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EVENTS AND ROUNDTABLES

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EVENTS AND ROUNDTABLES

Investing in Indonesia: the role of the in-house lawyer in growing markets

In association with

Indonesia is one of the world’s most populous countries, and recent economic, political and legal reforms have helped it to recognise its potential as one of the fastest growing economies in Asia.

As part of the Insight series, The Legal 500, Legal Business, In-house Lawyer and GC Magazine recently completed a market analysis of Indonesia, assessing the legal, regulatory and political challenges for investors and companies doing business in the country. Information was gathered from almost 100 in-house lawyers, policy makers and investors in order to create a true picture of the opportunities and challenges of doing business in Indonesia.

The analysis sits as part of the MINT Insight, which covers Mexico, Indonesia, Nigeria and Turkey. The full research can be accessed here.

To further discuss these issues, The Legal 500, K&K Advocates, NSMP and Bird & Bird hosted a roundtable discussion featuring leading Indonesia general counsel at the Pullman Hotel in Jakarta.

The conversation was free-flowing, with many GCs keen to gauge the opinion of their peers on a number of burning topics.

Rise of the in-house lawyer

It was obvious from the conversation that in-house lawyers are becoming more and more important to their businesses, regardless of the industry that they operate in. The role is widening in scope and companies are relying on their in-house legal team to cover an ever-expanding remit as the country continues to attract international investment and post strong domestic growth.

'The GC's role is widening in scope and companies are relying on their in-house legal team to cover an ever-expanding remit as the country continues to attract international investment and post strong domestic growth.'

The challenge facing those around the table was how to make sure their teams remain commercially savvy, communicating in a concise, business-oriented manner. One GC summarised the consensus by stating that ‘business just doesn’t speak law, it speaks P&L (profit and loss), and we have to modify how we communicate to fit that’. Many attendees stated that they have sent team members on MBA or financial courses in order to keep up with their company’s growing need for commercially-minded legal advice, even though ‘numbers are not our thing as lawyers’.

Managing international joint ventures

One of the strongest indicators of the strength of a growing economy is the amount of inbound investment it receives. As more foreign direct investment (FDI) flows into Indonesia, corporate counsel are expected to manage multiple (and often overlapping) international compliance regimes. The challenge is not so much ensuring Indonesian corporate counsel understand and comply with international standards like the UK Bribery Act or FCPA, but make international counterparties understand and comply with the local Indonesian Corruption Act; they need to work together and have compliance processes to cover all eventualities.

Education of business counterparts has been a significant part of in-house lawyers’ roles in recent times, ‘teaching people within their organisation’ during the process of their day jobs.

Relationships with external counsel

General counsel recognise that private practice lawyers face many of the same issues and have developed a collaborative approach to overcoming them. Both have to learn to tackle quickly changing and opaque regulation, which can often differ from region to region. While in-house lawyers have taken on much more work in recent times, and are ultimately responsible for the ‘commercial translation of legal advice’, there is an acceptance of the expert role that external counsel have to play in Indonesia. The ability to interpret the law, maintain good contacts with government and offer high quality advice are highly sought after when Indonesian GCs turn to external counsel.

Coping with regulatory change

The general view was that in-house lawyers often know specific industry regulations better than external counsel, because they live it and operate under it. Each GC had their own approach to handling Indonesia’s frequently changing regulations, and had developed strategies for coping with the different ways in which they are applied from region to region. Nonetheless, some common approaches appeared to be fruitful for the companies present.

Being involved from the drafting stage, working with industry bodies and associations, knowing the regulators and simply planning ahead can all allow companies to get on top of things cause problems. One GC mentioned that the ‘best case scenario is having a regulator call you to get an opinion before it goes live’. On the other hand, it was noted that corruption is still a problem in some of the regions across Indonesia, with many of those present reporting that they had come up against the challenge frequently.

Protecting intellectual property

With the development of new products and distribution of luxury goods to a growing middle-class, there has been an increasing problem with IP infringements and “lookalike” products in Indonesia. Although the trademark and IP laws are due to change this year, companies still have problems enforcing judgements on patents and marks. This is becoming more of a priority for companies, especially those in the fast-moving consumer goods sector, and they are starting to aggressively defend their products in certain areas. However, until the government further rewrites IP laws, this is something that businesses and their lawyers will continue to struggle with.

For photos of the evening click here.

 

The panellists

  • Daniswara Pradiptha, PT Home Credit Indonesia
  • Frederic Brion, PT Hutchinson 3 Indonesia
  • Bambang Triwicaksono, Delhaize Indonesia
  • Maya Pranoto, PT Trisula International
  • Ciu Ping Thio, PT Trisula International
  • Nobel November Hasibuan, PT Bank BNP Paribas Indonesia
  • Reski Damayanti, Unilever Indonesia
  • Aldi Pagaruyung, Hewlett Packard
  • Fabianus Wirawan, PT Pacific Indomas
  • Febrian Andika, PT Pupuk Sriwidjaya
  • Kenny Margamuljana, Saratoga Asia Funds
  • Pak Tri Hartarto, PT NGC / Maxpower
  • Guy Markham, PT NGC / Maxpower
  • Restu Pranandari, BAT Indonesia
  • Nofia Ridwa, PT ANTAM
  • Katherine Grace, PermataBank
  • Dinar Shinta Ulie, BAT Indonesia
  • Erdha Widayanto, PT Pupuk Sriwidjaya
  • Dominic Williams, The Legal 500
  • Iwan Nurjadin, NSMP
  • Risti Wulansari, K&K Advocates
  • Alban Kang, Bird & Bird ATMD