The Minister of Public Works Regulation No.05/PRT/M/2011 on the Guidance on the Requirements to Grant Foreign Construction Company Representative License (the “Regulation”) was recently issued, having to consist 19 Articles and 5 Appendices.
The Regulation in essence serves as a guide to the Minister of Public Works in issuing licenses to a foreign construction company representative’s pursuant to Article 2, and stipulating which construction services may be performed by a foreign construction company (BUJKA) in Indonesia (article 3).
Pursuant to Article 4, the License will only be granted to BUJKA which is classified as “large” based on a certificate issued by the Construction Service Development Institution (Lembaga Pengembangan Jasa Konstruksi / LPJK) after receiving a classification and qualification equalization assessment. The BUJKA which has obtained such a license may perform construction services in Indonesian jurisdiction.
Set in Article 5 (2) types of application that a BUJK may submit to the appointed regional/city government agency are:
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a.
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An application for a new license (documents to be submitted is provisioned in Article 6 (1));
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b.
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An IUJK extension (documents to be submitted is provisioned in Article 6 (2));
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c.
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Data changes on the BUJK (documents to be submitted is provisioned in Article 6 (3)); and/or,
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d.
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License / IUJK closure (documents to be submitted is provisioned in Article 6 (6)).
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A BUJKA must cooperate with a national construction company (BUJK) on a project as pursuant to Article 10. This BUJK will have to be:
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(a)
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In the form of a Limited Liability Company (Perseroan Terbatas / PT)
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(b)
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100% (one hundred percent) owned by one or more Indonesian citizen and/or an BUJK
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(c)
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Classified as “large” BUJK;
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(d)
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Possess a Business Entity Certificate (SBU); and,
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(e)
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Possess a Construction Service Business License (IUJK).
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Article 11 sets out that BUJKA may only be involved in complex, high risk, and/or highly technical construction project.
A License is valid for 3 years from the date of issue and may be extended, having its validity in any Indonesian jurisdiction pursuant to Article 13.
Article 12 (2) provides that A BUJKA that has secured a License is obligated to:
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(a)
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Comply with all rules and regulations;
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(b)
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Form a cooperation with BUJK in every construction work;
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(c)
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Perform necessary knowledge transfer to its BUJK counterpart; and,
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(d)
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Submit annual reports to the Minister or other working units with a copy to LPJK.
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Failure to comply with the obligations as set out in article 12 would make the BUJKA liable to administrative sanctions including: written warnings and prohibition in continuing its work (Article 15 (2)).
The Regulation repeals and replaces the Minister of Housing and Regional Infrastructure Decree No.28/PRT/M/2006 on the Licensing of Foreign Construction Service Company.
The Regulation was issued on 28 March 2011 and has been in force since 4 April 2011.
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