On July 9, ALB, in partnership with China Tiantai Law Firm, successfully hosted the ALB & Tiantai Forum 2024: Indonesia Investment Landscape - Legal and Regulatory Updates at the Ritz-Carlton Hotel in Jakarta. The event saw nearly a hundred representatives from Chinese and local Indonesian enterprises, as well as legal professionals from both countries, engage in discussions on various hot topics related to investing in Indonesia.
The forum kicked off at 2 p.m. with a video speech by Amantha Chia, Senior Director of Thomson Reuters Legal Media Group. Chia welcomed the attendees, highlighting that the forum aimed to strengthen cross-border cooperation between China and Indonesia, helping enterprises navigate complex legal issues to better seize business opportunities.
Following this, Zhang He, director of the management committee of Tiantai Law Firm, delivered an onsite address. Zhang emphasized that China is Indonesia's largest trading partner and a major source of foreign investment. The rapidly growing trade demand and ever-changing market environment present new opportunities and challenges for enterprises. This forum is a crucial part of Tiantai's overseas plan, aimed at discussing the pain points and difficulties Chinese enterprises face in international development and enhancing Tiantai's professional capabilities in cross-border legal services.
After the opening speeches, the first sharing session of the forum began with a presentation by Jia Zongda, Senior Partner of Tiantai Law Firm Shanghai Office, titled Practical Analysis of Cross-border Investment and Financing in Indonesia.
Jia first provided an overview of relevant data on Chinese investments in Indonesia, focusing on key regions and investment models, and pointed out that nickel-iron, new energy, e-commerce, textiles, and electric vehicles are currently the most prominent sectors. He then detailed various practical legal issues from both direct and indirect investment perspectives, including foreign investment access, company establishment and governance, land systems, labour employment, anti-monopoly issues, and transaction processes for indirect investment, as well as related government approvals. Lastly, he focused on financing, sharing case studies of Chinese enterprises obtaining domestic and international financing for investments in Indonesia.
The next speaker was Lia Alizia, a Partner at Indonesia’s Makarim & Taira S. Law Firm, who focused on labour law with a presentation titled Foreign-invested Enterprises’ Labor and Employment in Indonesia.
Alizia provided an overview of labour and employment in Indonesia, including different employment methods for foreign enterprises, payroll systems, tax issues, and employment contracts. She discussed the four common forms of employment in Indonesia and emphasized that hiring foreign employees requires obtaining regulatory approvals. Alizia then highlighted six types of employee benefits and the consequences of violating these rights, concluding with an explanation of contract termination, particularly focusing on legally prohibited terminations.
The forum then took a break for refreshments, during which attendees and speakers engaged in lively exchanges.
After the break, the forum resumed with a presentation by Ma Zhanjun, President of the Asia Pacific International Arbitration Chamber, on the topic of How Chinese Lawyers Use International Arbitration to Safeguard Chinese Enterprises Abroad.
Ma introduced the development of international arbitration in Southeast Asia, the Asia-Pacific International Arbitration Institute's layout and service features in the region, and the challenges Chinese lawyers face when participating in international arbitration, including language, cultural, and institutional issues. He explained how the Institute's neutral and friendly services, rules, and arbitrator selection can help Chinese lawyers and enterprises better navigate the challenges of going abroad.
Ma's presentation was followed by a panel discussion, moderated by Chen Cong, CEO and Senior Partner of Tiantai Law Firm. The panellists included Edwina Mononutu, Legal Head (Director) of GSK’s Indonesia Legal Department, Josef Sunario, Group Head of Legal Affairs at PT Datang DSSP Power Indonesia, and Ira Thania Rasjidi SH MH, VP Legal at NS BlueScope Indonesia.
Together they engaged in a discussion titled The Evolving Legal Landscape in Indonesia: Overview and How Chinese Law Firms Can Assist Enterprises in Investing in Indonesia.
Chen first invited the panellists to introduce the latest trends in legal regulations in Indonesia's investment sector.
Mononutu highlighted investment trends in the pharmaceutical sector, especially Indonesia's increasingly relaxed investment requirements, changes in government budgets, and the impact of digital economy development on the pharmaceutical industry.
Sunario, representing the energy sector, noted that Chinese investment in Indonesia is facing historic opportunities, particularly with the Indonesian government's push for green energy transformation, which presents new opportunities for Chinese enterprises in clean energy and battery sectors. He also emphasized the importance of foreign investment in the complete industrial chain, such as the electric vehicle industry chain.
Rasjidi, from the steel manufacturing industry, pointed out that Indonesia's manufacturing products have always faced challenges from low-cost imports. Additionally, the new labour law provides more protection for employees, making it crucial to pay attention to employment issues when investing in Indonesia.
Chen then asked what specific issues Chinese enterprises should pay attention to when investing in Indonesia, given the cultural differences between China and Indonesia.
Rasjidi used her own experiences to illustrate the many differences in work culture between Chinese and Indonesian workers, such as the frequent "small breaks" Indonesian workers take during work hours, which can create conflicts between the efficiency sought by enterprises and the respect sought by employees.
Sunario addressed the issue from three aspects: First, finding common ground and respecting differences; second, understanding the Indonesian cultural context and social operation model; and third, ensuring compliance, building a strong legal team, and collaborating with external legal experts.
Mononutu stressed the importance of establishing smooth communication mechanisms with local communities and stakeholders, especially in the pharmaceutical industry, because behind regulations are group interests. The true enforcement of laws is flexible, and establishing dialogue with local communities is essential to providing good legal advice.
Chen then asked the panellists to provide suggestions from the perspective of building a local legal team.
Mononutu recommended that enterprises make decisions based on their scale and development strategy. For instance, GSK's legal team in Indonesia is lean but covers all necessary functions. She also advised enterprises to collaborate with local lawyers and plan their future development based on potential risks.
Sunario suggested that enterprises collaborate with legal talents at different stages of development, such as partnering with law firms during mergers and acquisitions and building their own legal team during the operational stage. He also recommended establishing an external lawyer cooperation pool based on the type of expertise needed.
Rasjidi said foreign companies tend to find local law firm partners through their home country's law firms. Once operational, companies can consider hiring local lawyers for regular legal services and start building their own legal team as their business scale expands.
Lastly, Chen asked the panellists to share their criteria for selecting law firm partners.
Rasjidi advised foreign enterprises to establish cooperation with local law firms and have local lawyers guide them to find the most professional services. Sunario emphasized the importance of utilizing local resources while assessing the internationality of law firms. Mononutu pointed out that legal professionals must fully understand the business to seek the most suitable lawyers and stressed the importance of a lawyer's personal reputation and expertise, in addition to the law firm's brand.
Amid enthusiastic applause from the attendees, the first overseas investment forum co-hosted by ALB and Tiantai concluded successfully. During the evening banquet, Tiantai's legal experts and legal and business professionals from Chinese and Indonesian enterprises enjoyed dinner in a relaxed atmosphere, exchanging insights and building deeper understanding and friendships.
ALB, with editorial and event resources spanning multiple jurisdictions in Asia, looks forward to playing an active role in the going-abroad process of Chinese enterprises and law firms, bridging the legal communities of China and various Asian countries!
