Saturday, February 13, 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


   

Monday, February 08, 2010

Sudden Inspection by The Minister of Envorimental to Coal Mining Location

On Saturday according to Kompas newspaper of 8th February,2010, the Minister of Environmental had conducted a sudden inspection to several Coal Mining Location in South Kalimantan. Indication of violation against Law No.32 Year 2009 concerning the Protection and Management of Environmental consisting of non-reclamation on the ex Mining and non re-planting of such ex Mining area.  The Environmental Audit and correction and environmental restoration must be performed by such Mining Company says the Minister as quoted by Kompas newspaper. 


The Environmental Officers says that it does no longer talk about permit or administration but about pollution and damaging environmental. The Environmental Ministerial will sent letter to enforcement of the law to the control at the Regional and Central Government.  



The Investigation team have earlier verify the coal mining management environmental in South Kalimantan, 9 Coal Mining Companies at Kabupaten Kotabaru and 7 at Kabupaten Banjar. The Mining Area had been abandoned without reclamation, erosion control, drainage to the pool sediment, and the water at the mining area is below the quality standard which caused the pollution to the river according to Kompas Newspaper of 8th February 2010.

Note :

From the above news by Kompas, it shows that attention by the Mining Companies are needed to not ignore the reclamation obligation as required by the New Mineral and Coal Mining laws as well as the Laws concerning Protection and Management of Environmental to avoid being imposed of violating the Laws which might fall under Criminal as well as Civil Legal Exposures. 


The Minister of Environmental had indicated that the Government Regulation as implementation of the New Mineral and Coal Law shall be issued by the Government.

Construction Termination Issues

  • Constructions legal issues are really very interesting for Business Lawyers who are interested in the operations.We had an exiting experience relating to this Construction issues where there was a litigation case which occurred, due to the mishandling by the operations people who had one sided terminated a construction contract, without properly observing the manner in terminating a contract as ruled under the termination clauses under the Contruction Agreement .
  • This case erupted into a case where the Owner of the project was being sued 4 times in the Court; The Plaintiff succeeded in seizing the Bank Account of the Project Owner, where there were a significant amount of money in such Bank Account. The suit case involved claims for losses of material, moral, loss of business opportunities, reputation claimed being suffered by the Contractor.
  • The Contractor claimed, that they were not in default, since they were not given the proper manner and time to remedy the work which according to the Owner of the Project was not being properly performed by the Contractor. The lessons that we can take from such case is that, when, you want to terminate a Construction Agreement, due to a default by the Contractor, we have to make sure that the proper reminder had been submitted in writing by the Owner of the project in accordance with the rulings, and time frame, under the terms and conditions of the Construction Contract.
  • The Contractor has to be given the chance to remedy its wrong performance, pursuant to the terms and conditions under the Construction Contract. Even though there was a default due to non-performance by the Contractor, there is a mechanism under the Construction Contracts as to how,  we  can  legally terminate such Contract, to avoid more further losses of time and monies which could be suffered by the Project Owner.
  • Accordingly, we cannot just terminate such Contract without following the terms and conditions and the procedures which are ruled under such Construction Contract. The Contracts are the ruling provisions which had been mutually agreed by both the Contractor and the Owner of the Project, including agreeing as to how shall they handle the situation where the Contractor has conducted a default in performing its tasks under such Construction Agreement.
Agung Supomo Suleiman  


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