Sunday, April 17, 2011

Natural Resources Created By The Creator

If you are allowed by the AL  MIGHTY to stay ==>  in this World  for quite a while, at a certain stage of your life Cycle  you will  realize that your life journey also rotates similarly  as :
    • sun and and moon, day and night, 
    • hungry, eat, full stomach, hungry, start eating again, full stomach, 
    • you earn money, you spent your money, you are out of cash, start working  hard again, your earn money, you spent money  etc. 
    • ups and down 
    • like a merry go round; 
    • spinning around 
    If you happen to be a Muslim Believer, you can found this Rotation Fenomena  in the Holly Book        Al Quran, where it actually shows  the Sign of the Greatness, the Merciful of ALLAH the AL Mighty;

    • The Important and significant thing is that  you start realizing  that ALLAH The Al Mighty has created this World  with all the Natural Resources distributed and scattered around the world  ready to be searched, find out, explored, mining out  it out, exploited, developed, transported, stored and sell  for the benefit of all mankind.  
    • This process of Awareness of knowing our Creator : ALLAH is also following the ups and down rythm, where you have to maintain it on the up level by continously listening to the words of ALLAH  from the Al Quran and testing its reality in the Real World of your Real Day to day life;
    Well, my life experienced as a Business Lawyer makes me becoming interested in looking and observing the Nature of the Hard Minerals such : as Copper, Iron Ore, Gold, Diamond, Bentonite, and Hydro carbon (Oil and Gas); 

    • Gold is Valuable in its price ; 
    • Diamond is the strongest Minerals if you want to crush with other Minerals, which therefore is  being used in the Drilling Bit,  known among others as Diamond Shamrock  Drilling Bit,  where the price of such Diamond Drilling Bit is equal to 2( two) new Brand Mercedes Car
    • Benton  "cannot be melted down"  even in a very High Degree Temperature Plant and thus is used as to Shape other Minerals  in a High Boiling Temperature  Plant;        


    The ALL Mighty has granted the Indonesian Archipelago  with full of Natural Resources; 

    It is not human being who planted and created this Natural Resources regardless of their nationality; The human being are only being given Brain with  its built in Mind, capacity,  Soul, and Heart, instinct, willingness to search these Natural Resources by conducting General Survey, with Knowledge, Science,  and Capital Engineering, Infrastructure.

    • Further this Human Being has to explore these Natural Resources  by conducting Seismic line services  in several appointed Coordinates, by first clearing the Surface Land from trees or houses ; and than planting the dynamite to be blown, where the sounds are detected ind captured  in the Seismographic instruments which will than be shown in a graphic picture showing the prospective contents of what is in the structure below the ground.   
    If there are Mineral Resources determined to be commercial developed, these Human Being start developing  the production facilities from pipeline, station gathering, separation instruments to separate the  Oil from the water and sulfur if it is Hydrocarbon, and if it is Hard Minerals such as Coal to split the Coal from the Water, Sulfur, Ash; with the Technical Instruments developed by the Human Being using their Brain, and Mind; and develop the Coal Plant.

    As a Business Lawyer in reviewing the Mineral Contracts, Cooperation Agreement between the relaeant Parties, the  Sales Coal Contract,  we have to understand the Nature of this  Mineral Business in order to be able to accommodate the willingness and desires of  the Business Players /Investors who are your Client in giving legal advice and drafting or reviewing the Purchase Sales Coal Contracts or if you are requested to conduct Legal Due Diligence if your Client is interested to acquire share of the Company who is operating a Mining Activities either Coal, Iron Ore or Magnesium. 

    • It is really enjoying if you love your professional work and if you happen to search the real meaning of life and start questioning why are we dropped in this World and who had created these Huge World together with all what is contain  below  the Ground  which includes those Natural Resources which can really be useful to increase the Quality of Mankind. 
    • Well, these are my thoughts  this morning when I walked up from my bed and start writing what is in my mind in this Blog of mine;Cheers and Good Luck and success
    • Jakarta, April 17, 2011 Agung S.Suleiman 


    Saturday, April 02, 2011

    IPM DRILLING

    It is really interesting in discussing contracts aspects in the IPM Drilling. Well  if your Company is relatively small in terms of manpower within the Oil and Gas Explorations in Indonesia, you might as well thing of engaging IPM Drilling, since your do not have to tender 10 x for the Services relating to Drilling your Explorations or Producing Wells by just tender One IPM Drilling which is an Integrated Management Drilling
    This  Drilling Services consists of Drilling Services itself, and shall than includes the Mud Services, Cementing Services, 
        • Drilling Rig
        • Logging Unit
        • Cementing Unit
        • Casing/Tubulars.
        • Mud Engineering
        • Waste  drilling  disposal
        • Testing
        • Transportation
        • Fishing
        • Directional Drilling/ Horiziontal
        • Land – Heavy Equipment for road Constructions

    Every Company who are specializing will be asked to supply the Materials. 

    In this IPM Drilling – the Oil Company – Out sources all the Services relating to the Drilling activities  –  The Concept is Let the Contractor do it,  they  just  shift  the  Cost,  So  they  don not have to do  tender  process several times.
    Thus the Oil and Gas Companies, can skip the procedure doing many tenders with many vendors 

    Either  the Oil Company or the Drilling IPM Contractor  will design the Drilling  Program. If  The Drilling Contract Design this Drilling Program,  the Design Cost will be included in their Lump Sump Turnkey Project.. There is a 100% Turn Key project or Semi Turn Key.

    The Drilling Contractor shall lead the Drilling Operations. If the Oil Company has got many manpower, they usually manage the Drilling activities. The Oil Company will engage several Companies : the Drillling Company, The Mud Contractor, Wireline Logging, Perforating, Fishing. 

    But now a days the Drilling Companies shall do the Management of the Drilling several activities. 

    This Drilling Company shall own or lease the Drilling Rig.  The Drilling Contractor shall enggage and manage all the relevant Supporting services such as the Cementing, Mudlogging, Casing-Tubing, Wireline Logging. Thus The Oil Company does not be worried how to manage such drilling other services activities. So this is a Turnkey P

    Well as a Business Oil and Gas Operational Lawyer,  you may be engaged in Drafting the IPM Drilling Contracts or you may also end up in assisting the Drilling Company in establishing the Drilling Companies. There are many interesting Legal Aspects in these venture. There are several questions that you have to raise. Is the Drilling Company has to be a PT Local Company or can there be a Foreign PT PMA Drilling Company engaged in the Drilling activities. Thus there is the Company Act Law issues, If the Shareholders of the Drilling Company consist of a PT PMA Foreign Company, is the Drilling Company automatically become an Foreign PMA Company. 
    These question has to be research with the BKPM, as well as the Director of Oil and Gas and BPMIGAS institutions. What Licenses are required to conduct such IPM Drilling Activities. 

    How about the BKPM (Foreign Investment Coordination Body) facilities for the equipment that are being imported from outside of Indonesia; Can this Drilling Company be granted such Facilities  by BKPM or can they just use the Oil Companies' Facilities which are given such facilities under the PSC.

    Well those are part of the interesting Issues that the Business Lawyer in the Oil and Gas activities have to check and dig out in assisting their Clients                  

    Cheers
    Agung S.Suleiman
    Independent Business Lawyer  
     Jakarta, 2 April 2011  

    Friday, February 04, 2011

    Elements in Coal Trading

    The Specs and quality of the Coal is really significant to be observed in trading Coal Products. You have to learn carefully from  the Coal Professional, when they are talking and discussing about the Calorie of the Coal. The Coal from Sumatera appears to be high grade ranging around 6.3 to 7.00. 

    Stock pile of the Coal is really important to avoid delay in loading the Coal and  for the purpose of determining the Laycan or the time when you will ask the Ship to move or berth to the Terminal Port, for loading the Coal because you will be exposed with Demurage and Dead Freight from the Mother Vessel which will pass by the Buyer to us as the Seller.

    If we agree with an FOB arrangement, and delay occurred  causing longer time for the agreed Loading time, this will result  additional cost to the Vessel for parking the Vessel  at the Port, whch will be passed to us by the Buyer of the Coal..  


    To minimize the risk  you may try to request that your responsibility as the Seller in taking  the Coal Product is up to the Stock Pile, where you will ask part of payment be made by the Buyer when the Coal reached  the Stock Pile.  We have several experiences, where we are being exposed with Demurage and Dead Freight due to the delay on our part in meeting the agreed volume of Coal to be loaded to the Vessel during the Laycan, since there are certain level of the Quality /Spec Coal  which may reach the Rejection figure specified in the Coal Sales Contract .

    As a Corporate Business lawyer involved in this situation we have to experienced upon the real reality occurring during the Loading and shipment of the Coal.    

    As you may now, even though the Grade is below the agreed level, frequently the Buyers insist you to continue Loading the Coal Products to the Vessel, event though  Coal Spec reached the Rejection level shown in the Coal Sales Agreement , since it appears  there are always Buyers or Endusers who will  absorb such Coal products. 

    However, it may be that since the Coal Product is blended, the Calories are being mixed resulting negotiation upon the adjustment price to the agreed Coal Price, is conducted after a while from the time  Shipment of the Coal had reached its destiny, in the sense that The Coal had been delivered by the Buyer to the Enduser, but adjustment of the Coal Price between the Seller and the Buyer had not been reached. .  

    Well the above are some elements that we have to observe in dealing with Selling, Loading the Coal Products  experienced  during the Loading time of the Coal.

    Jakarta 4th February 2011
    Agung S.Suleiman.  

    Thursday, February 03, 2011

    Challengging Oil Operations

    Yes, here  I  am back in front of my computer, writing in by Blog AGUNGSS Business Lawyer Note. After having experienced Independent as an Independent  Business Lawyer for more than 12  11/2 Years since June 1998, I am now busy with Oil works and also Coal Mining Works.

    The Oil Company which I am being assigned through Secondment by Saco Law  through its Holding Company,  is in the face of Commercial Production. It is really exiting since we are all busy in preparing the arrangements as to how to implement to  get the oil Production from below the Ground around 500 meters  to carry  and moved it  to the Terminal Port for lifting to the Tanker of the Buyers. Well, it is really interesting since, cash and funds are needed to transport and move such Crude Oil from the Oil  Field to the Terminal Port.   


    Moving such oil can be done through pipeline facilities, however, funds are need to built such pipeline facilities. If we are intending to use existing pipeline of other Oil Companies in the Working area, in reality it  is not that easy since quality of the Oil which we are intending to flow through  such pipeline must meet the quality oil of the existing producing Oil Companies who are already using such pipeline facilities. 

    The temperature of the oil has to be high with a certain degree of level so that the oil could still  move and being transported through such pipeline facilities. Bankers who are financing oil Companies needs to see the real oil products being actually sold to the Buyers.   

    Bankers will only disburse a certain amount of funds needed by the Oil Company for the working capital and will only further disburse  if the Oil Companies can show the Oil Products really being sold to the Buyer at the Terminal Port of Point of Sales. 

    Accordingly, there have to be business strategy by the Oil Company, as to how to show  the Bankers of the realization of such Sales of Oil. 

    If the process of using the Pipeline facilities still needs a long time for realization, the alternative way out has to be made,  which among others are  by using Trucks to carry such Crude oil from the Oil Field to such Terminal Port.  There must also be Storage tankers needed  to store such Crude Oil before lifting  to the Tankers. 

    This may initially be more costly compared to using the pipeline facilities. But since, we are competing with time to show the Bankers on the Sales of the Oil to the Buyers, we may than choose  using Trucks as the first priority action to be taken by Oil Companies who are in the early stage of growth. in building their Financial Strength.  

    This is really challenging for us including fo the Oil Business Commercial Lawyer to prepare the required  contracts to stipulate the terms and conditions for implementing this business strategy.    

    Good and Well Team work are needed to make these  challenges  become real and executable. We have to be professional  and  focused on the Goals and Priorities. These are really challenging operations experienced  by us involved  in the Oil Business Operations in Indonesia.

    Cheers
    Agung S.Suleiman
    Jakarta 3rd  February 2011                 

    Thursday, August 19, 2010

    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.                      

    Thursday, May 27, 2010

    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.      
       



    Monday, May 24, 2010

    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.       

    Saturday, May 22, 2010

    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. 
    Click Here!

    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.

              

     

    Friday, May 21, 2010

    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.    



    Tuesday, May 18, 2010

    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.             

         

    Friday, May 14, 2010

    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.            

    Tuesday, April 20, 2010

    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 .     

    Tuesday, April 13, 2010

    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.          

    Monday, March 29, 2010

    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.

    Thursday, March 25, 2010

    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 
         


    Monday, March 22, 2010

    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.   

    Monday, March 15, 2010

    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.             



    Thursday, March 11, 2010

    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.






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