Tuesday, September 30, 2008

Glance of Rulings in Indonesia in the Mining Sectors

Indonesia is now facing a new era of democracy. However it appears that we are in a rather dilemma situation, since it appears that everything is expensive in Indonesia including education and health treatment. Everything that you buy is expensive.

If you happen to be in the middle class, then you still have the chance to develop your money strength cash in. But if your just coming from the below class, then it really will be difficult for you to school your children as well as health treatment to maintain your health condition.

Relating to the development of legal structure, it appears that there are many products of law ruling being established and introduced, these recent years, which includes that every rulings issued by the DPR (Indonesian People’s Parliament) together with the Government shall be subject to the Court Constitution to ensure that it does not violate the more higher level of Law which is the Indonesian Constitution Act.

For instance when the new Oil and Gas was being introduced, there was a Court Constitution Decision which was launched which states that the Domestic Market Obligation which is the obligation of the Oil and Gas Contractor’s to contribute or sell its portion of Oil Entitlement to Domestic Market which words was mentioned “maximum” 25% of its Portion of Oil Share was being decided by the Court Constitution to drop the words “maximum”.

During my practice as Business Corporate Lawyer in the field of General Mining, there frequently appears to exist overlapping rulings between the inter departmental rulings among others between the Laws and Rulings of the Department of Forestry and the Department of Mining and Energy.

There often also raises overlapping Rulings between the Law Products from the Local Government and the Central Government, whereas the Local Governments Ruling sometimes are in contradictory with the Ruling form the Central Government.

Thus no coordination seems to frequently appear between the Local Government and the Central Government, and among the various Departments who sometimes are only looking from their angle and perspectives.

These situation of courses resulted confuse ness on the Mining Contractors who has been granted a Working Area by the Government to mine their minerals deposits, which part of the Mining Area is overlapping for instances with the Forestry Area.

If we faced such problems, in practice there will then be a meeting which will be held by the inter departmental officials, in the efforts to try to solve such overlapping problems.

Accordingly, before the Various Departments and Contract Area are making its rulings or granting a Forestry Rights which may be overlapping with another Activities such as Mining Activities, it is really strongly advisable that coordination between the Departments must have been prior conducted to avoid such overlapping obstacles.

Agung Supomo Suleiman – Partner of Suleiman Agung & Co http://www.sacolaw.blogspot.com

Email : agungsacolaw@telkom.net

Mobile Phone : 0816830647

Tuesday, September 23, 2008

Promoting your Positive Contribution

My hobby is to be independent and free. But Freedom is not enough, because in reality there is no free lunch in this world. Thus the purpose of me Creating My Own Law Firm was actually starting to be a free man. And thanks to GOD the ALL Mighty, I have manage to survive and be independent for more than 10 Years since I June 2008. And the real problem to attack is cash flow problems. Because every month you need to have some income or cash in order to feed your family and also the supporting staff in my Office.

Frankly, speaking I am more of an independent type in which I wanted to have the freedom in setting my working time schedule. And I have manage to establish this flexible time for more than 10 Years. At this present moment, I have already establish my blog, where I have inserted some of the writings of my life experience, travel experience, experiencing to be independent in running my Law firm for more than 10 Years, and also writing of my professional experience being a lawyer particularly, serving business clients mostly in the Oil and Gas Business, Coal Mining Sectors, Hotel Sectors, either in supporting their business from the legal aspects such as drafting their business contracts, reviewing and advising their business transactions, advising the rules and regulations as well as defending their business legal rights in the Arbitration or Court.

Well, through this Blog, so called Agung’s Note Blog, in the development, I have manage to starting linking it with the services and the products which they can offer, either through advertisements or through selling their products.

Thus, I hope that Agung's Note Blog may also be useful in promoting my Client’s or any party’s Services and Products either to their Customers or to the management, directors, employees, who needs some supports for helping to boost up their carrier path in their working offices or sites, working fields starting from printers, computers, telecommunications accessories, tools and hard wares, safety shoes and other significant products.

And If they need some refreshing and break, there also advertisements of hotels and nice places to visit and relax your minds from the day to day high tension activities and under pressure overloaded works and assignments.

When I was working as the in-house Legal Counsel in big MNC Companies, I am also aware that promotion of what the respective MNC Companies are doing, or had continuously contributing to the society surrounding their working locations, needs some sorts of promotion or public awareness and publications not always in a formal way or manner, but in a more non - formal manner and way such as through Blogs or Websites Sites which may now be playing an important role to promote their positive continuous contribution.

Based on such experience My Agung’s Note Blog is ready to assist such MNC Companies, or any companies who are seeking ways to promote their contribution to the society.

Based on the above circumstances if your Companies are interesting to put your ads or publications in my Agung’s Note Blog, please feel free to contact me.

Agung S.Suleiman HP: 0816830647

Email : agungsacolaw@telkom.net

Thursday, September 18, 2008

Experience Handling Arbitration Case in Indonesia

I have experienced handling Arbitration Case at the Indonesian National Board of Arbitration ( BANI) in Jakarta, Indonesia. At one time my Law Firm was representing one of our Clients who was involved in the Oil and Gas Sectors at BANI in which my Client was claimed to pay for a certain amount of monies, by a drilling Contractor. Such experience was very interesting for me as the Partner of my Law Firm Suleiman Agung & Co, since the condition of defending our Clients interest in this Arbitration Board is totally different than handling a case in the Indonesian Court.

The most different part is because in Arbitration proceedings the conditions are very informal, where the Arbitrators consists of 3 members, whereby 2 arbitrators were each chosen by each Party from the list of arbitrators available in the list provided by BANI. The 2 Arbitrators shall then select 1 arbitrator who shall act as the empire of such Board of Arbitration. The Arbitration fee is being paid upfront by the Party who is applying for such Arbitration Proceedings, and will be adjusted accordingly to be shared by both Parties pursuant to the rules under the BANI ruling, depending on the Award of such Arbitration. We experienced that in practice, BANI may only proceed the Arbitration Cession, if the full Arbitration Fee had been made by the Party who request such Arbitration to take place.

Before the Arbitrations proceeding commence, we experienced that the Arbitrators will informed both Parties that the most significant element in handling this case is, processed through a fair arbitration proceeding, where both Parties are being given the same chances and opportunities to represent their argumentation, and mutual solution shall be strive to settle the differences between the disputing Parties through this Arbitration Proceedings.

In practice, each Party shall not only just launch their argumentation in writing, but may also be granted the chance to orally represents their argumentation. In my view, this is a significant difference compared to handling civil cases in the Indonesian Court, where only written argumentation can be submitted by each Party, during the Court Proceedings, and the time for launching oral argumentation is only given during the stage of submission of evidence by each Party.

The surroundings or place of such Arbitration during the arbitration proceedings is also not too formal, as we experienced in a Court Cessions. Thus, such condition really helps establishing a friendly environment of arbitration proceedings, and shows more of a meeting cession.

During such Arbitration Proceedings if there appears to be a dead lock or stagnant, the Board of Arbitrators shall act as a middleman, trying to seek out a way for the Parties to reached a win and win situation. If the Parties failed to reach such settlement, the Arbitrators will then remind the Parties that the Arbitrators may make its decision according to their perception of the case, which may end up the feelings of loosing and winning by a Party.

Frequently, in order for the Parties to cool down, if the tension rises, there will be a break of time, before the proceeding continues and emerged into a dead lock situation.

Well, at the end of the day, I may say that based on my above experience, the forum through the Indonesian National Board of Arbitration (BANI) appears to be a good and attractive alternative solution for the Parties who entered a Business Transactions in Indonesia, in choosing a forum to handle and settle disputes between the Parties, if such event occurred.

This is based on our Law Firm and or Senior Partner's experience of this Law Firm of Suleiman Agung & Co, where the process, which resulted in an Arbitration Award, is satisfactory to both Parties or close to a win-win situation. And as a business man who seeks and try to maintain good long term business relationships, we believe that there must always be a room to negotiate and settle differences, and avoid selfishness and greediness in conducting business, in other words we have to honour honesty, integrity and fairness in conducting our day to day business.

Cheers April 30, 2009

Agung Supomo Suleiman

Partner of Law Firm Suleiman Agung & Co

HP 0816830647

This is also Published in ALLVOICES GLOBAL MEDIA

Law Firm Blog: http://www.sacolaw.blogspot.com

Email: agungsacolaw@telkom.net

Oil and Gas Contracts and legal works

During my experience in running my Law Firm which now is called Suleiman Agung & Co, there are many experiences involving legal works relating to Oil & Gas. When I started in June 1, 1998, I started my office from my home at Cipete, South of Jakarta. After around 3 months I got legal works from an Oil Company who has returned its Contract Area /Block to the Indonesian Government.

For such purpose I had been requested to give them legal advices as to what are the procedures required to be completed, and ask my law firm to conduct, research and legal due diligence on their documents including reseraching with the relevant authorities, as to what are the steps that must be taken. Based on such request I made such legal research and legal due diligence, and provide my Client with the legal advices and legal services.

For my legal services rendered, my Law Firm received legal fees, for which I then moved to a certain office building where I had shared space with my friend who was renting office space and offered me a space to be shared. I then obtained another retainer arrangement with an Oil and Gas Company who retained my Law Firm for 1 year.

It was really interesting. My Client is actually the holding company, which I was requested among others to review and look at their Production Sharing Agreements (PSC) and Technical Assistance Agreement (TAC) and assisting and accompanying them in meetings and negotiations in their efforts to reschedule their financing/ loan agreement. Well, related to the Production Sharing Contracts, it is really interesting because there are several types of Oil and Gas Contracts between the Government of Indonesia and the Oil and Gas Contracts, among others PSC, TAC, Enhance Oil Recovery(EOR), PSC-JOB ( Joint Operating Body).

One of the interesting part in drafting and reviewing such Oil and Gas Contracts, is the history surrounding such oil and gas activities, where according to the geologies, such oil and gas products was actually originated from fossils and plankton of animals, plants which was buried deep down in the earth, through process of over more than 350 Years, where the pressure is very high and the temperature is very high, which changed them to become oil and gas and are being trapped or deposited in a reservoir deep below the earth.

Amazing and really interesting isn't it? The risk in the oil a gas industry is very high, because you may find that after spending huge amount of monies, you may end up in finding a dry hole. And there are also risks exposure such as blow-out which is a kick of high pressure to the well head which could not be controlled, and shall then cause a blow out which could collapse the Drilling Rig, and even cause a crater, after such blow-out occurred. Of course there is the Blow Out Preventer ( BOP), but, this Blow Out, which is beyond the capacity of the BOP can occur. Thus the liabilities and financial exposure is really huge.

Since the risk is very high, the Government Of Indonesia’s policy is to shift the risk to Oil and Gas Contractors. After commercial production is declared by the Government, which right now is BP Migas, together with the Oil and Gas Contractors, then if such field or portion of the Contract Area is decided to be developed for production, then all the prior expenses which was incurred by the Contractor will be recovered by the Government in this case represented by BP Migas.

Thus the philosophy adopted by the GOI, is that such cost recovery is made by the Government of Indonesia ("GOI) "not" with cash and fresh monies, but through the oil and gas products produced from such Contract Area, field or portion of the Contract Area which had been declared commercially production. If no commercial oil or gas is made, then the risk of spending the monies or sinking fund is solely borne by the Oil and Gas Contractor, and not by the GOI, accordingly the GOI will not make any cost recovery upon the costs and expenses incurred by the Oil and Gas Contractor.

We should also note that, under the concept under the Indonesian Constitution Law, the Oil and Gas deposits are owned by the whole people of the Republic of Indonesia, and is totally different with the concept of a country which allows individual to own such oil and gas deposits which lays below their individual land property. Since the oil and gas reservoir and deposits which are under the ground is owned by the whole people of the Republic of Indonesia, the Government then has the full responsibility and obligation to ensure that the social welfare of the whole people of the Republic of Indonesia is guaranteed from such oil and gas reservoir and assets.

Formerly Pertamina, was being established, by Law No.8 Year 1971, as the proxy of the oil and gas authority mining rights, granted by the people, but now this concept had been changed where Pertamina is changed and become a PT Pertamina (Persero), which has the same status as Oil and Gas Contractors like other Oil and Gas Contractors, but this PT Pertamina (Persero) is 100 % owned by the State.

As we then realized, the GOI, who has the obligation and responsibilities to manage the social welfare of the whole people of Indonesia, based on the Indonesian Basic Constitutions Article 33 paragraph 3 Basic Law 1945 and its amendments, really needs the sources of revenue, which until know, the main resource is still depending on the oil and gas assets. Such resources from the oil and gas from the whole Area of the Republic of Indonesia, is then considered as the resources to fill in be the Governments Yearly Income and Budgets Program, which usually is made based on a 5 Year Plan, but every year the Government has to make report to the Indonesian Peoples Parlement (MPR and DPR).

Thus to make sure that GOI is guaranteed to get the portion of the Oil and Gas produced from the whole Contract Area located within the Whole Oil and Gas Territory of the Republic of Indonesia, then for each Contract Area under the PSC, TAC, PSC JOB, EOR, there is always a First Tranche Petroleum ( FTP) mechanism, built in such contracts, which means that on the Current Year before cost recovery is made to the costs and expenses incurred by such Oil and Gas Contractors, after commercial production has been declared by the Government of Indonesia represented by BP Migas ( a State Regulatory Body in Oil and Gas), and production is to take place, 20% of the Total Oil and Gas produced from such Contract Area has to be allocated aside to fill in the Yearly Government Income and Budget Program.

This FTP is split between the GOI and the Contractor in proportion to their split equity portion as been mutually agreed in their PSC. Besides this FTP there is also a Domestic Market Obligation (DMO) imposed to the Oil and Gas Contractors, where a certain formula is established under the PSC, TAC, EOR, PSC -JOB, where in essence based on the latest Oil and Gas Law including the Decision from the Constitutional Court, such DMO is 25% of the Oil and Gas Contractors portion of the Crude Oil produced in the current Year.

Well the above are some of the legal aspects which my Law Firm and I am involved in giving legal advises to our Oil and Gas Contracts. If some of you readers needs some legal advises and assistance from my Law Firm of Suleiman Agung & Co, please do not hesitate to contact me as the Senior Partner of this firm through my Mobile phone 0816830647 or my email agungsacolaw@telkom.net or agungsuleiman@gmail If you wish to put your advertisement of your products or services we will be happy to offer you as space for your ads in our website of http://www.agungssuleiman.blogspot.com

Agung Supomo Suleiman September 20, 2008

Sunday

Wednesday, September 17, 2008

Drafting Contracts Related To Coal Mining Activities

When you draft Contracts, you have to make sure that the parties are clear, and the object of the agreements are also clear. Under the Indonesian Law, parties of the Contract has the freedom to make and develop and incoporate whatever terms and conditions of their contracts, subject however, that the contents must not violate the laws and the public order. The surroundings, circumstances and conditions of the parties shall have great influence in drafting contracts. It really depends on the nature and situation where the parties are involved and situated. The Indonesian Civil Code actually is just a supplement to the terms and conditions entered and agreed by the parties. For instances if you are involved in a Coal Mining Activites, there are some rulings issued by the Directorate General of Coal Mining; Our experience in assisting Clients related to Coal Mining Activites, among others are that we are requested to assist our Client in drafting the Loan and Fiduciary Deeds. Our Client is actually Coal Trader, in which their Customers who are purchasing the Coal Products, form our Client, are Power Plant Industries, outside of Indonesia, among others China, who requires Coal Products to generate their Plants, to run the Industries which are booming in China. Our Client, who is a Coal trader is willing to assist in financing Coal Mining Companies in Indonesia, usually located in Kalimantan Island, in Indonesia, who needs some financing to develop their infrustructures, among others their Coal Plant Facilites to produce the coal, their jetties. The payment of such loan by the Coal Mining Companies to our Client are through selling the Coal Products to our Client. In this case our Law Firm Suleiman Agung & Co will assist our Clients by checking the legal documentations involved in such transactions from reviewing the legal documentation of such Coal Mining Companies such as their Coal Mining Licensces, their Agreements with the Government, drafting the Loan or Financing Agreement, including its Collateral / Fiducia Documents, and registering such Fiducia Deeds with the Fiduciary Office in Indonesia, of course advising our Clients on the rules and laws involved and governing such transaction and coal mining activities. Accordingly, readers who are involved in the Coal Mining Transactions including its financing transaction who seeks for legal assistance may contact our Law Firm Suleiman Agung & Co, Mobile Phone HP 0816830647. For those who are interested in putting advertisement relating to their products and services related to such Coal Mining Activities may put their ads as shown in our website.

Hoping that the above information will be usefull and beneficial to all of you.

Wednesday, September 17, 2008

Agung Supomo Suleiman SH. Senior Partner Law Firm Suleiman Agung & Co

http://www.sacolaw.blogspot.com email: agungsacolaw@telkom.net

agungsuleiman@gmail.com

Drilling Rig

Drilling Rig
oil gas

AMAZON