate room to observe workers who are showing COVID-19

symptoms.

f. Facilitate a self-quarantine/self-isolation facility (if necessary).

g. Maintain hygiene and sanitation in the workplace.

h. Implement transmission prevention measures such as the installation of barriers

or glass screens for workers serving customers.

i. The day before entering the workplace, all workers shall carry out a COVID-19

Risk Self-Assessment to ensure they are healthy and free from the virus.

j. Set up a temperature checkpoint at the entrance of the workplace.

k. Implement physical distancing inside the workplace, using positioning stickers on

the floor and posters/signage as a reminder.

l. If possible, the workplace shall provide transportation for workers from their home

to the workplace.

m. A health worker or designated person in charge of K3/personnel shall proactively

monitor the health of all employees.

Worker Obligations After PSBB

After the PSBB period, workers are required to continue to follow the protocols for a

healthy lifestyle (Gerakan Masyarakat Hidup Sehat or “GERMAS”) on the way to the

workplace, in the workplace and upon returning to their homes. These procedures are

outlined in the Guidelines.

They shall also maintain a healthy immune system. Workers with a degenerative

disease such as diabetes, hypertension, respiratory problems or kidney problems, and

immunocompromised or pregnant workers must also exercise extreme caution.

OTG, ODP, PDP or Infected Workers

The Guidelines also provide procedures for various scenarios. These include the

following:


A. A worker who been in contact with an infected individual but is not showing any

symptoms (Orang Tanpa Gejala or “OTG”) shall immediately report to the nearest

health center and health office and take a polymerase chain reaction (“PCR”) test

or Rapid Test.

B. A worker with a fever (≥38 degrees Celsius) or respiratory problems without any

other symptoms, or who in the 14 days prior to the onset of these symptoms has

travelled to or resided in a country that has reported local transmission of COVID-

19, or has had contact with a confirmed COVID-19 patient (Orang Dalam

Pemantauan or “ODP”) shall take a PCR test on the first and second day of the

onset of the symptoms. If a PCR test is not available, they may take a Rapid

Test.

C. A worker with a fever (≥38 degrees Celsius) and a cough, trouble breathing, sore

throat, flu/pneumonia-like symptoms without any other causes, and in the 14

days prior to the onset of these symptoms has travelled to or resided in a country

that has reported local transmission of COVID-19 or has had contact with a

confirmed COVID-19 patient (Pasien Dalam Pemantauan or “PDP”) shall

immediately be referred to a designated hospital. They will also complete an

epidemiology test (form attached in the Guidelines) to identify OTG workers they

have been in contact with.

D. A worker who has been declared to have COVID-19 following a positive PCR test

(Kasus Konfirmasi or “Infected Workers) will also complete an epidemiology test

to identify OTG workers they have come in contact with.

The workplace will identify workers who have been in contact with PDP and Infected

Workers through a Contact Identification Form (attached to the Guidelines). These

workers are then categorized as Ring 1 (direct contact with ODP, PDP and Infected

workers) and Ring 2 (in the same room as ODP, PDP and Infected workers). Workers in

Ring 1 and Ring 2 are required to take a Rapid Test and self-quarantine/self-isolate by

working from home and implementing proper physical distancing procedures. If they

experience COVID-19 symptoms, they shall immediately inform health workers. The

procedures for self-quarantine/self-isolation can be found in a form attached to the

Guidelines.


Workplace areas contaminated by ODP, PDP or Infected Workers shall be disinfected

and closed for 24 hours during the cleaning process, and the doors or windows shall

then be left open for 24 hours after the cleaning/disinfectant process.

Monitoring and Sanctions

The Minister of Health decree does not stipulate sanctions for non-compliance with the

Guidelines. However, it provides that the central government, provincial governments,

and regency/city governments are authorized to supervise the implementation of the

Guidelines, in accordance with their respective authorities, and may also involve the

community.

At the moment in Jakarta, sanctions for violations of PSBB restrictions are regulated in

Government of DKI Jakarta Regulation No. 41 Year 2020 (“Regulation 41”). Article 6

paragraph 2 of Regulation 41 provides that workplaces operating during PSBB that do

not implement proper protocols to mitigate the transmission of COVID-19 are subject to

administrative sanctions in the form of a written warning and administrative fines of at

least Rp 25 million and a maximum of Rp 50 million.

Coordination Between Industries and Regional Governments

The Guidelines provide that government, the private sector and the community must

cooperate and collaborate in efforts to mitigate and control COVID-19. The roles of

health offices (Dinas Kesehatan), employment offices (Dinas Ketenagakerjaan), health

centers (Puskesmas), hospitals/clinics, offices and industrial workplaces, and workers

are all laid out in the Guidelines.

Offices/industrial workplaces shall:

a. Provide a safe and healthy work environment for workers by implementing

various measures to mitigate and control COVID-19 in the workplace. These

measures shall be integrated with other occupational safety and health

measures.

b. Coordinate with their local health office in preventing the transmission of COVID-

19 in the workplace.

c. Report to the health office if workers are exposed to COVID-19.


d. Facilitate self-quarantine/self-isolation facilities for workers classified as OTG,

ODP or PDP (if necessary).

The involvement of all parties – the government, businesses and the community – in the

mitigation and monitoring of COVID-19 in the workplace can help minimize the impact of

the virus on the sustainability of business, and can help to suppress and control the

spread of the virus in the community. Workers play a significant role in breaking the

chain of transmission due to their large numbers and high mobility and interaction. It is

therefore crucial that the Guidelines are implemented as intended. (May 27, 2020)





consent of SSEK.


Indonesia Targets Taxation of Tech Companies to Boost Economy Amid

Covid-19

By Dewi Savitri Reni and Greita Anggraeni

Indonesia is set to tax tech companies that may or may not have a legal presence in the

country, as electronic transactions and the use of streaming services and online telecom

apps have increased notably during the COVID-19 pandemic.

The legal basis for this measure is the recently enacted emergency bill Government

Regulation in Lieu of Law No. 1 of 2020 regarding State Financial Policy and Financial

System Stability for the Management of the Coronavirus or COVID-19 Pandemic and/or

in Facing Threats to the National Economy and/or Financial System Stability (“GR

1/2020”).

Collection of VAT

Article 6 of GR 1/2020 states that the government will collect value-added tax (“VAT”) for

intangible taxable goods and/or taxable services from outside Indonesia which are

utilized in the country through electronic system trade activities, in accordance with

Law No. 8 of 1983 regarding Value-Added Tax for Goods and Services and Sales Tax

on Luxury Goods, as lastly amended by Law No. 42 of 2009. This VAT will be collected,

deposited and reported by foreign traders, foreign service providers, foreign electronic

trading system providers and/or domestic electronic trading system providers appointed

by the Minister of Finance. These parties can appoint representatives domiciled in

Indonesia to collect, deposit and report the VAT.

Procedures for the appointment of representatives and for the collection, deposit and

reporting of the VAT are further regulated under Minister of Finance Regulation No.

48/PMK.03/2020 regarding Procedures for the Appointment of Collectors and for the

Collection, Deposit and Reporting of VAT for the Use Inside the Customs Area of

Intangible Taxable Goods and/or Taxable Services from Outside the Customs Area

through Electronic System Trade Activities (“MOF Reg. 48/2020”).

https://www.ssek.com/attorneys/partners/dewi-savitri-reni

https://www.ssek.com/attorneys/associates/greita-anggraeni


Collection of Income Tax

The government will also collect income tax from foreign traders, foreign service

providers and/or foreign electronic trading system providers that have a significant

economic presence in Indonesia. The determination of “significant economic presence”

is based on the consolidated gross turnover of the business group, sales in Indonesia,

and number of active users on digital media in Indonesia. The threshold for these criteria

are to be further regulated in a Minister of Finance regulation. A party that meets the

threshold for a significant economic presence in Indonesia will be treated as a

permanent establishment and subject to income tax.

If foreign traders, foreign service providers or foreign electronic trading system providers

are determined to have a significant economic presence in Indonesia but cannot be

treated as permanent establishments due to the application of agreements with other

governments in the context of avoiding double taxation and the prevention of tax

evasion, they will be subject to an electronic transaction tax.

Such income tax or electronic transaction tax is to be paid and reported by the foreign

traders, foreign service providers and foreign electronic trading system providers. Similar

to the VAT payment, parties are allowed to appoint representatives domiciled in

Indonesia to fulfil their income tax or electronic transaction tax obligations.

The rate for the income tax or electronic transaction tax, its calculation, the procedures

for tax payment and reporting, and the procedures for the appointment of

representatives to fulfil tax obligations are to be further regulated by Minister of Finance

regulation.

Sanctions

Foreign companies that do not comply with the above provisions are subject to

administrative sanctions and could also have access to their apps blocked by the

Minister of Communication and Informatics.

As the government implements large-scale social distancing restrictions and businesses

apply work from home policies, the number of users of streaming services and online

meeting apps has increased markedly.


The government has for years been aiming to collect taxes from foreign tech companies

that enjoy significant revenue from Indonesia, but to no avail. It has been a struggle

because of these companies’ lack of a physical presence in Indonesia, with prevailing

tax regulations only covering companies domiciled in the country or those that can be

considered permanent establishments.

This is a loophole in the era of the cross-border digital economy that GR 1/2020 tries to

address. As noted by Indonesian Finance Minister Sri Mulyani Indrawati, under the new

regulation a permanent establishment would no longer be defined solely on physical

presence. Consequently, even if foreign tech companies do not open an office in

Indonesia, they would still have tax obligations if they established a significant economic

presence in the country.

For example, it has been reported that, pursuant to MOF Regulation 48/2020, the

government will impose a 10% tax on subscription fees for streaming apps starting July

1, 2020.

Status of GR 1/2020

It appears that these efforts to tax foreign tech companies will continue after the COVID-

19 pandemic ends. Pursuant to Law No. 12 of 2011 regarding the Formulation of Laws

and Regulations, as amended by Law No. 15 of 2019, an emergency bill must be

submitted to the House of Representatives for approval. If it is approved by the House it

will then become a law, and if it is rejected, the emergency bill will be revoked.

In this regard, the House has approved the adoption of GR 1/2020 as a law, resulting in

the promulgation of Law No. 2 of 2020 regarding Stipulation of GR 1/2020 regarding

State Financial Policy and Financial System Stability for the Management of the

Coronavirus or COVID-19 Pandemic and/or in Facing Threats to the National Economy

and/or Financial System Stability, This new law is effective as of May 18, 2020. (May 20,

2020)






consent of SSEK.



By Stephen Igor Warokka and Zulfikar D. Winarno

The Indonesian Government has taken a string of measures in an attempt to minimize

the spread of COVID-19 in Indonesia. One of those measures has been to enact

regulations governing the traffic of individuals entering and leaving the country. These

regulations specifically mandate limitations and exceptions for the granting of Entry

Permits and Re-entry Permits for foreign nationals wanting to visit or return to Indonesia,

and Emergency Stay Permits (Izin Tinggal Dalam Keadaan Terpaksa) for all foreign

nationals currently in Indonesia. The most recent regulation, and currently in force, is

Minister of Law and Human Rights (“MOLHR”) Regulation Number 11 of 2020 on the

Temporary Prohibition of Foreigners Entering Indonesia (“MOLHR Reg No. 11/2020”).

Please visit the website of the Indonesian Directorate General of Immigration,

imigrasi.go.id, or its official Instagram account, @ditjen_imigrasi, to access the relevant

information.

Entry Permits and Re-entry Permits

In response to the COVID-19 pandemic, the Indonesian Government has temporarily

suspended all foreign nationals from entering or transiting in Indonesia. As provided in

Director General of Immigration (“DGI”) Circular Letter No. IMI-GR.01.01-2325 Year

2020 (“CL 2325”), this suspension applies to:

i. Individuals entering on Visa-Free Visits and Visa on Arrival Visits (Visa Kunjungan

Saat Kedatangan or “VKSK”);

ii. Multiple Business Visit Visa (Visa Kunjungan Usaha Beberapa Kali Perjalanan or

“VKUBP”), Visitor Visa 211A (“VK 211A”), Visitor Visa 211B (“VK 211B”), APEC

Business Travel Card (“ABTC”), Transit Visa and Working Holiday Visa holders;

iii. Diplomatic passport holders who do not have a diplomatic visa or residence permit in

Indonesia and are visiting on a Diplomatic Visa Exemption for Short Visit (Bebas Visa

Kunjungan Singkat or “BVKS”); and




iv. Service passport holders who do not have a service visa or service stay permit in

Indonesia and are visiting on a Service BVKS.

This suspension, however, does not apply to anyone holding either a valid or expired

Limited Stay Permit (Izin Tinggal Terbatas or “ITAS”) or Permanent Stay Permit (Izin

Tinggal Tetap or “ITAP”), a valid Diplomatic or Service Visa issued by an Indonesian

Representative, or a valid Diplomatic Stay Permit or Service Stay Permit issued by an

Indonesian Representative. Also exempted from the suspension are medical, food and

humanitarian aid support workers; crew members for means of transport; and foreign

nationals entering Indonesia with a valid Limited Stay Visa (Visa Tinggal Terbatas or

“VITAS”) issued by an Indonesian Representative for the purpose of working on national

strategic projects, e.g. infrastructure or construction.

Note that these exceptions only apply to foreign nationals after satisfying requirements

provided under MOLHR Reg No.11/2020 and other requirements, in particular those

provided by the Indonesian Ministry of Health.

Emergency Entry Stay Permit

To further elaborate on this matter, the DGI issued Circular Letter No. IMI-GR.01.01-

2493 Year 2020 (“CL 2493”). CL 2493 gives foreigners whose ITAS or Entry Permit (for

ITAP holders) expired when they were abroad the chance to enter Indonesia on an Entry

Emergency Stay Permit (Izin Tinggal Keadaan Terpaksa Masuk or “ITKT Masuk”). The

granting of an ITKT Masuk requires the foreigner to present a health certificate or a fit-to-

fly certificate, which are subject to protocols issued by the Ministry of Health. They must

also be willing to self-quarantine under the monitoring of Indonesian health authorities.

Bear in mind that the ITKT Masuk does not serve as an automatic extension of the

foreigners’ ITAS/ITAP.

CL 2493 also provides for the automatic reactivation of expired Approval/Telex Visas

and Visas issued since January 1, 2020, which will be effective for 60 days and 90 days

respectively from the day the pandemic is declared over by the authorized institution in

Indonesia. Sponsors of foreigners whose Approval/Telex Visa or Visa has been

automatically reactivated must, once the foreign national arrives in Indonesia, submit a

report to the Directorate General of Manpower Placement Development and Job

Opportunity Extension (Direktorat Jenderal Pembinaan Penempatan Tenaga Kerja dan


Perluasan Kesempatan Kerja) for expatriate workers or the Investment Coordinating

Board (Badan Koordinasi Penanaman Modal or “BKPM”) for foreign investors. Note that

automatic reactivation only applies for Visas issued by Indonesian Representatives that

have administered the Immigration Management Information System (Sistem Informasi

Manajemen Keimigrasian).

Along with the requirements provided under MOLHR Reg No.11/2020, there may be

additional requirements in practice to obtain new visas/visa extensions.

Extensions of ITAS and ITAP

Once the pandemic is declared over, holders of expired ITAS or ITAP who reside in

Indonesia may be granted an extension for their permits. Sponsors of the foreigners will

need to re-submit applications for Notification from the Ministry of Manpower for

expatriate workers or recommendation from the BKPM for foreign investors. Sponsors

must also administer the Re-Entry Permit (Izin Masuk Kembali) ITAP holders at the

Immigration Office.

These exceptions and visa requirements are subject to future changes based on the

situation with the COVID-19 pandemic. (May 26, 2020)





consent of SSEK.


COVID-19 Legal Update: Foreigners to be required to obtain COVID-19

tests to enter Indonesia

By Michael S. Carl and Stephen Igor Warokka

The Indonesian Ministry of Health (the “MOH”) has issued new guidelines requiring that

foreigners have or take a PCR (Polymerase Chain Reaction) test result for COVID-19 as

a condition to entering Indonesia.

Following the designation of COVID-19 as a global pandemic, Indonesia’s immigration

authority issued guidance to allow holders of Limited Stay Permits (“ITAS”) and

Permanent Stay Permits (“ITAP”) to enter Indonesia on an Entry Emergency Stay Permit

(Izin Tinggal Keadaan Terpaksa Masuk or “ITKT Masuk”) if their ITAS or ITAP had

expired while they were abroad. That guidance was contained in Director General of

Immigration Circular Letter No. IMI-GR.01.01-2493 Year 2020 (“DGI CL 2493”).

The Indonesian Ministry of Health on May 7, 2020, then issued guidelines for handling

foreigners and Indonesian citizens entering the country. Those guidelines are in Minister

of Health Circular Letter No. HK.02.01/MENKES/313/2020 regarding Health Protocols

for Returning Indonesian Citizens and Foreign Citizens Arriving from Abroad at

Entrances to the Country and in Regions with Large-Scale Social Restrictions (PSBB)

(“MOH CL 313”).

DGI CL 2493 provides that to obtain an ITKT Masuk a foreign citizen must present a

health certificate, which may be replaced by a fit-to-fly certificate, and be willing to self-

quarantine under the supervision of Indonesian health authorities. The attachment of

MOH CL 313, specifically Section (E), provides further technical requirements with

regard to the health certificate, as follows:

12. Each foreign citizen entering Indonesia must carry a health certificate in English

which indicates a negative PCR (Polymerase Chain Reaction) test result for

COVID-19. The health certificate shall be valid for a maximum of seven days from

its issuance by a health facility in the origin country and will be validated by the Port

Health Office doctor at the seaport/airport/state border post (“PLBDN”) of arrival.

https://www.ssek.com/attorneys/advisors/michael-s-carl



13. Foreign citizens entering with a health certificate indicating negative PCR results

for COVID-19:

a. Shall undergo additional medical examinations, except a Rapid Test or PCR.

b. If no illness or risk factor is found during the health checkup, the KKP (Kantor

Kesehatan Pelabuhan or Port Health Office) will issue a health clearance and

Health Alert Card to the person concerned.

c. May carry on traveling to their destination, carrying travel papers from the local

COVID-19 Mitigation Task Force and always wearing a mask during their

travels.

d. Will self-quarantine at their own home for 14 days, applying physical distancing,

wearing a mask, and observing Clean and Healthy Behavior (Perilaku Hidup

Bersih dan Sehat).

e. A Health Clearance will be submitted and forwarded to the local health

department to conduct monitoring during the self-quarantine period at home.

14. Foreign citizens entering without a health certificate, or with a health certificate over

seven days old, or with a health certificate that does not indicate a negative PCR

test:

a. Additional health checkups will be conducted including a Rapid Test.

b. For foreign citizens with comorbidities, if the Rapid Test is reactive, they will be

referred and isolated in an emergency hospital/COVID-19 referral hospital.

c. Foreign citizens not showing symptoms and without comorbidities with reactive

Rapid Test results will be recommended to immigration officers to be deported.

d. If the Rapid Test result is non-reactive, the foreign citizen will be recommended

to immigration officers to be deported.“

MOH CL 313 also provides that Indonesians returning to Indonesia should, as much as

possible, carry a health certificate in English that is valid for a maximum of seven days


from its issuance by the health facility from their country of origin, and validated by the

doctor at the Port Health Office at the PLBDN. The Circular Letter also provides certain

protocols for Indonesians who carry a health certificate that indicates a negative COVID-

19 PCR test result.

Conclusion

We would advise foreign citizens to adhere to these requirements and always carry

copies of DGI CL 2493 and MOH CL 313 when traveling to Indonesia. Indonesian

citizens should also bring a copy of MOH CL 313 for reference. The requirements in

these Circular Letters are subject to change based on the situation with the COVID-19

pandemic. (May 15, 2020)





consent of SSEK.


Electronic Signatures in Indonesia: New Focus on Not-So-New

Innovation

By Stephen Igor Warokka and Albertus Jonathan Sukardi

The COVID-19 outbreak has forced most of us to adapt to new ways of working and

doing business. We are attending online meetings instead of physical ones, webinars

have replaced seminars, and we are e-filing whatever documents we can. Countries

around the world have imposed physical distancing, travel bans and lockdowns. In

Indonesia, many businesses have shut their doors and people are working from home to

abide by the large-scale social restrictions enforced by the central and regional

governments.

This new normal for business poses the question of how to conclude transactions,

submit applications, execute corporate actions, and otherwise keep the economy

moving. The answer is not a new innovation, but one that is taking on new significance,

at least in Indonesia – electronic signatures. E-signatures allow businesses, government

agencies and related parties to exchange consents and documents safely and validly

through the internet during the COVID-19 lockdown.

This article discusses the legality and utility of e-signatures under Indonesian law,

especially during the COVID-19 situation.

E-Signatures at a Glance

A common misconception is that an e-signature is a handwritten signature that is

scanned and then made in a digital format such as a pdf or jpeg. This is not the case.

An e-signature is a signature made from electronic data produced by configured

hardware or software. A handwritten signature is made from muscle-drawn strokes of a

pen’s ink on a piece of paper and is unique from one person to another, while an e-

signature is made from personal, biometric, cryptographic or other codes configured by

software/hardware so it is unique from person to person.

An e-signature functions in the same manner and serves the same purpose as a

handwritten one. When a message is executed with a handwritten signature, the reader



or receiver automatically perceives such message as being sent by the signatory. An e-

signature enables the signed message to be verified and authenticated as being sent by

the e-signature signatory. It also ensures the message’s integrity and originality and

ensures that the message is unaltered.

Both handwritten signatures and e-signatures are unique, authentic and distinct to each

person. And, most important, both types of signature can be authenticated and verified

using their own methods, i.e. handwritten signatures through the art of typography, and

e-signatures through cryptography and computer science.

Indonesian Law and E-Signatures

The Indonesian legal framework for e-signatures is not new. Law No. 11 of 2008

regarding Electronic Information and Transactions, as amended by Law No. 19 of 2016

(the “EIT Law”), laid the foundation for e-signatures. Article 11 paragraph 1 of the EIT

Law provides that an e-signature is acceptable and has binding legal force if certain

requirements are met. Government Regulation No. 71 of 2019 on the Implementation of

Electronic Systems and Transactions (“GR 71/2019”) distinguishes between two types of

e-signature: certified and uncertified. The main difference is that a certified e-signature

has stronger evidentiary value; some legal practitioners contend it has the same

evidentiary value as an authentic deed. This is crucial if the document is to be used in

court proceedings where the parties need to prove the authenticity of the e-signature.

In specific sectors, the use of e-signatures has gained wider recognition and legal

foundation. For instance, in the financial technology sector, Indonesian Financial

Services Authority (“OJK”) Regulation No. 77 of 2016 regarding Technology-Based Loan

Provision Services explicitly recognizes the use of e-signatures in fintech loan

agreements. And OJK Circular Letter No. 18/SEOJK.02/2017 regarding Information

Technology Risk Management for Technology-Based Loan Services stipulates the

procedures for using an e-signature.

In the Indonesian judicial system, the Supreme Court issued Supreme Court Regulation

No. 1 of 2019 regarding Electronic Case Administration and Court Hearings, which was

further implemented by Chief of the Indonesian Supreme Court Decree No.

129/KMA/SK/VII/2019 regarding Technical Guidelines for Electronic Case Administration

and Court Hearings.


Particularly for agreements and contracts, the use of e-signatures can make the process

simpler and faster, particularly in a situation like the current one with COVID-19. An

agreement signed by e-signature will have valid and binding legal effect on the

concerned parties as long as the agreement adheres to the requirements under Article

1320 of the Indonesian Civil Code, namely competence, consent, a certain matter and

permissible cause, regardless of whether the medium is paper, a pdf document or a

verbal record.

Certified Versus Uncertified E-Signature

As mentioned above, GR 71/2019 recognizes certified and uncertified e-signatures, with

the difference in the evidentiary value. In our daily lives, uncertified e-signatures occur

every time we subscribe to a newsletter or download an app on our phone by clicking

the “I agree” or “Yes” button. To use these types of uncertified e-signatures in court

proceedings as evidence would require digital forensics. It is much easier to present

certified e-signatures in court proceedings because they have been authenticated and

verified by certified providers. For evidentiary purposes in Indonesia it is necessary to

use a certified e-signature provider that is registered in Indonesia and has been certified

by the Indonesian Ministry of Communications and Information (“MOCI”). According to

the MOCI website, there are six Indonesian certified e-signature providers. They are the

(i) Agency for the Assessment and Application of Technology (Badan Pengkajian dan

Penerapan Teknologi or “BPPT”); (ii) State Code and Cyber Agency (Badan Siber dan

Sandi Negara or “BSSN”); (iii) Perusahaan Umum Percetakan Uang Republik Indonesia

(Perum Peruri); (iv) PrivyID; (v) Vida; and (vi) Digisign.

The first two institutions are government agencies, while the other four are state or

private companies.

Obstacles and Issues

Although e-signatures are technically regulated and there are now several certified e-

signature providers, there continue to be issues in terms of the use of e-signatures in

practice. One of the bigger problems is the discrepancy in infrastructure readiness, as

well as a lack of awareness in some governmental institutions. In certain sectors and

certain services, such as notarial deeds, e-signatures are rarely used for any number of

reasons.


We were told by a Central Jakarta District Court official that most courts, even those in

DKI Jakarta, are still reluctant to accept e-signatures and prefer documents with

handwritten signatures that can then be scanned and submitted by email or through the

court’s electronic platform. Notaries generally still require all documents, such as

shareholders resolutions, to be signed manually before they execute the notarial deeds

due to regulations on the notary profession, as well as out of a sense of caution.

The use of e-signatures has become more common in other areas such as consumer

agreements, inter-company transactions and multimedia subscriptions.

Conclusion

We are living in a digital age and e-signatures have a role to play in transactions and

agreements, and in helping companies cut expenses for transportation, couriers and

paper. That is even truer in the face of a situation like COVID-19. The legal climate and

business trends in Indonesia have kept the practice of e-signatures in motion. But

caution is necessary and not all signatures, electronic or handwritten, will be treated the

same. It is best to consult with your counterparty, notary or relevant government

institution, and it is recommended to use an e-signature provider certified in Indonesia to

ensure the legality of the action/document you are signing. (May 13, 2020)





consent of SSEK.


COVID-19: Indonesia Issues Regulations for Faster and Easier Import

Licensing

By Arvin Raharja

Many businesses in Indonesia have been forced to temporarily cease their activities

because of COVID-19. Some factories are still operating to ensure the continuation of

production, while implementing certain restrictions to try and prevent the spread of

COVID-19, but production volume is down and price inflation is a possibility.

In response, Indonesia has taken measures to ensure the stock availability of basic

commodities and the continuity of manufacturing for industries. These measures include

simplifying the import licensing process and maintaining the accessibility of essential

goods and principal commodities.

It has done this through the issuance of Presidential Regulation Number 58 of 2020

regarding the Arrangement and Simplification of Import Licensing (“PR 58/2020”), on

April 8, 2020, and Presidential Regulation Number 59 of 2020 regarding the Amendment

of Presidential Regulation Number 71 of 2015 on the Stipulation and Storage of

Essential Goods and Basic Commodities (“PR 59/2020”).

PR 58/2020 simplifies import licensing for certain goods, depending on availability,

production, price and national interest. These goods are (i) essential goods and food

commodities; (ii) foodstuffs for government food reserves; (iii) raw materials or

supporting materials; (iv) goods and raw materials for disaster prevention and mitigation;

and/or (v) other goods as stipulated by the government (together, “Prioritized Goods”).

Separately, PR 59/2020 stipulates the types of goods deemed essential goods and/or

basic commodities.

Types of Import Licenses and its Pre-requisite Requirements

PR 58/2020 acknowledges four types of import licenses. These can be in the form of (i)

approval, (ii) registration, (iii) stipulation, and/or (iv) acknowledgement (together, “Import

Licenses”).

https://www.ssek.com/attorneys/associates/arvin-raharja


To obtain the Import Licenses, an importer must provide certain documents issued by

the minister with oversight of the sector relevant to the imported goods. Those

documents can be in the form of a (i) permit, (ii) letter of approval, (iii) statement letter,

(iv) recommendation, (v) technical consideration, (vi) stipulation of the sufficiency of

demand, production of basic commodities or government food reserves, and/or (vii) any

other import requirements depending on the regulations in the relevant sector (together,

“Import Prerequisite Documents”).

The Import Licenses are granted by the Minister of Trade (“MOT”) once it receives the

necessary Import Prerequisite Documents, as stipulated by the relevant regulations in

each sector.

New Mechanism to Simplify the Granting of Import Licenses

PR 58/2020 introduces a new mechanism to issue the Import Prerequisite Documents

without having to fulfill the technical requirements stipulated in the relevant regulations in

each sector. This new mechanism is a coordination meeting organized by the

Coordinating Ministry for Economic Affairs and attended by the minister/head of the

related sector/head of the non-ministerial government department, or their authorized

representatives (“Coordination Meeting”). This meeting can be held by

videoconference or teleconference.

The Coordination Meeting is valid if attended by at least one minister/head of related

sector/head of non-ministerial government department. The decision of the Coordination

Meeting will be rendered in a minutes of the Coordination Meeting.

The Coordination Meeting can decide to suspend or waive technical requirements for the

Import Prerequisite Documents by considering the urgent need for the goods or the

current unreasonably high price of the goods in the domestic market, the lack of

domestic or international supplies, and/or obstacles to import traffic and/or disruptions to

distribution.

Other Items on the Coordination Meeting Agenda

PR 58/2020 and PR 59/2020 stipulate that the Coordination Meeting may also decide on

the following matters:


1. Assignment of state-owned enterprises to import Prioritized Goods.

2. Determination of the types and amounts of Prioritized Goods that can receive

certain taxation, customs and excise facilities.

3. Determination of the types of essential goods and/or basic commodities.

4. Creation of policy to control access to essential goods and/or basic commodities,

including the opening hours for hypermarkets and supermarkets.

Implementation of the Coordination Meeting

It is still unclear under PR 58/2020 what the formal outcome of the Coordination Meeting

might look like. Currently, several MOT regulations still require the fulfilment of Import

Prerequisite Documents to obtain the Import Licenses for certain products, such as

sugar and animal products. It is unclear whether these requirements can be waived by

the result of the Coordination Meeting.

As of this writing, we are not aware of any Coordination Meeting decisions granting

Import Prerequisite Documents using the mechanism under PR 58/2020. However,

certain MOT regulations were issued prior to the enactment of this regulation to simplify

the licensing process for certain goods including medical devices to respond to COVID-

19.

PR 58/2020 also stipulates that upon the enactment of this regulation, any regulations

on the granting of Import Prerequisite Documents remain valid as long as they are not

contrary to or are not specifically regulated under PR 58/2020. (May 12, 2020)





consent of SSEK.


Indonesian Land Office Regulations and Services During the COVID-19

Pandemic

By Stephen Igor Warokka and Albertus Jonathan Sukardi

In response to the declaration of COVID-19 as a public health emergency and national

disaster by the central government, and to implement social distancing requirments, the

Indonesian Land Office (Badan Pertanahan Nasional/Kementerian Agraria dan Tata

Ruang or “BPN”) has issued policies to support physical distancing and help prevent and

minimalize the spread of COVID-19.

Land Office Services Move Online

On March 20, 2020, the BPN issued Circular Letter Number 3/SE-100.TU.03/III/2020 on

Land Services in the Context of Preventing the Spread of Coronavirus Disease 2019

(COVID-19) (“CL 3/2020”). The purpose of this circular letter is to implement social

distancing while still providing land services.

In essence, CL 3/2020 obliges all land offices to adapt their provision of land services to

local conditions. Generally, land offices must adhere to all regional policies, regulations

and restrictions, and consider the severity of COVID-19 locally. Specifically, land offices

are required to provide the following services via a website established by the

BPN, https://htel.atrbpn.go.id/:

i. services related to Security Right (Hak Tanggungan) such as registration,

assignment, deletion (roya), change of name and/or amendment of data;

ii. services related to Land Value Zone (Zona Nilai Tanah); and

iii. services related to land certificate examination for the issuance of a Land

Registration Statement Letter (Surat Keterangan Pendaftaran Tanah).

However, these services cannot be accessed directly by members of the public. As

confirmed by a BPN official, assistance from a local land deed official (Pejabat Pembuat

Akta Tanah or “PPAT”) or notary is required because they are the ones with user access

to the BPN’s website.


https://htel.atrbpn.go.id/


For other particular services deemed of special and dire necessity but not yet available

through the BPN website, e.g. renewal or extension of land right certificates, CL 3/2020

provides that the services can still be provided by submitting the physical documents to

the local land office in a closed plastic folder.

The applicant should also scan the documents and submit them to the local land office

service center email address, stating the applicant's name, email address or telephone

number. The land office will contact the applicant once the application file is examined.

For this process, CL 3/2020 re-emphasizes the obligation to implement health and safety

measures by both applicants and land office officials, e.g. wearing masks and gloves,

and the sterilization of documents if necessary.

In addition, land offices will implement work from home policies with office shifts as

necessary. CL 3/2020 mandates that services that require physical inspections, such as

the re-measurement of land plots, will be temporarily halted or limited according to local

conditions.

Initially, CL 3/2020 was only in effect until April 5, 2020. However, as confirmed by a

Land Office official, the BPN issued a subsequent letter which states that CL 3/2020 will

remain valid until the BPN issues a subsequent policy/decree with regard to the COVID-

19 situation. As of this writing, we have not seen a copy of this letter.

The implementation of CL 3/2020 may differ from region to region due to factors

including the unwritten policies of local land offices, the impact of COVID-19 locally and

the readiness of local infrastructure.

BPN to Relax Expiry, Extension and Renewal of Land Rights

In addition to moving land services online, the BPN has relaxed the time for granting,

extending or renewing expiring land rights. The new rules are contained in BPN Decree

Number 88.1/SK-HR.01/IV/2020 dated April 16, 2020, regarding the Extension of the

Validity of Land Rights and the Extension for the Registration of the Decree on the

Granting, Extension or Renewal of Land Rights that Have Expired or Will Expire during

the Coronavirus Disease 2019 (COVID-19) Emergency Period (“Decree 88/2020”).


As background, Decree 88/2020 was issued following the stipulation of the COVID-19

outbreak as a public health emergency and non-natural national disaster. Decree

88/2020 was promulgated on April 16, 2020. However, its legal effect applies

retroactively from March 31, 2020.

Decree 88/2020 extends the expiry date of land rights and the registration deadline for

submitting the decree regarding the granting, extension or renewal of land rights, until

December 31, 2020. This policy applies to all land rights with an expiry period, i.e. Right

to Build (Hak Guna Bangunan or “HGB”), Right of Cultivate (Hak Guna Usaha or “HGU”)

and Right to Use (Hak Pakai or “HP”). It also applies to all decrees on the granting,

extension or renewal of land rights that expire from March 31, 2020, onward during the

COVID-19 emergency period. As of this writing, the COVID-19 public health emergency

is still in effect.

Land right certificates and decrees that expired before March 31, 2020, are excluded

from this relaxation policy.

Every land right holder and/or owner whose land right is granted an extension will have

to submit their extension or renewal application to their local land office before

December 31, 2020. Otherwise, their particular land right will end by law after December

31, 2020.

Land right holders and/or owners who have already acquired their decree on the

granting, extension or renewal of their respective land right will have to register their

decree with their local land office before December 31, 2020. Otherwise, the decree in

question will be null and void and the land right holders and/or owners will have to re-

apply for the extension, renewal or granting of their intended land right.

Finally, Decree 88/2020 regulates that the policies therein may be subject to further

review by the BPN and may be revised or adjusted as necessary. (May 5,2020)





consent of SSEK.


How DKI Jakarta Is Supervising Companies During COVID-19

Restrictions

By Dewi Savitri Reni and Syarifah Reihana Fakhry

In response to COVID-19, the government officially enacted large-scale social

restrictions, or Pembatasan Sosial Berskala Besar (“PSBB”), in Jakarta beginning April

10, 2020, to help check the spread of the virus.

The enactment of the restrictions was based on Minister of Health Regulation No. 9 of

2020 concerning Guidelines for Large-Scale Social Restrictions to Expedite

Countermeasures Against COVID-19. Jakarta residents have been instructed to stay at

home, while schools and workplace are closed, religious, social and cultural activities

are restricted, and limitations have been placed on transportation and public facilities.

Companies Exempted from Social Restrictions

Exemptions to workplace closure are made for companies that provide services

involving the public interest including healthcare, food and beverage, energy,

communications, banking and finance, logistics, and strategic business sectors that are

crucial to fulfilling people’s daily needs.

Examples of businesses exempted from PSBB are businesses selling basic ingredients

and medicines such as supermarkets and pharmacies, restaurants, healthcare centers,

transportation services, and facilities that help fulfill the community’s basic needs.

However, even if a business is allowed to remain open it must follow established

COVID-19 workplace protocols set by the government, which include restricting

interactions, denying workplace access to people with underlying health conditions that

could make them more vulnerable to COVID-19, ensuring the cleanliness and hygiene of

the workplace, providing necessary healthcare protections, ensuring physical distancing

between people of at least one meter, and specifically for restaurants, providing only

takeaway or online order/delivery services.




Industrial Companies

Industrial companies can also receive a PSBB exemption. The Ministry of Industry

allows industrial companies and/or companies located in industrial parks to operate their

factories and offices, and maintain the movement of their workers, materials and finished

products, as long as they have the necessary operational license, known in Indonesian

as an Izin Operasional dan Mobilitas Kegiatan Industri (“IOMKI”).

Note that companies require an account at the National Industry Information System

(Sistem Informasi Industri Nasional or “SIINas”) to apply for the IOMKI through the

SIINas website.

As of last week, 900 companies have obtained an IOMKI. Note that companies with an

IOMKI are still obliged to comply with COVID-19 workplace protocols and establish

standard operating procedures in the workplace. They must also provide weekly reports

on their operations and mobility to the Ministry of Industry by uploading the reports to the

SIINas website. Failure to submit a report for three consecutive weeks will result in

revocation of the IOMKI.

Office Closures

Companies not included in the list of sectors allowed to operate or that have not

obtained an IOMKI are obliged to adhere to PSBB by closing their offices and having

employees work from home. According to the DKI Jakarta provincial government, which

is monitoring compliance with social distancing restrictions, 3,725 companies have

reported the implementation of PSBB, with 1,306 of those companies having

implemented full work from home and the rest conducting partial work from home and

significantly reducing activity in the workplace. The DKI provincial government is

routinely supervising and monitoring companies and workplaces in Jakarta to ensure

they are implementing PSBB. Companies that violate PSBB will face sanctions.

Sanctions for Violation of PSBB

The prevailing laws and regulations, namely Governor of DKI Jakarta Province

Regulation No. 33 of 2020 regarding the Implementation of PSBB to Handle COVID-19

in DKI Jakarta Province and Law No. 6 of 2018 regarding Health Quarantine, provide


that individuals who violate the implementation of a health quarantine, including PSBB,

causing a health emergency, may be imprisoned and/or fined up to IDR 100 million. On

this basis, the DKI Jakarta provincial government has implemented sanctions for

businesses/workplaces that violate PSBB. If the business/workplace is a limited liability

company, the members of the company’s Board of Directors will be responsible for any

violation of PSBB.

The DKI provincial government is routinely supervising and monitoring companies and

workplaces in Jakarta. Officials have divided companies in the Indonesian capital into

three categories, namely (i) companies that are allowed to operate because they fall

under a business sector exempted from PSBB; (ii) companies that are not allowed to

continue operating; and (iii) companies that have obtained the necessary licenses to

continue operating.

For companies in the first and last category, the government is conducting strict

supervision to ensure they are adhering to social-distancing protocols in the workplace.

Whereas businesses in the second category are strictly prohibited from operating and

the government is routinely monitoring and inspecting these workplaces to ensure they

remain closed. Companies found in violation of PSBB will receive warnings, guidance

and closure until the end of the PSBB period. As of April 24, 2020, 502 companies had

been found in violation of PSBB and 71 companies had been temporarily closed by the

government.

The government also has issued warnings to 76 companies that obtained a license from

the Ministry of Industry to continue operating but failed to comply with COVID-19

workplace protocols.

Reporting

The DKI provincial government has also put in place a mechanism for employees to

report their companies for not adhering to PSBB. Employees can file a report at

bit.ly/laporanpelaksanaanwfh. This reporting mechanism has been put in place to ensure

the implementation of PSBB and that workers are being treated in accordance with the

provisions of Minister of Manpower Circular Letter M/3/HK.04/III/2020 concerning he

Protection of Workers and Laborers and Business Continuity in the Context of

Preventing COVID-19.


Practical Steps for Businesses

In light of the above, we strongly urge all companies to adhere to the current PSBB

regulations that have been put in place. To determine their next steps, we suggest

businesses consider the following:

1. What activities are conducted by the business?

2. What licenses does the business operate under?

3. Are the activities conducted by the business included in the list of sectors

permitted to continue operating during PSBB?

4. Is the company involved in industrial activities and has it set up a SIINas account

so it can apply for an IOMKI?

5. Has the company obtained an IOMKI?

6. If the company is among those permitted to continue operating, has it established

guidelines to adhere to the COVID-19 workplace protocols set by the

government?

The provincial government in Jakarta is continuously supervising the implementation of

PSBB for both individuals and businesses. Companies found in violation of PSBB

regulations may receive a warning or be forced to close until the end of the PSBB

period.

We strongly urge companies not among those permitted to continue operating to close

their offices and introduce work from home measures. Companies that are permitted to

continue operating should ensure they adhere to the COVID-19 workplace protocols. If

your company is involved in industrial activities, we recommend you obtain an IOMKI.

(May 6, 2020)

More information on how to obtain the IOMKI license can be found in our previous

articles, “Indonesia Provides Mechanism for Companies to Operate During Pandemic”

and “Update on License for Companies in Indonesia to Operate During Pandemic.”




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https://www.ssek.com/blog/update-on-license-for-companies-in-indonesia-to-operate-during-pandemic



consent of SSEK.


COVID-19 Social Distancing in Indonesia – Jakarta and Bogor Put in

Place PSBB

By Stephen I. Warokka and Kadek Denny B. Adiputra

In furtherance of Government Regulation No. 21 of 2020 on the Limitation of Large-

Scale Social Interactions to Expedite Countermeasures against COVID-19 (March 31,

2020) (“GR 21/2020”), Bogor Regency has implemented Limitations on Large-Scale

Social Interactions (Pembatasan Sosial Berskala Besar or “PSBB”), effective April 15 to

April 28, 2020, with the hope of slowing the spread of COVID-19.

The introduction of PSBB was deemed necessary following a spike in the number of

COVID-19 cases in Bogor Regency and its proximity to DKI Jakarta, the center of the

COVID-19 outbreak in Indonesia and which implemented similar social-distancing

measures on April 10, 2020. As of the time of this writing, 58 COVID-19 cases have

been declared in Bogor Regency.

PSBB in Bogor Regency took effect through the enactment of Regent of Bogor

Regulation No. 16 of 2020 regarding the Implementation of PSBB to Handle COVID-19

in Bogor Regency (April 14, 2020) (“Bogor PSBB Reg”).

The PSBB measures implemented in each province and/or regency may differ from one

another as GR 21/2020 allows regional governments to enact measures deemed

appropriate for their particular circumstances, subject to several minimum mandatory

social limitations. This article compares the PSBB enacted in Bogor Regency and the

PSBB enacted in DKI Jakarta based on Governor of DKI Jakarta Province Regulation

No. 33 of 2020 regarding the Implementation of PSBB to Handle COVID-19 in DKI

Jakarta Province (“Jakarta PSBB Reg”)

a. Limitation on Outdoor Activities

Both the Bogor PSBB Reg and Jakarta PSBB Reg (the “Regulations”) define the

following scope of outdoor activities: (i) activities at schools and other educational

institutions; (ii) activities at workplaces; (iii) religious activities at houses of worship;

(iv) activities in public places or facilities; (v) social and cultural activities; and (vi) the

movement of people and goods by means of transportation. As a general rule,


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activities under these categories shall be closed or minimized, subject to several

exemptions.

There are differences between the Regulations in terms of the types of activities

under each specific category, as follows:

i. Limitation on Teaching at Schools and Other Educational Institutions

Under the Bogor PSBB Reg, religious educational institutions are also subject to

closure, while the Jakarta PSBB Reg does not explicitly stipulate the closure of

such institutions. The Regulations provide that educational institutions that

remain open are subject to COVID-19 prevention measures including the COVID-

19 Prevention Protocol.

ii. Limitation of Activities at the Workplace

The difference between the Regulations lies in the workplaces exempted from

mandatory closure. In addition to the exemptions to workplace closure provided

in the Jakarta PSBB Reg, the Bogor PSBB Reg provides the following additional

exemptions:

1) Regional institutions providing direct services to society, including disaster

relief services, health services, transportation services, garbage disposal

services, fire brigade, safety and compliance services, manpower services,

food security services, social services, funeral services, and regional financial

revenues and expenditure services;

2) Businesses in the field of production of essential commodities, production that

requires continuous process subject to obtaining a permit from the Ministry of

Industry, oil and gas production, manufacturing of packaging for food,

medicines, pharmaceuticals and health equipment, agricultural activities for

basic ingredients and holticulture, production of goods for export, production

of farming and agricultural goods, and production by micro, small and medium

enterprises; and


3) Land utilized for farming, growing plants for consumption, horticulture and

fisheries.

In addition to the above, the Bogor PSBB Reg does not contain an exemption for

technology companies as provided in the Jakarta PSBB Reg. Any businesses

that remain open must implement COVID-19 prevention measures and follow the

COVID-19 Prevention Protocol.

The Bogor PSBB Reg provides additional guidelines for industries whereby the

management shall minimize activities. This includes the minimum number of

employees, activities and operational times.

iii. Limitation of Religious Activities at Houses of Worship

The Regulations stipulate that during the implementation of PSBB, religious

activities shall be conducted at home. During PSBB, individuals in charge of

houses of worship must employ COVID-19 prevention measures by limiting

access to and maintaining the cleanliness of the houses of worship and

educating worshippers to conduct religious activities at home.

iv. Limitation of Activities in Public Places or Facilities

The Regulations prohibit any gathering of more than five individuals. The Bogor

PSBB Reg provides an exemption for activities involving health services,

medicine and health equipment, including:

1) Fulfillment of health services at hospitals and all relevant medical institutions;

2) Production and distribution activities, both private and public, such as

pharmacies, blood tranfusion units, chemical supply and medical equipment

stores, laboratories, clinics, ambulances, and pharmaceutical research

laboratories, including veterinary health facilities.

In providing services to the public, the abovementioned facilities must seek

guidance on health protocols and the requirements set out under the relevant

rules and regulations.


Further, the Bogor PSBB Reg limits the operating hours for providers of retail

goods as follows:

1) Traditional markets can open from 4 am to 1 pm;

2) Mini markets can open from 8 am to 6 pm; and

3) Supermarkets can open from 9 am to 6 pm.

The Jakarta PSBB Reg does not provide any elucidation on the operational hours

for providers of retail goods. Based on reports from several news outlets,

however, supermarkets and other stores in DKI Jakarta have taken the initiative

to limit their operational hours.

v. Limitation on Social and Cultural Activities

During PSBB, the Regulations prohibit all gatherings or meetings related to

politics, sports, entertainment, and academic and cultural activities. Additionally,

the Bogor PSBB Reg requires all attendees at certain exempted gatherings such

as circumcisions in health facilities, weddings at the Religious Affairs

Office/Registry Office and funerals to wear masks.

b. Transportation of People and Goods

The Bogor PSBB Reg provides specific transportation categories permitted during

PSBB, while the Jakarta PSBB Reg provides that all movements are temporarily

suspended except for activities to fulfill primary needs and other permitted activities.

The permitted transportation categories in the Bogor PSBB Reg are as follows:

i. Transport of goods which includes freight trucks for transporting medical, health,

and sanitation supplies, primary needs, food and beverages, distribution of

money, fuel and gas, and the distribution of industrial materials; freight trucks and

buses for the distribution of packages; buses picking up industrial employees;

and transportation to support defense and security activities.

ii. Transport of people which includes private vehicles, public transportation by

motorcycle and trains.


The number of people permitted inside private vehicles differs between the

Regulations. The Jakarta PSBB Reg provides that private cars may not carry more

than 50% of the vehicle’s passenger capacity, while the Bogor PSBB Reg

determines the passenger limit by vehicle type. A private sedan with a capacity of

four people may only carry three people, while non-sedans with a capacity of more

than four people may only carry four people.

The requirements that application-based motorcylces are only allowed to carry goods

and public vehicles can carry only 50% of the vehicle’s passenger capacity are the

same in both Regulations.

c. Relief for Businesses during PSBB

The Jakarta PSBB Reg provides that incentives for businesses may take the form of

reduction of regional tax and retribution, social aid for employees affected by PSBB,

and other aid under the applicable laws and regulations. The Bogor PSBB Reg

provides that incentives for businesses may take the form of abolishment of

administrative sanctions such as interest on late payments or fines for failure to pay

hotel taxes, restaurant taxes, entertainment taxes and/or parking taxes.

d. Monitoring, Evaluation and Reporting

The Regulations call for active participation by neighborhoods to monitor and report

the implementation of PSBB to local Task Forces.

e. Sanctions and Enforcement of PSBB

On sanctions, the Regulations refer to the applicable laws and regulations. Based on

Law No. 6 of 2018 on Health Quarantine (August 7, 2018), every person shall adhere

to and participate in the implementation of a health quarantine (e.g., PSBB). Failure

to adhere to and participate in the implementation of a health quarantine and/or the

obstruction of the quarantine resulting in a public health emergency shall be

punishable by imprisonment for a maximum of one year and/or a maximum fine of

one hundred million Rupiah. (April 29, 2020)






consent of SSEK.


DKI Jakarta Starts Limiting Large-Scale Social Interactions

By Stephen Igor Warokka and Sabrina C.M. Tobing

One of the ways to combat the spread of COVID-19 in Indonesia is to implement

Limitation of Large-Scale Social Interactions (Pembatasan Sosial Berskala Besar or

“PSBB”). PSBB is a health quarantine measure under Law No. 6 of 2018 on Health

Quarantine (August 7, 2018) (“HQ Law”) and is further supported by Government

Regulation No. 21 of 2020 on the Limitation of Large-Scale Social Interactions to

Expedite Countermeasures Against COVID-19 (March 31, 2020) (“GR 21/2020”), which

was issued as an implementing regulation.

The Indonesian Ministry of Health (“MOH”) enacted MOH Regulation No. 9 of 2020 on

Guidelines for PSBB to Expedite Countermeasures Against COVID-19 (April 3, 2020)

(“MOH Reg 9/2020”) to further regulate the mechanism for governors/regents/mayors to

apply to the MOH to implement PSBB in their regions, as introduced by GR 21/2020.

On April 7, 2020, DKI Jakarta Governor Anies Baswedan announced that the MOH had

approved the enactment of PSBB in DKI Jakarta Province, under MOH Decree No.

HK.01.07/MENKES/239/2020 on the Determination of PSBB in DKI Jakarta Province to

Expedite Countermeasures Against COVID-19.

This was followed by the issuance of Governor of DKI Jakarta Province Decree No. 380

of 2020 regarding the Enactment of PSBB to Handle COVID-19 in DKI Jakarta Province

(April 9, 2020). This decree states that DKI Jakarta will implement PSBB for 14 days,

from April 10 to April 23, 2020. A day later, Governor Baswedan issued Governor of DKI

Jakarta Province Regulation No. 33 of 2020 regarding the Implementation of PSBB to

Handle COVID-19 in DKI Jakarta Province (April 10, 2020) (“Governor Reg 33/2020”).

Implementation of PSBB under MOH Reg 9/2020

PSBB is defined under MOH Reg 9/2020 as the limitation of certain public activities in an

area with suspected COVID-19 cases to prevent its possible spread.

In determining whether a region can put in place PSBB measures, the MOH relies on the

criteria in GR 21/2020:




total number of cases and/or total number of deaths resulting from illness are

increasing and spreading in a significant and swift manner to several regions; and

there exists an epidemiological link with similar cases in other regions or

countries.

A governor/regent/mayor – together or separately – may submit an application to the

MOH for PSBB enactment if they believe their region meets the above criteria. In cases

where only the regent/mayor is applying for PSBB, they must first consult with their

governor and copy the governor in the application letter.

A PSBB enactment application shall included the following information:

the growth in the number of cases over time along with an epidemiological curve;

the spread of cases over time with the relevant mapping of such spread; and

events of local transmission with the result of an epidemiologic investigation that

states second- and third-generation transmission has occurred.

The MOH also requires information regarding the region’s readiness to supply people’s

basic needs, maintain health facilities and infrastructure, finance and operate the social

safety net, and maintain security in the region. The application for PSBB may be

submitted electronically to the MOH’s email address, [email protected].

A determination from the MOH for PSBB will be delivered no later than two days after

the application has been submitted. Although the form of determination was not

specified in MOH Reg 9/2020, we have seen in practice that it will most likely be issued

in the form of an MOH decree. In cases where a region no longer meets the criteria for

PSBB, the MOH may revoke its approval.

The governor/regent/mayor shall record and report the implementation of PSBB

measures in their respective region and report them to the MOH as the basis to assess

the success of the PSBB implementation. PSBB implementation shall also be guided

and supervised by the governor/regent/mayor and the Task Force to Expedite

Countermeasures Against COVID-19, as established by the President, consistent with

their respective authorities.

mailto:[email protected]


PSBB may be implemented for 14 days. If new evidence of COVID-19 spread is found

during the implementation, the PSBB measures may be extended by 14 days from the

date when the most recent COVID-19 case was found.

PSBB implementation shall consist of the following measures:

temporary closure of schools and workplaces;

limitations on religious activities;

limitations on activities in public places or facilities;

limitations on social and cultural activities

limitations on transportation modes; and

limitations on other activities related to defense and security.

Although the MOH has provided guidelines for the implementation of the above

measures, each region may structure the measures according to its specific needs and

circumstances, as DKI Jakarta has done in Governor Reg 33/2020.

Implementation of PSBB in DKI Jakarta under Governor Reg 33/2020

1. Temporary closure of schools

School and/or educational institution activities in Jakarta shall be conducted at

home/residence during the PSBB implementation. An exemption is given for

educational, training and research institutions linked to health services. In conducting

this measure, the head of the school and educational institution shall ensure that the

learning process continues during the implementation of the PSBB measures, while

preventing the spread of COVID-19.

2. Temporary closure of workplaces

Work activities in Jakarta shall be temporarily conducted from home/residence during

PSBB implementation. During the temporary closure, office managements shall ensure

the services provided and/or business activities continue to operate in a limited manner,

protect the productivity of employees, prevent the spread of COVID-19 and protect the

safety of the workplace, and also provide assistance to employees exposed to COVID-

19.


The following are exempted from mandatory closure:

a. all government offices/institutions, central or regional, based on the regulations of

the relevant ministries;

b. foreign representative offices and/or international organizations conducting

diplomatic and consular functions, along with other functions under international

law;

c. state/regional-owned enterprises handling COVID-19 and/or fulfilling the public’s

primary needs under the regulations of the relevant ministry and/or the

Government of DKI Jakarta Province;

d. business actors operating in the sectors of health, foodstuffs/food/drinks, energy,

communications and information technology, finance, technology, logistics,

hotels, construction, strategic industries, basic services, public utilities and

industries that have been determined as national vital objects, and/or daily needs;

e. local and international public organizations in the field of disaster relief and/or

socialization.

For offices that fall under the above exemption, management must implement social

distancing among employees during work activities, social distancing of people with

underlying conditions and/or who are vulnerable to COVID-19, and protocols to prevent

COVID-19 in the workplace.

Governor Reg 33/2020 provides specific guidelines for restaurants, food stalls and

similar businesses, hotels, and construction work. These include:

restaurants, food stalls and similar businesses are to limit their service to take-

away and deliver through online and telephone orders;

hotels must provide special services for guests who are self-quarantining, and

they must suspend activities and close facilities that may violate social distancing

efforts;

construction projects must provide housing and the daily needs for all workers for

as long as they are in the project area.

3. Limitations on religious activities

Religious activities during PSBB shall be conducted at home. Although not mentioned in

Governor Reg 33/2020, the MOH provides that such religious activities at home may be


attended by limited family members, provided that distance is maintained between each

person. Any exemption for religious activities should be guided by the relevant laws and

regulations, and the views of official religious institutions that are acknowledged by the

Government.

4. Limitations on activities in public places or facilities

All public places or facilities shall be temporarily closed for public activities during PSBB

implementation. With regard to crowd control, any activity in a public place or facility may

be attended by no more than five people.

An exemption is provided for activities conducted for (i) fulfilling primary and/or fulfilling

daily needs such as providing, processing, distributing and/or delivering

foodstuffs/food/drinks, energy, communications and information technology, finance,

banking, and payment system, and/or logistics; and (ii) individual sports activities in the

area outside of homes.

The term “fulfilling primary and/or daily needs” for providing, processing, distributing

and/or delivering foodstuffs/food/drinks consists of (i) providing retail goods in traditional

markets, supermarkets, or stalls, and (ii) laundry services. For the purpose of

maintaining economic stability, business actors involved in providing basic/daily needs

are prohibited from raising the price of goods.

5. Limitations on social and cultural activities

Social and cultural activities consisting of all political, sports, entertainment, academic

and cultural gatherings, meetings and activities that would result in people gathering

together are prohibited during PSBB.

An exemption is provided for circumcisions in health facilities, weddings in the Religious

Affairs Office/Registry Office, and funerals at funeral homes. Such events may be

attended by a limited number of people, with physical distancing of at least one meter

between each person. Any celebration of such activities that would result in a mass

gathering is prohibited.

Further, the attachment of MOH Reg 9/2020 provides that no more than 20 people may

attend a funeral and only in cases where the cause of death was not COVID-19.


6. Limitations on transportation modes

During PSBB, all movements of people and goods are temporarily suspended except for

activities to fulfill primary needs and activities that are permitted during PSBB.

There is no limitation on modes of transportation for the transport of goods related to

permitted activities. However, for the transport of passengers, permissible modes of

transportation are limited to private cars and motorcycles, public motor vehicles and

public train.

The operation of private cars, private motorcycles and public motor vehicles for

transporting passengers is permitted in Jakarta, with the following limitations:

Private cars can carry no more than 50% of the car’s total passenger capacity;

Application-based motorcycle are only allowed to carry goods and not

passengers;

Public motor vehicles can carry no more than 50% of the vehicle’s total

passenger capacity.

8. Social Aid for Citizens and Business Actors Affected by PSBB in DKI Jakarta

The Government of DKI Jakarta Province may provide assistance to residents unable to

fulfill their primary needs during the implementation of PSBB. It may also provide

incentives for business actors affected by the implementation of PSBB. Such incentives

may be given in the form of:

reduction of regional tax and retribution for businesses;

social aid for employees affected by the implementation of PSBB; and/or

other aid under the applicable laws and regulations.

Enforcement and Potential Sanctions

Every person shall adhere to and participate in the implementation of the health

quarantine (e.g., PSBB). Article 93 of the HQ Law provides that the failure to adhere to

and participate in the implementation of the health quarantine, and/or the obstruction of

the quarantine resulting in a public health emergency, shall be punishable by


imprisonment for a maximum of one year and/or a maximum fine of one hundred million

Rupiah.

With regard to enforcement, the chief of the Indonesian National Police (“Kapolri”)

issued Announcement of Kapolri No. MAK/2/III/2020 of 2020 on Compliance with the

Government’s Policy regarding Countermeasures Against the Spread of COVID-19

(March 19, 2020) (“MAK/2/III/2020”). MAK 2/III/2020 stipulates the police will enforce

measures to ensure (i) there are no social activities that will result in mass gatherings;

(ii) there is no hoarding of primary needs or other public needs; and (iii) there is no

spread of fake news could cause a public panic. (April 13, 2020)





consent of SSEK.


Indonesia and COVID-19: Government Issues Regulation on Limiting

Social Interactions

By Ridzki Putra Ramadhan

As part of the national effort to battle the spread of the coronavirus in the country, the

Government of Indonesia (“GOI”) has issued Government Regulation No. 21 of 2020 on

the Limitation of Large-Scale Social Interactions to Expedite Countermeasures Against

COVID-19 (March 31, 2020) (“GR 21/2020”). GR 21/2020 is an implementing regulation

for Law No. 6 of 2018 on Health Quarantine (the “HQ Law”).

Under the HQ Law, health quarantine is defined as an effort to prevent or curb the

spread of a disease and/or public health risk factor that has the potential to cause a

public health emergency. The HQ Law defines a public health emergency as an

extraordinary public health event as indicated by the spread across regions or countries

of infectious disease and/or events caused by nuclear radiation, biological pollution,

chemical contamination, bioterrorism or food contamination.

COVID-19 Declared a Public Health Emergency

On the same date it issued GR 21/2020, the GOI designated COVID-19 a public health

emergency by virtue of Presidential Decree No. 11 of 2020 on the Stipulation of

Coronavirus Disease 2019 (COVID-19) as a Public Health Emergency (“Decree

11/2020”). Decree 11/2020 recognizes COVID-19 as a public health emergency as

defined by the HQ Law, empowering the GOI to introduce health quarantine measures

as set out in the HQ Law to fight the spread of COVID-19 in Indonesia. These quarantine

measures include home quarantine, regional quarantine, hospital quarantine, and limits

on large-scale social interactions.

While the HQ Law discusses the general provisions for the implementation of health

quarantines in the event of a public health emergency, GR 21/2020 focuses solely on

limitations on large-scale social interactions, particularly as a countermeasure to the

spread of COVID-19.

Such limitations are a method of health quarantine by way of temporarily closing certain

public places to prevent the spread of an infectious disease stipulated as a public health

https://www.ssek.com/attorneys/associates/ridzki-putra-ramadhan


emergency by the GOI. The implementation of such limitations includes at least the

following:

a. temporary closure of schools and places of work;

b. limitations on religious activities; and/or

c. limitations on activities in public places or facilities.

Pursuant to GR 21/2020, the enforcement of such limitations on large-scale social

interactions can be initiated by the Minister of Health (“Minister”) or by a

governor/regent/mayor. In the case of the latter, the governor/regent/mayor would need

to submit a recommendation to the Minister, who would then consider such

recommendation and determine whether to enforce the requested limitations in a certain

region.

The implementation of such large-scale social distancing efforts must be based on

various considerations as set out in Article 2 paragraph (2) of GR 21/2020, including

epidemiology, scale of threat, resources, and political, economic, social, cultural,

defense and security considerations.

Further, under Article 3 of GR 21/2020, for limitations on large-scale social interactions

to be implemented, the following conditions must be fulfilled:

a. the number of infections and/or the death toll from the disease have increased

and spread significantly and quickly to several regions;

b. there exists an epidemiologic link with a similar case in another region or country.

As of the date of this article, we are not aware of any decree or stipulation by the

Minister that enforces any limitations on large-scale social interactions in any region in

the country. In practice, however, several regional governments, including those in DKI

Jakarta and West Java, have begun to implement such limitations in their own regions.

Given that GOI has stipulated COVID-19 a public health emergency and issued an

implementing regulation specifically for the exercise of large-scale social distancing

efforts in response to the COVID-19 pandemic, it would appear that it is possibly

preparing itself, by validating its authority pursuant to the HQ Law, to introduce health

quarantines to handle the crisis. (April 6, 2020)






consent of SSEK.


Homecoming Postponed by COVID-19: An Overview of Transport

Restrictions in Indonesia During Idul Fitri

By Zulfikar Dimas Winarno

Indonesia, the largest Muslim-majority country in the world, has a long tradition of

millions of people traveling back to their home villages and hometowns for Idul Fitri, a

custom known as mudik Lebaran. That tradition is being upended this year by COVID-

19.

With the goal of curbing the spread of COVID-19, the Indonesian government, through

the Minister of Transportation (“MOT”), has enacted MOT Regulation No. PM 25 of 2020

regarding Transportation Control During the 1441 Hijriah Eid Al-Fitr Homecoming Period

for the Purpose of Preventing the Spread of Coronavirus Disease 2019 (COVID-19)

(“PM 25/2020”).

Essentially, PM 25/2020 imposes a temporary prohibition on Idul Fitri travel by restricting

the use of different modes of transportation during the peak travel season of Ramadan.

Although temporary in nature – at the moment the enforcement period is April 24 to May

31 – it is possible the prohibition could be extended, depending on developments with

the COVID-19 pandemic in Indonesia.

PM 25/2020 seeks to prohibit all modes of transportation from exiting and/or entering

areas, including the Jakarta metropolitan area of Jakarta, Bogor, Depok, Tangerang and

Bekasi, known as Jabodetabek, where large-scale social restrictions (pembatasan sosial

berskala besar or “PSBB”) are in place or areas designated as COVID-19 red zones.

Land and Water Transportation

The scope of land transportation temporarily prohibited in designated areas under PM

25/2020 includes public and personal motor vehicles (buses, cars and motorcycles). The

regulation also prohibits transportation by ferry or other watercraft for lakes or rivers.

PM 25/2020 prohibits any personal motor vehicle from leaving its point of origin and

requires all public land transportation operators to refund any ticket purchased for the

prohibited travel period. Checkpoints administered by the Indonesian National Police



and Indonesian Armed Forces will be set up to enforce the travel ban for public and

personal motor vehicles.

The Land Transportation Management Office and port administrator units will establish

separate checkpoints for ferries and river and lake watercraft.

Sanctions for violations differ depending on the time period. Between April 24 and May

7, violators will be instructed to return to their point of departure. Beginning May 8,

stricter sanctions in accordance with applicable laws and regulations will apply, in

addition to the order for violators to return to their point of origin. Government agency

vehicles, emergency vehicles (fire trucks, ambulances and hearses), and other essential

vehicles used for services related to logistics, food and beverage, and medicine are

exempted from this prohibition.

Recent reports from news media outlets indicate about 50 checkpoints have been

established in areas such as the Cikarang and Bitung tollgates and that thousands of

vehicles have been instructed to return to their points of departure

Rail Transportation

The prohibition on rail transportation applies to both intercity and city train travel. Intercity

trains in designated areas are required to cancel all trips during the prohibited time

period and refund tickets, while city trains are only prohibited to travel in the area of

Jabodetabek. Any city trains operating outside Jabodetabek may continue to operate as

long as they comply with any PSBB arrangements applicable in their locale.

PM 25/2020 allows the operation of intercity trains for the transport of necessary goods.

It also allows “extraordinary” train travel strictly for the purpose of the mitigation and

prevention of COVID-19.

Following the enactment of PM 25/2020, PT Kereta Api Indonesia (Persero), the

government-owned operator of public railways in Indonesia, has reportedly suspended

all its intercity train operations until May 31 and offered refunds for passengers who had

already purchased tickets.


Sea Transportation

PM 25/2020 prohibits all passenger ships from travelling from or to PSSB areas.

Deviating from the approach of providing refunds, sea transportation business entities

may reschedule or reroute prohibited trips free of any additional charge. Port

harbormasters and local port COVID-19 task forces will set up checkpoints at passenger

terminals to monitor compliance. Administrative sanctions for sea transportation

business entities violating this regulation range from a refusal of port services to the

revocation of their sea transportation business license, known as a SIUPAL, in

accordance with the applicable laws and regulations.

Exemptions apply for, among others, ships transporting commodities and medical

essentials, Indonesian citizens returning from abroad, inter-island transportation for

government and medical personnel, and ships servicing a single agglomeration of

districts/regencies/provinces.

Air Transportation

The temporary prohibition on air transportation applies to domestic flights, by both

commercial and private aircraft, from and to PSBB areas and/or red zones. Affected

airlines must offer a remedy for passengers who previously purchased tickets. Remedy

options include rescheduling or rerouting flights, providing membership points equal to

the nominal value of the ticket, providing ticket vouchers equivalent to the amount paid,

and cash refunds. Violations of the regulation are subject to administrative sanction in

the form of route permit revocation.

Consistent with other modes of transportation, exemptions apply to, among others,

flights for high-level government officials and law enforcement and emergency services.

As confirmed by the Director General of Air Transportation on April 23, 2020, air

transportation to accelerate the mitigation and prevention of COVID-19 may continue to

operate.

Conclusion

PM 25/2020 is an active response to the COVID-19 pandemic in Indonesia. It was

enacted to control the movement of people, with the aim of preventing the further


transmission of COVID-19. It may be premature to judge the effectiveness of PM

25/2020 in checking the spread of COVID-19 across Indonesia, but it appears off to a

positive start, with the police and armed forces as of this writing returning more than

25,000 cars to their point of departure on the Java-Lampung route alone since the

enactment of PM 25/2020. (May 7, 2020)





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Indonesian Capital Market Update During the Coronavirus Pandemic

By Ira A. Eddymurthy and Callista Putri Mayari

To generally calm the market from its consistent downward volatility amid the global

coronavirus pandemic, the relevant Indonesian government authorities have taken

several actions. These include (i) the suspension of all short selling transactions

implemented by the Indonesia Stock Exchange (“IDX”) and (ii) the introduction by the

Indonesian Financial Services Authority (“OJK”) of a new policy on share buybacks.

IDX Suspends Short Selling

The IDX suspended short selling as the Jakarta Composite Index (“JCI”) was in a free-

fall, continuing its losses since the start of 2020. The IDX believed the stock market

correction in Indonesia was mirroring similar losses around the world over fears of the

coronavirus pandemic.

The IDX suspension resulted from a coordination meeting attended by IDX officials and

Indonesian President Joko Widodo, together with other financial industry regulators,

including OJK, Bank Indonesia and Ministry of Finance officials.

The suspension of short selling was declared effective upon the issuance of IDX Circular

Letter No. S-01419/BELPOP/03-2020 on Provisions Relating to Short Selling

Transactions dated March 2, 2020. It is further reiterated through IDX Announcement

No. Peng-00058/BEI.POP/03-2020 on the Revocation of the List of Securities that Can

Be Transacted Through Short Selling dated March 2, 2020 (“IDX Announcement 058”).

Under IDX Announcement 058, all securities stipulated by the IDX as securities or

shares eligible for short selling transactions, as stated in item I.e. of IDX Announcement

No. Peng-00054/BEI.POP/02-2020 on Securities that Can Be Transacted and

Guaranteed in the Context of Margin Transactions and/or Short Selling Transactions

dated February 28, 2020, are now prohibited from being transacted by way of short

selling in Indonesia for an indefinite period.


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Current IDX Policy on Short Selling

In essence, the IDX has adopted three policies regarding short selling transactions as of

this writing:

1. The IDX will not issue any list of securities that can be traded through short

selling transactions for an indefinite period;

2. The IDX will not entertain any applications requesting short selling transactions,

even if requested by Securities Exchange members, for an indefinite period; and

3. Securities Exchange members are obliged to ensure that any transaction carried

out, both for the benefit of Securities Exchange members and/or their customers,

is not a short selling transaction.

The above prohibition applies to any natural or legal person irrespective of their country

of residence, including all qualified investors and securities companies listed on the IDX

website which had previously obtained approval from the IDX to carry out short selling

transactions.

OJK Policy on Share Buybacks

The week after the IDX introduced its prohibition on short selling, the OJK, also taking

into account the pressure of the global pandemic and the plunging JCI, which had fallen

about 18.46% since the start of the year, issued Circular Letter No.3/SEOJK.04/2020

dated March 9, 2020, on Other Significantly Fluctuating Market Conditions for the

Performance of Buyback of Shares Issued by Issuers or Public Companies (“OJK

Circular Letter No. 3/2020”).

On March 16, 2020, the OJK issued Circular Letter No. S-89/D.04/2020 to further clarify

procedures for share buybacks as set forth in OJK Circular Letter No. 3/2020 (“OJK

Circular Letter No. S-89/2020”). In principle, OJK Circular Letter No. S-89/2020

regulates procedures for issuers or public companies (i) to provide written disclosure of

information according to the required timeline and (ii) to satisfy the stipulated mechanism

for the refloat of treasury shares.

Share Buyback Without a GMS


Under OJK Circular Letter No. 3/2020, issuers and public companies can now conduct

share buybacks without convening a General Meeting of Shareholders (“GMS”). In

addition, the number of shares that can be repurchased by issuers and public

companies can now be more than 10% of paid-up capital and at most 20% of paid-up

capital, provided that the outstanding shares are at least 7.5% of paid-up capital.

For the sake of clarity, the relaxed process of share buybacks without obtaining prior

GMS approval is not mandatory in nature. This is merely an option for issuers and public

companies, to allow them if they choose to expedite the timeline by being able to skip

the approximately two months required to plan and hold a GMS to approve a share

buyback.

With the issuance of OJK Circular Letter No. 3/2020 and OJK Circular Letter No. S-

89/2020, the OJK is seeking to help reduce the impact of the coronavirus pandemic on

the market by empowering issuers and public companies to execute expedited share

buybacks without violating the provisions of applicable laws and regulations. (March 30,

2020)





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Indonesia Introduces Criminal Court Trials by Teleconference in

Response to COVID-19

By Dimas Indartono

The Indonesian Supreme Court has issued Circular Letter Number 1 of 2020, dated

March 23, 2020, regarding Adjustment of the Working System for Judges and Court

Apparatus in an Effort to Prevent the Spread of COVID-19 at the Supreme Court and

Subordinate Courts (the “Circular Letter”).

The Circular Letter gives courts the discretion to postpone hearings or restrict those who

can attend hearings, as part of social distancing efforts in response to COVID-19. The

Circular Letter also encourages parties in civil, religious and state administrative

proceedings to utilize the e-litigation application system that the courts recently

launched.

And on April 13, 2020, the Supreme Court, the Attorney General’s Office and the

Ministry of Law and Human Rights executed a Memorandum of Understanding on the

Implementation of Trials by Teleconference (the “MOU”).

This MOU is intended to optimize, effectuate and ensure safety in holding criminal trials

by teleconference.

The following are the authorities and responsibilities of each institution according to the

MOU:

Supreme Court

a. Carry out duties and functions in conducting trials in accordance with the

prevailing laws and regulations;

b. Provide adequate supporting facilities and infrastructure for the purpose of

holding trials by teleconference at district courts;

c. Monitor and evaluate the implementation of trials by teleconference.

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Attorney General’s Office

a. Carry out duties and functions as a prosecutor in accordance with the prevailing

laws and regulations;

b. Provide adequate supporting facilities and infrastructure for the purpose of

holding trials by teleconference at the Attorney General’s Office;

c. Monitor and evaluate the implementation of trials by teleconference.

Ministry of Law and Human Rights

a. Carry out duties and functions in the correctional field in accordance with the

prevailing laws and regulations;

b. Prepare prisoners who are defendants/witnesses in teleconference trials at

detention/prison facilities;

c. Provide adequate supporting facilities and infrastructure for the purpose of

holding trials by teleconference;

d. Maintain order, safety and respect during trial proceedings in accordance with the

prevailing code of conduct for criminal trials;

e. Monitor and evaluate the implementation of trials by teleconference.

Any matters not yet been stipulated in this MOU will be stipulated by these three

institutions in the form of an addendum, which shall be considered an inseparable part of

the MOU. As of the date of this writing, several courts in Indonesia have implemented

criminal trial hearings by teleconference in response to the COVID-19 outbreak. (April

27, 2020)





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Indonesia Suspends Foreign Manpower Work Permit Applications

During Covid-19 Outbreak

By Angky Banggaditya

On April 8, 2020, Ida Fauziyah, the Indonesian Minister of Manpower (“MOM”), signed

and issued Circular Letter No. M/4/HK.04/IV/2020 regarding Services for the Utilization

of Foreign Workers in Relation to the Prevention of Covid-19 (“MOM CL 4/2020”).

This new circular letter follows the issuance of Minister of Law and Human Rights

Regulation No. 11 of 2020 regarding the Temporary Prohibition on Foreigners Entering

Indonesia and the expiration of an earlier MOM circular letter concerning services for the

utilization of foreign manpower from the People’s Republic of China in order to prevent

Covid-19.

Through MOM CL 4/2020, the Ministry of Manpower suspends all services for new

applications related to the utilization and licensing of foreign workers. The circular letter

stipulates exceptions for applications for (a) foreign nationals who will work on national

strategic projects and (b) stay permit holders who are still residing in Indonesia.

MOM CL 4/2020 also allows employers to apply for work permit extensions for their

foreign workers who are still in Indonesia and cannot return to their country of origin due

to entry restrictions. This allows employers to continue employing their expatriate

workers during the Covid-19 outbreak.

As a practical consequence, although the Ministry of Manpower’s online system for

foreign workers is still accessible, companies planning to apply for new work permits for

foreign workers that do not qualify for the exemptions noted above may need to wait for

further notice from the Ministry of Manpower.

MOM CL 4/2020 will remain in effect until the pandemic is declared over by the

Indonesian Government. (April 24, 2020)







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Indonesian Employment Law and COVID-19

As a result of the serious economic disruptions from COVID-19, many employers in

Indonesia may be forced to reduce costs for the foreseeable future.

What options are available to employers under Indonesian employment law?

Salary Cuts and Unpaid Leave

Employers that want to avoid terminations as much as possible can pursue the option of

reaching an agreement with employees on salary cuts and/or unpaid leave

arrangements.

Key points to consider include:

If employees freely agree to the employer’s proposal to salary cuts and/or unpaid

leave, that agreement should be recorded in writing.

If there is a union at the company then the employer must consult with and

secure the approval of the union for any agreed salary cuts and/or unpaid leave.

If employees decline to agree to salary cuts and/or unpaid leave, the employer

can seek to encourage agreement by implying that employees who do not agree

to the proposed changes could potentially be made redundant, subject to a

mutual termination agreement (“MTA”) or, if disputed, approval from the labor

court.

It is important to secure the consent from each employee for proposed salary

cuts and/or unpaid leave. Without that consent, employees remain entitled to

their benefits under their current employment agreement.

Note that the agreement with employees must be signed in the Indonesian

language. A dual-language form of the agreement can be drafted but the

prevailing language must be Indonesian. If the agreement is not signed in the

Indonesian language, there is a risk that it could be considered null and void if

disputed in the courts.

Employee Terminations

There are a number of different scenarios employers might consider in response to

COVID-19. These include the complete closure of the business because it is no longer


financially viable and the redundancy of all the employees, or laying off only a portion of

the workforce.

Some of the key considerations for these scenarios include the following:

Under the Indonesian Manpower Law, terminations for efficiency basically can be

done only when there is a closure of the business (including partial closure or a

reduction of overall business activities), either preceded with or without losses for

two consecutive years (this is relevant for determining termination entitlements).

Whether a force majeure event would be an acceptable reason for employee

terminations with minimal severance payment.

If the business is not being shuttered, employee terminations can still be done but

only with the express written agreement of employees by way of a mutual

termination agreement (“MTA”).

Note that without an MTA the proposed terminations will be deemed as being

disputed and can only be settled through the labor court, a process that can take

six months or more, during which the employees’ salaries must be paid.

Note that Indonesia does not recognize the concept of notice of termination.

Unless an MTA is reached, the lengthy and costly termination process for

permanent employees is as follows:

o The parties (the employer and employees, or if applicable, a labor union)

are required to meet in an attempt to reach an amicable termination

settlement, a process known as bipartite negotiation. If a settlement is

reached, an MTA should be executed and registered at the relevant labor

court;

o If negotiations fail, either the company or the employee may file the

dispute with the relevant manpower affairs office. The manpower office will

ask both parties whether the dispute should be resolved through

conciliation with private conciliators or mediation with a mediator from the

manpower office.

o If the non-binding written recommendation of the conciliator or mediator is

rejected, the matter must be brought by either party to the relevant labor

court to approve the termination and the benefits payable in connection

with the termination. If the labor court decision is appealed the case then

goes to the Supreme Court.

o


Statutory Severance Requirements:

o For contract/fixed-term employees: The balance of the contract must be

paid to fixed-term employees terminated before the end of their fixed-term

employment agreement.

o For permanent employees:

A permanent employee’s entitlement in connection with termination

of employment depends on their years of service and the

circumstances of the separation. The categories of possible

separation entitlements under Article 156 of the Manpower Law

consist of (a) severance pay of up to nine months’ wages, (b)

service pay of up to 10 months’ wages, and (c) other compensation

(ie, for unused annual leave, any applicable relocation costs or

expenses, compensation for housing, medical and hospitalization,

and other separation benefits as may be agreed).

o Under the Indonesian Manpower Law, in the event of terminations as a

result of the company closing down due to two consecutive years of

continuous losses or due to force majeure, terminated permanent

employees are entitled to single severance pay, single service pay, and

compensation

o In the event of terminations for downsizing due to efficiency reasons (ie,

not due to financial losses or force majeure), terminated permanent

employees are entitled to double severance pay, single service pay and

compensation.

o Note that an ex gratia payment of two to three months’ salary on top of the

permanent employee’s mandatory severance entitlements may be

necessary to ensure the employee signs an MTA to avoid the costly labor

court process.(March 27, 2020)

For more information, please contact Fahrul S. Yusuf at [email protected]





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COVID-19 and Indonesia: Force Majeure and Other Considerations


The COVID-19 global pandemic has caused significant disruptions to businesses

globally. The rapid rate of transmission, the unchecked growth in the number of cases

and the lack of a vaccine has forced governments around the world to implement

policies that have disrupted business operations globally.

In Jakarta, Governor Anies Baswedan declared a two-week state of emergency,

beginning March 20, later extended by two weeks, in an attempt to contain the virus. The

Jakarta administration has urged all businesses and organizations to close their offices

or at the very least reduce the number of employees working in the office.

These actions will likely, if they have not already, cause contracts, agreements and

transactions to be delayed or cancelled. Whether due to travel and import restrictions,

supply and demand issues, and/or a lack of human resources, more and more

businesses are finding it difficult to continue to operate and meet their contractual

obligations.

This raises a number of questions regarding COVID-19 and its impact on existing

contracts. Can the defaulting party avoid liability? Will the contract be terminated? Will

the obligations be suspended? How can parties to a commercial contract protect

themselves during the pandemic?

This article discusses the repercussions of COVID-19 on contracts in Indonesia, the

concept and implementation of force majeure clauses, and the ability of defaulting

parties to avoid liability.

What Is Force Majeure?

Force majeure clauses are contractual clauses that alter parties’ obligations and/or

liabilities under a contract in the event that an extraordinary event or circumstance

beyond their control prevents one or more of the parties from fulfilling those obligations.

Under Indonesian law, the concept of force majeure is mentioned in Articles 1244 - 1245

of the Indonesian Civil Code (ICC). These articles provide that a defaulting party




(obligor) is liable for compensation for costs, losses and profits for non-performance or

the late performance of a legal obligation under a contract, unless they can prove that

such non-performance or delay is caused by something which is unforeseen, for which

they cannot be held responsible, even in the absence of bad faith on their part, and/or

fulfilling such obligation would be deemed as committing a prohibited act.

In light of the above, one may surmise that in order to constitute force majeure that may

exempt the defaulting party from liability for compensation, the following elements must

be met:

1. An unexpected event/circumstance.

2. Circumstances beyond the defaulting party’s control.

3. The defaulting party is not accountable for the event/circumstance.

4. The event/circumstance could not be anticipated/avoided by any of the parties.

5. The situation prevents the defaulting party from performing its obligations.

6. The performance of the obligation would be prohibited.

7. There is no bad faith from the defaulting party.

8. No intention of the defaulting party to default.

If the contract provides a detailed force majeure clause, the terms of that clause will

generally prevail. Indonesian courts will likely enforce the clause written in a contract

agreed between both parties on the twin principles of sanctity and freedom of contract.

Force Majeure Clause in a Contract

The drafting and construction of a force majeure clause is to be negotiated between the

parties to the contract. However, the parties should consider including these

components in the clause:

1. A clear description of what matters constitute a force majeure event. In

order to accommodate an event such as COVID-19, wording such as “pandemic”

or “outbreak” should be included. General examples will likely give rise to debate

as what may or may not qualify as a force majeure event.

2. The consequences of the occurrence of a force majeure event. Parties

should clarify the impact on the agreement should a force majeure event occur.

For example, will it delay the object of the agreement, or terminate it, and who will

be liable for any costs incurred as a result of the force majeure.


3. Procedures to be taken upon the occurrence of a force majeure event. For

example, parties may choose to regulate that the party invoking force majeure is

obliged to notify the other party of its intention and include a description of the

impediments it is facing.

4. The party invoking the force majeure clause shall prove that it

has exhausted the necessary and reasonable measures to mitigate the

damages brought upon the occurrence of the force majeure. This can be

included to protect the other parties to the contract and ensure that the force

majeure directly impedes the performance of the agreement and is beyond the

control of the parties.

However, regardless of whether a contract contains a force majeure clause, force

majeure can still be applied by reason of law. Indonesian civil courts can determine

whether force majeure has happened and whether it should preclude the defaulting

party from all liability. Non-performance may still be excused if a company successfully

argues in court that COVID-19 is a force majeure event and is able to prove that there is

a direct causal link between the COVID-19 pandemic and its non-performance.

Is COVID-19 a Force Majeure Event?

In order to determine whether COVID-19 constitutes a force majeure event, a detailed

analysis of the specific contractual clause is required. The following questions should be

considered:

1. What events are listed as force majeure events in the contract?

2. Are the words “pandemic” or “disease” included in the above list?

3. Has COVID-19 rendered it impossible for the party to fulfill its obligations under

the contract?

4. What is the impact on the party invoking the force majeure clause?

If the force majeure clause does not refer to specific events, the parties may need to rely

on general contractual terms and evaluate whether the effects of the COVID-19

pandemic fulfill the elements of a force majeure event and have resulted in the defaulting

party being unable to meet its contractual obligations.


One may certainly argue that the pandemic is an unexpected event beyond the control

of the parties that could neither have been anticipated nor avoided. And it can certainly

be regarded as an impediment to business operations worldwide.

Nonetheless, it may be difficult to use COVID-19 to claim force majeure in the absence

of decisions or policies from local, provincial or national authorities that have created

such impediments to business operations. An example would be government-ordered

travel restrictions, quarantines, office closures or a citywide lockdown. If the government

orders companies to halt business operations and workers to stay home to check the

spread of the virus, this may result in various failures to perform contractual obligations.

Once proven that these measures prevented performance, the defaulting party’s

argument for COVID-19 as a force majeure event would in these circumstances be

difficult to dispute. But in the absence of any such government policies, regulations or

orders, it is difficult to determine when exactly COVID-19 may be categorized as a force

majeure event.

What Must Be Shown to Invoke Force Majeure?

Regardless of whether pandemic is included in the contract as a force majeure event,

the party claiming force majeure will want to show that any failure to perform its

contractual obligations was beyond its control and that it could not have otherwise

prevented or mitigated the damage from such failure.

The party claiming force majeure should ideally show:

1. The inability to perform the obligation was directly caused by the pandemic.

2. Its non-performance was beyond its control.

3. There were no reasonable steps it could have taken to avoid the non-

performance and/or mitigate the damage.

Although it is not specifically mandated by the abovementioned articles of the ICC, the

party seeking to invoke force majeure for non-performance must still take reasonable

steps to mitigate the foreseeable damages brought about by the non-performance, to

strengthen its case in legal proceedings. In this regard, companies should ensure that all

the impacts of COVID-19, as well as the companies’ actions in response to such


impacts, are documented. These records may be crucial to support the claim that the

company took steps to mitigate the damages in the event of non-performance.

We also encourage all businesses looking to invoke force majeure to show that they are

still acting in good faith by complying with all the other requirements of the contract.

As mentioned above, a well-drafted force majeure clause in a contract will also require

the party invoking force majeure to comply with specific procedures upon the occurrence

of a force majeure event. For example, contracts often require parties to provide

notifications or updates to the other party, including at the commencement and

conclusion of the force majeure event. In this regard, the defaulting party should give the

other party notice of its situation, describing the impediments it is facing and expressing

its intention to invoke the force majeure clause.

The impact of invoking the force majeure clause depends on the contract. It will

generally excuse the invoking party from performing its obligations under the contract,

provide the invoking party additional time to perform its obligations or give one or both

parties the option to terminate the agreement. The clause may also allocate liability for

increased costs arising during the continuation of the force majeure event.

Impact of COVID-19 on Indonesian Courts

The outbreak has delayed and/or suspended operations for not only businesses but also

government institutions and agencies, including court tribunals. The Indonesian

Supreme Court recently issued Circular Letter Number 1 of 2020, dated March 23, 2020,

giving court tribunals the discretion to determine any postponement of hearings or

restrictions on visitors attending hearings. Parties in civil, religious and state

administrative proceedings are encouraged to utilize the e-litigation application system

the courts recently introduced (E-Court). Several courts in Indonesia have announced

that they have postponed proceedings for two weeks to accommodate the Government’s

efforts to battle the COVID-19 outbreak.

The Supreme Court recently issued Letter No. 379/DJU/PS.00/3/2020 dated March 27,

2020, to allow trials for criminal cases to be held by teleconference.


Practical Steps for Businesses Affected by COVID-19

There is no doubt the COVID-19 pandemic has presented unprecedented challenges

and impediments to businesses in conducting their normal operations. It is imperative

that businesses enact policies and measures to protect themselves during this time. We

suggest several measures companies can take in this situation.

Review all business contracts and identify what events are regulated as force

majeure and the remedies provided in the event of force majeure, as well as the

requirements to invoke force majeure if business operations are disrupted by the

effects of COVID-19.

Companies should identify and assess the consequences of the non-

performance of all their valid contracts.

Identify any notification requirements. Some contracts require parties immediately

to notify the other parties of their intention to invoke force majeure, or at the very

least to inform the other parties of any change in their business operations.

Businesses should ensure they have taken reasonable steps to avoid non-

performance or to mitigate the damages brought about by the non-performance.

Assemble and retain all documentation pertaining to the impact of COVID-19 on

business operations and the measures taken by the company in response to

such impact.

Include wording or provisions on infectious disease/pandemic in new contracts

and amend existing contracts if possible.

Continually engage and communicate with workers regarding updates on the

pandemic.

Create a policy for the foreseeable future (for example, a work from home policy

in the event of a lockdown) and provide adequate training for workers in an effort

to prevent business operations from being severely impeded.

Check insurance arrangements, including whether the business is covered in the

event of non-performance as a result of a pandemic.

Conduct risk assessments.

Ensure proper training and provide information and education on the virus for

workers.

(April 7, 2020)






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Indonesia and COVID-19: FAQs on Force Majeure

By Michael S. Carl and Mahareksha S. Dillon

1. Is force majeure a recognised concept and how is it defined?

Yes, the concept of force majeure is recognized in the Indonesian Civil Code (the “ICC”).

However, the concept as formulated in the ICC is relatively unspecific in comparison to

what is generally found in contemporary international legal practice. As a result, parties

will want to negotiate their own rules of force majeure when drafting their contract.

The principal rules of law relevant to the concept of force majeure are found in Articles

1244 and 1245 of the ICC, which read as follows:

Article 1244:

“An obligor shall be ordered to compensate for costs, losses and profit if he/she cannot

prove that the non-performance of a legal obligation or the late performance of such

legal obligation, is caused by something which is unforeseen, for which he/she cannot

be held responsible, even in the absence of bad faith on his/her part.”

Article 1245:

“There is no compensation for costs, losses or profit, if because of uncontrollable

circumstances or because of happenstance, the obligor is prevented from delivering or

performing something which is obligatory, or commits an act which is prohibited for

him/her.”

The Indonesian for the phrase “uncontrollable circumstance,” or “keadaan memaksa,”

found in Article 1245 above, is commonly used as the Indonesian translation for “force

majeure” or “act of God” in English. There is thus no doubt that the concept of force

majeure exists in Indonesian law, although neither Article 1244 nor Article 1245 provide

any examples of force majeure or give much granularity to the concept.

In the absence of a rigid statutory formulation, many Indonesian legal scholars rely on

common law formulations in broadly describing force majeure as an event which: (i)

causes the party claiming the force majeure to be unable to perform an obligation; (ii)


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results from an occurrence for which the claiming party cannot be faulted; and (iii) could

not have been foreseen by the claiming party at the time the obligation was formed.

However, one should not assume that an Indonesian court will follow this or any other

formulation of the concept.

In certain sectors, regulatory pronouncements and legal practices may also be relevant.

For example, government-formulated rules for emergency situations in the petroleum

industry make specific provision for pandemics, among others.

Finally, employment law is also relevant. An employer is not generally permitted to

terminate an employee on force majeure grounds, except in limited situations provided

by statute and after paying compensation in an amount mandated by law. Neither may

an employer suspend or reduce an employee’s salary and other compensation, except

with the employee’s permission.

2. Is it only available if it is specified in a contract?

Indonesia is part of the civil law tradition. Articles 1244 and 1245 of the ICC thus apply

generally in circumstances where the parties themselves have not addressed the issue

of force majeure in their legal relations. However, Indonesia also honors the principle of

freedom of contract found in Article 1338 of the ICC. Consequently, parties may

supplement or opt out of the ICC provisions governing force majeure by instead

including bespoke force majeure clauses in their written contracts. This is highly

recommended.

3. What are the key requirements, such as notification, to claim force majeure?

The ICC does not stipulate any specific requirements for a party to claim force majeure,

including notice. As with the substantive formulation of force majeure, the parties are

also free to agree procedural requirements in their contract, and both the substantive

and procedural requirements may generally be expected to prevail in legal proceedings.

4. What is the effect of a force majeure certificate issued by a government body?

Indonesian law does not presently provide a mechanism by which the government will

issue a force majeure certificate or its equivalent. However, government agencies can

and often do comment on natural disasters and other instances of force majeure.


Nothing in Indonesian law prevents a court from considering these declarations or

pronouncements in determining whether specified circumstances of unclear origin are to

be treated as natural disasters or other acts of God.

There is also one instance, quite controversial, in which the Government issued a

regulation directing that a particular disaster of questionable origin be treated as an act

of God in legal proceedings, and the courts have honored this regulation.

There are presently no reports that the Government will issue any regulation, guidelines

or other pronouncement with respect to the effect of the COVID-19 pandemic on private

contractual relations. Should there be any such pronouncement, one may expect the

Indonesian courts to give it significant weight.

5. What remedies are available if there is a force majeure event?

Where the parties have themselves provided for remedies in the case of a force majeure

event, one may expect that those remedies will generally prevail. In the absence of

contractually specified remedies, Articles 1244 and 1245 of the ICC provide that a party

which is successful in claiming force majeure is relieved of the obligation to pay

damages. In effect, the party is excused from the performance to which the force

majeure relates.

In the context of a sale of goods, Article 1264(3) of the ICC provides that if goods, due to

no fault of the seller, depreciate in value while awaiting the satisfaction of conditions

precedent for their delivery, the buyer shall have the option either to cancel the

agreement or to require delivery of the goods in their existing condition without any

reduction in the agreed price.

In the context of the employer-employee relationship, Indonesian law does not allow

employers unilaterally to suspend and/or reduce the salary or other compensation of

employees except with the express consent of the employee, irrespective of any force

majeure event.

6. What are the risks of claiming force majeure incorrectly?

If a party claims force majeure incorrectly and discontinues performance of a contract

unilaterally, that party may be held in breach of its obligations and the other party may


be successful in seeking damages for non-performance. Although the ICC provides for

specific performance a breached obligation in Article 1267, it is generally understood

that courts are reluctant to award specific performance, and where they do so, the

judgment is very difficult to enforce. Damages are thus generally the preferred remedy.

7. Are there alternatives to force majeure such as frustration of contract or

“change in circumstances”?

Although the ICC does not recognize “frustration of contract” or “change in

circumstances” as express legal doctrines, there may be alternative concepts which may

accommodate these concepts with effective legal advocacy. For example, Article 1254

of the ICC provides:

“All conditions that are intended to do something that cannot be done, something that is

contrary to morality, or something that is prohibited by law are void and render

agreements conditioned upon them not in effect.”

The circumstances captured by the phrase “cannot be done” in the above provision are

open to interpretation.

Another example may be found in Article 1381 of the ICC, which provides in relevant

part:

“Obligations shall cease … by reason of the destruction of the goods that were owed.”

8. How can you find out if courts or other types of tribunals have been closed or

suspended?

The Supreme Court of the Republic of Indonesia has issued Circular Letter Number 1 of

2020, dated March 23, 2020, following the earlier promulgation of the same Circular

Letter, regarding the Adjustment of the Working System for Judges and Court Apparatus

in Efforts to Prevent the Spread of COVID-19 at the Supreme Court and Subordinate

Courts (the “Circular Letter”).

The Circular Letter gives to court tribunals the discretion to determine any postponement

of hearings or restrictions on visitors attending hearings. The Circular Letter also


encourages parties in civil, religious, and state administrative proceedings to utilize the

e-litigation application system which the courts have recently activated.

As of the date of this writing, several courts in Indonesia have announced that hearings

in civil matters are postponed for two weeks to accommodate the Government’s efforts

to battle the COVID-19 outbreak.

These and similar court announcements are generally made publicly and need to be

monitored continuously.

9. Are arbitration proceedings in the Indonesian jurisdiction being suspended?

We have been informed verbally that proceedings administered by the Indonesian

National Arbitration Board (BANI) are suspended until March 27, 2020. This date is

subject to change and requires continuous monitoring.

(March 26, 2020)





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Indonesian Government to the Rescue: COVID-19 Economic Relief

Packages

By Stephen Igor Warokka and Hanna Yovita Onggano

The ongoing COVID-19 public health crisis has strained not only Indonesia’s healthcare

infrastructure, but also the economy, placing an even heavier burden on the Indonesian

people.

In response, President Joko Widodo’s administration announced a 405.1 trillion rupiah

(about US$26 billion at current exchange rates) relief package to support healthcare

infrastructure and facilities, incentivize medical workers, shore up the country’s social

safety net, and provide economic relief for businesses and impacted communities. This

amount is divided into 75 trillion rupiah for healthcare infrastructure, 110 trillion rupiah for

the social safety net, 70.1 trillion rupiah in industrial support and 150 trillion rupiah for the

National Economic Recovery Program. This relief package was put in place through

Government Regulation in Lieu of Law No. 1 of 2020 concerning State Financial Policy

and Financial System Stability in Response to Coronavirus Disease 2019 (“Perpu

1/2020”).

This article discusses the legal measures already implemented or being contemplated

by the Government to allocate the relief package budget.

Import Facilities and Exemptions

President Widodo issued Presidential Decree Number 9 of 2020, whereby the head of

the National Agency for Disaster Mitigation (Badan Nasional Penanggulangan Bencana/

“BNPB”) is authorized to provide exemptions for licensing procedures in the trade and

import sector. The President subsequently issued Presidential Regulation Number 58 of

2020 dated April 8, 2020, which serves as an overarching regulation stipulating the

relaxation of licensing procedures for imports of:

essential goods and foodstuffs;

foodstuffs for government food reserves;

raw materials or supporting materials;



goods and raw materials for disaster prevention and mitigation; and/or

other goods as stipulated by the government.

As of April 21, 2020, only goods imported for COVID-19 prevention and relief have been

further regulated in detail through ministerial regulations and/or circular letters, namely:

i. Minister of Trade Regulation No. 28 of 2020 regarding the Amendment of

Minister of Trade Regulation No. 87/M-DAG/PER/10/2015, dated March 20,

2020, regarding Imports of Certain Products, which exempts companies from the

application of the provisions of the regulation itself for medical equipment under

17 Harmonized System (“HS”) Codes. This exemption is in place until June 30,

2020.

ii. Minister of Trade Regulation No. 31 of 2020 regarding the Amendment of

Minister of Trade Regulation No. 23 of 2020, dated March 24, 2020, regarding

the Temporary Prohibition on the Export of Antiseptic, Mask Raw Materials,

Protective Gear and Masks, which stipulates that goods falling under 14 HS

Codes cannot be exported from Indonesia until June 30, 2020.

iii. Minister of Trade Regulation No. 37 of 2020 regarding the Second Amendment

of Minister of Trade Regulation No. 118 of 2018, dated March 31, 2020,

regarding Imports of Non-New Capital Goods, which exempts companies from

the application of the provisions of the regulation itself, including the requirement

for Import Approval and a Surveyor Report for used capital goods in the form of

medical equipment that falls under two HS Codes, therapeutic respiratory

apparatus and other medical respiratory equipment and gas masks. This

exemption is in place until June 30, 2020.

iv. Joint Circular Letter of the BNPB and Directorate General of Customs No.

01/BNPB /2020 and No. KEP-113/BC/2020 (“BNPB DGC Circular”), which

provides the standard operating procedure for import facilities and exemptions

from trade regulations for the following three categories: (a) central/regional

governments and public service agencies; (b) yayasan/foundations and non-profit

organizations; and (c) individuals/private parties acting in a non-commercial

capacity.


Individuals and private parties acting in a commercial capacity are ineligible for the

exemptions, but they may still submit their Import of Goods Notice through the BNPB

pursuant to Section C, Item 7 of the BNPB DGC Circular.

While details on the trade regulations for which eligible parties will receive exemptions

have not been specified, the following areas were discussed in a Ministry of Finance

press conference on April 1, 2020, on the exemptions and facilities:

● Simplification and reduction of prohibitions and restrictions on 749 HS Codes;

● Simplification and reduction of prohibitions and restrictions on certain

commodities, including manufacturing support goods, food, and health and

medical equipment;

● Acceleration of the export-import process for reputable traders; and

● Acceleration and increase of export-import services through the National

Logistics Ecosystem.

Further details on the proposed measures above shall be subject to Minister of Trade

regulation. At present, no other Minister of Trade or Minister of Industry regulation

targeting economic recovery for businesses has been issued. The implementing

regulations currently in place are focused on providing the medical care necessary to

protect public health.

Credit Assistance Relief for Businesses

On the banking side, Financial Services Authority (Otoritas Jasa Keuangan/”OJK”)

reports indicate that there is no liquidity issue for Indonesian banks. However, with

respect to businesses, especially micro, small and medium enterprises, or MSMEs, loan

repayment may become an issue in the near future as indicated by the volume of

businesses implementing redundancy plans, resorting to unpaid leave or simply closing.

i. OJK allows banks to grant credit relaxation

The OJK issued Regulation No. 11/POJK.03/2020 concerning National Economic

Stimulus as Countercyclical Policy to the Coronavirus Disease 2019 Outbreak. This


regulation allows banks to take certain measures to relax the credit requirements or to

restructure loans. Based on the OJK Announcement on Credit Relaxation or

Restructuring, dated March 31, 2020, public banks are free to set their own terms for

implementing relaxation measures.

According to the OJK FAQs on Credit Relaxation and Restructuring, accessible on the

OJK website (www.ojk.go.id), credit relaxation or loan restructuring due to COVID-19

may, for example, be granted to debtors:

● significantly affected by the reduction of import-export volume due to supply chain

dependence and trade with China or other countries impacted by COVID-19;

● affected by the suspension of infrastructure construction projects due to the halt

in the supply of raw materials, manpower and machines from China or other

countries impacted by COVID-19; and/or

● affected by travel warnings or the closure of transportation routes and tourism to

and from China and/or other countries due to COVID-19.

These categories include, but are not limited to, MSME debtors with a credit ceiling of 10

billion rupiah.

ii. Bank Indonesia (“BI”) allows banks to grant credit relaxation

To ensure the liquidity and solvency of financial institutions, Article 16 of Perpu 1/2020

authorizes the Indonesian central bank, BI, to:

Provide short-term liquidity loans or short-term liquidity financing under shariah

principles to Systemic Banks or banks other than Systemic Banks; and

Provide special liquidity loans to Systemic Banks experiencing liquidity issues

that are unqualified to obtain short-term liquidity loans or short-term liquidity

financing.

Article 17 of Perpu 1/2020 provides that the OJK and BI shall jointly conduct a solvency

assessment to determine whether a short-term liquidity loan or short-term sharia liquidity

financing may be granted. Article 16(2) of Perpu 1/2020 states that this matter shall be

further regulated in a Bank Indonesia regulation.

http://www.ojk.go.id/


Direct Cash Aid

In addition to providing aid for the supply of raw materials, working capital adequacy for

businesses and liquidity for banks, the government aid package also contemplates

providing direct cash aid for the most vulnerable portion of the population in order to

maintain purchasing power. The regulatory framework for this measure has yet to be

confirmed as of this writing, but the President has reportedly said the amount provided to

each family shall be Rp 600,000 per month for a period of three months.

The Minister of Villages, Development of Disadvantaged Regions and Transmigration

issued Regulation No. 6 year 2020, dated April 13, 2020, to allocate 22.4 trillion rupiah

from the Village Fund (Dana Desa) budget for direct cash aid disbursements to residents

of villages. Under this regulation:

I. Villages receiving 800 million rupiah or less from the Village Fund may allocate a

maximum of 25% of their Village Fund aid for direct cash aid disbursements;

II. Villages receiving between 800 million and 1.2 billion rupiah from the Village

Fund may allocate a maximum of 30% of their Village Fund aid for direct cash aid

disbursements; and

III. Villages receiving more than 1.2 billion rupiah from the Village Fund may allocate

a maximum of 35% of their Village Fund aid to direct cash aid disbursements.

Families living in poverty will be identified and determed by mutual discussion, or

musyawarah, at the village level, after which the village head will report to the regional

government for confirmation.

This measure is intended to supplement pre-existing programs under the Ministry of

Social Affairs such as the cash assistance PKH program and non-cash food assistance,

as well as employment training programs for laid-off workers and those employed in the

informal sector.

Regarding employment training, the Coordinating Ministry for the Economy issued Press

Release No. HM.4.6/45/SET.M.EKON.2.3/04/2020 concerning the launch of Pre-

Employment Cards. This program provides funding assistance and incentives for


workers in the informal sector, job seekers, and micro and small enterprises. This

program has a quota of 164,000 participants per week until the fourth week of November

2020. However, as of April 12, 2020, just in the first wave of registrations, the Pre-

Employment Card program had already received 1.4 million applications.

Each recipient of the Pre-Employment Card is entitled to a benefit package of Rp

3,550,000.- in total, consisting of:

Training assistance of Rp1 million to purchase various trainings on partner digital

platforms.

Incentives that will be transferred to the participant’s bank account or e-wallet

LinkAja, OVO or GoPay. These incentives consist of two parts:

i. Incentives provided after the completion of the first training of Rp 600,000

per month for four months (Rp 2,400,000).

ii. Incentives provided after completing evaluation surveys of Rp 50,000 per

survey for three surveys (Rp 150,000).

Participants can choose the training they want on the digital platforms of the official

partners of the Pre-Employment Card program. These digital platforms are Tokopedia,

Skill Academy by Ruangguru, Maubelajarapa, Bukalapak, Pintaria, Sekolahmu,

Pijarmahir and Sisnaker. The assistance expires after 30 days of receipt if the Pre-

Employment Card has not been used for training. (April 23, 2020)





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Indonesian Government Relaxes Licensing Requirements for Medical

Devices to Combat COVID-19

By Arvin Raharja

Since the first COVID-19 case was reported in Indonesia on March 2, 2020, the number

of cases has expanded to around 4,839 as of April 14, 2020, with 459 deaths. A number

of medical professionals in the country have contracted COVID-19, in part due to a lack

of medical devices to diagnose, treat or prevent the virus, as well as personal protective

equipment (“PPE”) such as gloves, face shields, goggles, face masks and respirators.

In response, the Government has issued several regulations and policies to relax the

licensing requirements for the importation and production of medical devices, which is

hoped will encourage business actors to support the procurement of the necessary

medical equipment to prevent the spread of COVID-19.

Accelerated Issuance of Licenses for Production, Distribution of Medical Devices

The Indonesian Ministry of Health (“MOH”) has expedited the application process for the

licenses required to produce domestically and distribute certain medical devices and

household supplies (Perbekalan Kesehatan Rumah Tangga or “PKRT”) to deal with

COVID-19. It has (i) accelerated certification services for production and distribution

certificates, and (ii) is offering one-day service for Marketing Authorization (Izin Edar).

The medical devices and PKRT being prioritized by the MOH include:

surgical apparel (face masks, PPE and medical goggles);

liquid chemical sterilant/high-level disinfectants;

surgical gloves;

patient examination gloves;

clinical electronic thermometers;

ventilators;

culture transport medium (VTM/UTM);

microbiological specimen collection and transport device (Dacron swabs); and

antiseptic hand sanitizer.

https://www.ssek.com/attorneys/associates/arvin-raharja


Under these new policies, manufacturers or distributors that wish to produce or distribute

the above medical devices and/or PKRT can obtain a production certificate or

distribution certificate within one to two days upon fulfilling the (i) statutory payment of

Non-Tax State Revenue (Penerimaan Negara Bukan Pajak or “PNBP”) to the

Government and (ii) submitting the required documents and information. The MOH has

also simplified the required documents and information, so manufacturers or distributors

are only required to submit their business identification number (Nomor Induk

Berusaha or “NIB”), an application letter, information on the technical person in charge

and a statement letter that they will fulfill the required commitments within six months.

Manufacturers that have already obtained a production certificate for certain medical

devices and/or household supplies from the MOH can obtain the relevant Marketing

Authorization in less than a week upon fulfilling the requirements as stipulated in the

MOH’s Technical Licensing Guidelines for Medical Devices and Household Supplies.

While the MOH has cut the timeline for obtaining Marketing Authorization, it has not

changed the required application documents, in order to ensure the quality of medical

devices and household supplies distributed in Indonesia. In total, manufacturers should

be able to start business operations in approximately one to two weeks.

To accelerate the issuance of production and distribution certificates the MOH is

providing services every day from 8 am to 4 pm, Monday to Friday, and from 8 am to

noon on Saturdays and Sundays. For the one-day service for Marketing Authorization,

the MOH is providing services 24 hours a day, seven days a week until June 30, 2020.

Given the urgency of ensuring the availability of certain medical devices, the Indonesian

Capital Investment Coordinating Board (Badan Koordinasi Penanaman Modal or

“BKPM”) has accelerated the integration of the NIB, industrial business license and

MOH operational licenses in order to expedite the licensing requirements for certain

medical devices to deal with COVID-19. On March 2, the BKPM launched a new system,

the Investment Control and Command Centre (Pusat Komando dan Pemantauan

Investasi or “Pusat KOPI”), to monitor all licensing requests through the Online Single

Submission system in order to prevent delays in the BKPM licensing process.


Licensing Exemption for Importation and Distribution of Certain Medical Devices

Under new rules issued by the ministries of trade and health, the importation of certain

medical devices no longer requires a Surveyor Report from the country of origin of the

goods. Also, such goods are no longer subject to restrictions on the port of entry. These

exemptions will apply until June 30, 2020.

These new rules are provided in Minister of Trade (“MOT”) Regulation Number 28 of

2020 on the Eighth Amendment to MOT Regulation Number 87 M-DAG/PER/10/2015 on

Provisions on the Importation of Specific Products dated March 20, 2020. They are also

in MOH Decree No. HK.01.07/MENKES/218/2020 on Medical Devices, In

Vitro Diagnostic Medical Devices and Household Supplies Exempted from Import

Licensing Procedures to Reduce Coronavirus Disease 2019 (COVID-19) dated March

30, 2020 (“MOH Decree No. 01/2020”).

The MOH has also issued a regulation to allow business actors to bypass the need for a

Marketing Authorization or Special Access Scheme (“SAS”) license to distribute certain

medical devices. This new rule is contained in MOH Regulation No. 7 of 2020 on the

Amendment to MOH Regulation Number 51 of 2014 on the Importation of Medical

Devices through the Special Access Scheme dated March 27, 2020 (“MOH Reg.

7/2020”).

Under MOH Reg. 7/2020, importers will only be required to obtain a recommendation

from the National Disaster Management Agency (Badan Nasional Penanggulangan

Bencana or “BNPB”), which they can apply for through the Indonesia National Single

Window online system. The list of HS Codes for medical devices eligible for the licensing

exemption is contained in MOH Decree No. 01/2020.

Temporary Export Ban for Certain Medical Devices

Alongside encouraging the importation and production of medical devices to combat

COVID-19, the Government has also temporarily prohibited the export of certain medical

devices, through the issuance of MOT Regulation No. 23 of 2020 regarding Temporary

Export Ban on Antiseptic, Mask Raw Materials, PPE and Masks dated March 17, 2020

(“MOT Reg. 23/2020”).


Under MOT Reg. 23/2020, business actors cannot export medical devices with HS

Codes as stipulated in the attachment of the regulation. That prohibition is in place until

June 30, 2020. Anyone who violates the import ban under MOT Reg. 23/2020 shall be

subject to criminal sanctions in the form of imprisonment for a maximum of five years

and a fine of up to IDR 5 billion, as stipulated in Law Number 7 of 2014 on Trading. (April

16, 2020)





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Indonesia to Accelerate Product Registration for Covid-19 Drugs

By Ira A. Eddymurthy and Fadhillah Rizqy

The arrival of Covid-19 has placed health systems in countries around the world under a

significant strain, pushing governments to introduce emergency measures to accelerate

the response to the virus in the hope of the containment or, ideally, elimination of Covid-

19. One measure implemented by a number of countries is fast-tracking the registration

of drugs to treat Covid-19 using what is normally referred to as Emergency Use

Authorization (“EUA”).

The Indonesian Food and Drugs Supervisory Agency (Badan Pengawas Obat dan

Makanan or “BPOM”) announced on April 7, 2020, that it would follow other foreign food

and drug agencies in accelerating the drug registration process using the EUA platform

for any drugs with the potential to treat Covid-19.

Under the normal procedure it can take months or even years to complete the drug

registration process due to the multiple layers of inspection and lengthy bureaucratic

procedures. Significantly cutting back the time needed for drug registration may allow

viable drug products to be accessible to Covid-19 patients, which could save lives and

eventually help bring the pandemic to an end.

Accelerated drug registration has been implemented by BPOM in the past, but it has

been largely adopted on a discretionary basis. Given the urgency of the Covid-19

outbreak, BPOM plans to formalize the procedure using the EUA platform in the coming

days. In the meantime, in an official press release, BPOM provided the following brief

guideline that may be useful to Indonesian pharmaceutical manufacturers in registering

products with the potential to treat Covid-19.

Mechanism for Emergency Use Authorization

In the press release, BPOM emphasized that it would prioritize the registration of any

drugs with a potential claim to treating Covid-19. This includes the registration of any

new drugs or existing drugs being repurposed for Covid-19 treatment.

The pharmaceutical manufacturing company, acting as the registrant for the product,

would need to submit, among others, information and documents on:


https://www.ssek.com/attorneys/associates/fadhillah-rizqy


a. Pilot scale;

b. Stability data for the past six months;

c. Validation document on pilot scale;

d. Comparative dissolution test.

Upon receiving the application, BPOM will conduct an accelerated review of the

application and, if everything is in order, issue a pre-registration approval within six

hours. The actual product registration approval itself will depend on the type of drug

being registered and could take up to 20 business days for a new drug and five business

days for a generic drug.

Conditionality of Registration

It is important to note that the drug registration approval issued by BPOM using the EUA

platform is conditional and BPOM reserves the right to revisit the drug registration

approval based on further findings on the efficacy, safety and quality of the drug. This

means that despite the significantly faster process using the EUA platform, BPOM will

still deploy rigorous supervision of drug products.

Other Efforts

In addition to the implementation of the EUA platform, BPOM has announced that it will

shorten the importation process for raw materials for drugs to treat Covid-19, from one

business day to only two hours. BPOM also plans to employ a fast-track procedure for

the certification of manufacturing facilities producing drugs to treat Covid-19, cutting the

Good Manufacturing Practice (“GMP”) certification process from 10 to five business

days.

Further Guidelines

Our contact at BPOM advised that further regulatory guidelines on the EUA platform and

other fast-track procedures are being finalized and will be made public in the near future.

A more detailed update to this publication will follow. (April 21, 2020)






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Update on License for Companies in Indonesia to Operate During

Pandemic


The Indonesian Ministry of Industry announced last week that industrial companies

and/or companies located in industrial parks can continue to operate their factories and

offices and maintain the movement of their workers, materials and finished products

during the COVID-19 lockdown if they have the necessary operational license, known in

Indonesian as an Izin Operasional dan Mobilitas Kegiatan Industri.

Companies with an account at the National Industry Information System (Sistem

Informasi Industri Nasional or “SIINas”) can apply for the abovementioned license

through the SIINas website.

Based on our recent discussions with our contacts at the Ministry of Industry, a SIINas

account is only available to companies that have obtained their Industrial Business

License (Izin Usaha Industri or “IUI”) from the Online Single Submission (“OSS”) system

or uploaded their IUI to the OSS system if they obtained the license prior to the launch of

the system. If companies have not uploaded their license, their registration for a SIINas

account will be rejected.

Also, please expect some delay in processing these licenses. Due to the recently

enacted social distancing restrictions in Jakarta, there are fewer than 10 officials

designated to handle licensing at the moment. If you experience any technical difficulties

during the application process, you can contact the SIINas helpdesk through the SIINas

website or by email at [email protected], or at the following numbers: 0819-

500-7755, 0878-010-84059 or 0878-010-84069. (April 17, 2020)

For more information, you can contact Dewi Savitri Reni ([email protected]) or

Syarifah Reihana Fakhry ([email protected]).





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Indonesia Provides Mechanism for Companies to Operate During

Pandemic


The Indonesian government has enacted several policies to check the spread of COVID-

19. One of these policies is a restriction on large-scale social interactions to limit the

activities and mobility of people.

Since April 10, 2020, residents of Jakarta and surrounding cities have been instructed to

remain at home, while transportation and activities at offices, schools and public facilities

have been limited. This has disrupted the operations of businesses in different sectors

around the country. In the industrial sector, Indonesian manufacturing output has

significantly decreased and the situation could worsen if stricter measures are put in

place.

In an attempt to ensure that industrial companies remain productive and are able to

provide essential goods to the public during the pandemic, the Indonesian Ministry of

Industry recently announced that industrial companies and/or companies located in

industrial parks will be allowed to operate their factories and offices, and maintain the

movement of their workers, materials and finished products, as long as they have the

necessary operational license, known in Indonesian as an Izin Operasional dan Mobilitas

Kegiatan Industri.

This is pursuant to Ministry of Industry Circular Letter No. 7 Year 2020 regarding

Guidelines for Industrial Companies to Apply for Continued Operations During the

COVID-19 Health Emergency.

How to Apply

Companies can apply for the abovementioned license electronically through the National

Industry Information System (Sistem Informasi Industri Nasional or “SIINas”), using the

following steps:

1. Log in to the company’s SIINas account and proceed to the e-services page.

2. Choose the option, “Apply for Izin Operasional dan Mobilitas.”




3. Complete the required information on the page, (e.g., address, license, number of

workers, contact person, production details and capacity).

4. Submit the application.

5. The Ministry of Industry will then evaluate and validate the application.

6. If the application is approved the company will receive the license in the form of a

statement letter (Surat Keterangan) issued electronically by the system.

Statement Letter

The issued statement letter permits the company to continue operating and maintain the

movement of its workers, materials and products during the pandemic. It will remain

valid throughout the COVID-19 health emergency period. Therefore, regardless of the

social restrictions put in place during the pandemic, a company can continue to operate

if it holds a valid statement letter.

The authenticity of the letter is shown by the QR Code on the bottom of the page. The

QR Code can be scanned by the relevant authorities and it will direct them to the

Ministry of Industry website page detailing the company’s data and the data of its

supplier/distributor.

Industrial companies intending to continue operating during the pandemic should

consider applying for the abovementioned license and obtain a valid statement letter to

avoid any restrictions in the future. We are aware that several companies have already

applied for the license and successfully obtained the statement letter. If you experience

any technical difficulties during the application process, you can contact the SIINas

helpdesk through the SIINas website. (April 14, 2020)

For more information, you can contact Dewi Savitri Reni ([email protected]) or

Syarifah Reihana Fakhry ([email protected]).





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Indonesia’s OJK Issues Regulation on Quick Restructuring for Troubled

Banks in Wake of COVID-19

By Julian Martin

The COVID-19 global pandemic has taken a toll on the Indonesian economy, underlining

the need for financial institutions to have adequate liquidity in the face of uncertain times.

In response, the Indonesian government issued Government Regulation in Lieu of Law

No. 1 of 2020 on State Financial Policy for the Handling of COVID-19 and/or Other

Threats to the National Economy and/or Financial System Stability, dated March 31,

2020 (“Perppu 1/2020”). Perppu 1/2020 gives the Indonesian Financial Services

Authority (Otoritas Jasa Keuangan or “OJK”) the power to issue written instructions for

financially troubled banks in Indonesia to restructure by way of an acquisition, merger,

consolidation or integration (hereinafter, “Restructuring Measure”).

In an article in Kompas, a leading Indonesian newspaper, by Bambang P. Djatmiko,

dated April 23, 2020, the OJK conveyed that in normal times it typically puts troubled

banks under intensive supervision for about nine months, giving the banks’ shareholders

time to seek new investors. But considering the gravity of the COVID-19 situation, the

OJK favors a speedier response in order to prevent negative sentiment and maintain

public trust in the financial sector.

Subsequently, the OJK issued an implementing regulation for Perppu 1/2020 specifying

the procedures for the Restructuring Measure. This implementing regulation is OJK

Regulation No. 18/POJK.03/2020 on Written Instructions for the Handling of Troubled

Banks, dated April 21, 2020 (“OJK 18/2020”).

New Regulation on Bank Restructuring Measures

Article 2 of OJK 18/2020 provides that the OJK may issue written instructions to banks

involved in a merger, acquisition, consolidation and/or integration (“OJK Instruction”),

whether as the initiator of such action or the counterparty. This means that the OJK has

the power to instruct banks to conduct a Restructuring Measure and to instruct

counterparty banks to accept the proposal for such Restructuring Measure.

https://www.ssek.com/attorneys/associates/julian-martin


OJK 18/2020 sets out the criteria for the OJK to instruct a bank to make an initial

proposal for a Restructuring Measure, which are as follows:

1. Bank’s Ability to Withstand Pressure

The OJK may issue an Instruction to a bank if, based on the assessment of the OJK, the

bank has financial troubles that might affect the continuity of its business or leave it

unable to withstand ongoing pressure or other pressure in the near future. OJK 18/2020

does not elaborate on what the assessment is based on, but it provides that the

assessment will consider the individual condition of the bank (idiosyncratic) and external

factors that affect such bank. External factors may include the COVID-19 situation

and/or other conditions that threaten an economic crisis and/or the stability of the

financial system.

2. Factors Related to Controlling Shareholder

Based on the assessment of the OJK, if the controlling shareholder of a bank does not

have the ability to “strengthen the bank,” that bank may be subject to the OJK

Instruction. The term “strengthen the bank” means the ability of the controlling

shareholder either to (i) increase or maintain the level of capital in the bank and/or an

adequate level of liquidity; and/or (ii) consolidate such bank through methods expressed

in OJK Regulation No. 12/POJK.03/2020 on Consolidation of Commercial Banks dated

March 17, 2020. A bank with a controlling shareholder that is unable to perform these

actions can be subjected to an OJK Instruction.

OJK 18/2020 also sets out the criteria for banks that may be subject to an OJK

Instruction as the counterparty of a Restructuring Measure:

1. Conventional Commercial Bank (Bank Umum Konvensional) or Sharia Commercial

Bank (Bank Umum Syariah):

A minimum bank soundness level of Composite Rating 3 (Peringkat Komposit 3 or “PK-

3”) is required after a Conventional Commercial Bank or Sharia Commercial Bank

receives a Restructuring Measure. Both OJK Regulation No. 4/POJK.03/2016 of 2016

on Commercial Bank Soundness Level Assessment dated January 27, 2016, and OJK

Regulation No. 8/POJK.03/2014 on Sharia Commercial Bank Soundness Level


Assessment dated June 13, 2014, provide that PK-3 indicates a financially sound bank

that is able to withstand a change of external factors. The assessment of bank

soundness level for both Conventional Commercial Banks and Sharia Commercial

Banks is based on the bank’s risk profile, good corporate governance, earnings and

capital.

2. Rural Bank (Bank Perkreditan Rakyat):

A minimum bank soundness level, as represented by a credit score of 66-81 (Financially

Sound or Cukup Sehat), is required after a Rural Bank receives a Restructuring

Measure, as regulated under Bank Indonesia Board of Directors Decision No.

30/12/KEP/DIR on Guidelines for the Assessment of Rural Bank Soundness Level dated

April 30, 1997. The determination of credit score includes reviewing the bank’s capital,

asset quality, management, earnings and liquidity.

3. Sharia Rural Bank (Bank Perkreditan Rakyat Syariah):

A minimum bank soundness level of PK-3 is required after a Sharia Rural Bank receives

a Restructuring Measure. The bank soundness level must be determined using the

standard of assessment regulated by OJK Regulation No. 20/POJK.03/2019 on

Assessment System for Sharia Rural Bank Soundness Level dated September 9, 2019.

The soundness level of a Sharia Rural Bank is assessed based on its capital, asset

quality, management, earnings and liquidity.

Action Plan for Restructuring Measure

After the receipt of a written instruction from the OJK to conduct a Restructuring

Measure, banks are obliged to respond with an action plan that stipulates the process

and schedule for such Restructuring Measure until its effective date (the “Action Plan”).

It must be noted that OJK 18/2020 does not indicate a time limit for when the Action Plan

must be submitted following receipt of the OJK Instruction.

Sanctions

Failure to respond to the OJK Instruction with an Action Plan may result in administrative

sanctions for the bank as a legal entity and each member of its board of directors and


board of commissioners, and its controlling shareholder (“Principal Parties”).

Administrative sanctions will first be in the form a written warning. Failure to heed the

written warning may result in further administrative sanctions.

For banks, as legal entities, violation of the written warning may result in a downscaling

of its operation. For example, Conventional Banks or Sharia Banks may be downscaled

to Rural Banks or Sharia Rural Banks, while temporary restrictions on business activities

may be imposed for banks already classified as Rural Banks or Sharia Rural Banks.

If the Principal Parties fail to comply with a written warning from the OJK, they may be

prohibited from holding any position as a Principal Party at any bank in the future by

virtue of OJK Regulation No. 34/POJK.03/2018 of 2018 on Re-evaluation of Principal

Parties in Financial Services dated January 28, 2019.

Conclusion

OJK 18/2020 gives the OJK the authority to decide which financially troubled banks

require an early Restructuring Measure through the issuance of an OJK Instruction.

Such decision is contingent on the OJK’s subjective assessment of the bank’s ability to

withstand external pressures such as the COVID-19 pandemic. Although the intention of

OJK 18/2020 is to remove obstacles faced during the threat of an economic crisis and/or

financial system instability, it gives banks and business actors limited time to react once

an OJK Instruction is directed to them. Time is certainly of the essence to the OJK

during the COVID-19 situation. (April 30, 2020)





consent of SSEK.


Navigating Sea Transportation in Indonesia During COVID-19

By Stephen Igor Warokka and Shafira Nindya Putri

The Indonesian Directorate General of Sea Transportation (“DGST”), at the Ministry of

Transportation, has issued several circular letters aimed at preventing the spread of

COVID-19. This article discusses measures taken in Indonesian ports, including

terminals, as well as measures concerning ship crews.

Indonesian Ports and Terminals

During the early spread of COVID-19, and in response to Indonesian Director General of

Disease Prevention and Control of the Ministry of Health the Circular Letter No.

PM.04.02/III/43/2020 dated January 3, 2020, and International Maritime Organization

Circular Letter No. 4204 dated January 31, 2020, the DGST issued Circular Letter No. 5

of 2020 regarding Anticipating Coronavirus Spread in Port Areas in Indonesia dated

February 5, 2020 (“DGST CL 5/2020”). The DGST instructs all port operators to identify

all ships arriving from abroad, including those in transit, especially from countries with

COVID-19 cases. Port operators are also instructed to intensify supervision of ships,

especially those from mainland China and Hong Kong. Under this Circular Letter, the

DGST also establishes a special integrated task force to handle the spread of severe

pneumonia disease from sea transportation.

The DGST then issued Circular Letter No. 8 of 2020 regarding Preventive Steps Against

the Spread of Coronavirus in Indonesian Ports dated March 5, 2020 (“DGST CL

8/2020”). This Circular Letter provides guidelines for handling passengers arriving in

Indonesian ports. It instructs all DGST Technical Implementation Units to take the

following preventive measures:

a. determine if incoming ships are arriving from countries affected by COVID-19;

b. coordinate with health quarantine personnel to identify and handle arriving

passengers with COVID-19 symptoms;

c. ensure the international terminal and other locations in the port are equipped with

sufficient body temperature scanners and hand sanitizer;

d. ensure port operators are vigilant in maintaining the hygiene of terminals by

spraying disinfectant periodically; and


https://www.ssek.com/attorneys/associates/shafira-nindya-putri


e. report any potential spread of COVID-19.

Limitations on Sea Transportation

DGST Circular Letter No. 13 of 2020 regarding Limitations on Passengers Aboard Ships,

Logistics Transportation and Port Services During the COVID-19 Outbreak Management

Emergency Period (“DGST CL 13/2020”) emphasizes the importance of cooperation

between regional governments where ports are located and the DGST with respect to

potential port closures. The aim of such cooperation is to ensure the DGST is able to

carry out a proper evaluation before any closure is decided.

Under DGST CL 13/2020, passenger ships can continue to operate, with some

limitations that must be communicated to the relevant stakeholders in the shipping

industry as well as potential passengers. Despite the ongoing COVID-19 pandemic, the

measures put in place by DGST CL 13/2020 are not as strict as some may have hoped

in limiting the traffic of individuals and goods going in and out of Indonesian ports. For

example, instead of suspending all travel by sea transportation, DGST CL 13/2020 only

instructs relevant port authorities to disseminate information to passengers on the risks

of traveling during the COVID-19 outbreak.

DGST CL 13/2020 does prioritize access for ships carrying Indonesian nationals from

abroad, on-duty police officers and military personnel, primary and crucial goods and

supplies, and people who are ill and need to be moved to COVID-19 referral hospitals.

DGST CL 13/2020 also ensures that port services, such as berthing and unloading

services, shall be made available for cargo ships carrying supplies, goods for

infrastructure development and export commodities.

Ban on Foreign Cruise Ships

DGST CL 13/2020 bans foreign-flagged cruise ships from berthing at Indonesian ports. If

a foreign-flagged cruise ship needs to refuel and disembark crew members for such

purpose, it must first apply for a permit in the determined anchorage area and only for

the period stated in the Foreign Ship Agency Approval (Persetujuan Keagenan Kapal

Asing). Specifically for foreign-flagged ships sheltering in the Riau Islands, crew

disembarkation and refueling may only be done in the Ship-to-Ship and Lay-Up locations

at Nipah Island, Balai Karimun Cape and Galang Island.


Foreign crew members are prohibited from disembarking except in the determined

anchorage area. In the event of an emergency medical situation involving a foreign crew

member, such person may be disembarked from the ship only after the COVID-19 Task

Force in the relevant port has issued its authorization.

DGST CL 13/2020 also emphasizes the importance of maintaining good hygiene,

practicing social and physical distancing and supplementing ships with sanitation

facilities and COVID-19 prevention announcements. Only if perceived as necessary in

preventing the accelerating spread of COVID-19 can ship operators limit the number of

passengers allowed onboard.

Ship Crews and Operators

DGST Circular Letter No. 11 of 2020 regarding Contingency Plan for Seafarers and

Vessel Operators dated March 24, 2020 (“DGST CL 11/2020”) prescribes exemptions

and relaxations for ship crews and ship owners and/or operators with respect to the

management of crew certification and documentation in the midst of the COVID-19

pandemic. It provides an exemption for the Minimum Safe Manning Document in case

there are crew members who must be disembarked due to COVID-19 and the ship

owners are unable to find replacements. If a Seaman’s Book (Buku Pelaut) expires while

the relevant crew member is onboard and not permitted to enter the port or the transit

country has implemented a lockdown in response to COVID-19, the expired Seaman’s

Book may be deemed as valid until the relevant authorities in the transit country allow

the crew member to disembark and renew the Seaman’s Book at the Indonesian

Embassy.

DGST CL 11/2020 also relaxes the Medical Certificate for Seafarers, pursuant to

Standards of Training, Certification and Watchkeeping Regulation 1/9 and Maritime

Labor Convention 2006, allowing the certificate to remain valid for an additional three

months after its expiration in certain circumstances such as the COVID-19 pandemic. In

addition, foreign nationals working on Indonesian-flagged ships whose Certificate of

Recognition (“COR”) expires between March 1 and May 31, 2020, may email a copy of

their certificate and DGST CL 11/2020 to the Directorate of Shipping and Navigation and

a temporary COR valid for three months will be issued. (April 8, 2020).






consent of SSEK.


Indonesia and COVID-19: New Tax Policies Aim to Stimulate Economy

By Michael S. Carl and Charvia Tjhai

The COVID-19 pandemic has slowed the Indonesian economy, cut state revenue and

forced increased state spending and financing. In response, the Indonesian government

has issued a new regulation aimed at providing tax relief for the coronavirus-battered

economy.

The new regulation lowers corporate tax rates, imposes tax on electronic transactions by

foreign tax subjects, extends tax filing deadlines and empowers the Ministry of Finance

to waive import duties in the context of responding to the COVID-19 pandemic and/or in

responding to a threat to the economy or national stability.

This article takes a closer look at the implications of the new tax policies contained in

Government Regulation in Lieu of Law No. 1 of 2020 regarding State Financial Policy

and Financial System Stability for the Management of the Coronavirus or COVID-19

Pandemic and/or in Facing Threats to the National Economy and/or Financial System

Stability (March 31, 2020) (“GR 1/2020”).

Lower Tax Rates for Domestic Companies

GR 1/2020 reduces tax rates for domestic corporate taxpayers and permanent

establishments from 25% to 22% applicable for the 2020 and 2021 tax years, and to

20% starting in the 2022 tax year.

A further reduction of 3% will apply for any domestic taxpayers that meet the following

criteria: (i) in the form of a publicly listed company; (ii) trade at least 40% of their shares

through the Indonesia Stock Exchange; and (iii) meet certain other conditions to be

further regulated by or based on government regulations.

Tax Treatment for Electronic Transactions

GR 1/2020 provides a tax treatment for Trade Through Electronic Systems

(Perdagangan Melalui Sistem Elektronik or “PMSE”) that is intended to increase state

revenue. This includes imposing value added tax (“VAT”) on intangible taxable goods


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and/or taxable services originating from outside Indonesia and utilized inside the country

as part of PMSE activities.

VAT will be imposed subject to the provisions of Law No. 8 of 1983 regarding Value

Added Tax for Goods and Services and Sales Tax on Luxury Goods, as lastly amended

by Law No. 42 of 2009 (the “VAT Law”). The VAT on PMSE activities is to be collected,

deposited and reported by foreign traders, foreign service providers, foreign electronic

system trade providers (Foreign PPMSE) and/or domestic electronic system trade

providers (Domestic PPMSE), appointed by the Minister of Finance.

Electronic system trade providers, or PPMSE, as referred to above, are business actors

that provide electronic systems used for trade transactions. Foreign traders and foreign

service providers are individuals or entities residing or domiciled outside Indonesia that

engages in transactions with buyers of goods or recipients of services in Indonesia

through an electronic system.

GR 1/2020 also imposes income tax or electronic transaction tax on PMSE activities

carried out by foreign tax subjects that meet certain criteria. Foreign traders, foreign

service providers and Foreign PPMSE deemed to have a “significant economic

presence” in Indonesia can be treated as a permanent establishment subject to income

tax. Significant economic presence is determined by sales in Indonesia, number of

active users on digital media and the consolidated gross turnover of the business group.

If foreign traders, foreign service providers or Foreign PPMSE are determined to have a

significant economic presence but cannot be treated as a permanent establishment due

to the application of agreements with other governments in the context of avoiding

double taxation, they will be subject to electronic transaction tax. This tax shall be

imposed on the sale of goods or services from outside Indonesia through PMSE

activities to buyers or users in Indonesia by foreign tax subjects, either directly or

through a Foreign PPMSE.

Income tax or electronic transaction tax on PMSE activities is to be paid and reported by

foreign traders, foreign service providers and Foreign PPMSE. Note that they may

appoint representatives domiciled in Indonesia to collect, deposit and report VAT owed

and/or to fulfill their income tax or electronic transaction tax obligations.

Failure to fulfill the above provisions shall be subject to administrative sanctions as

provided by the VAT Law. Additional government regulations will be issued as necessary


to further regulate the imposition, calculation, collection and other matters related to the

above taxes.

Tax Filing Deadlines Extended

GR 1/2020, in light of the COVID-19 outbreak, provides extensions for the fulfillment of

tax obligations, as follows:

a. the deadline for a taxpayer to file an objection as referred to in Article 25 (3) of Law

No. 6 of 1983 regarding General Provisions and Procedures on Tax, as lastly

amended by Law No. 16 of 2009 (the “KUP Law”), is extended by six months;

b. the deadline for filing a request for the return of tax overpayment as referred to in

Article 11 (2) of the KUP Law is extended by one month; and

c. the deadline for taxpayers to apply for the return of tax overpayment as referred to

in Article17B (1) of the KUP Law, file an objection letter as referred to in Article 26

(1) of the KUP Law, or apply for the reduction or cancellation of administrative

sanctions or incorrect tax assessment or the cancellation of examination results, as

referred to in Article 36 (1) KUP Law, is extended by six months.

These extensions are subject to future changes based on the situation with the

coronavirus outbreak.

Ministry of Finance Empowered to Provide Customs Facilities

Lastly, GR 1/2020 authorizes the Minister of Finance to provide customs facilities in the

form of exemption or relief of import duties, which is to be further regulated by Minister of

Finance regulations. (April 9, 2020)





consent of SSEK.



By Stephen Igor Warokka and Manika Jashan Sadarangani

The Government of Indonesia has taken a string of measures to minimize the spread of

COVID-19 in Indonesia. One of those measures has been to enact regulations

governing the traffic of individuals entering and leaving the country. These regulations

specifically mandate limitations and exceptions for the granting of Entry Permits and Re-

entry Permits for foreign nationals wanting to visit or return to Indonesia, and Emergency

Stay Permits (Izin Tinggal Dalam Keadaan Terpaksa) for all foreign nationals currently in

Indonesia. The most recent regulation and currently in force is Minister of Law and

Human Rights (“MOLHR”) Regulation Number 11 of 2020 on the Temporary Prohibition

of Foreigners Entering Indonesia (“MOLHR Reg No. 11/2020”).


imigrasi.go.id, or its official Instagram account, @ditjen_imigrasi, to access the

abovementioned regulation and other relevant information, as well as the Indonesian

Director General of Immigration circular letter and the Indonesian Ministry of Foreign

Affairs’ announcement regarding this matter, all of which need to be read collectively to

determine the required steps in terms of visas during the COVID-19 pandemic.


In response to the COVID-19 pandemic, the Government of Indonesia has temporarily

suspended all foreign nationals from entering or transiting in Indonesia. As provided in

Director General of Immigration Circular Letter No. IMI-GR.01.01-2325 Year 2020 (“DGI

Circular Letter”), this suspension applies to:

i. Permanent Stay Permit (Izin Tinggal Tetap or “ITAP”) holders whose re-entry

permit has expired;

ii. Limited Stay Permit (Izin Tinggal Terbatas or “ITAS”) and ITAP holders whose

stay permit has expired;

iii. individuals visiting on Visa-Free Visits and Visa on Arrival Visits (Visa Kunjungan

Saat Kedatangan or “VKSK”);



iv. Multiple Business Visit Visa (Visa Kunjungan Usaha Beberapa Kali Perjalanan or

“VKUBP”), Visitor Visa 211A (“VK 211A”), Visitor Visa 211B (“VK 211B”), APEC

Business Travel Card (“ABTC”), Transit Visa and Working Holiday Visa holders;

v. diplomatic passport holders who do not have a diplomatic visa or residence

permit in Indonesia and are visiting on a Diplomatic Visa Exemption for Short

Visit (Bebas Visa Kunjungan Singkat or “BVKS”); and

vi. service passport holders who do not have a service visa or service stay permit in

Indonesia and are visiting on a Service BVKS.

This suspension, however, does not apply to anyone holding a valid ITAS, valid ITAP,

Diplomatic or Service Visa issued by an Indonesian Representative or a Diplomatic Stay

Permit or Service Stay Permit issued by an Indonesian Representative. Also exempted

from the suspension are medical, food and humanitarian aid support workers; crew

members for means of transport; and foreign nationals entering Indonesia with a valid

Limited Stay Visa (Visa Tinggal Terbatas or “VITAS”) issued by an Indonesian

Representative for the purpose of working on national strategic projects, e.g.

infrastructure or construction.

Note that these exceptions only apply to foreign nationals if they are travelling from a

country that has not been affected by COVID-19 or have not travelled to or transited in a

country affected by COVID-19 within the last 14 days; and after satisfying the other

requirements provided under MOLHR Reg No.11/2020.

Along with the requirements provided under MOLHR Reg No.11/2020, there may be

additional requirements to obtain new visas/visa extensions in practice.

Emergency Stay Permits

As stipulated in Articles 4 and 5 of MOLHR Reg No. 11/2020, an Emergency Stay Permit

is automatically applicable to any foreign national whose stay permit (any stay permit)

has completely expired and/or can no longer be extended, without having to submit an

application to the immigration office. This overstay will not be subject to a fine and will be

completely free of charge.

The DGI Circular Letter, however, clarifies that an Emergency Stay Permit is not

applicable to foreigners whose residence permit expired at least 60 days before January

1, 2020. Those individuals whose permit expired at least 60 days before January 1,


2020, but who nevertheless obtain an Emergency Stay Permit may be prevented from

entering Indonesia in the future.

Please note that Article 6 of MOLHR Reg. No 11/2020 stipulates that the minister may

issue other policies related to immigration facilities for foreign nationals as long as such

policies provide general benefits.


situation with the COVID-19 pandemic. (April 15, 2020)





consent of SSEK.


Update Indonesian Visas in the Time of COVID-19


On 11 March 2020, the World Health Organization (“WHO”) officially announced that

COVID-19 had become a global pandemic. Following this announcement, as with many

other countries, Indonesia enacted regulations to govern the traffic of individuals

entering and leaving the country. These regulations specifically mandate limitations and

exceptions for the granting of Entry Permits and Re-entry Permits for foreign nationals

wanting to visit or return to Indonesia and Emergency Stay Permits (Izin Tinggal Dalam

Keadaan Terpaksa) for all foreign nationals currently in Indonesia.


imigrasi.go.id, or its official Instagram account, @ditjen_imigrasi, to access the

abovementioned regulations and other relevant information, as well as the Indonesian





In response to the COVID-19 pandemic, the Government of Indonesia has temporarily

suspended all foreign visitors from entering or transiting in Indonesia. This suspension,

however, does not apply to anyone holding a Limited Stay Permit (Izin Tinggal

Terbatas or “ITAS”); Permanent Stay Permit (Izin Tinggal Tetap or “ITAP”); Diplomatic or

Service Visa; or a Diplomatic Stay Permit or Service Stay Permit. Also exempted from

the suspension are medical, food and humanitarian aid support workers; crew members

for means of transport; and foreign nationals entering Indonesia to work on national

strategic projects, e.g. infrastructure or construction.

Note that these exceptions only apply to foreign nationals if they are travelling from a

country that has not been affected by COVID-19 or have not travelled to or transited in a

country affected by COVID-19 within the last 14 days; and after satisfying the other

requirements provided under Indonesian Minister of Law and Human Rights (“MOLHR”)

Regulation Number 11 of 2020 on the Temporary Prohibition of Foreigners Entering

Indonesia (“MOLHR Reg No. 11/2020”).




As stipulated in Articles 4 and 5 of MOLHR Reg No. 11/2020, an Emergency Stay Permit

is automatically applicable to any foreign national whose stay permit (any stay permit)

has completely expired and can no longer be extended, without having to submit an

application to the immigration office. This overstay will not be subject to a fine and will be

completely free of charge.

Director General of Immigration Circular Letter No. IMI-GR.01.01-2114 Year 2020

provides that Emergency Stay Permits are applied differently for foreign nationals who

arrived in Indonesia before and after 5 February 2020. However, in practice, Emergency

Stay Permits have been leniently provided to every foreign national in Indonesia whose

permit can no longer be extended, even if they arrived before 5 February 2020.

There may be additional requirements to obtain new visas/visa extensions in practice.

Please note that Article 6 of MOLHR Reg. No 11/2020 stipulates that the minister may

issue other policies related to immigration facilities for foreign nationals as long as such

policies provide general benefits. We have received further information from the Director

General of Immigration that another Circular Letter will be issued regarding MOLHR Reg

No. 11/2020.


situation with the COVID-19 pandemic. (April 2, 2020)





consent of SSEK.


Indonesian Visas in the Time of COVID-19


On 11 March 2020, the World Health Organization (“WHO”) officially announced that

COVID-19 had become a global pandemic. Following this announcement, as with many

other countries, Indonesia enacted regulations to govern the traffic of individuals

entering and leaving the country. These regulations specifically mandate limitations and

exceptions for the granting of Entry Permits for foreign visitors, Emergency Stay Permits

(Izin Tinggal Dalam Keadaan Terpaksa), Limited Stay Permits (Izin Tinggal Terbatas or

“ITAS”), Permanent Stay Permits (Izin Tinggal Tetap or “ITAP”) and Re-entry Permits for

foreign visitors currently in Indonesia and expatriates currently abroad whose Indonesian

permits are to expire soon.


imigrasi.go.id, to access the abovementioned regulations as well as the Indonesian




Entry Permits

In response to the COVID-19 pandemic, the Government of Indonesia has suspended

the granting of Visit Visa Exemptions (Bebas Visa Kunjungan) and Visas on Arrival (Visa

Kunjungan saat Kedatangan) to foreign visitors visiting Indonesia from any country.

Foreign visitors may still visit Indonesia on a different valid visa issued by an Indonesian

representative in their country, after satisfying several requirements provided under

Indonesian Minister of Law and Human Rights (“MOLHR”) Regulation Number 8 of 2020

on the Temporary Termination of Visit Visa Exemption and Visa on Arrival and the

Granting of Emergency Stay Permits (“MOLHR Reg No. 8/2020”). However, this

exception does not apply to foreign visitors who have traveled to certain areas/countries

in the last 14 days. These countries include China, South Korea (specifically Daegu City

and Gyeongsangbuk-do Province), Iran, Italy, the Vatican, Spain, France, Germany,

Switzerland and the United Kingdom.




As stipulated in Article 4 of MOLHR Regulation Number 7 of 2020 on the Granting of

Visas and Stay Permits in Order to Prevent the Coronavirus Outbreak (“MOLHR Reg

No. 7/2020”), an Emergency Stay Permit is applicable to (a) any foreign citizen currently

in Indonesia; (b) foreigners who hold a stay permit of another country; or (c) the spouse

or child of a citizen of a country other than Indonesia whose visa (any visa) (i) has

completely expired and can no longer be extended, and (ii) cannot fly back to their

country due to the COVID-19 pandemic. As further affirmed by the Director General of

Immigration in Circular Letter No. IMI-GR.01.01-2114 Year 2020, Emergency Stay

Permits are applied differently for foreigners who arrived in Indonesia before and after 5

February 2020.

Limited Stay Permits, Permanent Stay Permits and Re-entry Permits

MOLHR Reg No. 7/2020 and MOLHR Reg No. 8/2020 stipulate exceptions and

procedures for extending an ITAS/ITAP permit for holders currently in Indonesia and

currently abroad. For individuals currently abroad whose visa is to expire soon, a Re-

entry Permit may be granted after satisfying certain requirements.


situation with the COVID-19 pandemic. There may be additional requirements to obtain

new visas/visa extensions in practice. (March 30, 2020)





consent of SSEK.