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Minister of Energy and Mineral Resources Regulation No. 35/2021 was issued by the government in order to set out the most recent provisions for determining and offering oil and gas working areas within Indonesia.

ESDM Ministerial Regulation 35/2021: A Fresh Start for the Determination and Offering of Oil-and-Gas Working Areas

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The government has now issued Decree of the Minister of Energy and Mineral Resources No. 15/2022, which regulates procedures for the issuance and registration of Mining Business Permits (IUP).

Issuance and Registration of Mining Business Permits (IUP) Based on Civil Court of Justice (PTUN) Decisions and State Institution Reports (Laporan Lembaga Negara)

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PROPER offers evaluations of environmental business performance in order to increase the transparency of environmental management within Indonesia.

PROPER: Environmental Management Transparency in Indonesia

However, various preparations and commitments will be required so that this EBT mix can ultimately be realized. So what exactly is the government's current level of preparedness and commitment in terms of achieving the 23% NRE Mix by 2025?In order to answer these questions, Hukumonline held a webinar titled, "Opportunities and Challenges Towards a New and Renewable Energy Mix of 23% by 2025" on Monday, May 30, 2022. Several expert speakers were present at the webinar and offered explanations of Indonesia's preparations for achieving this target, including the Director of Geothermal Energy at the Ministry of Energy and Mineral Resources, Harris Yahya, and the Lahendong Manager of Planning and Engineering at PT Pertamina Geothermal Energy, Jati Permana Kurniawan.The materials that Mr. Yahya presented affirmed that current conditions are encouraging the push for the NRE mix. Specifically, fluctuations in the prices and supplies of both coal and natural gas have pushed the world into the current energy crisis. Moreover, a decline in supplies of domestic coal in early 2022 disrupted coal-fired power plants and led to the introduction of a temporary export ban. In addition, Mr. Yahya explained that carbon dioxide emissions are growing ever larger. Indeed, according to IEA data, 33 Gt of CO2 will be released into the atmosphere in 2021.Current domestic operational fuel reserves are only sufficient for 20 - 23 days, while there is currently no buffer reserve. Indonesia's 2020 oil reserves break down as 4.17 billion barrels or 9.5 years of production. Meanwhile, the 2021 oil-and-gas balance of trade posted a deficit of US$ 13.25 billion. "EBT resources with a potential of more than 3,000 GW are an option in order to maintain energy supplies while reducing the greenhouse gas emissions that cause climate change and can ultimately reduce the trade deficit," explained Mr. Yahya.Mr. Yahya also stated that the current utilization of EBT stands at only 0.3% of total potential. In fact, Indonesia has large, varied and dispersed NRE resources. This potential includes hydroelectric power, which is distributed throughout Indonesia, particularly in North Kalimantan, NAD, West Sumatra, North Sumatra and Papua. Furthermore, solar energy is also evenly spread throughout Indonesia, particularly across NTT, West Kalimantan and Riau, which experience higher levels of solar radiation. Meanwhile, wind energy (&gt; 6 m/s) is mainly found in NTT, South Kalimantan, West Java, South Sulawesi, NAD and Papua. Furthermore, marine energy is spread throughout Indonesia, especially Maluku, NTT, NTB and Bali. Finally, geothermal energy is spread around the Ring of Fire area, specifically across Sumatra, Java, Bali, Nusa Tenggara, Sulawesi and Maluku.Mr. Yahya further added that the government has organized various programs aimed at encouraging the uptake of EBT, including tax incentives such as geothermal. In addition, the government has also set fixed prices for NRE. However, significant work safety issues also require human resources working in the NRE sector to be afforded protections, including in relation to geothermal energy.Mr. Kuriawan also explained that the development of EBT, especially in relation to geothermal energy, should result in a push for higher levels of production. However, infrastructure costs remain a significant challenge due to the fact that sources of geothermal energy are mainly located in remote areas. These high levels of investment will equire a strong commitment from investors. Nevertheless, financial institutions have stated their willingness to take risks in relation to geothermal energy exploration."From an economic point of view, tariffs still have to compete with fossil fuels. However, the use of NRE [geothermal] must be valued more highly than fossil fuels as it offers significant benefits," Mr. Kurniawan explained.Mr. Kurniawan also expressed his optimism that Indonesia has a great opportunity to become number one in terms of installed geothermal capacity. Indeed, Pertamina (through PGE) has become the largest geothermal company in the world. Thus, a breakthrough is needed that provides incentives for geothermal development with an eye to achieving the energy mix target by 2025.Optimism will be needed and a belief in the great opportunity to maximize geothermal utilization through direct application. Geothermal investment requires more access to green financing, as well as green energy customers. In this regard, the Feed-in-Tariff scheme is the most popular economic instrument and has been applied across more than 50 countries in order to promote investment in sources of renewable energy. "This approach has been empirically proven to be highly adaptable and effective in both developed and developing countries," explained Mr. Kurniawan.A competitive marketplace has led to the development of renewable energy. Through the open market, the government can implement the Renewable Portfolio Standard (RPS), which has succeeded in increasing the share of renewable energy in many countries.Many environmental regulations and regulations that specifically address renewable energy will be required in order to achieve a bold future capable of mitigating climate change. Our Regulatory Compliance System gives you access to regulatory updates quickly and in real-time through an artificial intelligence (AI) system that offers legal compliance monitoring solutions. You can request get a free demonstration here to see how easy it is to accurately and quickly monitor your company's compliance with legislative changes.

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As a result of the ever-increasing impact of climate change, Indonesia is looking to participate in efforts aimed at reducing the effects of global climate change by setting a New and Renewable Energy Mix (EBT) target of 23% to be reached by 2025.

Indonesian Ministry of Energy and Mineral Resources Optimistic of Achieving 23% Emissions Reduction by 2025, Pertamina Geothermal Energy Faces Both Opportunities and Challenges

Indonesia's industrial development is facing various challenges and competition, including the Covid-19 pandemic and global competition. Entering the Industrial era 4.0, the government has declared Industry 4.0 to be a priority sector capable of achieving a sustainable national economic recovery.Through the Hukumonline Compliance Talks #5 Webinar last Friday (01/07), expert member of staff for Business Climate and Investment at the Indonesian Ministry of Industry, Andi Rizaldi and the General Secretary of the Association of Indonesian Automotive Industries (GAIKINDO), Kukuh Kumara, explained the potential of the industrial revolution 4.0 in Indonesia.Andi Rizaldi explained that with the various challenges that exist, holistic government policy support is needed as a pillar that will ensure the success of industry 4.0 initiatives. Several aspects have been set as main pillars of the implementation of industry 4.0 including the availability and quality of digital infrastructure, regulatory readiness, the availability of superior human resources, access to capital and consumer maturity.The government has prepared the tagline 'Making Indonesia 4.0' as a national concept for implementing the 4.0 industrial revolution in Indonesia. The 'Making Indonesia 4.0' initiative is a medium for achieving Indonesia's aspirations as one of the ten best performing economies by 2030. This tagline is being aimed at generating enthusiasm among stakeholders in terms of prioritizing the implementation of Industry 4.0.These visions and achievements are being implemented through a priority strategic agenda that is targeting the automotive, food and beverage, chemical, textile and textile products, electronics, pharmaceutical and medical devices sectors.The implementation of the Making Indonesia 4.0 initiative has been divided into several stages:<ol style="list-style-type:decimal;"><li>Strengthening of fundamental industry, to be achieved by2021;</li><li>Strengthening of cross-sectoral engagement, to be achieved by 2024; and</li><li>Strengthening engagement in global markets, to be achieved by 2030</li></ol><figure class="image image_resized" style="width:60.37%;"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/Screen_Shot_2022_07_22_at_09_50_33_c960729be3.png" alt="Screen Shot 2022-07-22 at 09.50.33.png" srcset="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/thumbnail_Screen_Shot_2022_07_22_at_09_50_33_c960729be3.png 245w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/small_Screen_Shot_2022_07_22_at_09_50_33_c960729be3.png 500w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/medium_Screen_Shot_2022_07_22_at_09_50_33_c960729be3.png 750w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/large_Screen_Shot_2022_07_22_at_09_50_33_c960729be3.png 1000w," sizes="100vw"></figure>Given the need for holistic regulatory support in order to achieve industry 4.0, the government is aligning the implementation of the 'Making Indonesia 4.0' initiative by issuing several legal frameworks, as follows:<ol style="list-style-type:decimal;"><li>Presidential Regulation No. 18 of 2020 on the National Medium-Term Development Plan (RPJMN) for 2020 - 2024, which emphasizes that the implementation of the industrial revolution 4.0 as a major RPJMN project that must be prioritized during the 2020 - 2024 period;</li><li>Presidential Regulation No. 74 of 2022 on National Industrial Policy for 2020 - 2024;</li><li>Regulation of the Minister of Industry No. 21 of 2020, which regulates the measurement of industrial readiness to effect a transformation in line with Industry 4.0; and</li><li>Draft Revision of Government Regulation No. 14 of 2015 on the Master Plan for National Industrial Development (RIPIN) for 2015 - 2035.</li></ol>During the webinar, the General Secretary of the Association of Indonesian Automotive Industries (GAIKINDO), Kukuh Kumara said that as a business actor, one of the challenges being faced by the automotive manufacturing industry during the Covid-19 pandemic has been the complex automotive industry ecosystem.Without component suppliers, the automotive industry cannot function and produce vehicles for domestic and export needs. Meanwhile, during the Covid-19 pandemic crisis, component supplier companies were only operating at the tier 2.3 level up to the level of MSMEs. Therefore, component supply activities were hampered during the pandemic.In terms of the current condition of the motor vehicle industry, Kukuh Kumara said that Indonesia currently ranks 15th in the world in terms of motor-vehicle production. Although the automotive industry in Indonesia experienced a contraction during the Covid-19 pandemic, it showed significant improvement in 2021.Looking at the future of Indonesia's motor vehicle industry, various countries have set targets for 2025, where per capita income has been predicted to reach $10,000 to $20,000. This number increases the community's need for motorized vehicles, especially LCGC (Low-Cost Green Cars).However, Kukuh Kumara also expressed the hope that new technologies will emerge and will increase digitalization within the motor vehicle industry. The motor vehicle industry is gradually trying to penetrate new trends and present environmentally friendly vehicles in order to support the Making Indonesia 4.0 concept. These strategies are being implemented in order to reduce exhaust emissions from motorized vehicles.In terms of green mobility and environmentally friendly vehicles being adequately rolled out, holistic support is needed, from the use of technology to government support. However, the motor vehicle industry is working to follow the government's vision by pursuing better exhaust emission standards.The manifestation of industrial revolution 4.0 within the automotive industry is seen by Kukuh Kumara as inevitable because industry 4.0 leads to automated processes within business. Through digital transformation in the motor vehicle industry, the automotive industry's supply chain could be adjusted in real time and also fully integrated.Utilizing technologies in relation to industrial activities can provide various conveniences aimed at improving company performance. The dynamic development of regulations often becomes a challenge as business actors constantly work to update their latest legal obligations. Therefore, Hukumonline has developed a&nbsp;Regulatory Compliance System (RCS), an Artificial Intelligence (AI)-based legal compliance monitoring solution that will ensure that your company is constantly up to date with its legal obligations in accordance with the latest policies.The Regulatory Compliance System (RCS) is equipped with various features that integrate all compliance monitoring activities and the reporting of the fulfilment of legal obligations. You can enjoy a free demo&nbsp;<a href="http://bit.ly/Adv-ComplianceTalks5">here</a> to experience firsthand the benefits of the Regulatory Compliance System.

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Through Making Indonesia 4.0, the Ministry of Industry is focusing on the implementation of the 4.0 industrial revolution in order to increase competitiveness and effect a national economic recovery.

Making Indonesia 4.0, Indonesia's Vision for Industrial Revolution 4.0

The registration of PSE or&nbsp;Penyelenggara Sistem Elektronik (Electronic System Providers) is currently a hot topic of discussion. This area is closely associated with the Ministry of Communication and Information Technology of the Republic of Indonesia, which is currently engaged in intensive efforts to socialize private PSE registrations among the general public.Through the Hukumonline Compliance Talks #6 webinar, which was held on Friday (25/08), Aulia Zulfa, a young expert in policy analysis at the Ministry of Communication and Information Technology of the Republic of Indonesia, explained that business actors must understand several things in relation to private PSE registrations.&nbsp;The current regulatory framework for private PSE registrations is Regulation of the Minister of Communication and Information Technology (PM Kominfo) No. 5 of 2020, which is an amendment to Government Regulation No. 71 of 2019 on the Implementation of Electronic Systems and Transactions.Electronic System Providers (PSE) generally comprise two elements: PSE in the public and private spheres.PSE in the public sphere are intended for use by state administrative agencies and other agencies. Ministerial regulations that address PSE in the public sphere are still in the process of being drafted.Meanwhile, private PSE are supervised by the Ministry, which organizes an online portal, site and application that facilitate the following:<ol style="list-style-type:decimal;"><li style="text-align:justify;">Offering/trading of goods/services;</li><li style="text-align:justify;">Financial transaction services;</li><li style="text-align:justify;">Delivery of paid digital loads;</li><li style="text-align:justify;">Operation of communications services;</li><li style="text-align:justify;">Search engine services; and</li><li style="text-align:justify;">Processing of personal data.</li></ol>Characteristics of Private PSEPrivate PSE have four main characteristics. Firstly, their business operations originate from and are organized either in Indonesia (for domestic PSE) or outside Indonesia (for foreign PSE). Secondly, companies organize portals, websites and online applications that include various digital services.&nbsp;Thirdly, said services are used within the territory of Indonesia and/or are offered within the region of Indonesia. Fourthly, private PSE are registered through the OSS system and are supervised by ministries and agencies. &nbsp;<img class="image_resized" style="width:75%;" src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/Screenshot_104_0d44200b64.png" alt="Screenshot (104).png" srcset="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/thumbnail_Screenshot_104_0d44200b64.png 245w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/small_Screenshot_104_0d44200b64.png 500w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/medium_Screenshot_104_0d44200b64.png 750w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/large_Screenshot_104_0d44200b64.png 1000w," sizes="100vw">Source: Material presented by Aulia Zulfa&nbsp;Private PSE Registration Procedure&nbsp;During his presentation, Aulia Zulfa explained that there are four main registration stages.Firstly, in order to fulfil the prerequisite conditions that apply in relation to private PSE registrations, the NIB process must first be completed and the relevant party must then apply for a related business license and secure the appropriate KBLI code required in order to file a domestic private PSE registration.Secondly, PSE registrations should be completed through the OSS system. Thirdly, TDPSE (Electronic System Operator Registration Certificates) should be printed out, this stage can be undertaken after the relevant OSS registration has been completed. Finally, during the last stage, the electronic system in question is automatically recorded on the official PSE list.&nbsp;Challenges for EntrepreneursDuring the same session, Apung Sumengkar, a member of the Digital Economy Committee of the Indonesian Employers Association (APINDO), stated that entrepreneurs have to face a number of challenges regarding PSE registrations. One of these challenges is a prevailing lack of understanding regarding PSE registrations.There are three further stages employers need to take note of in relation to PSE registrations: starting a business, business development and tax-related matters.In terms of starting a business, the influence of current trends is encouraging many companies to take advantage of electronic systems. However, entrepreneurs often face difficulties registering and developing previously non-digital businesses into digital ones.Apung Sumengkar went on to explain that, based on the experience of APINDO, a number of entrepreneurs who have had plans to develop their businesses have often found it challenging to define their business development based on the appropriate KBLI. Therefore, there is a keen expectation that comprehensive provisions will soon be introduced that entrepreneurs will be able to understand more easily.In terms of tax-related matters, Apung Sumengkar added that taxation is another point of concern for entrepreneurs. One of the things that concerns entrepreneurs in relation to this issue is the implementation of an electronic tax system capable of dealing with tax payments.&nbsp;Administrative SanctionsDuring his closing statement, Aulia Zulfa emphasized that PSE registrations are a requirement that business actors must take into consideration. Indeed, any parties who neglect this obligation may be subject to the imposition of various types of sanctions, from relatively light sanctions, such as written warnings, to terminations of access or even the blocking of their electronic systems.<figure class="image image_resized" style="width:75%;"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/Screenshot_135_dc6e00e290.png" alt="Screenshot (135).png" srcset="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/thumbnail_Screenshot_135_dc6e00e290.png 245w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/small_Screenshot_135_dc6e00e290.png 500w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/medium_Screenshot_135_dc6e00e290.png 750w,https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/large_Screenshot_135_dc6e00e290.png 1000w," sizes="100vw"></figure>Source: Material presented by Aulia Zulfa&nbsp;The two speakers’ presentations on private PSE registrations demonstrated the importance of business actors complying with the latest government policies and with their legal obligations. For its part, Hukumonline is currently offering subscribers the use of its Regulatory Compliance System (RCS), an artificial intelligence (AI) based legal compliance monitoring platform capable of facilitating the monitoring of a company’s legal obligations.The Regulatory Compliance System utilizes cutting edge AI technology and can automatically monitor your legal compliance status. In this regard, the RCS can extract a company’s legal obligations, as set out under the most recent regulations, in real-time through the use of its NLP (Natural Language Processing) feature, ensuring that all legal obligations can be easily understood.The Regulatory Compliance System (RCS) is equipped with various features that integrate all compliance monitoring activities into the reporting of the fulfilment of legal obligations. You can enjoy a free demo&nbsp;<a href="http://bit.ly/Adv-ComplianceTalks5">here</a> and experience firsthand the benefits of the Regulatory Compliance System.

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At least four main stages must be understood by business actors whenever carrying out private PSE registrations.

Private PSE Registration Procedure and the Challenges for Entrepreneurs

Sadiq and Governatori (2015) define compliance as the process of ensuring that processes, operations and business practices run according to a set of norms that have been determined or agreed.Historically, compliance was initially considered a burden. However, early on and over time, compliance instead offered an opportunity for companies to improve their business processes and operations.Data from the Business Process Management Forum 2006 (in Sadiq and Governatori, 2015: 2) reveal that 80% of companies experience rapid expansions after increasing their levels of compliance. The conclusion that’s hard to avoid is that compliance is essential for all companies as they strive to develop their businesses.Aspects of ComplianceFurthermore, Bayu Setiaji affirms that what is assessed in compliance is the compliance of all activities with applicable policies, rules, regulations and laws.In addition, levels of compliance are also determined by whether the relevant parties or companies involved have followed certain procedures, standards and rules set by the authorities.Ignoring the need for compliance may ultimately result in the imposition of criminal sanctions, such as fines in the form of penalties and terms of imprisonment to the destruction of brand value and reputations that companies have worked hard to build.Perspectives of ComplianceTyler (in Setiaji, 2014: 12) explains that there are two fundamental perspectives of compliance in law, namely instrumental and normative. The instrumental perspective relates to the individual and their interests and responses to changes in behavior.Meanwhile, the normative perspective relates to morals and conflicts with personal interests. The normative meaning in this context means compliance with the law as the law is considered a necessity.Compliance BenefitsIn simple terms, compliance can be defined as efforts to meet the rules, procedures and all of the standards that have been set. However, compliance is not necessarily an easy thing to achieve.This is because, during processes of compliance, various obstacles are often encountered, including large numbers of laws and regulations, regulations that are revoked and changed on a regular basis, information not being centralized and other issues.So why exactly is compliance so important for a company or business? Here are the main benefits associated with company compliance.<ol style="list-style-type:decimal;"><li>The company is spared from the imposition of sanctions. Compliance is mandatory. All companies and businesses are obliged to comply with the regulations that have been set or they will find themselves becoming subject to sanctions, fines, terms of imprisonment and revocation of business licenses.</li><li>Maintaining the company's reputation. Through compliance, a company's reputation will always be maintained. The reason for this is that a company will be in possession of several legal documents and types of certification needed to run a business. There are no "hidden" activities and everything takes place in accordance with the applicable laws and procedures.</li><li>Forms of corporate risk management. Managing risk is a matter of compliance. Every business is subject to risks that cannot be avoided. However, through compliance, several types of risks that a company must deal with can be minimized.</li></ol>Regulatory Compliance SystemHukumonline is proud to present the Regulatory Compliance System (RCS) as a solution that can help with corporate analysis and implementation in relation to legal compliance. The RCS boasts a diverse range of functions, including the following:<ol style="list-style-type:decimal;"><li>The RCS simplifies the auditing process and minimizes audit-related risk;</li><li>The RCS prevents companies from missing their legal obligations;</li><li>The RCS is an artificial intelligence-based enterprise legal-compliance monitoring solution.</li></ol>The Regulatory Compliance System functions to resolve the various legal challenges that all companies must face.&nbsp;<a href="https://rcs.hukumonline.com/en/wa?utm_source=whatsapp&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_konsep_kepatuhan_hukum_en">Click here</a> for the best RCS solution for your business now!

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Compliance is mandatory for every business or company. Moreover, any failure in this regard may result in your company being subject to sanctions that may range from fines to the revocation of business licenses.

Definition, Aspects, and Benefits of Company Compliance 

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Through the issuance of Presidential Regulation No. 44 of 2020, the government now requires ISPO certification to be secured by all palm-oil business actors.

ISPO Certification: Towards a Concrete Realization of a Sustainable Indonesian Palm-Oil Industry

The financial services industry continues to experience changes in line with technological developments. As the institution responsible for this industry, the Financial Services Authority (OJK) continues to follow these developments. One aspect currently gaining more attention relates to the digitalization of the financial services industry, particularly in relation to regulatory technology.During the recent&nbsp;<a href="https://www.youtube.com/watch?v=EunOQ-h8xu4">Peran&nbsp;Regulatory Technology&nbsp;dalam Mendukung Kinerja Lembaga Jasa Keuangan</a> webinar, the OJK explained that the implementation of regulatory technology is expected to be able to improve compliance within the financial services industry with applicable regulations and laws.In addition, applying regulatory technology can also facilitate the financial services industry in terms of compliance with a number of provisions and reporting, which can in turn improve the industry's performance. Through regulatory technology, major changes will be made and compliance reporting that was previously completed manually can now be undertaken digitally.Nuhaida, Deputy Chairman of the OJK’s board of commissioners explained that regulatory technology involves the use of information technology by financial services industry players in order to fulfill their obligations and still lies within the scope of OJK supervision.Nurhaida continued that OJK regulatory technology is expected to be used within the financial services industry to monitor developing regulations and to ensure accurate reporting in order to improve compliance.The implementation of this regulatory technology represents a part of efforts aimed at minimizing possible violations committed by financial services industry players. Regulatory technology in a systematic form will make it easier for financial service institutions to follow changes in existing regulations.The OJK itself has started to take various steps in order to develop technologies for the financial services industry, both supervisory technologies and regulatory technologies. In terms of supervisory technologies, the OJK has inaugurated OJK Suptech Integrated Data Analytics or OSIDA.OSIDA is capable of detecting early warning signals and undertaking compliance checks in order to unearth governance weaknesses during bank business activities, as well as potential acts of fraud, data manipulation and acts of non-compliance with applicable regulations. OSIDA assists OJK Supervisors in the conducting of early interventions and supervisory actions that are undertaken as an anticipatory measure.&nbsp;Furthermore, within the banking sector, there is the OJK Box or OBOX, a banking supervisory tool that is capable of obtaining digital reports on commercial banks, rural credit banks (BPR) and Islamic community financing banks (BPRS).Within the capital market, the OJK first introduced a technology support system back in 2016 through the implementation of a securities transaction supervision system. This system is used for stock transactions, derivative market transactions, debt securities markets and Sukuk.Moreover, within the IKNB or non-bank financial industry, the OJK has implemented regulatory technology through the establishment of the Fintech Lending Data Center (Pusdafil).Regulatory Compliance SystemDevelopments introduced by the OJK indicate that regulatory technology is crucial within the financial industry, particularly in terms of attempts to minimize non-compliance with regulations.However, regulatory technology is also essential within other industries. In this regard, regulatory technology is useful for all companies in terms of analysis and the application of the legal compliance (compliance) that companies must carry out. Hukumonline is therefore proud to present its Regulatory Compliance System (RCS). The RCS offers a wide range of diverse functions, including:<ol style="list-style-type:decimal;"><li>The RCS simplifies the auditing process and makes audits less risky;</li><li>The RCS prevents companies from missing their legal obligations;</li><li>The RCS is an artificial intelligence-based, enterprise, legal compliance, monitoring solution that is implemented comprehensively.</li></ol>The Regulatory Compliance System offers solutions and can resolve the many legal challenges that companies are required to meet.&nbsp;<a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_dm_oktober1">Click here</a> to enjoy the best RCS solution from Hukumonline right now! &nbsp;

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Applying regulatory technology within the financial services sector can make it easier for players in the financial services industry to comply with regulations.

Regulatory Technology Within the Financial Services Industry

In order to build good relationship, especially with associations in the upstream oil and gas sector, Hukumonline held a breakfast meeting activity with the Indonesian Petroleum Association (IPA), last Thursday (27/10). The agenda discussed in the event held at the Sheraton Grand Jakarta was related to Good Corporate Governance.Good Corporate Governance is a term used in corporate governance matters. If elaborated, Good Corporate Governance means the company’s efforts to create a pattern of conducive relationships between the stakeholders.This Hukumonline and IPA discussion event are part of the series of introductions to the Regulatory Compliance System (RCS) to associations as a solution for corporate legal compliance. Previously, Hukumonline had held discussions with the Indonesian Mining Association (IMA) on Wednesday (12/10).The Hukumonline and IPA discussion event are part of the series, purposing to introduce the Regulatory Compliance System (RCS) as a solution for corporate legal compliance.Collaborating with IPA, Hukumonline discussed a number of steps and strategies for Cooperation Contract Contractors (KKKS) in doing business so that they comply with the laws and regulations and Good Corporate Governance.The speakers emphasized the importance of Good Corporate Governance by KKKS and the importance of compliance with the applicable law and the relatedness of other regulations in the upstream oil and gas sector, such as: Regulation of the Minister of Energy and Mineral Resources 3/2021 regarding Control of Gratification; Regulation of the Corruption Eradication Commission No. 2 of 2019 regarding Gratification Reporting; and&nbsp; Regulations which may lead to potential acts of bribery.Apart from these regulations, there is also Regulation of the Supreme Court No. 13 of 2016 which emphasizes that the companies have the potential as a medium in corporate crime liability. Thus, activities carried out together with the government must be maintained and preserved so that they are in accordance with the laws and regulations.Furthermore, in an international perspective, the speakers explained that, in addition to the United Kingdom Bribery Act (UKBA) and the United Kingdom The Foreign Corrupt Practices Act (UK FCPA), the companies registered in Indonesia have committed to implement GRI 205 ESG on Anti- Corruption.Through the application of GRI 205 ESG, in principle, it is clear that all forms of donations and facilities provided to the government must be ensured that they are not a disguised form of bribery.These points were conveyed by the speakers to emphasize the importance of legal compliance with various regulations for the business actors. This is necessary in order to avoid the occurrence of potential risks of non-compliance with the law which may cause problems in the future.To support the company's legal compliance with the laws and regulations and minimize the risk of potential legal exposure, Hukumonline presents the Regulatory Compliance System (RCS). The Regulatory Compliance System is a real-time legal compliance monitoring platform.The Regulatory Compliance System utilizes various sophisticated technologies such as Artificial Intelligence (AI) and Natural Language Processing (NLP), so that monitoring of legal compliance status and extraction of company legal obligations can be updated automatically and can be easily understood by the users.Additionally, the Regulatory Compliance System is equipped with various features that can facilitate all activities to fulfil legal obligations, from monitoring the latest regulations, fulfilling obligations, to downloading audit reports in one click. Grab the benefit of RCS by submitting a free demo <a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_breakfast_meeting_ipa">here</a> to try and get the Regulatory Compliance System free trial.

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Hukumonline held a discussion with the Indonesian Petroleum Association (IPA) regarding Good Corporate Governance.

Hukumonline and IPA Held a Good Corporate Governance Discussion

Proxsis Consulting Group began the year 2023 by organizing the 2023 Proxsis Expo &amp; Conference. The event was held on January 18 and 19 (18/01). With the theme of Business Insight 2023: Resilience Mode On, Proxsis Expo &amp; Conference 2023 initiated a discussion regarding industrial growth amidst the global uncertainty. The current condition of Indonesia, which is entering a political year, also became the main topic of discussion.&nbsp;The conference was opened by Proxsis Consulting Group’s Founder, Rudi Maulana, and various regulators, including the Governor of Lemhanas Andi Widjajanto and the Deputy for Budgets &amp; Statistical Analysis Moh. Edy Mahmud.Discussing the economic projections for 2023 amidst various uncertainties, Andi Widjajanto stated that currently there is still a hope in the projection of the national economy. This is because the data indicated a positive sign of 4.8 percent. This condition is expected to become a positive signal that can increase the optimism of business actors.To gather insights from various business sectors, Proxsis Expo &amp; Conference 2023 presented speakers from various industries. Some of the speakers were the President Director of PT Pelabuhan Indonesia, Arif Suhartono, the President Director of PT Aviasi Pariwisata Indonesia, Dony Oskaria, the President Director of Garuda Indonesia, Irfan Setiaputra, the CEO of Hukumonline, Arkka Dhiratara, and others.&nbsp;In that event, the CEO of Hukumonline, Arkka Dhiratara, delivered a presentation with the theme of "Business Resiliency &amp; Continuity from Regulatory Risk Perspective". Arkka explained that Indonesia is one of the countries with the most complex regulations which are developing very fast.&nbsp;<figure class="image"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/mas_arkka_artikel_proxsis_d150d0c18d.jpg" alt="mas arkka -artikel proxsis.jpg"></figure>Arkka Dhiratara, CEO of Hukumonline, presented the Regulatory Compliance System at the 2023 Proxsis Expo &amp; Conference. &nbsp;"There are around 82,768 regulations in total that Indonesia currently has. These broad and up-to-date regulations certainly require technological solutions as a fundamental factor in the management of legal compliance risk.” Arka explained.While performing legal obligations under various regulations, business actors often encounter challenges, such as regulations that are frequently updated, the complex and lengthy process to prepare an extract of obligations under the laws and regulations, and the process of regulatory watch which may expose the company's business to the risk of sanctions.&nbsp;These conditions are often challenging and difficult to address manually with limited resources. Learning from these difficulties and limitations, Arkka explained that Hukumonline offers a solution. Hukumonline may give complete and updated legal information.&nbsp;Supported with the most complete data centre for laws and regulations, currently Hukumonline presents the Regulatory Compliance System (RCS) as a platform that will help companies manage their legal compliance.&nbsp;The Regulatory Compliance System is supported by various cutting-edge technologies such as the Artificial Intelligence (AI) and NLP (Natural Language Processing) so that all activities relating to the monitoring of legal compliance, the regular identification of legal obligations according to the latest regulations, to audit analysis can be carried out easily and automatically.Companies wishing to try the solution offered by Hukumonline can try the RCS for free by requesting for a demo. Click&nbsp;<a href="https://rcs.hukumonline.com/wa?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=website_rcs_adv_proxsis">here</a>&nbsp;for more information. &nbsp;&nbsp;

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The conference organized by Proxsis & Co offered various insights in facing the political year and global uncertainty in 2023.

The Proxsis Expo & Conference 2023: Resilience in Global Uncertainty from a Legal Risk Perspective

Hukumonline and the Indonesian Corporate Counsel Association (ICCA) recently organized a legal discussion relating to the legal risk management on Tuesday (20/12). The event titled "The Importance of Implementing Risk Management and Legal Risk Management through ISO 31000 and 310222" was opened by ICCA Vice President Erlangga Gaffar and Secretary General of the Institute of Compliance Professional Indonesia (ICoPI) Agustinus A. Haryono.&nbsp;Currently, companies and organizations are encounter various legal risks in their business processes. In this regard, Haryono stated that a company should be capable of mitigating any legal risks which may arise in the future. The mitigation must be performed, particularly to avoid any potential legal issues to occur in a litigation.As regards the legal issues in a litigation which must be avoided, Haryono added that in fact, any cases that have reached the litigation stage may require considerable time and costs. Therefore, the protection shall be preventive via among others the implementation of ISO in the company.As regards the development of ISO relating to the risk management, Haryono stated that since 2018, the provisions for risk management in ISO 31000 have been updated.&nbsp;Previously, the risk management was focused at preventive actions. Meanwhile, currently there is an addition so that the risk management is not only focused at preventing potential risks from occurring but also at given an added value for the company.It should be noted that the implementation of risk management is highly dependent on the leadership and commitment of the leaders. Without any commitment from the board of directors, the implementation of risk management will not be successful. This happens because the implementation of risk management will be dealt with in the planning, process or implementation, until supervision.In ISO 31022: 2020, there are six phases that must be considered by an in-house counsel of a company. The six phases are elaborated below.<ol style="list-style-type:decimal;"><li>Establish the relevant context and criteria.</li><li>Assessment of legal risk: every ISO includes an assessment consisting of:<ol style="list-style-type:lower-latin;"><li>Identify.</li><li>Analyse.</li><li>Evaluate.</li></ol></li><li>Treatment of legal risk: treatment of each risk, which consists of:<ol style="list-style-type:lower-latin;"><li>Choose options.</li><li>Evaluate the current practices.</li><li>Develop a risk treatment plan.</li></ol></li></ol>One important process in ISO 31022 is a legal risk assessment, namely the entire process of identifying legal risks, analysing them, and evaluating legal risks.&nbsp;It is important to do so in order to identify legal risks properly. Therefore, an organization can prevent the occurrence of these risks pursuant to its objectives.To support the implementation and identification of corporate legal risks, Hukumonline introduces the Regulatory Compliance System (RCS), a platform for monitoring the legal compliance. The RCS is supported by various innovative technologies so that all legal obligations and risks of sanctions can be extracted on an automatic and real-time basis. The RCS is also supported by laws and regulations from the legal data centre of Hukumonline that is always updated and customized to a company's business sector.Get the benefits of the RCS by subscribing to the RCS now! Click&nbsp;<a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_hol_icca">here</a>&nbsp;for more information. &nbsp;

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Hukumonline and the Indonesian Corporate Counsel Association (ICCA) organized a legal discussion regarding Legal Risk Management.

Hukumonline and ICCA Organized a Discussion on Legal Risk Management

These days, the legal risk management is well known. A discussion about the legal risk management cannot be separated from regulatory and legal obligations. In this regard, Isharyanto et al. explained that in the legal risk management,&nbsp;an issue dealt with by the law is a risk source&nbsp;or the cause of the emergence of a legal risk.&nbsp;Richard Moorhead in&nbsp;Legal Risk: Definition, Management and Ethics&nbsp;explained about two dominant approaches used to define legal risks in a company.&nbsp;First, considering the broad definition of legal risk, the approach that each action of a company that relates to business activities is considered as part of the legal consequences.&nbsp;Second, in a more specific context,&nbsp;<a href="https://www.hukumonline.com/berita/a/manajemen-risiko-bagi-perusahaan-lt62e724dfa4d58">legal risk</a> arises from weak legal products or legal uncertainty in respect of business consequences.&nbsp;Furthermore, Moorhead (in&nbsp;<a href="https://layanan.hukum.uns.ac.id/data/RENSI%20file/Buku%20ISHARYANTO/Ebook%20_MODEL%20PEMBADANAN%20LEGAL%20RISK.pdf">Isharyanto et al</a>., 2020:135) explained that legal risks may arise in the company due to internal errors which will have an impact on:<ol style="list-style-type:decimal;"><li>Reputation concern: reputational issues, particularly in relation to any approach taken by the company in managing legal risks against the national law of a country. In this respect, issues which often arise are usually related to the risk of property lawsuits or tax issues.&nbsp;</li><li>Intra-organizational culture:&nbsp;a work culture affected by the legal risks that occur. For example, a weak performance will cause a disruption to public services.&nbsp;</li></ol>Moorhead also mentioned that the extent of legal risk for companies is beyond the legal compliance. Ethics and business measures will not only be seen as a way to gain profits but also a legal approach regarding how certain business actions are justified and the legal risks arising from any inter-company agreement.&nbsp;Legal Risk According to OJKIn relation to the legal risk, as explained by Isharyanto et al., the Financial Services Authority has tried to describe the legal risks. It can be in the form of a litigation process, a weakness in the agreement entered into by the company, and the absence of any legal basis. This analysis is contained in&nbsp;<a href="https://www.hukumonline.com/pusatdata/detail/lt53a7f167ec94a/surat-edaran-otoritas-jasa-keuangan-nomor-10-seojk03-2014-tahun-2014/document">Circular Letter Number 10/SEOJK:03/2014</a>.&nbsp;In the circular letter, it is explained that bank management should observe the general principles as a basis for assessing the soundness of a bank that is risk oriented, proportional, material and significant, as well as comprehensive and structured.&nbsp;Risks that must be assessed consist of ten risks, namely credit risk, market risk, liquidity risk, operational risk, legal risk, strategic risk, compliance risk, reputation risk, yield risk and investment risk.&nbsp;Of the ten risks described above, let's understand more about two risks relating to the law, namely the legal risk and the&nbsp;<a href="https://www.hukumonline.com/berita/a/hukum-perusahaan-lt620c3bf47edd3">compliance risk</a>. In the Circular Letter Number 10/SEOJK:03/2014, the legal risk is defined as a risk arising from lawsuits and/or any weaknesses in the juridical aspect. Then, it is explained that legal risks may arise, among others, due to the absence of any underlying laws and regulations or the weakness of agreements.&nbsp;The compliance risk is a risk resulting from not fulfilling and/or not implementing the applicable laws and regulations, as well as sharia principles. This risk can be caused by a lack of legal understanding or awareness of provisions, sharia principles, and generally accepted business standards.Legal Risk ManagementTo help companies in the legal risk management,&nbsp;to avoid legal risks, compliance risks, or other risks,&nbsp;the Regulatory Compliance System (RCS) was introduced. The RCS has various functions, including as follows:<ol style="list-style-type:decimal;"><li>The RCS streamlines the audit process and minimize risks from audits;</li><li>The RCS prevents companies from missing certain legal obligations;</li><li>The RCS is a solution for companies to monitor their legal compliance that is based on the Artificial Intelligence and it is run in a comprehensive manner.&nbsp;</li></ol>The function of the Regulatory Compliance System is to address legal challenges encountered by each company. Get the best solution from&nbsp;<a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_dm_legal_risk_management">RCS Hukumonline&nbsp;</a>right now! &nbsp;

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A discussion about risk management by a company cannot ignore the legal risk management.

Understanding Legal Risk Management by Companies

Behind the concept of legal risk management, there is a concept of risk management. Stin Claessens (in Isharyanto et al., 2020: 59) described the risk management as a way to ascertain the uncertainty of plans in the future and all possibilities that will happen.&nbsp;Then, Claessens explained in detail that a company or an organization will identify existing risks, how those risks may affect their long-term plans, and how to insure them.&nbsp;<a href="https://www.hukumonline.com/berita/a/pengertian-aspek-manfaat-compliance-lt62de06aeee815/">Risk management</a> is intended to create a certainty of plans by avoiding fluctuations that can possibly occur.&nbsp;In relation to the risk management, Ferry N. Idroes (in Isharyanto et al., 2020: 60) explained that in a corporation, the risk management is needed to support the achievement of company goals. The risk management makes it possible to create much more opportunities with low fatalities, and solutions which are suitable to the existing risks.&nbsp;As explained by Hinsa Siagian (in Isharyanto et al., 2020: 60), there are two categories of risk management objectives, namely preventing risks before losses occur or the pre-loss objective and after losses have occurred or the post-loss objective.&nbsp;The risk management performed before losses occur or the pre-loss objective has several purposes, one of which is the economic purpose namely to prepare the company for&nbsp;<a href="https://www.hukumonline.com/berita/a/kepatuhan-hukum-dan-solusinya-lt6258f48f37291/">incurring potential losses</a> in the most economical way. A method that can be done is to reduce any outdatedness and to meet the standard of internal obligations.&nbsp;The risk management performed after losses have occurred or the post-loss objective is intended to support the sustainability of the company. The emphasis is on how to mitigate risks after losses have occurred, how a company can operate for at least a predetermined period, and how the company can continue to operate and meet customers’ needs.&nbsp;In Indonesia, there are common approaches for the risk management, namely the Enterprise Risk Management (ERM) as introduced by COSO and the risk management set forth in ISO 31000.&nbsp;<a href="https://layanan.hukum.uns.ac.id/data/RENSI%20file/Buku%20ISHARYANTO/Ebook%20_MODEL%20PEMBADANAN%20LEGAL%20RISK.pdf">Isharyanto et al</a> explained that the ISO 31000 risk management may encourage companies to manage risks in a proactive manner, facilitate a level of accountability in decision making processes, and take the opportunity and benefits from its implementation.&nbsp;Furthermore, the risk management must be implemented pursuant to predetermined principles and guidelines. This is intended to ensure effectiveness in the successful implementation of the risk management by the company. As regards the ISO 31000, its process is adapted from the AS/NZS 4360: 2004, with the following process of risk management.&nbsp;<ol style="list-style-type:decimal;"><li>Establishing the context</li><li>Risk assessment</li><li>Risk treatment</li><li>Monitoring and review</li><li>Communication and consultation&nbsp;</li></ol>The five processes can be carried out in a sequential or irregular order. This is because risk management tends to be very flexible. Its process must also be implemented in consideration of any applicable cultures and values.&nbsp;Legal Risk ManagementThe scope of risk management, including the legal risk management, has expanded. To help companies in the legal risk management,&nbsp;the Regulatory Compliance System (RCS) was introduced. The RCS has various functions, including as follows:<ol style="list-style-type:decimal;"><li>The RCS streamlines the audit process and minimize risks from audits;</li><li>The RCS prevents companies from missing certain legal obligations;</li><li>The RCS is a solution for companies to monitor their legal compliance that is based on the Artificial Intelligence and it is run in a comprehensive manner.&nbsp;</li></ol>The function of the Regulatory Compliance System is to address legal challenges encountered by each company. Get the best solution from&nbsp;<a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_dm_feb16">RCS Hukumonline&nbsp;</a>right now! &nbsp;

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One of the ways to optimize a company is by implementing the risk management. 

Understanding the Concept of Risk Management for Companies

Prior to discussing about the legal compliance, let's first take a look at the concept of legal awareness. To begin with, it is important to understand that law is a means of regulating the social life and it serves as a means of life.&nbsp;In this regard, Soerjono Soekanto stated that law is a means of social control, a means of facilitating the process of social interaction, and a means of reform.The function of law as a means of facilitating the process of social interaction is to create a harmony between order and peace in the social life. Then, in the process of social interaction, law serves as a means of social control which is generally based on a number of values and norms. Furthermore, in respect of the means of reform, law is intended to create a legal awareness.&nbsp;Phases and Purpose of Legal AwarenessCreating the legal awareness in the society is certainly not easy. Soerjono Soekanto (in&nbsp;<a href="https://core.ac.uk/download/pdf/276127615.pdf">Rosana</a>, 2014:14) explained about four indicators in the creation of legal awareness in a sequential or gradual order. The four phases are as follows.&nbsp;<ol><li>Legal knowledge</li></ol>It is a person's knowledge regarding certain behaviours that is regulated by written laws about what is prohibited and what is permitted.&nbsp;<ol><li>Legal understanding</li></ol>The information owned by a person regarding the content of (written) rules, namely the substance, purpose and benefits of the regulations.&nbsp;<ol><li>Legal stance&nbsp;</li></ol>It is a tendency to accept or reject a law due to the appreciation or awareness that the law is beneficial for the human life. In this case, the element of appreciation for the rule of law already exists.&nbsp;<ol><li>Patterns of legal behaviour</li></ol>Regarding whether or not the rule of law applies. If applicable, the extent to which the rule applies and the extent to which the society complies with it (the legal compliance). &nbsp;The creation of legal awareness is certainly intended for a specific purpose or function. The function of a high legal awareness is the legal compliance or the compliance with law. Then, the ultimate purpose is to achieve the objectives of law. In this context, law is aimed at creating harmony between order and peace.&nbsp;Definition of Legal ComplianceThe legal compliance can be defined as the legal awareness which creates a sense of loyalty in the society to the applicable norms. Simply put, the legal compliance is the compliance with law; the implementation of the rule of law by the society.&nbsp;It is important to understand that in the context of legal compliance, sanctions, in either positive or negative forms, are threatening. One often asked about who must be involved in the legal compliance. Ideally, the legal compliance must be implemented in a fair manner. In this context, it relates to not only the society, but also law enforcement officers as the officers carrying out the law enforcement process.&nbsp;Indicators for Legal ComplianceAccording to Soerjono Soekanto, three indicators cause the society to comply with laws or implement the legal compliance. The three factors are compliance, identification, and internalization.&nbsp;<ol style="list-style-type:decimal;"><li>Compliance is a form of legal compliance driven by the existence of sanctions for any perpetrators. In other words, the purpose of legal compliance is solely to avoid any existing legal sanctions.&nbsp;</li><li>Identification is a form of legal compliance intended to maintain a favourable relationship with another person or group.&nbsp;</li><li>Internalization is a form of legal compliance driven by the knowledge about the purpose and function of the rule of law.&nbsp;</li></ol>Efforts to Achieve Legal Compliance&nbsp;In relation to efforts to create the legal compliance, as explained at&nbsp;<a href="https://www.ombudsman.go.id/artikel/r/artikel--tingkat-kepatuhan-hukum-dan-potensi-maladministrasi-penegakan-hukum">Ombudsman</a>, there are three ways to achieve it. Such efforts are repressive, preventive, and persuasive measures.&nbsp;<ol style="list-style-type:decimal;"><li>Repressive measures are taken to implement the enforcement of laws. An example of these measures is those carried out by law enforcement officers during the law enforcement process, which requires both internal and external supervision.&nbsp;</li><li>Preventive measures are intended to prevent any violation of laws or any decrease in the legal awareness.&nbsp;</li><li>Persuasive measures are steps to promote or encourage the creation of legal awareness which relates to norms or a legal culture.&nbsp;</li></ol>Legal Compliance by CompaniesIn a broad sense, the legal compliance is implemented by all citizens, including law enforcement officers. In a more specific context, particularly in relation to businesses, the legal compliance is currently implemented by companies.&nbsp;In order to establish and operate a smooth business, a company is required to look carefully at its legal compliance with various regulations in Indonesia.&nbsp;However, implementing the compliance with existing regulations is not straight-forward. Indonesia adopts many levels of regulations, starting from the MPR Decree, Acts, Government Regulations in lieu of Acts, Government Regulations, Presidential Regulations, Regional Regulations, to District or Municipal Regulations. Furthermore, the types of legal compliance that must be implemented by companies are different from each other.&nbsp;Regulatory Compliance SystemTo simplify the analysis and the legal compliance that must be implemented by companies, the Regulatory Compliance System (RCS) was introduced. The RCS has various functions, including as follows:<ol style="list-style-type:decimal;"><li>The RCS streamlines the audit process and minimize risks from audits;</li><li>The RCS prevents companies from missing certain legal obligations;</li><li>The RCS is a solution for companies to monitor their legal compliance that is based on the Artificial Intelligence and it is run in a comprehensive manner.&nbsp;</li></ol>The function of the Regulatory Compliance System is to address legal challenges encountered by each company. Get the best solution from&nbsp;<a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_dm_dec08">RCS Hukumonline&nbsp;</a>right now! &nbsp;

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In a simple term, a legal compliance is the compliance with laws. Generally, the legal compliance is undertaken by citizens. 

Legal Compliance and Modern Solutions to Achieve It

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) organized the third International Convention on Indonesian Upstream Oil and Gas or IOG 2022 on Wednesday-Friday, 23-25 November 2022. One of the things discussed at the event was the importance of increasing investments in the upstream oil and gas in Indonesia.Increasing investments in the upstream oil and gas industry is considered important, given the various states of global economic and political turmoil that are existing and have impacts on the upstream oil and gas industry. The current disruption to energy supply has become the main cause of price hikes which can potentially give rise to a risk of inflation and crisis.The Chairman of SKK Migas, Dwi Soetjipto, said that investments in the upstream oil and gas industry may be increased by improving the regulations in order to facilitate investments to flow in. In addition, the government should further regulate incentives in respect of the upstream oil and gas.At the IOG 2022, Hukumonline took part by offering the Regulatory Compliance System (RCS), which is a solution that will help oil and gas companies in Indonesia in monitoring their legal compliance, at booth A6, Bali Nusa Dua Convention Center, Bali.<figure class="image"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/212b7002_480a_4008_ba65_36584db974d0_2_e14e1c093d.jpg" alt="212b7002-480a-4008-ba65-36584db974d0 (2).jpg"></figure>&nbsp;By utilizing various cutting-edge technologies, the Regulatory Compliance System is capable of monitoring a state of legal compliance and preparing an extract of legal obligations of a company on an automatic and real-time basis.Various reputable companies have been relying on the Regulatory Compliance System as their legal compliance monitoring platform.&nbsp;Follow them and enjoy the benefits from the Regulatory Compliance System now by requesting for a free demo&nbsp;here and try the Regulatory Compliance System for free. &nbsp;&nbsp;

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During the IOG 2022 held at BNDCC, Bali, SKK Migas emphasized the importance of increasing upstream oil and gas investments in Indonesia.

SKK Migas Organized Its Third International Convention in Bali

Industrial activities refers to any commercial activities to process raw materials, unprocessed materials, semi-finished goods, and/or finished goods into goods with a higher value for their use, including industrial design and engineering activities.Sandi (in Nasution, 2018:8) further explained that an industry is an attempt to produce finished goods from unprocessed materials or raw materials in a production process by way of cultivating in large quantities so that these goods can be generated at the lowest possible price but with the highest quality.Classification of Industrial ActivitiesWith regard to the industrial classification, Abdurachmat and Maryani (in Widiardy, 2021: 12) categorized an industry into a primary industry and a secondary industry.&nbsp;The primary industry refers to an industry which processes raw materials in the primary sector, such as agriculture, fishery, animal husbandry, forestry and mining. This industry is generally oriented towards raw materials.&nbsp;The secondary industry refers to an industry which further processes any proceeds from the primary industry. The raw materials for this industry are finished goods or semi-finished goods which have been produced by another industry.&nbsp;As regards its classification based on the number of workers and investment amounts, as stipulated in the Industrial Ministerial Regulation No.64/M-IND/PER/7/2016, industrial business activities can be divided into 3 types, namely a small scale industry, a medium scale industry and a large scale industry.&nbsp;The small scale industry refers to an industry with a maximum of 19 workers and an investment amount of less than IDR 1 billion, excluding any land and buildings for the business which is also used as the business owner's residence.&nbsp;The medium scale industry refers to an industry with a maximum of 19 workers and an investment amount of at least IDR 1 billion; or an industry with an at least 20 workers and a maximum investment amount of IDR 15 billion.The large scale industry refers to an industry with at least 20 workers and an investment amount of more than IDR 15 billion.&nbsp;Things which May Affect Industrial ActivitiesSmith (in Widiardy, 2021: 13) specified certain conditions which may affect industrial activities. Those conditions are, among others:<ol><li>Resources, including raw materials, energy, water supply, climates and land shapes.&nbsp;</li><li>Social factors, including the availability of workers, skills and capabilities in utilizing technology, as well as organizational abilities.&nbsp;</li><li>Economic factors, including the marketing, availability of capital, land values and prices, taxation, and transportation.&nbsp;</li><li>Government policy as a factor. The government policy relates to any regulations that must be satisfied by each industrial sector.&nbsp;</li></ol>To discuss further on the government policy, we want to highlight that the government has enacted certain regulations pursuant to the industry classification. For example, the regulations applicable to the agricultural industry differ from those applicable to the mining industry. Any non-compliance with the regulations will affect the business continuity and cause penalties to be imposed.&nbsp;The types of penalties which can be imposed are reprimands, administrative fines, temporary closures, suspension of any industrial business license, up to the revocation of any industrial business license.&nbsp;Regulatory Compliance SystemTo facilitate the implementation of regulations or the legal compliance for industrial activities, we created the Regulatory Compliance System (RCS). The RCS has various functions, including as follows:<ol><li>The RCS streamlines the audit process and minimizes any audit-related risks;</li><li>The RCS prevents companies from overlooking any legal obligations;</li><li>The RCS is a solution for monitoring the legal compliance of industrial activities (companies) on the basis of Artificial Intelligence and it is operated in a comprehensive manner.&nbsp;</li></ol>The Regulatory Compliance System is introduced to solve legal challenges faced in each industrial activity. Get the best solution from&nbsp;<a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=website_rcs_advertorial&amp;utm_campaign=advertorial_dm_mar14">RCS Hukumonline&nbsp;</a>right now!

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Various conditions may affect the sustainability of industrial activities.

Classification of Industrial Activities and Things which May Affect It

Allianz Indonesia recognizes the urgency of having legal technology that can help companies improve legal compliance. As part of the top global network in insurance services, Allianz Indonesia finds the Regulatory Compliance System (RCS) from Hukumonline highly beneficial."The existence of RCS can provide some kind of monitoring to our leaders in each unit. Starting from what must be accounted for, how the process would be to how the fulfillment should be," said Head of Compliance of Allianz Indonesia Januar Jahja during the Grand Launching of RCS Allianz at the Hukumonline Office, Jakarta, Monday (29/4/2024). Allianz Indonesia sees the need for a system that streamlines and simplifies compliance across its business lines.“These tools from RCS can help businesses, since sometimes regulations are seen as an obstacle. But it's called regulations, so we have to follow them and we have to obey them. So that leaders can focus on business, matters related to administration and monitoring can be supported with this system," continued Januar.The business lines currently owned by Allianz Indonesia are quite varied, from Allianz Utama, Allianz Life, to Allianz Syariah. It is not impossible that in the future it will continue to develop. For this reason, Allianz Indonesia needs a system that ensures that many business lines meet legal compliance.Meanwhile, Legal and Compliance Director of Allianz Indonesia Hasinah Jusuf said that the presence of RCS for Allianz was a significant breakthrough in helping business. “We've been thinking about this for a long time, but haven't found a good tool that can help business. This RCS proves that we can digitize and make it easier for departments to remain compliant," explained Hasinah.For Hasinah, technological developments must be utilized as optimally as possible, especially when they relate to regulations that are always changing and evolving to adapt to current conditions. It takes a long time to identify new regulations when using manual methods. In fact, that time could be better spent on other tasks. Company activities can be more efficient and effective when managed systematically and digitally.She hopes that RCS will enable the compliance team to work more efficiently, thereby supporting Allianz’s business in running optimally.Arkka Dhiratara, Chief Executive Officer of Hukumonline, attended to commend Allianz Indonesia for adopting the system. He noted that over 3,000 new regulations are introduced annually at both central and regional levels. This creates significant complexity for companies, particularly in the dynamic and high-risk insurance industry."Of course, manual procedures would be very challenging for the team in monitoring the new regulations. Because of that, we are here so that users get the latest information regarding regulations. We will highlight those related to the company, then it will immediately be clear what obligations the company must fulfill from these regulations," explained Arkka. He added that with RCS, all regulatory compliance activities can be managed through a single integrated platform. This includes identifying legal obligations based on the latest regulations, ensuring those obligations are met, and monitoring the fulfillment reports. &nbsp;

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By using RCS, the compliance team aims to enhance their speed and support Allianz Indonesia’s business operations effectively.

Allianz Adopts RCS to Streamline Legal Compliance

Domestic Component Level (TKDN) is the percentage of use of local components in certain products or services. Construction works are not released from the obligation to comply with the TKDN requirements.&nbsp;In Indonesia, construction works can be divided into several sectors, each of which is handled by a directorate general under the Ministry of Public Works and Public Housing (PUPR).The Directorate General of Water Resources of the PUPR Ministry, for example, handles the construction work in the form of dam construction, swamp area development, and flood control development. Meanwhile, the Directorate General of Bina Marga is responsible for the road construction, bridge construction, and landslide handling.&nbsp;In addition to that, the Directorate General of Cipta Karya and the Directorate General of Housing carries out various construction works and consulting services, which are also regulated in the TKDN regulation.&nbsp;The Calculation for the TKDN Construction is as FollowsThe Minister of Public Works and Housing has issued Decree No. 602/KPTS/M/2023 regarding Minimum Levels of Domestic Components (TKDN) for Construction Services (Minister Decree 602/2023), which took effect on 5 June 2023. The calculation for each sector is as follows:<ul><li>TKDN for Water Resources:</li></ul>The government sets a minimum requirement of 25-80% for construction works relating to water resources.<ul><li>TKDN for Bina Marga:&nbsp;</li></ul>Construction works under the Directorate General of Bina Marga must now meet the minimum TKDN requirement of 65-70%.<ul><li>TKDN for Cipta Karya:&nbsp;</li></ul>Construction works carried out by the Directorate General of Cipta Karya must satisfy a minimum TKDN requirement of 30-85%.<ul><li>TKDN for Housing:</li></ul>Each construction of flats must satisfy the minimum TKDN requirement of 45%. Meanwhile, TKDN for the construction of special houses is 55%.<ul><li>Consulting Services:</li></ul>All consulting services related to the Ministry of Public Works and Housing must satisfy a minimum requirement of 60%.Details of the minimum TKDN calculation for each work related to each directorate general under the Ministry of Public Works and Housing can be seen <a href="https://pro.hukumonline.com/a/lt64927defb7ad0/batas-minimum-sebesar-25---85-untuk-nilai-tkdn-pekerjaan-konstruksi-ditetapkan">here</a>.However, the minimum TKDN limit for planned construction works and integrated construction works are not included into the list on the link. Therefore, any commitment making official needs to set a minimum TKDN of 25% for construction works financed by offshore loans or grants.&nbsp;&nbsp;The Purpose of the Minimum TKDN RegulationThe TKDN minimum regulation for the procurement of goods and services in the country is applied with an aim to:<ul><li>Increase the utilization of domestic products</li><li>Create more jobs</li><li>Increase the efficiency of local industries so that they can compete internationally</li><li>Increase efficiency in the country's foreign exchange reserves</li><li>Reduce dependence on foreign products</li></ul>To facilitate the legal compliance by companies, particularly in relation to the compliance with the TKDN, Hukumonline via the Regulatory Compliance System (RCS) presents a technology as a solution for companies to identify, analyse, and elaborate legal obligations to be fulfilled. How RCS does it?Monitoring Legal Obligations Through an All-in-One PlatformRCS is capable of analysing and extracting each legal obligation of a company under the laws and regulations.&nbsp;<figure class="image"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/image_766456f5c7.png" alt="image.png"></figure>Always up to Date with the Latest Regulatory UpdatesThrough RCS technology, business actors can easily monitor their company's level of legal compliance in real time.<figure class="image"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/image_d4a175d495.png" alt="image.png"></figure>Streamline Company Auditing ProcessesBy using the RCS, users can effortlessly compile legal compliance aspects, making it easier to conduct audits.<figure class="image"><img src="https://es-rcs.s3.ap-southeast-3.amazonaws.com/cms/image_6db959c396.png" alt="image.png"></figure>With various benefits being offered by the RCS, businesses will no longer be concerned with legal risks from any violation of regulations relating to environmental permits despite the changing regulations.&nbsp;What are you waiting for? It is time for you to get the benefits of the RCS. For more information about the Regulatory Compliance System and any request for a free demo, please click <a href="https://rcs.hukumonline.com/?utm_source=website&amp;utm_medium=seo_articles&amp;utm_campaign=cta_kerjamigas">here</a>.&nbsp;

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Domestic construction works must now meet the minimum TKDN requirements.