DOING BUSINESS IN INDONESIA

RELATIONSHIPS v RIGHTS

CROSS CULTURAL DYNAMICS

AIBC Melbourne 2014

CAMPBELL BRIDGE SC FCIArb

Campbell Bridge SC FCIArb

Campbell Bridge SC FCIArb

Example – Complexity of Indonesia

A few days in Bali does not make you an expert on Indonesia – Waikiki does not make you an expert on the United States of America.

17,508 islands - approximately 1000 permanently inhabited.

240 million people

300 ethnic groups speaking 700 living languages.

5500 km across - Jayapura is closer to Sydney than it is to Jakarta.

Be aware of the differences between a Javanese and a Batak or a Manadonese and a Balinese.

Campbell Bridge SC FCIArb

“The influence of culture is pervasive. It affects how we think, speak and act. It is unseen and silent, and therefore easy to overlook. But we disregard it at our peril. The saying “When in Rome, do as the Romans do”, is sound advice, particularly for those of us who are involved in dispute resolution and peacemaking (negotiation)”.

Professor Tommy Koh Singapore’s Ambassador-At-Large

Campbell Bridge SC FCIArb

• Western societies – business perceptions and culture is more rights and contract based.

• Asian society, in business and otherwise, tends to be more relationship focussed.

• Do not focus predominantly on contractual and legal rights.

• Misreading culture can result in no deal, a bad situation arising, or a minor dispute quickly becoming a large dispute.

• Fixing relationship issues usually prerequisite to resolution.

Campbell Bridge SC FCIArb

Case Study #1- Major Commercial Dispute

• Infrastructure / Resource based dispute involving some €40 million.

• Indonesian and European parties.

• American, Indonesian, and Swiss representatives.

• Indonesian, Australian and English lawyers.

• Estimated future legal costs of arbitration - €1 million per party.

• Criminal Summonses issued by Indonesian police against European executives.

Campbell Bridge SC FCIArb

• Indonesian party – total focus on whether or not the other party had not behaved honourably.

• European focus on “fine print" in the contract enraged the Indonesians.

• Negative reactions may not be easily discernible.

• When discussion focussed on parties’ relationships and behaviour (not the contract) the solution was reached.

• Without recognition of relationship issues by the Europeans, the very substantial monetary issues were never going to be resolved.

• Issues of face and culture had to be addressed.

Campbell Bridge SC FCIArb

When the trouble starts – what are the major options?

Campbell Bridge SC FCIArb

Everyone must play the same game – on the same field

Campbell Bridge SC FCIArb

Almost Invariably a Bad Option….

Campbell Bridge SC FCIArb 7 Selborne Chambers Sydney Australia - Singapore – Malaysia - IndonesiaE-Mail: cb@campbellbridge.comwww.campbellbridge.com

Objective is this…………………..