Coal Trading Business

During this recent weeks, I have been really busy  involved in a team work  with our group members  relating to a certain Coal Trade  Project. It is really exiting, interesting and frustrating  because there seems to be difference of manners and attitude in approaching the price settlement  of Coal that had been loaded on the Vessel,  for approximately 15,000,000 MT of Coal. 

The issue was that the Coal Quality spec was not reaching the spec but was not rejected by the Purchaser, and requested to be loaded to the Vessel, with  conditions  proposed by the Purchaser that if the Coal is below  5500 Kcal/GAR, the price will be renegotiated. 

However, when we as  Seller had followed the instruction to load the Coal to the Vessel for shipment, the Purchaser seems not having room for negotiation, and had keep on insisting  to decide unilaterally, for which purpose we as the Seller who had followed the instructions of the Purchaser to load the Coal,  feels of not being treated fairly, which also resulted several of the stockholders, suffers delay in payment for their rendered services.

The Purchaser had requested that the pricing of the Coal must apply CV prorated basis plus discount of 20%, which resulted the figure far below the market price of the Coal. We as the Seller had moved our position from just applying prorated basis with discount to applying the market price. 

Well, in doing Coal Trading Business, we have to be professional and also have to honor the commitment that we had made. In practice even though the Sale and Coal Purchase Agreement  had been signed, if one of the Party   particularly the Purchaser had waived their rights to reject the Coal Commodity which had reached the rejection point, and requested to load the Coal immediately to the Vessel,  subsequently, such instructions has to be treated as a legal contractual binding commitments, for which  we have to honor our wordings made through such email,  which suggested for negotiation on the pricing of the Coal,  which in average had shown a certain Gross Caloric Value that had  been be determined by the Independent Consultant mutually agreed by the parties. 

There appears to be Coal Pricing Index,  where there are several Coal Kg Calorie  Value Indexes, where according to the Indonesian Mining Association News, Indonesia, one of the major Coal Exporter  through  PT. Coalindo Energi (PT CE), will soon launch the Indonesian Coal Mining Index ("ICI")  for example ICI 1 to 3 ranging from ICI 1 GROSS caloric Value GAR 6500 Kg Calorie, ICI 2 - 5500 Kg Calorie  and ICI  3 - 5000 Kg Calorie, where there is a range of pricing deduction, if it falls between these range index. From our brain storming discussions, it indicates that we may  have several alternatives /options to either apply (i) the prorate basis to get the pricing of the Coal or (ii) deducting a certain percentage, or (iii) we just  seek the market price of such average Coal Kg calorie on As Received Basis (ARB). 

As a Business Lawyer who is a member of  the Professional Coal Trading Team,  we really have to anticipate how if in the real practice there occurs, condition where the Quality of the Coal did not meet the required spec quality and rather had reached the rejection point but from the commercial basis,  the Purchaser had requested to waive its right to reject the Coal and insist on loading the Coal to the Vessel, but do not want to open its room for negotiation on the Price of the Coal that had been actually loaded to the Vessel ( FOB) and delivered to the Purchaser and had reached the End-user  .

The Rainy weather, must also be taken into consideration, since the Naught of the Vessel had to be closed to avoid flood of water causing The Total Moisture (TM) contents in the Coal Increase dramatically. 

One of the issues that also  have to be taken into consideration is relating to Demmurrage and Dead Freight issue, particularly if the Inventory of the Coal in the Stock Pile,  either within the Mining Location or in the Stock Pile in the Port is not sufficient in quantity, to fulfill the agreed amount  of Coal Bulk to be supplied,   which could cause Demmurrage and Dead Freight Exposures.     

Well, those are some of the issues that has to be anticipated in the real world of trading Coal for shipment.                      

Shareholder Loan

There are instances where a PT Limited Liability Company operating in Indonesia needs funds from its Shareholder. In this situation you as a Business Lawyer are being required to draft a  certain Shareholder Loan Agreement by your Client. If you are an In House Legal Counsel of such PT Company you may try to draft a first draft of such Shareholder Loan Agreement to be further reviewed by an Outside Lawyer. Click Here!

If there are several shareholders in such PT Company, there must firstly be a Shareholders Meeting  called  by the Board of Directors for a meeting with the agenda to request the shareholders to give such Shareholders Loan to the PT Company, where Minutes of the General Shareholders Meeting will be the legal basis  for the  Shareholders and the PT Company to enter into a Shareholder Agreement. As we understand under the Indonesian Limited Liability Company Law, the PT and its respective Shareholders are being treated respectively as an independent Law Subject in front of the Law.   Thus if the shareholder agreed to provide such Shareholder Loan, such Shareholder who are providing such Shareholder Loan has the right to demand for the repayment of the Shareholder Loan against the PT Company. S corporation shareholder loans: a cautionary tale.: An article from: The Tax Adviser

SUBORDINATE LOAN 

This Shareholder Loan has the level of subordinate Loan against Loan From a Bank made to such PT Limited Liability Company, meaning that if there is cash-in received by such PT from its business, the repayment has to be  firstly made by the PT  to the Bank and if there is remaining amount after being deducted for the operations of the PT Company such monies is allocated for the repayment to such Shareholder providing such Shareholder Loan to such PT Company.

This repayment to the Shareholder is also made first before dividend are distributed to the Shareholders. This all depends upon the agreement between the shareholders of the PT Company and the Shareholder who is providing such Loan. It is really interesting for a Business Lawyer to draft this Shareholder Loan Agreement since there are legal aspects of Civil Law regulating loan, and  there are Corporation PT Law regulating the corporation aspects of such PT, which have to be observed by the Business Lawyer in drafting the Shareholder Loan Agreement.      

   

Loan Agreements

If your Client needs some funds from a certain Financier, you may be requested to draft or review a Loan Agreement. In drafting this Loan Agreement there are several legal aspects that you have to draw your attention. You must know the amount of the Loan which your Client requires, the Disbursement of the Loan, and the Repayment of such Loan. In order to secure the Loan the Banks or Financier usually request a certain Independent Business Lawyer to conduct Legal Due Diligence to review several legal aspects that have to be observe to make sure that your Client is eligible to receive the Loan and will ask the purpose of your Client in requesting such Loan.      

Besides Legal Due Diligence, there may also be conducted the Financial Due Diligence for the purpose to review the Business Financial aspect relating to your Client Business. Is the purpose of such Loan for expansion of your Clients Business ? What is the project cash flow projections of your Clients Business.Who is the target market of your Client ? What is the market  share of your Clients selling products. Is your Client conducting business in Manufacturing a certain product ? Or is your Client conducting General Mining Business Operations ?

There are certain Bankers who looks at the reputation of your Clients Business. For instance if the Project is really feasible and your Client based on the Financial Records shows positive cash flows based on a certain Project that had been done by your Client, The Banker may trust your Client and provides a Project Financing arrangements, where the Banker is more focusing on the proven Cash in of the Projects in several projects that had been performed by you Client.   

If your Client has not yet shown Projects being performed, the Bankers may request several Corporate Assets of your Client such as Buildings, Plants, Machines, Heavy Equipments  as collateral  to secure the repayment of the Loan. As a Business Lawyer you need to review all the Legal aspects including the title ownership of such Corporate Assets.

The Bankers may also need to request some pledges upon the shares issued by your Clients Company. As  a Business Lawyer you need to review the Corporate Documents relating to the owner of the shares issued by your Clients Company.  Besides  reviewing the  Loan Agreements you may also need to draft or review  Collateral arrangements including the Fiduciary arrangements and probably may need to conduct checking with the Fiduciary Office relating the registering the Fiduciary Deeds.       

Business Legal Exposures Beef Restaurant Franchise Arrangements

In doing business you may be interested to enter into a business cooperation with another company who is mastering a certain business ventures that you are interested. For instances if you want to open a steak beef business Restaurant  you need to master all the conditions of the beef meat that you desire to serve in your Restaurant. You need to now the location of the place where your restaurant is going to be open. Is such place strategic or not. Are you intending to open a small or big Restaurant ? Where do you want to purchase such beef. Is it local beef or imported beef. 

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If you feel that you want to use a famous beef Restaurant  that is already well known, you may be interested to enter into a Franchise Agreement with such well Known Beef Restaurant.  It really depends whether the owner of such well known brand is willing to allow you to use their brand in your Restaurant. If this is the case than you may need to observe the legal clauses under such Franchise Agreement. What are the rights that you have in using such well known brand, and what are the requirements that you need to comply as requested by the Owner name Brand  of such well Known Restaurant. It may be that the performance image of such Beef Restaurant including the conditions and cleanness of  your Restaurant must meet the standard  performance which is adopted by the Owner of the Well Known Beef Restaurant.

The Hygene and quality of the Foods and services have to be in accordance with the standard quality of Food as determind by the Owner of the Well Known Beef Restaurant. In fulfilling such above quality and standards you may need to redecorate your table, sits, Bathrooms, table cloth as well as the cleanest and standard dress  used by the Person who provide and serve such Beef Steak to  the  Customers and guests of your Restaurant all to be in the cost of you alone.  

The quality of the water may also be important to be observed. Who are the suppliers of the Beef Steak?. It may be that the Owner of the Brand will select the Supplier of such Beef Steak. The condition of the Kitchen as well as the Chef  may also be in accordance with the standard  requirements  as requested by the Owner of the well Known Beef Brand. Since this will be a Franchise arrangements there may be a certain Franchisee fee or Royalties that  you have to pay upfront to the Owner of the Franchise before they allow you to use their Beef Brand Restaurant.


This all depends upon the circumstances  and conditions surrounding the business transaction between you and the Owner of the Beef Brand Restaurant Owner. Well those are some of the business aspects which  have to be jotted down under the Franchise Agreement between you and the Owner of the Well Known Beef Brand Restaurant resulting legal binding contractual arrangements between you and the Beef Brand Owner.   

Writing Business Legal Aspects

Well, as Business Lawyer you like to write legal aspects relating to business in Indonesia.I ndonesia has been developing into a Democracy Society, where transparency and openness is a requirement to be performed by all the stake holders of this Country. Indonesia is an archipelago where there are many islands spread in the equator within the South East Asian Region. After the changing of the ruler of the previous former President Soeharto in the Year 1998, this country became a country in Asia where democracy is adopted. 

This transparency also spreads to the Business Sectors, where every person or party who wishes to conduct business in the Indonesian Territory  are given the same and fair chance to be a business player in the field of business. Anti Monopoly Act are being introduced in the Indonesian Law system.Good Corporate Governance are also being socialized in the Indonesian Business Community. During the Indonesian Economic Crisis in the Year 1998, many companies collapse due to the Economic Turbulence Crisis. Restructuring of the Non-Performance Loans had been made to revitalize the financial conditions of the Companies.

During  such period as a Business Lawyer we are experienced in helping our Clients to draft and negotiate the Restructuring Loan Agreements.  There were several  hair cut upon the Loan and rescheduling of the Repayment of the Loans. Now a  days  after the Indonesian Presidential Elections  and Vice President Elections as well as the Parliament elections were conducted, business society is waiting to experienced economic growth and business climate stability in order for the Business Players to start concentrating in pursuing their business.

The impact of the Indonesian  Parliament in controlling the Government is felt to be more of a political arena, where it could in a certain level affect the business condition in Indonesia. However, as a rule thumb of survival everybody needs to continue on their business ventures, where as individuals who are working as employees in Companies also needs stability in the Business Society to enable  them to work in their good quality performances.

In the Governmental Level in Indonesia, transparency and openness are also being required so that public services for the people as a whole including the business players who needs business  licenses and permits are simplified. The coordination between the Government Officials and policies in the Central Level and Regional Level are also required so that no contradictory policies are made which will affect the business investors conducting its business operation in the Regional Level.  

As a Business Lawyer, we are required to communicate and be the bridge for communication between our Business Clients and the Government Officers relating to the legals aspects and procedures involved in the business operations of our Clients. We have to read and observe the rules and policies in the Central Level and the Regional Level particularly to detect whether there occurs overlapping rulings and laws between the Central and such Regional Rules and Policies.    

Well those are some of the Business Legal Aspects that have to be observed and communicated effectively by the Business Lawyers to the Management of the Company where they work if they are In House Legal Counsel, as well as Business Lawyer on their own to their Clients.  

     

Business Lawyer Here We Come

Yes, it is the time that you act and behave like a professional Business Lawyer. There is professional ethics and manner and proper knowledge that you have to honor if you want to start becoming a Business Lawyer. You must increase your awareness on the Corporate Culture of your Client and Customers. What the Business players need from you is your professional business legal know how to protect their Business interest.You have to be aware of the business climate and business opportunities that your Business Client's desires to achieve their goal. 

You have to guide and give clear legal guidance to your Client on the various legal aspects surrounding the business operations of your Clients. What are the proper rules laws and policies that have to be observe  by your Clients in pursuing its business ventures.  If it relates to corporate matters you have to be sure that the proper corporation actions and approvals with the organization of your Business Client had been taken. 

Is your Clients desiring to enter and establish a new venture, or are they eager to participate into a cooperation  venture with other business players who are already operating their business operations in Indonesia.What is the nature of the business that your Clients desires to pursue. Are they also seeking some additional funds to expand their business ventures.Are they in the Hotel Business or are they in the oil and gas sectors. If they are eager to promote their products, what are the rulings relating to importing and distributing the products in Indonesia. 

Are they interested to conduct Coal Mining Operations in Indonesia, or are they just trader who wants to purchase coal from Indonesia. Those are some of the business operations aspects that you as a Business Lawyer have to explore and dig from your prospective Clients.  It is really interesting to be a Business Lawyer. The issue is that whether you want to be an In house Legal in a Corporation who conducts operation in Indonesia or are you interested to be a Lawyer in a Law Firm or you would like to practice as a Business Lawyer on your own. This all depends upon the circumstances and situation of you as a Lawyer. If you just graduated from a University in Indonesia, you might as well work in a Law Firm or apply to be an In-house Legal Counsel in a Company operating in Indonesia.

Everything needs learning and process of practicing your legal know how before you can become a professional Business Lawyer. This all depends upon your motivation and dreams in your life expectation and journey. Nothing is free in this world. So join the community of the Business Lawyer in Indonesia. Good Luck and success.

          

 

Snapshots Legal Due Diligence

One of the significant part of a business ventures who desires to enter into a partnership or equity sharing in a company, is that such business investor must firstly conduct legal due diligence upon the company who they intend to participate in equity.For instance if a company is interested to  acquire shares in a Company such business investor needs to be certain that the company they are intending to acquire or participate in equity sharing is  a legitimate company who has the proper licenses to conduct and operate its business in Indonesia. 

The company must also be a company who is being approved by the relevant authority in establishing its company. For instance if the company is a Limited Liability Company or PT is there an approval from the Department of Law and Human Rights ?  For such purposes the business investor must hire a Business Lawyer to check all the proper approvals and licenses that are required by the Indonesian Laws and regulations regulating the establishment of such PT Limited Liability Company.   The Business Lawyer shall conduct the Legal Due Diligence to check all the legal aspects relating to the Company that the business investor desires to acquire or participate equity in such Company.

The land where the Company is located should also be checked whether such land is being owned or leased by the Company and if yes for how long is such Land Title right to use or lease is available. Furthermore in conducting the Legal Due Diligence the Business Lawyer must also assist the Business Investor to check upon the Corporation Documents of such Company, including checking who are the shareholders of such Company, the major shareholder, the Board Directors as well as the member of the Board of Commissioner.  

Besides the corporation documents, the Business Lawyer must also check whether there are loans and collateral  made by the Company, and how long is the Loan Agreements Period, as well as the Outstanding Loans and what kind of restrictions are there imposed by the Bankers against the Company in the capacity as the Debtor. The numbers of Manpower including the Employment Agreements and the Collective Labor Agreement ( CLA) are also an important element that have to be checked by the Business Laywer for the interest of the Business Investors who desires to acquire some shares of the Company running such business operations.

In addtition to the above the Legal Due Diligence must also cover whether there is a potential material litigation case or arbitration, commercial court case, employment case pending during the period such Business Investor desires to participate as Equity Sharing, which might interrupt or disturb the business operations and companies assets of the Company.

Well, those are some of the elements which may be looked upon by the Business Investors who desires to acquire some shares of a company which shall be conducted by the Business Lawyer who shall be enggaged by the Business Investors in pursuing the above business desires through conducting Legal Due Diligence.    

Building Your Brand Image

In business it appears that one of the significant element to market yourself is establishing and building your Brand Image. This is what we frequently are told by the marketers. Well, in order to establish such brand image, you certainly have to elect and choose some specific brand element which could or may link you to your  products that you are selling. What are the products that you are selling ?  What are the specific element of the product or services that you are selling ?

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Is there any specific nature or brand that you may want your customers or your potential customers wants to remember about your products or services ? 

Those above items may be some of the key words that you have to explore within your product or services that you are selling. In reality there is no magic or instant result which you may find. You have to work hard and be consistent with what you are desiring to sell to feed your self and your family. 

I myself had been nearly 12 Years since June 1998 on my own selling the legal services to my Clienteles.  It is not that easy  to establish the brand image of the services that you are selling. Especially if you are on your own and not associated  or link to a well known links, you have to really strive hard to continue to survive in selling your legal services. There are times that you are wandering why are you not linked or associated with an already well known firm so that you can easily jack up your name in the Business Community in Indonesia.

• Well, I really do not know the right answer or reason. It might be that you are not at the right time and the right moment. However, since I have been already nearly 12 Years being Independent as a Free Business Lawyer, I have really learn a lot how to survive during this 12 Years time of my independent Life. There is no such school of being Independent on your own but to really jump on the board and be independent, since each person or individual may have their own reasoning why he or she had elected the kind of life that he likes or desires. One of the independent experimental moves that I have experienced is by establishing this blog of mine, where I can independently write whatever life experience that you have followed and exercised during your life time in this world.             

     

Seeking Business Opportunities

Is practicing Lawyer falls under Business Categories ? This question frequently appears in the mind of Lawyers who are practicing on their own. How can we maintain establishing our cash flows if we are running our own practicing Lawyer. Even though I have been practicing as a Business Lawyer for 12 Years since June 1998, we have to always learn the cash flow side of running this practicing Lawyer.

Under the Indonesian Law system, as long as the Lawyer has obtained License to practice as a Practitioner Lawyer, such Lawyer may be entitled to provide Legal Services, on his own. Thus as long as the Individual Lawyer had obtained such License issued by Peradi (The Indonesian Advocate Association ) or Himpunan Konsultan Pasar Modal (The Indonesian Capital Market  Consultant Association),  such Lawyer has the legal right to practice lawyer. Such Lawyer may enter an arrangement with another Lawyer to jointly  establish a partnership or sort of a cooperation or practicing solo.
    

The pricing of the legal services may be on a lump sum negotiated agreed price or may be based on hourly rate or time basis. These really depends on the situation and circumstances between such Lawyer and his/her Clientele. Based on the above circumstances I have managed myself to practice lawyer as a Business Lawyer for more almost 12 years. Having experiencing to be on my own for 12 Years is quite a long time. Most of my legal works are related to Construction, Financing, Oil and Gas, Coal Mining, General Mining, Hotels, Steel, Corporation covering drafting agreements, reviewing contracts, giving legal advices and legal opinions, legal due diligence.

In practicing lawyer particularly as a Business Lawyer  we have to really enjoy in what we are doing, so that we are attached with our work. We have to explore the business venture of our Client and relates it to the legal aspects which we have to highlight and communicate it with our Client in a communicative and effective manner. Networking and keeping contacts with our contacts are significant. Legal Certainty is important to establish a conducive business climate.            

Business Lawyers Attitude

As a Business Lawyer you have to establish and develop a positive attitude in maintaining your integrity. You have to be honest and must keep your business ethics and morals to protect the business interests of your Clients. Remember that your Clients are business players who seeks profits in their venture.

You must overcome the legal problems to maintain the  smoothness  business operations of your Clients. You have to seek solution to overcome obstacles which may delay your Clients business achievements and goals. You have to master yourself with the business sense and desires of your Clients. You must not be blocking the wants of your Clients Business Objectives to the extent that you must  advise your Client to observe and comply with the legal requirements as regulated by the laws and regulations surrounding the business activities of your Clients as may be advised by you. 

You must lead the smooth path and advise the rules, laws and policies that have to be taken into considerations by your Clients. You must seek solutions to solve the obstacles that may be faced by the uncertainty of the laws and rules which may occur in a certain circumstances and situation. As a Business Lawyer you have to have a positive attitude  in bridging the communications between the Local Government , Central Government and your Clients business desires particularly relating to the legal aspects surrounding  the business operation of your Client in such Area .     

Insurance Clauses Coverage

If you are a Business lawyer drafting Business Contracts you may be requested to review the Insurance Coverage Clauses that have to be covered by the Contractor of your Client. You must ensure to protect your Clients from unforeseen losses and significant financial burdens. In organizing an insurance  program  it is advisable that you may request your Client to engaged for an Insurance Broking and Consultancy Services who may be ready to advise your Business Clients for guidance and consultation with the Insurance Program and Plan that have to be covered by your Client or the Contractor of your Clients who are providing services to your Clients Business Activities.

There may be 3(three) basic considerations which have to be viewed in organizing an insurance program, namely  :

1. Recognize the perils facing the business and potential loss surrounding or which may occur in your Clients Business Operations.

2. Investigating the methods by which the costs of  the Insurance coverage can be reduced, which includes "exploring" for appropriate insurance plans.

3. Prepare and insurance plan that is compatible with the operation and goals of Your Clients Business 

Whereas relating to the Insurance Coverage there are several Insurance Coverage which may be covered to cover the Assets as well as the Personal which are engaged and may be found and exposed suffering such losses among others : fire, liability, vehicle, equipments, workers compensation and some other desirable insurance coverage which may include Business Interruption, Crime and Key Employees.     

The above insurance coverage really depends on the nature and specific character involved and attached to the business operations of your Client. If your Client is in the Oil and Gas Business Operations there may be insurance Coverage for the Drilling Rig of the Drilling Contractor and other Services and Supporting of Such Drilling Operations activities among others the Cementing, Perforating,Well Logging, Drill Stem Testing,  Fishing, Completing the Well.

You have to ensure that the Insurance Company are competent to cover such Insurance Coverage. As a Business lawyer you have to make sure upon the wordings and sentence of the Insurance Coverage, the Period of the Insurance Coverage, The Insurance Policy, The Waiver of  Subrogation Clause to ensure that the Insurance  Company will Waive their  Right to Subrogate ( take over in claiming) or the Right to Claim against your Client or their employees and directors, after the Insurance Coverage had been claimed and paid  to your Client as the Beneficiary, Assured or Co Assured  of such Insurance  Coverage in event such unforeseen perils occurred.  

There are also occurrence where Insurance Company are reluctant to cover the loss due to the high risks exposure such as the Lost of Down Hole Equipment which are lost down deep in the Well. There may be Business Interruption Insurance where damage to your Client's property or machinery or stock could seriously disrupt the business income or profit and extra cots of your Client Business. The loss of your Clients Contractors and Suppliers may also impact Your Clients Business for which you may advise your Clients to cover the Business Interruption Insurance to cover the short-fall of the gross profit of your Client.

Those above are some glance view and picture of the Insurance Exposures that have to be explored and checked by the Business lawyer in coordination with the Insurance Broker and Insurance Consultant and your Client.          

Maintaining Business Relation

It is really interested to learn and practice how to maintain your business relation with the Business Community. We are really lucky to have the experience in mastering a certain professional who are needed by the Business Community. You can build and maintain such relation after you are fully aware what is your function and what does the Business Community Needs. 

Every Business Community needs growth and ideas how to survive, establish continuity of cash flows,  make profit,   expand and  and grow. If you are eager to assist your Business Clients  desires and wants you have to be aware what they want to achieve success in their business objectives.     

You have to have certain value added to your business community. Business players needs funds or investors to establish their business desires and goals  which needs customers to purchase their products.  

Networks are really significant and important to get their business dreams comes true. You have to be patient in the process of learning and you have to be prepared to educate yourself to tune in the business community. Besides being a Business Lawyer you must have to continuously  expand your networks so that you can link and match the various stakeholders in the business community. 

You have to go out and make contact to your networks and serve the needs they required to start and make actions and steps to perform the desires and wants of the relevant business players. Business Lawyers does not stand by itself but has to develop and maintain contacts with the various business stackhloders. You have to be active and not pasive. You have to meet people and check what they need and require. Do not loose the momentum but create and make the momentum.

You will be amazed on the outcome of your making contacts and relations with the networks that you are linking and matching.  The results needs some time but you have to be consistent in developing the added value of your self in the business community.  Keep on maintaining and increasing your potential ability to establish and mainain such business relation so that a deal for the business transactions can be achieved and result a positive path.

Seeking Investors and Funds

You may notice that in the real business world, business players frequently are seeking funds or investors to expand their production capacity or pursuing new projects. In seeking there funds we as Business Lawyers might have an active role to assist our Clients in seeking such funds or investors. The mechanism of seeking such funds is that you must have networks who can advise you who to contact such Investors or Funds. 

The Funding or investors might be from your local area Country but they may also be from outside of your Country. The first thing that you must do is just ask one of your Business Investors Network who you can trust and ask whether they have some relevant contacts or experiencing in seeking such Funds or Investors. Your network may be some Capital Investment Consultants who have a wide range of networks in several countries.   There may be the Big players but there also may be middle class or boutique players. 

Your  Business Consultant Management Group may request you to contact your Clients who are seeking such Investors or Funds. When a specific date for a meeting had been set up you  may  coordinate  both of them to meet in  a certain place such as for instance in a coffee shop in a Hotel or in the office of your Business Management Consultant. In such first meeting  you will introduce each other and discussions will be held. In such meetings if both  parties had been acquainted with  each other  and communication has taken place,   the Business Consultant may request the Business Player to deliver what they want and might raise some questions which  usually relates to the capacity of the current production and the equipments and supporting infrastructure which they plan to develop to achieve their desire toincrease their production level capacity

 The Business Management Consult or the Investment Capital Company might also request the Business Player to provide them with the written Info Memo or Business Plan which requires such funding  or Investors. There may also be questions on what kind of cooperation or business relation is going to be established  and worked out relating to the need of such new Funds or Investors. These maybe Equity Share, cooperation, or split of the Profit and risk.

So it is quite interesting and exiting to make such contacts for which you as a Business Lawyer not only functioned as Business Lawyer giving Legal Advise,  but you may also seek, contact fund raiser  or Investors to your Clients,  for which you may also have the chance to get some fee payments for your services and also a certain Success Fee if such Business Contacts succeed in making a Business Deal.  

As the Business Players they may be able to seek the investors or funds by themselves, but if there is a media between them who can arrange and assist them professional in handling such business opportunities, it will for sure be benefit to safe their financial problems and difficulties, where  there might be someone out there, who can solve their business problems in a professional manner. These also depends upon your networks as to whether they are pro-active in striving to get their business deal succeed.

Well folks the above are some brief glance relating to seeking Investors and Funds to support your Client's Business Activities;

Cheers
Agung Supomo Suleiman 
     

New Decree Cost Recovery Scheme Oil and Gas

From reading some sources it appears that Indonesia will issue a government decree which will clarify what oil and gas contractors can claim under a scheme to reimburse their operational costs, including exploration spending. 

Cost Recovery Scheme.

As we are aware under the Indonesian system for the oil and gas operations it  adopts Cost Recovery mechanism for all the costs for exploration and production costs, incurred  by the Oil and Gas Contractors where it consists operation costs for the expenditure of current year and the capital costs which will recover based on the life time use of such capital item depending on the Group under the Accounting Clauses as Appendix in the PSC ( Production Sharing Contracts.    

Intervened by the DPR ( Parliament)to Limit The Cost Recovery Items

The House of the People's Representative has intervened for having limits on such  Cost Recovery. As we may noticed some of the Technical Assistance Agreement (TAC) in the Oil and Gas  previously  has a  certain cap for the Cost Recovery for the running Year. To guarantee the Government's cash in for its State Budget the  FTP or First Tranche Petroleum was adopted where the value is  equal to  20% of the Total Oil and Gas  production of the current Year  has to be  firstly deducted before Cost Recovery  is done to reimburse such costs  during the current running  Year.  So the Reimbursement is taken out from the remaining 80% of such Current Year Oil and Gas production.

We understand from reading the news that the Finance Minister Sri Mulyani  said  in a parliamentary hearing that such Decree will contain special rules for oil and gas, especially on cost recovery to calculate (production) sharing and tax. 

The Minister said that in this decree, the costs will be based on normal principles of business and tax rules.

Furthermore she said  that the government had previously issued sort of a "negative list of items and services that oil and gas contractors working in Indonesia could not be reimbursed for.

The list includes the cost of employees, expatriate costs, as well as costs for legal and tax consultants, and community development expenditure.

However according to the sources the Minister said that the decree is not aimed to intimidate those claiming costs. If the costs are related to exploration, exploitation and development, it can be claimed from the government.

It is noted that Indonesia expects the spending by  the Oil and Gas Contractors for  exploration in the  Indonesian Oil and Gas Fields Area will fall to $2.3 billion this year, which is down  to about 15  %  from the Estimated $2.7 billion in the Year  2009.

The Crude production, which was about 1.5 million barrels per day (bpd) in the 1990s, has nearly halved for which Indonesia has in the current years become a net importer of crude oil. We are aware that the Major Global Oil and Gas Players such as ConocoPhillips, Chevron (CVX.N), (COP.N) and Total (TOTF.PA) are operating  in Indonesia,  however the country  appears to be struggling  to attract fresh investment to develop new fields.

Indonesia is Producing  949,100 Bpd of crude oil and condensate in the Year 2009, which is missing a target of 960,000 Bpd in  such Year.

A certain sources said that the target of producing 965,000 Bpd  of crude and condensate this year would be very difficult to be accomplished  since  the Output from  the Older wells was falling  to about 10-15 percent per year. In order to encourage the Exploration we understand that The Government  has offered New  Exploration  Rights and  will provide new incentives to oil and gas investors, including more favorable tax treatment and a better production split.

However there are others saying that the incentives may not be sufficient for the Oil and Gas Investors  since many of the unexplored fields are in the Remote Locations and often in deep water, and so expensive to develop.

We can observe in practice that incentives issues are always brought up when a certain Oil and Gas Investors are having a negotiation with the Government Team in the process of getting a deal in a new contract in the Oil and Gas such as PSC, TAC or JOB. The Oil and Gas are taking all the Risks for the sinking funds if oil and gas is not commercially discovered. However, as we also note that pursuant to the spirit of  the  principles under the Indonesian Basic Constitutional  Law Article 33 (3)  the Resources which are owned by the public has to be managed for the social best welfare to increase the quality life of the people of Indonesia as a whole. Thus the concept of treating oil and gas Resources in Indonesia has a different approach with countries adopting the Concession Right where any person / party  can own the oil and gas which is discovered under the land such party/person owns.     

Accordingly, besides the Commercial side and consideration that had to be considered by the Oil and Gas players in Indonesia, we have to remember that  the Government of Indonesia as well as the House of Representatives  has to balance  the commercial side and the public function aspects.   

Review Contracts

As a Business Lawyer you are frequently requested to review and draft business contracts which are needed to cover the terms and conditions of your Business Clients who are dealing and enggaging contractual relation with their co partner in pursuing their Business. We have to be experienced in handling this kind of business transactions. You have to identify and explore their business venture and the legal exposures which are attached to their business relation. As a Business Lawyer besides practicing your skills in drafting such Business Contracts you may also purchase books which gives you some knowledge on Drafting Contracts.

 In drafting contracts you have to dig all the relevant data that Your Clients desires to pursue their business goals. You have to identify what your Clients wants out of the business. We have to check the rights and obligations of each party. Who will be responsible to do what, who is responsible on seeking the funds or investors to fund the investment. Is the Business deal in the form of cooperation between such Business players. Are there going to be a joint venture or setting up a new company. Is there going to be partnership, acquisition or merger between the companies.

Where are the business operations going to be performed. Is it in the manufacture of products. What are the products ? is it Customer Goods  ?  Is there a Principal and Agent or Distribution arrangements ? There are many several data and business information which you as a Business Lawyer have to dig out from your Client. You have to conduct legal research upon the corporate documents of your Clients Business Counter part.

The business licenses and permits they have. Are they engaged with other business investors in the field of business that your Clients desires to cooperate with such Co Prospective Investors.  Does such company received  loans with bankers which still outstanding ? Is their any collateral which are attached to their assets which shall be used in such Cooperation or Co Ventures ? Those are among others the relevant elements that have to be checked  by the Business Lawyer who are assisting their Clients in  drafting contracts to pursue a cooperation or joint venture arrangements with a prospective Investors / partner.             

Legal Marketing Strategy

As a Business Lawyer you have to seek a Legal Marketing Strategy. You have to be honest to your Customers and Client.  You have to put trust to your Client. Even you start your Law Firm from scratch since more than  11  3/4 Years ago, you have the real experienced in establishing your Track Records in handling and giving Business Legal Services to your Clients. As a Partner of your Firm you have gained the Professional Skills as Business Lawyer and you also have experienced in performing, operating your own Law Firm now called Suleiman Agung & Co (SACO Law Firm) where there is no school education but you have to experienced by yourself.

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• You have to be consistent in always learning and experiencing the legal aspects that must be highlighted to your Clients. Your Clients interests is to get their  Business Ventures succeed. You as a Business Lawyer are responsible to high light the Legal exposures and aspects that might occur where your Business Clients desires to pursue their Business. You have to advise your Clients upon the relevant Laws and Rules that are surrounding and may have to be high lighted to your Clients. 

You have to advise your Clients on the rules and laws that have to be abide by your Clients starting from the Permits, licenses required to operate their business.The rules relating to Foreign Investors including the manpower for the Expatriates. The Policies from the Relevant Government and Authorities. Since Indonesia consists of many Islands which are scattered you have to advise your Clients on the Policies and Rules between the Central Government and the Provincial/ Regional Governments. 

• The distributions of Authorities in granting the Business Licenses, Business Operating Permits  and distributions of revenues, levies, charges imposed against the Business Operations  between the Central Government and the  Provincial/ Regional Governments.  

The Land / Building title and Rules on Land and Building rights title to use governed by the Land Regulations. The Relevant Technical Departments involved in the operations of the Business and Investments of such Company. The Community Development Program as well as the Environmentl aspects that have to be taken into considerations.        

NATIONALIZATION 

The risk factor that  have to be looked out is the possibility of Nationalization by the Government. Although the Foreign Investment Law ( FIL) explicit stated that the Government will not nationalize or expropriate the investment or the right to manage the investment company, in exceptional circumstances we have to observe whether there is a ruling which regulates that it could be done according to the Law in the interest of the State   ( as was regulated in Article 21 Foreign Investment Law No.1 Year 1967).

Washington Convention 

As we are aware Indonesia is a member of the International Washington Convention which is the Convention on the International Centre for the Settlement of Investment Disputes ( "ICSD"), the International Centre fo Settlement of Investments Dispures between Staes and nationals of other States sponsored by the World Bank based on Law No.5 Year 1968. In case a dispute will arise between the foreign investor and the Indonesian Government, such dispute will be referred to ICSD, arbitration in Washington. One of the concrete example  of such investment dispute had caused a premature withdrawal of the investment licence in the case of Amco vs Indonesia filed in 1981 and is ultimatel finalized after 12 Years of arbitration proceedings.

Good Signs of Outlet Retail Store Sport Shoes Business in Indonesia

If you are starting from scrap bottom Rock, even though you have established and operate your Firm for more than 11 and a quarter Years of life time since June 1998, it is not easy to maintain continuous Clients with the right selling prices that could maintain your cash flow. You have to be tough and have strongly motivated spirit to survive in operating your Firm now called Law Firm Suleiman Agung & Co .  

Your Firm actually has a long term Track Records and have lots of experience in conducting various legal services and works in the Business Community. However  it is not that easy to perform growth to your Firm. Your cash Flows are actually from Clients  who are using your legal services. But  some of our Clients which are using us, they are  experiencing cash flows issues and are struggling hard to survive and really needs and seeks  funds or investors to assist them to continue  or expand their  business.

Accordingly some of the Businessmen experienced cash flow problems, which resulted delaying the  payments of  our  legal services fee, for which these in reality disturb our cash flows during the running operating years. 

It had been more than 11 Years that Indonesia had survive from the Economic Crisis since June 1998. I thought that after restructuring loans faced by the Indonesian Investors it will be much better, since their debts and loans had been rescheduled. However,  perhaps due to the Politics situation in Indonesia particularly relating to the Bank Century issues,which involve politicians in the Indonesian Parliament, who are  controlling the Policy of the Government in Bailing out Bank Century,  these conditions has affect the healing situation  of  the Indonesian Businessmen who suffered  turbulence caused by the Economic Crisis.  These situation occurred after Indonesia had experienced completing its Presidential Election and Parliament election. 

Positive Signs

However,  there are also signs  that several of  our Business Networks who are conducting  Outlet Retail Sport Shoes Consumer Goods in Indonesia are on their good business stage and phase, which could be indicated by their employees purchasing power and expansion of their Outlet Retail Sport Shoes Business in Indonesia. One of our Networks is engaged in the the Outlet Retail Consumer  of Sport shoes in Indonesia with their website address at  where it appears that they are in a good expansion condition. So in the Retail Consumer Goods in Indonesia it shows good expansion business progress. 

We really can learn from their good high spirits as Indonesian Entrepreneurs.  If you are really interested in purchasing such Sport Shoes you can  visit their above websites or you may contact us  for which  we  can contact you with the proper right persons  at PT Star who are operating and selling such sport shoes through their inter connection Retail Store  Outlets  Sport Shoes within several cities throughout Indonesia.  

Agung Supomo Suleiman 
Mobile Phone 0816830647
 

Brief Legal Notes on Preparing Drilling Contracts

When you enter and try to draft Drilling Contract,  you must be aware that the relation between the owner of the Drilling Unit, or Contractor and the Company  who requires such Drilling Operation  is governed by The Drilling Contract.  It is really  interesting as a Business Lawyer to be requested by  the end-user  to draft such Drilling Contract Agreement.

Within the petroleum industry, the drilling of wells is significantly important, since without a well - a simple yet complex ) hole in the ground -there is no way to get the oil and gas.  Basically the people directly involved in drilling are employed by operating companies, drilling contractors and various services and supply companies. The Operating Companies are the financiers of the industry and the principal users of the services provided by Drilling Contractors and Services Companies.

An operating company often called an Operator, is a person or company who actually has the right to drill and produce the petroleum that may exist at particular Site.  In Indonesia this Operator has to enter into a certain contract called  i.e.  Production Sharing Contracts (PSC) with  BP Migas pursuant to the terms and conditions under the PSC.  This Operator based on the PSC  who shall be the Oil and  Gas Company shall than enter into a Drilling Contract with a Drilling Company. The Oil/Gas Company itself under the PSC  has the right to explore, exploit, produces such Oil and gas in a certain Block Area as described under the PSC.   
 
At one time when I was experienced working as In House Legal Counsel for 5 Years in one of the Oil and Gas Companies in Indonesia called Huffco Indonesia (Vico), where such Oil and Gas Company were engaging 8 Drilling Rigs  to conduct the Drilling activities in the Contract Area of its PSC.

We must understand that in this kind of Drilling operations, there are high risks involved since the well which are being drilled are really deep wells  containing High Pressure  for instance 1,000 feet.  The oil, gas with such high pressure will flow and push  the casing and tries to found out a way to seek  places with lesser pressure to relieve its high pressure from  the hole below the Rotary Table. On land rigs Blow Out Preventers  (BOPs) are attached to the top of the well beneath the rig floor for preventions. The preventions are nothing more than large, high pressure valves  capable of being remotely controlled. When closed, they form a pressure tight seal at the top of the well and prevent the escape of the fluids. Without such BOP, if blow out occurs, gas, oil; and salt water spew on the air with a tremendous roar.

If there are gas, the whole thing will probably be on fire, and the Rig will lie as melted, twisted mess of junk.Human lives are threatened, pollution may occur,  precious Oil and Gas are wasted, and a Rig worth of  thousands or even million dollars maybe at a total Loss. Thus, obviously, it is desirable not to allow a blow out occur, and in fact not many occur. However, since a blow is spectacular, blow events becomes a media event. In reality according to the oil and gas expertise, Rig Crews will do their best and up most with great efforts that the well they are drilling remains under control. A hole with full of mud that weights the right amount or has the proper density, will not blow out.But sometimes the unexpected occurs.          

Having taking into the above consideration, as Business Lawyer / In-House Legal Counsel we have to ensure that a proper Drilling Contract is drafted and prepared to cover any and all such above risks, which may involved the loss of personal, equipments and event the Wells, for which we have to make sure that the rules concerning the liabilities, indemnities and risks relating to such  losses and damages which imposed legal exposures have to be covered and taken care under the Drilling Contracts. 

In the preamble of the Drilling Contract it shows how the contracting parties may describe the nature of the Drilling Task to be conducted by the Drilling Contractor. 

The Oil / Gas Company desires to have wells drilled in the Contract Area of the Company in Certain part of  Kalimantan as described under the Oil and Company Production Sharing Contract with the Government formerly Pertamina and now BP Migas. We as the Business Lawyer must emphasized in such Drilling Contract  that the Drilling Contractor has the expertise and experiences in the business of drilling, testing, completing. work over, and deepening wells. Such Drilling Contractor represents that it has adequate resources and equipment in good working order and has fully trained personnel capable of efficiently operating such Drilling Rig.

We have to make sure that the Drilling Contractor is ready, willing and able to drill said wells and carry out the said auxiliary operations and services for the interest and satisfactory of the Company. We also  have to stressed out that the Drilling Contractor agrees and is obligated to furnish the Drilling Unit with the Drilling and other equipment and personnel as described in detailed in the Appendix attached to such Drilling Contract.

 

The Contractor shall without prejudice comply with all instructions made by the Company consistent with the provisions under the Drilling Contract, which may from time to time be given by the Company. However, in performing the Drilling Work such Contractor shall be an independent Contractor with the authority to control and direct the performance of the detailed work, subject to Company's right to give instructions and of inspections and supervision by the Company's representatives at the Site Location where the Drilling operations is conducted and shall not relieve Contractor from Contractor's obligation and responsibilities. 

We have to be aware that many service companies such as Cementing Services, Mud, Well Testing, are also at the Location of the Rig Site, for which,  we have to make sure that the liabilities, indemnification,  and insurance clauses covering their respective properties and personal are properly covered with respect to loss and damages that might occur during the Drilling Operations. If there are tools stuck deep in the hole, usually the Insurance Company does not want to cover such down hole equipment loss. If there are losses to the structure of the well causing damages to the well or oil and gas reservoir, the Drilling Company, may request  that the Company absorb such well reservoir loss.           

Well, those are some brief provisions which the In-House Legal Counsel of an Oil and Gas Company must take into consideration in preparing and drafting a Drilling Contract to support the Drilling Operations conducted in the oil and gas operations in Indonesia. 

Probability Foreigners Allowed to own Property in Indonesia

New Hopes within the Entrepreneur relating to the probability of Foreigners to own property in Indonesia. This news emerged as good hopes for the Property Business players in Indonesia. During the Year of 2008 - 2009 according to Rhenald Kasli in Kompas Newspaper of  8 February 2010 there are property owners who are still hit by Crisis. However, if it is open according to the Minister of Peoples Housing there will be Foreign Investment coming in to Indonesia in the amount of USD 3 billion - 6 Billion per Year. 

The question which arises is as to whether is it true that Property are attractive for Foreigners and whether this plan is attractive to the business players in Indonesia says Rhenaldi Kasali in his Economic Analysis in Kompas News Paper of 8 February 2010. According to him, The Foreign Buyers of property in Indonesia in fact is not a new issue. In Karawang and Bekasi, West of Jawa there are plenty of Indian and Korean who are staying in said area. They said that they are the owner of such property. However,  from the answer  upon question to the developer,  it shows that such foreigners  which had already stayed for 10 Years is purchasing such property on behalf of the Company according to Rhenald Kasali.

In  Bali there are also many of Properties being build by Italian, French, Australian and Brasil. However, according to Rhenaldi the lands and buildings are on the name of certain person. These are also found in Batam and Bintan, where the owners are from Singapore and HongKong     In the island of Mentawai where the waves are good for surfing,  according to Rhenaldi,  many tourists are staying in the Boats. This is not because it is more comfort but since it is not easy to build or own property whch is suitable for  foreign tourists  who are regularly traveling there. 

If the above are ignored, the state for sure will loose the opportunity to get tax income since there are so much opportunities which are thrown away and loose from attention.

Regulations 

That Foreigners are not prohibited to own  property is actually known. However, according to Rhenaldi, we are used to make rulings which are blocking rather then opening. In the old rulings it is said that

Foreigners who  are allowed to buy property are those " who is domiciled in Indonesia". The words " domiciled in Indonesia" if we further check is more saying "No" then "Yes". Why is in not just shortened to become " Person who are allowed to purchase property. Point ?.

Furthermore according to Rhenaldi, the Right to use is limited only for 25 Years. For buyers which viewed the property as instrument for Investment, this ruling for sure is less attractive if compared with the rulings  applied in other countries within the similar Area. 

In Malaysia and Singapore, they can be provided with 99 Years, there are even being granted the rights for 900 Years. 

Furthermore countries which are desiring for the incmoing of foreign investment, the Property Policy are in line with other Policies, such as imigration, Buisiness Licenses/Permits, citizen status etc. In Indonesia such vision is not yet in line.

" Debottlenecking Mindset"

Rhenaldi says that there are lots of reasons why foreigners are attracted to purchase property in a country. Besides the need of having a place to stay, is for the schooling of their children, health care or medicare, working placement, or trading and also for investing.

There are lots of foreign traders who frequently entry and exit carrying products made in Indonesia to abroad electing to have a house in Indonesia by doing illegal manner rather then staying in the Hotel.

However, on the other side, the property in Indonesia is in fact attractive for Investors in the Asean Region. The pricing of property in Indonesia    in the main roads with the average quality is still ranging 20% of the similar property in Singapore.

Rhenaldi syas that as a comparison the pricing of 5 star Property in Singapore had reached Rp.150 million per square meter. In Indonesia with the same Class maximum  price is only Rp 30 million per square meter. Besides that the increasing price of property is interesting. Thus the potential is there according to Rhenaldi above writing.

For Japanese who had retired, felt that  the expensive living cost in their Country had driven such retired  person to seek for a staying place location in other country. Indonesia is included as the country who they are interested., however they frequently failed to get, resulting they choose Philipine and Thailand.  

The existing experienced shows that there are still " plenty of Bottle necking Mindset" which has to be solved to guide the new Governments Regulation, to enable the incoming of new investments within the property sector says Rhenaldi.

These Bottle necking Mindset is founded in several sectors in the Government, Parliament (DPR and DPRD/The House People Representative), The Chamber of Commerce and Industry ( Kadin), the entrepreneurs, and public.

• Firstly,  the new rules and regulations must be attractive enough by the Investors. The Use Right does not need to added other words which gives the perception that it is just making up something which in unnecessary, for instance it is said " can be extended 2 times each 20 Years after certain Years.

• Secondly, Bottlkenecking mindset in the elevant department, such as immigration, manpower, financing and banking

• Thirdly,  Bottlkenecking mindsetblock. This bottlenecking block according  to Rhenaldi are fears or  exesive nationalism, which resulted more of Restriction rather than Boosting -Pushing such as that ideas of limiting foreigners not to allow purchasing property above Rp1.5 milliard, and may only purchase new houses.  

• The latest mindset is that the worrisome that the need of people to own houses is still high which is 800,000 Unit.  However from the data form Panagian Simanungkalit and Associates shows that new houses which are being built had  reached  only 257.365 Unit in the Year 2010.

• Rhenaldi syas that we have to understand that the property market in not only determined by " the Need" or the desire to purchase, but also the preparation to buy and the power to purchase.

• Rhenaldi says that rather than raising about matters which has already  a market mechanisme, why are we not limiting on startegic matters such as prohibition to purchase property in the strtaegic area, border or area which can damage the natural resources. 

The above are my reading on Rhenaldi Economic Analysis relating to Probability Foreigners Allowed to own Property in Indonesia, as found in the Kompas Newspaper of 8 February 2010.


             

Running A Business Law Firm

Well, I have been running this shop of mine which is a Business Law Office for more than 11 1/ 2 Years since 1st June, 1998. The Law Firm specialty depends on the Partner who is running such Firm. Since I was formerly working as In - House Legal Counsel 5 Years in the Oil and Gas Company (formerly owned by Roy M.Huffington) called Vico Indonesia (Huffco Indonesia) who produces LNG as the end product after being refined in Bontang,  and 5 Years as In House Legal Counsel in a Cooper Mining Company (one of the biggest copper mining company in the world) called PT Freeport Indonesia who is operating in Irian or now called Papua, my links and network of friends are within the oil and gas as well as Mining Companies in Indonesia. 

I was also working for 5 Years as Legal Consultant and Advocate at the Law Office of Adnan Buyung Nasution and 2 Years as Partner at the Law Office of Delma Juzar  & Wiriadinata (Wiriadinata & Widyawan), where  I   experienced providing legal services relating to  corporate business, financing transactions, restructuring loan, insurances,  construction contracts, capital market, shipping, labour matters.

The significant experiences which I felt was  that I had experienced for more than 11 1/2 Years running my own Law Firm which is now called Suleiman Agung & Co.   since 1 st June 1998,  when Indonesia was hit by the Asian Economic Crisis. 

I managed to survive in running this Law Firm for more than 11 1/2 Years. Like selling other services, in the Legal Services field, the Services that you are offering to sell to your Customers or Clients are among others your legal expertise in  giving legal advices on the legal aspects of your Clients business. These includes giving legal advises on the rules and regulations that have to be taken into considerations by your Clients in conducting their business activities in Indonesia.

For instance if your Client happens to be a foreign investors who is interested in conducting Coal Trade Activities from Indonesia to be exported to outside the country for instance China, since their Industries are growing fast where for running their industry they  might need Coal for fueling their Power Plant to engine their Industry or manufacture to produce their products, than for sure they are in the high need of Coal. Our Customers or Clients are also questioning whether a foreign company is allowed to establish a Mining Company in Indonesia who desires to conduct the Coal Mining activities in Indonesia.  

Some of the Customers were asking whether a foreign Investor or  foreign Company maybe involved in the Trading of this Coal in Indonesia or  establishing a Coal Mining Company in Indonesia, several questions  may pop up such as : What are the rulings and what are the requirements that must be fulfilled. In order to answer their questions, we as Business Lawyer, have to check on the Rulings of Trading of Coal in the Department of Trade and The Directorate of Coal. We also need to seek on the New  Mineral  & Coal Law No. 4 Year 2009 concerning Coal Trading and Coal Mining activities. 

We have to check the Size of the Coal Mining Area, the  Location of the Coal  where they want to trade or mine and the Relevant Competent  Authority either Central Level and The Local Regional  level who is authorized to Issue/Grant the Izin Usaha Pertambangan ) Coal Mining Authority/ Business Mining License.  

As implementation of the Autonomy Law - there is a segregation - Delegation of Authority between the Central Government and the Local Regional Government, where the Ruling may be incorporated in the New Mineral and Coal law No. 4 Year 2009 as well as in the implementation ruling either made by the Central or Local Government.

We may  need to check whether the Location of the Coal is within 1  Regency, Province or  crossing more than 1 Regency or Province.  We may also need to check the size of  such Coal Mining or Coal Stock Pile. Since foreign investors are involved we also have to check the rulings on Foreign Investors who wants to invest in Indonesia in the Coal Mining Sector.  

For checking such purpose we have to Check -  the Rules and Law No.4 Year 2009 including checking with The Directorate of Coal and Department of Mine and Energy.  We also need to check with the Local Government Ruling ( Perda) as well as the Rulings from Local Government ( Bupati/Governor) where the Location of the Coal Mining is located. In order to avoid any overlapping  with other activities such as Forestry Conservation or any other activities we have to check with the Bupati and Local Government /Local Forestry Department. 

If our Client wants to take over or acquire any existing KP we have to check the existing documents possessed or held by the KP holder to know the legality, the size, the Duration period and who had issued such KP. We also need to check the rulings relating to converting KP into IUP either it is already expired  or still on. We  may also need to conduct research upon  the time period for processing the new IUP for  the size of the  coal concesion and whether it is more proper in acquiring  an existing KP or  applying for a new IUP

We may also notice from several information that there are many uncertain brokers of Coal Trader and Coal Mining Concession, where we really have to check whether the sources of the Coal Product or Coal Mining Stock or Coal Mining Permit are genuine and backed-up by real legal documentation. for which we as Business Lawyer can conduct the necessary checking on the Legal Documents and licenses, as well as the rulings and policies. 

Since Foreign Investors are involved, if the requirements under the New Mining law requires that a Limited Liability is required to be the legal entity to conduct the Mining Coal Business than a Joint Venture agreement might be drafted where we as Business Lawyer have to draft such Joint Venture Agreements. Initially before a Joint Venture is negotiated, in the initial stage  we may be requested to draft a Memorandum of Understanding  (MOU) or Letter of Intent to jot down the desires and intention of our Client and the Local Partner.

One interesting experience tasks which I was involved in assisting legal services related to Coal Business activities, is that our law firm was involved representing a Coal Trader who are also injections some funds to a certain  Mining Company for constructing its Coal Plant Facilities  where the repayment of the loans/funds is through the delivery of the Coal products by the Seller /Debtor to the Buyer or Financier.       

Well those are among others the functions of the Business Lawyer in assisting Clients to conduct business in Indonesia