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SSEK Legal Consultants Indonesia and Covid-19 Legal Updates As of May 8, 2020
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Page 1: SSEK Legal Consultants Indonesia and Covid-19 Legal Updates · Indonesia’s OJK Issues Regulation on Quick Restructuring for Troubled Banks in Wake of COVID-19 – April 30,2020

SSEK Legal Consultants

Indonesia and Covid-19 Legal Updates

As of May 8, 2020

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SSEK Legal Consultants 1

1. Land and Property

Indonesian Land Office Regulations and Services

During the COVID-19 Pandemic – May 5, 2020

2. Social Restrictions

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

3. Transportation

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

4. Capital Markets

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

5. Courts

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

6. Employment Indonesia Suspends Foreign Manpower Work Permit

Applications During Covid-19 Outbreak - April 24,

2020

Indonesian Employment Law and COVID-19 - March 27, 2020

7. Force Majeure

COVID-19 and Indonesia: Force Majeure and Other

Considerations - April 7, 2020

FAQs on Force Majeure in Indonesia - March 26, 2020

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SSEK Legal Consultants 2

8. Government Assistance

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

9. Imports Indonesian Government Relaxes Licensing

Requirements for Medical Devices to Combat COVID-19 - April 16, 2020

10. Industry 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

11. Restructuring & Insolvency 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. Tax

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

14. Visas

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

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SSEK Legal Consultants 3

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.

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.

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SSEK Legal Consultants 4

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

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SSEK Legal Consultants 5

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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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SSEK Legal Consultants 6

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

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SSEK Legal Consultants 7

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

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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

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SSEK Legal Consultants 9

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.”

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. You

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

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

consent of SSEK.

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SSEK Legal Consultants 10

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, 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:

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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.

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SSEK Legal Consultants 12

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.

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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

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SSEK Legal Consultants 14

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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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SSEK Legal Consultants 15

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.

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SSEK Legal Consultants 16

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.

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

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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.

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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.

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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

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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 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.

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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.

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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.

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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.

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;

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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

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empowering issuers and public companies to execute expedited share buybacks without

violating the provisions of applicable laws and regulations. (March 30, 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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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.

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.

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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.

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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.

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

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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]

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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COVID-19 and Indonesia: Force Majeure and Other Considerations

By Dewi Savitri Reni and Syarifah Reihana Fakhry

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.

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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

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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.

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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.

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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.

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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) 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.

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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

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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.”

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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:

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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;

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● 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.

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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.

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

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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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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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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.

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

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(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

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SSEK Legal Consultants 53

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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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:

a. Pilot scale;

b. Stability data for the past six months;

c. Validation document on pilot scale;

d. Comparative dissolution test.

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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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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Update on License for Companies in Indonesia to Operate During

Pandemic

By Dewi Savitri Reni and Syarifah Reihana Fakhry

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]).

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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Indonesia Provides Mechanism for Companies to Operate During

Pandemic

By Dewi Savitri Reni and Syarifah Reihana Fakhry

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.

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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]).

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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.

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:

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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.

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SSEK Legal Consultants 61

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

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SSEK Legal Consultants 62

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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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SSEK Legal Consultants 63

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

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

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SSEK Legal Consultants 64

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.

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SSEK Legal Consultants 65

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).

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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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 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

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SSEK Legal Consultants 67

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;

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SSEK Legal Consultants 68

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)

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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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SSEK Legal Consultants 69

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

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”).

Please visit the website of the Indonesian Directorate General of Immigration, 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.

Entry Permits and Re-entry Permits

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;

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SSEK Legal Consultants 70

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.

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SSEK Legal Consultants 71

These exceptions and visa requirements are subject to future changes based on the situation

with the COVID-19 pandemic. (April 15, 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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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SSEK Legal Consultants 72

Update Indonesian Visas in the Time of COVID-19

By Stephen Igor Warokka and Manika Jashan Sadarangani

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.

Please visit the website of the Indonesian Directorate General of Immigration, imigrasi.go.id, or

its official Instagram account, @ditjen_imigrasi, to access the abovementioned regulations 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.

Entry Permits and Re-entry Permits

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”).

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

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SSEK Legal Consultants 73

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.

These exceptions and visa requirements are subject to future changes based on the situation

with the COVID-19 pandemic. (April 2, 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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.

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SSEK Legal Consultants 74

Indonesian Visas in the Time of COVID-19

By Stephen Igor Warokka and Manika Jashan Sadarangani

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.

Please visit the website of the Indonesian Directorate General of Immigration, imigrasi.go.id, to

access the abovementioned regulations 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.

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.

Emergency Stay Permits

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

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SSEK Legal Consultants 75

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.

These exceptions and visa requirements are subject to future changes based on the situation

with the COVID-19 pandemic. There may be additional requirements to obtain new visas/visa

extensions in practice. (March 30, 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. You should contact a

lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and

may not be reproduced without the express written consent of SSEK.


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