Business Lawyers Attitude

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

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

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

Insurance Clauses Coverage

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

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

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

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

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

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

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

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

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

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

Maintaining Business Relation

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

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

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

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

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

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

Seeking Investors and Funds

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

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

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

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

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

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

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

Cheers
Agung Supomo Suleiman 
     

New Decree Cost Recovery Scheme Oil and Gas

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

Cost Recovery Scheme.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Review Contracts

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

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

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

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

Legal Marketing Strategy

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

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

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

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

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

NATIONALIZATION 

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

Washington Convention 

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