LEGAL DUE

DILIGENCE
REPORT
[*]
([*year])
BUDIARTO Law Partnership

Table of Contents

LEGAL DUE DILIGENCE REPORT ...................................................................................................... i

1.
Purpose of Report ............................................................................................................... i
2.
Scope of Report .................................................................................................................. i
3.
Assumptions ....................................................................................................................... i
4.
QUALIFICATIONS ............................................................................................................. ii
5.
RELIANCE .........................................................................................................................iii
EXECUTIVE SUMMARY ...................................................................................................................... 1
1.
DEFINITIONS .............................................................................................................................. 3
2.
CORPORATE STRUCTURE ....................................................................................................... 5
2.1 Legal Background .............................................................................................................. 5
(1)
Company Formation........................................................................................................... 5
(2)
Replacement or Appointment of Board Members; Share Transfers; and Amendment of
Articles................................................................................................................................ 5
(3)
Company Officers .............................................................................................................. 6
(4)
Articles of Association ........................................................................................................ 7
2.2 PT Mesra Coalindo ............................................................................................................ 8
(1)
Articles of Association, MOLHR Approval and State Gazette ........................................... 7
(2)
Letter of Domicile, NPWP and Taxable Entrepreneur Number ......................................... 8
(3)
Certificate of Company Registration .................................................................................. 9
(4)
Register of Shareholders ................................................................................................... 9
(5)
Special Register ............................................................................................................... 10
3.
GOVERNMENT LICENCES AND FILINGS .............................................................................. 10
3.1 Regulatory Regime for Special Terminal Companies ..................................................... 10
(1)
Ministry of Law and Human Rights .................................................................................. 10
(2)
Department of Trade ........................................................................................................ 11
(3)
Ministry of Transport ........................................................................................................ 11
3.2 Business Licenses ........................................................................................................... 11
(1)
Forms of Company........................................................................................................... 11
(2)
Companys Business Licenses ........................................................................................ 12
3.3 Licenses and Approvals Issued by Transportation Authorities ....................................... 12
(1)
Legal Background ............................................................................................................ 12
(2)
Stipulation of Special Local Port Area (Penetapan Lokasi Pelabuhan Khusus Lokal) .... 13
(3)
Special Port Construction Permit (Izin Pembangunan Pelabuhan Khusus or IPPK) .... 13
(4)
Special Port Operation Permit (Izin Operasi Terminal Khusus or IOPK) ...................... 14
(5)
Other Documents Relating to the Port Activities ............................................................. 16
3.4 Agreement Regarding Port Activities............................................................................... 17
3.5 Environment Licenses ..................................................................................................... 17
4.
ASSETS, LIABILITIES AND LABORS ....................................................................................... 17
4.1 Assets .............................................................................................................................. 17
4.2 Liabilities .......................................................................................................................... 17
4.3 LABORS .......................................................................................................................... 18
5.
TAXATION ................................................................................................................................. 18
6.
LITIGATION ............................................................................................................................... 18
Attachment 1: List of Documents Received ........................................................................................ 20
CONCLUSIONS AND RECOMMENDATIONS .................................................................................. 21

CONFIDENTIAL

Ref. No. [*]

[*], 2012
[*]1
Attn. Directors
[*].

Dear Sirs,
LEGAL DUE DILIGENCE REPORT
1.

Purpose of Report
This legal due diligence report ("Report") has been prepared at the request of [*buyers ID] in
relation to the proposed acquisition (the Project) of the issued shares in [*] (the
Company).
We understand that Buyers intend to acquire [*] of the issued shares in the share capital of
the Company.
The Company is a limited company established under the laws of the Republic of Indonesia,
and having its registered office in [*].

2.

Scope of Report

2.1

Budiarto Law Partnership (BLP) has been instructed by the Buyers to conduct the following
legal due diligence investigations:
(1)

Corporate, to confirm the due incorporation of the Company, their current

shareholdings and the current membership of management;

(2)

Licensing, to confirm that the Company holds all required material licenses from the
government and those licenses are valid;

(3)

Assets, Liabilities and Labors, to confirm the nature and validity of the Assets,
Labors and Liabilities owned by the Company; and

(4)

Litigation, to confirm whether any of the Company is a party to any litigation or

arbitration proceedings.

2.2

This Report is based on information obtained prior to [*].

3.

Assumptions

Insert intended PT to whom this LDD addressed

i

In our examination of the legal due diligence materials referred to in Attachment 1: List of Documents
Received of this Report, we have assumed that:
3.1

all the signatures on the documents are genuine and authentic;

3.2

all documents provided to BLP are authentic, true and correct in all material respect and
complete and without omission in any material respect;

3.3

all documents submitted as copies conform truly and accurately to the original documents and
are without omission in any material aspect;

3.4

all documents submitted to us as English language version documents that were executed in
the Bahasa Indonesia language are accurate translations of the Bahasa Indonesia language
version;

3.5

all documents submitted to us as execution version conform to the executed originals;

3.6

all documents have been duly authorized, executed and delivered by each party thereto, and
that all the documents have been validly authorized and the entry into and performance
thereof are within the capacity and powers of, each such party thereto;

3.7

resolutions of shareholders and directors that were reviewed by us have been properly
passed and all constitutional, statutory and other formalities were duly observed;

3.8

documents sought by us that were not supplied or were incomplete by the date of this Report
do not contain information which is material to the Project;

3.9

all documents, contracts, leases and other agreements have been duly and validly
authorized, executed, delivered and stamped (where necessary) in accordance with
applicable law by and are binding on each party thereto, and that the entry into and
performance thereof are within the capacity and powers of each such party thereto; and

3.10

no legal or insolvency proceedings have been or are contemplated or instituted and no

injunction has been granted against any party to any document, contract, lease or other
agreement reviewed by us that would restrain or prevent it from performing any of its
obligations thereunder.

Furthermore, in conducting our due diligence investigations and in preparing this Report, we have
considered such laws, regulations and practices as we have deemed necessary. In the examination
of such laws, regulations and practices, our opinions herein are based on the following assumptions:
3.11

The practices of Indonesian authorities are consistent with applicable law and will not change
significantly, provided that as of the date of this Report, nothing has come to our attention to
indicate that such assumptions are not accurate; and

3.12

In our examination of such laws, regulations and practices, that there are no provisions in the
laws of any jurisdiction outside Indonesia which would be contravened by Buyers execution
of and entry into the Projects, documents or agreements referred to herein, and that nothing
expressed herein will be affected by the laws (including public policy) of any jurisdiction
outside Indonesia.

4.

QUALIFICATIONS

This Report is subject to, and modified by, the following facts, actions, laws, or interpretation of laws
to the extent that such are partially or wholly true:
4.1

This Report is based upon the laws of Republic of Indonesia which are available to the public
as of the date hereof; provided that nothing has come to our attention despite our best efforts
indicating that any unpublished laws, decrees, regulations, governmental policies or
ii

governmental interpretation or notifications exist which would affect any of the statements
made herein.
4.2

The opinions and decisions of the courts of Indonesia are usually not published or available to
the public, and the judicial interpretation of the Indonesian law is therefore uncertain; provided
that nothing has come to our attention despite our best efforts indicating that any unpublished
opinions or decisions of the Indonesia courts would affect any of the statements made herein.

4.3

While companies established in Indonesia are required to be registered with the relevant
licensing authorities, it is not possible to rely on corporate information (such as the
Memorandum & Articles of Association (or equivalent) or names of shareholders or directors)
obtained from the licensing authorities as being conclusively up-to-date. Also, the information
available does not include information relating to encumbrances, charges, pledges or
assignments over corporate assets, or whether encumbrances, charges, pledges or
assignments over such assets exist.

4.4

We do not purport to be experts and do not purport to be generally familiar with or qualified to
make statements based on any law other than the Indonesia laws and accordingly make no
statement herein upon any other laws than the Indonesian laws.

4.5

Although documents involving a foreign element may be executed in the English language,
current judicial practice indicates that the courts of Indonesia may rely solely on an Indonesia
translation of such documents.

A certificate, determination, notification or opinion as to any matter provided for in a document might
be held by the courts of Indonesia not to be conclusive, if it could be shown to have an unreasonable
or arbitrary basis, or in the event of manifest error.
5.

RELIANCE

This Repot
5.1

is addressed only to the addressee named at the beginning of this Report and is for its sole
benefit and may not be duplicated or disclosed to any other person, or relied upon by any
other person or for any other purpose, without our prior written consent;

5.2

is valid as at the date hereof and should not be relied upon by any party after the date of
issue hereof. The opinions expressed in this Report will not be updated to take account of
subsequent changes to the legislation or to the practices of regulatory authorities unless we
are specifically instructed to do so. It is your responsibility to seek updated opinions if you are
to rely on opinions expressed in this Report at a later date;

5.3

may not be filed with any governmental agency or authority or quoted in any public document
without, in any such case, our prior written consent;

5.4

addresses only those issues that we have identified in the course of our review of the due
diligence materials and any inquiries we may have made with any Indonesian court,
governmental agency or authority and which appear to us to be material in the context of the
Project. A legal issue is considered material if it imposes onerous obligations on any of the
Company, results from conduct undertaken by any of the Company other than in the ordinary
course of business or relates to the ownership or ability to operate their registered lines of
business;

iii

5.5

provides a purely legal analysis and investigation and does not assess the business
implications of any of the matters addressed in the Report. Without prejudice to the generality
of the foregoing, this Report makes no representation on commercial, financial, accounting or
actuarial matters, the adequacy of any insurance arrangements or the value or fitness for
purpose of any asset, interest, facility or service;

5.6

is in no way to be interpreted as providing a tax due diligence and extends only to basic tax
compliance matters to assess whether the required annual and monthly tax filings have been
submitted to the relevant tax authorities (if relevant). This Report does not concern itself with
nor assess the accuracy of the tax filings, adequacy of the payments made, or whether such
tax filings were made in a timely manner, nor does this Report assess the existence of any
tax liabilities, fines, etc.; and

5.7

is limited to the matters stated herein and does not extend, and is not to be read as extending
by implication, to any other matter.

Sincerely yours,
BUDIARTO LAW PARTNERSHIP

WIDJOJO BUDIARTO
NIA 92.10155

iv

EXECUTIVE SUMMARY
This Report, which summarizes the results of our legal due diligence review in relation to the
Project, should be read in full. However, we believe that the matters set out in this Executive
Summary may be of particular concern or interest to the addressee.

NO

ISSUE

ANALYSIS/RECOMMENDATION

CORPORATE
1.

The
Company
was
established
pursuant to the Deed No. [*], made on
[*], before [*], S.H., then a Notary in [*]
(Deed of Establishment).

The Deed of Establishment has been

approved by the Decree No. [*] dated [*]
concerning
MOLHRs
Approval
and
registration with the Company Registrar No.
[*] dated [*].We were [not] provided with the
announcement of the Deed of Establishment
in the State Gazette.

2.

[insert other details on AoA]

[*]

3.

Taxable
Entrepreneur
(Pengusaha Kena Pajak)

Number

We were not provided with a Taxable

Entrepreneur Number (Pengusaha Kena
Pajak) of the Company.

4.

Certificate of Company Registration

(Tanda Daftar Perusahaan).

The Companys Certificate of Company

Registration will expire on March 10, 2013.

LICENSING
1.

Business License (Surat ljin Usaha

Perdagangan).

2.

[ insert principal licenses]

3.

Environment Licenses

Companys Business License No [*], dated

[*], expires on [*].

We were provided with technical documents

of Environmental Management Attempt
(Upaya Pengelolaan Lingkungan or UKL)
and Environmental Supervision Attempt
(Upaya Pemantauan Lingkungan or UPL).
We have yet to receive the approval of the
UKL and UPL.

AGREEMENT
Insert details on agreements target engaged
in]
ASSETS
[*]
LIABILITIES
[*]
LABORS
[*]
1

LITIGATION
Impending Litigation

[*]

1.

DEFINITIONS
Unless otherwise defined, all and any words or terms used in this Report shall have the
following meanings:
APL

Area Penggunaan Lain, as defined in page 162

BLP

Budiarto Law Partnership.

Company

[*].

Company Law

Law No. 40/2007 concerning limited liability companies.

DT

Department of Trade Republic of Republic of Indonesia.

Deed of Establishment means Deed No. [*] made on [*].

GMOS

General Meeting of Shareholders.

IOPK

Special Port Operation Permit (Izin Operasi Pelabuhan Khusus).

IPPK

Special Port Construction Permit (Izin Pembangunan Pelabuhan

Khusus).

KM 55/2002

Decree of Minister of Transport No. KM 55 year 2002 concerning the

Management of Special Sea Port.

KM 55/2007

Decree of Minister of Transport No. KM 55 year 2007 concerning the

Amendment of KM 55/2002.

KPP

Tax Service Office (Kantor Pelayanan Pajak).

Law No. 13/2003

means Law No. 13 year 2003 regarding Employment.

Law No. 17/2008

means Law No. 17 year 2008 regarding Shipping.

MOLHR

Ministry / Minister of Law and Human Rights Republic of Indonesia

which shall refer also to the predecessors of the ministry of law and
Human Rights.

NPWP

Tax File Number (Nomor Pokok Wajib Pajak) as defined in page 8.

PM 51/2011

Minister of Transport Regulation No. PM 51 year 2011 concerning

Special Terminal and Private Interest Terminal.

Report

means this legal due diligence report, as defined in page i.

RKAB

Work and Cost Budget Plan (Rencana Kerja dan Anggaran Biaya).

SIUP

Business License (Surat ljin Usaha Perdagangan).

SKDP

Letter of Domicile (Surat Keterangan Domisili Perusahaan) as

defined in page 8.

SSP

Special Sea Port.

Please update field

3

TDP

Certificate of Company Registration (Tanda Daftar Perusahaan) as

defined in page 9.

UKL

Environmental
Management
Attempt
Lingkungan) as defined in page 17.

(Upaya

Pengelolaan

UPL

Environmental
Management
Attempt
Lingkungan) as defined in page 17.

(Upaya

Pemantauan

2.

CORPORATE STRUCTURE
The Company is an Indonesian limited company and all of the shares in its share capital are
held and owned by Indonesian individuals.

2.1

Legal Background
(1)

Company Formation
The following is a summary of steps required under Company Law and by the
MOLHR for the incorporation of a company in Indonesia. It is noteworthy that the
actions were also common under the predecessors of the Company Law.

Summary of Action Required

Execute Deed of Incorporation containing Articles of Association of the company
before a Notary.
Submit Deed of Incorporation to MOLHR for approval, attaching Letter of Domicile,
Tax File Number and evidence of payment of paid up capital.
Register the company at Company Register maintained by Company Registrar and
obtain Certificate of Company Registration (Tanda Daftar Perusahaan).
Announce the Deed of Establishment of the company in the Supplement to the
State Gazette (Tambahan Berita Negara).

A company obtained its status as legal person under the Company Law once its deed
of incorporation is approved by the MOLHR.
All actions done by its founders on behalf of a company prior to its establishment
shall bind the Company upon the Company obtaining its legal person status if such
actions are accepted or taken over by the first General Meeting of Shareholders (the
GMOS). The GMOS must be convened within 60 days after the company obtaining
its legal person status, attended by all shareholders of the Company. The resolution
passed in this GMOS has to be voted for by all shareholders of the Company. Failing
this, the founders who entered into the contract shall be personally, jointly and
severally liable for the performed actions and all their consequences.
All actions done by all members of board of directors, board of commissioners and
founders of a company on behalf of the company after the company is established
but prior to the company obtaining its legal status shall automatically bind the
company upon the company obtaining its legal person status.
(2)

Replacement or Appointment of Board Members; Share Transfers; and

Amendment of Articles
In general, appointment or removal of director or commissioner, share transfer,
amendment to the articles of association (including the issue of new shares / increase
of paid up and subscribed capital and increase of authorized capital) requires a
resolution passed by the GMOS or all shareholders of the company and the
resolution has to be restated in a Notarial deed. In addition, the following actions have
also to be completed:
5

(i)

in the case of a share transfer or share issue, a report must be submitted to

MOLHR;

(ii)

in the case of an increase in authorized capital, the increase must be

approved by MOLHR;

(iii)

in the case of an increase in subscribed and paid up capital within the

authorized capital threshold, a report must be submitted to MOLHR;

(iv)

the share transfer, share issue or increase in capital must be reported to

Department of Trade (DT); and

(v)

in the case of amendment to the articles of association, the amendment must

be published in the State Gazette.

In the case of share transfers, the transferor and transferee will sign Deeds of
Transfer (Akta Pemindahan Hak) either under hand or before a Notary.
(3)

Company Officers
The Company Law, following the Dutch Civil Law tradition, adopts a two-tier
management structure, comprising:
(i)

a Board of Directors (Direksi); and

(ii)

a Board of Commissioners (Komisaris).

Under the two-tier management structure, the basic function of directors is to manage
and represent the company. The role of commissioners is to supervise and advise the
directors. A limited analogy may be made between the roles of:
(i)

Direksi and common law executive directors; and

(ii)

Komisaris and common law non-executive directors.

A company must have at least one director and one commissioner. In the event there
is more than one director, one of the directors may be appointed as President
Director, who generally has the authority to bind a company under agreements with
third parties. In the event there is more than one commissioner, one of the
commissioners can be appointed as President Commissioner.
Each time there is a change to the members of the Board of Directors or the Board of
Commissioners, the following must take place:
(i)

the shareholders approve the change to the members of the Board of

Directors and/or Board of Commissioners, with such shareholders' resolution
being restated in notarial deed form;

(ii)

the change to the members of the Board of Directors and/or the Board of
Commissioners is reported to MOLHR; and

(iii)

the change to the members of the Board of Directors and/or the Board of
Commissioners is reported to DT. Indonesian companies are not required to
maintain a Register of Directors or Register of Commissioners. Rather,
evidence of the current composition of the Board of Directors and Board of
Commissioners is in the form of Shareholders' Resolutions appointing the
directors and commissioners of the company, which follow steps (i) to (iii)
above.
6

Indonesia has no reliable registry of corporate information which is available to the

public. Accordingly, we are unable to independently verify the information contained
in this Section One by conducting a company search, which would be standard in
other jurisdictions.
(4)

Articles of Association
Under the Company Law, all Indonesian companies were required to amend their
Articles of Association by mid-August 2008, so as to comply with standard-form
Articles of Association which have been issued by the Ministry of Law and Human
Rights. Failure to amend Articles of Association could ultimately result in an
"interested party" to apply for the relevant company to be wound-up. The Company
was established in [*] pursuant to the Company Law No. 40 Tahun 2007.

2.2

[*target name]
(1)

Articles of Association, MOLHR Approval and State Gazette

(a)

Background
(i)

The Deed of Establishment of the Company (Deed of

Establishment) which includes the Articles of Association of the
Company is contained in Deed No. [*], made on [*], before [*], then a
Notary in [*].
The Deed of Establishment was approved by the MOLHR on [*]
pursuant to Decree No. [*] and registered with the Company
Registrar No. [*] on [*].
Note:
We were not provided with the announcement of the Deed of
Establishment in the State Gazette.

(ii)

(b)

up to the date of this Report, the Articles of Association in the Deed

of Establishment have been amended pursuant to [*].

Corporate Structure
The main features of the Company as set out in the documents referred to in
section (1)(a) above may be summarized as follows.
(i)

Status of Incorporation
The Company became a separate legal entity on receipt of MOLHR
approval on [*].

(ii)

Authorized and Issued Capital

Pursuant to the Deed of Establishment, its authorized capital is [*]
divided into [*] shares, and the issued capital of Company is [*]
divided into [*] shares, each with a nominal value of [*].
All companies incorporated in lndonesia must denominate their
shares in Indonesian Rupiah (IDR) in the Articles of Association.

(iii)

Shareholders
7

a)

Pursuant to the Deed of Establishment, the shareholding

structure of the Company was as follows:
Shareholders

(iv)

Amount (Rp)

Company Officers
a)

Pursuant to the Deed of Establishment, the composition of

the Board of Directors and the Board of Commissioners were
as follows:
Position

(2)

Shares

Name

Appointment
Effective Date

Letter of Domicile, NPWP and Taxable Entrepreneur Number

(a)

Requirement for Domicile Confirmation

In Indonesia, government departments will frequently require a company to
provide a current Letter of Domicile (Surat Keterangan Domisili) when
applying for new licenses or extensions to existing licenses.
The details of the Companys Domicile are as follows:
Date of issue
Number
Issuing authority
Address

:
:
:
:

This Letter of Domicile is valid until [*].

(b)

Taxpayer Registration, Tax File Numbers and Taxable Entrepreneur Number

All companies in Indonesia must have Taxpayer Registration (Surat
Keterangan Terdaftar) and must have a Tax File Number (Nomor Pokok
Wajib Pajak) and the details of the Companys Taxpayer Registration and
Tax File Number are as follows:
(i)

Taxpayer Registration:

Type

:
8

Date of issue
:
Number
:
Issuing authority :
(ii)

Tax File Number:

Type
Date of issue
:
Number
:
Issuing authority :

Note:
We were not provided with a Taxable Entrepreneur Number (Pengusaha
Kena Pajak) of the Company.
(3)

Certificate of Company Registration

We have examined the following Certificate of Company Registration (Tanda Daftar
Perusahaan) of the Company:

(4)

Office

Effective Date

Expiry Date

[*]

[*]

[*]

Register of Shareholders
(a)

Background
The Company Law requires the Board of Directors to maintain a Register of
Shareholders (Daftar Pemegang Saham), setting out, amongst other things:
(i)

the name and address of the shareholders;

(ii)

the amount, number and date of acquisition of the shares owned by

the shareholders and, if more than one class of shares is issued,
each class of shares issued;

(iii)

the name and the address of any individual or legal body which holds
rights under a pledge of the shares and the date of obtaining such
rights of pledge; and

(iv)

information with respect to shares paid in a form other than cash.

The Register of the Shareholders comprises evidence of:

(b)

(i)

ownership of shares in the company; and

(ii)

whether any security has been granted over the shares.

Register of Shareholders
The Company maintains a Shareholders Register dated [*]. The latest
shareholding structure pursuant to the Shareholders Register is as follow

Shareholders

(c)

Number
of
Shares

Date of
Acquiring
Shares

Amount of
Shares

Nominal
Amount
(Rp)

Remarks

Shares Certificate
The Company has issued Share Certificates. The details os the Shares
Certificates are as follow:
Collective Share Certificate No. 1
Shares No.
Total Shares
Authorized Capital
Name on the Certificate
Issuance Date

:
:
:
:
:

Note:
These Collective Shares Certificates have been signed by [*] as the
President Director and [*] as the President Commissioner.
(5)

Special Register
The Company Law requires the Board of Directors to maintain a Special Register"
(Daftar Khusus) containing information on the shareholdings of the members of the
Board of Directors and Board of Commissioners and their families in both the
company and any other companies (this disclosure requirement is aimed at
preventing conflict of interest).
Note:
We were not provided with any document relating to this matter.

3.

GOVERNMENT LICENCES AND FILINGS

3.1

Regulatory Regime for Special Terminal Companies

The key government authorities in relation to Indonesian companies engaged in the
business of sea port below.
(1)

Ministry of Law and Human Rights

10

MOLHR has authority in relation to matters concerning the establishment of

companies and other corporate issues, including amendments to the Articles
of Association. Please refer to Section One above.
(2)

Department of Trade
The Department has authority for registration of all companies and trading
matters of general Indonesian companies. Please refer to Section One
above.

(3)

Ministry of Transport
The Ministry has several governmental authorities in the area of sea
port/terminal business and in particular, to issue the licenses for sea
port/terminal activities.

3.2

Business Licenses
(1)

Forms of Company
Indonesian law recognizes:
(a)

(b)

(c)

General Indonesian Companies (Perseroan Terbatas Biasa), which

are:
(i)

100% Indonesian-owned;

(ii)

not able to take advantage of any taxation facilities offered by

BKPM;

Domestic Capital Investment Companies (Penanaman Modal Dalam

Negeri or "PMDN"), which are:
(i)

100% Indonesian-owned;

(ii)

able to take advantage of taxation facilities offered by BKPM;

and

(iii)

subject to the MOLHR and BKPM company regulatory

regimes; and

Foreign Capital Investment Companies (Penanaman Modal Asing

PMA), which:
(i)

have a percentage of or total foreign share ownership;

(ii)

are able to take advantage of taxation facilities; and

(iii)

are subject to the MOLHR and BKPM company regulatory

regimes.

All forms of companies are:

(a)

subject to the MOLHR company regulatory regime; and

(b)

required to obtain a Business License (Surat ljin Usaha Perdagangan

or "SIUP) from DT;

11

The Company is classified as a General Indonesian Company and therefore

subject to the MOLHR company regulatory regimes and not qualified to take
advantage of any taxation facilities offered by BKPM.
(2)

Companys Business Licenses

Business License (Surat ljin Usaha Perdagangan)
The details of the Companys Business License are as follows:
Date of issue
Classification
Valid until
Number
Content

3.3

:
:
:
:
:

Licenses and Approvals Issued by Transportation Authorities

(1)

Legal Background
Under the Law No. 17/2008 concerning Shipping (Law No. 17/2008), sea
transportation is a part of whole integrated system of national transportation
which is designed to support national welfare. Transportation has its
invaluable and significant roles in supporting and boosting the developments
of local and regional areas which have rich potential of natural resources, but
have yet been expounded. Realizing such roles of transportation,
Government has enacted laws and regulations to control sea transportation
as one of the modes of transportation to accommodate such goals of
integrated system of national transportation.
Regulation regarding to Special Sea Port (SSP) can be found in
Government Regulation No. 61/2009 concerning Harbor Affairs (GR No.
61/2009). The GR No. 61/2009 states that Minister of Transport as the
competent authority to issue permits/licenses regarding SSP activities,
including stipulation of location, construction and operation of SSP (article
112, 117 and 120, GR No. 61/2009).
Prior to Minister of Transport Regulation No. PM 51 Year 2011 concerning
Special Terminal and Private Interest Terminal (PM 51/2011), in the spirit of
decentralization, Minister of Transport delegated the authority to issue
permits/licenses regarding SSP activities in local area to competent local
governments pursuant to Decree of Minister of Transport No. KM 55 Year
2002 (KM 55/2002) concerning the Management of Special Sea Port which
then amended with Decree of Minister of Transport No. KM 55 Year 2007
(KM 55/2007).
Under KM 55/2002, other than stipulation of location of SSP which had to be
stipulated by the Minister of Transport with recommendation from competent
local governments (article 4(2) KM 55/2002). Government (Minister of
Transport/Director General of Sea Transportation), Provincial Government
(Governor) and Local Government (Regent or Mayor) have their own
authorities in issuing permits/licenses regarding SSP activities: i) Minister of
Transport covering national or international SSP, ii) Governor covering
regional SSP activities and iii) Regent or Mayor covering Local SSP activities.
These local authorities then revoked in PM 51/2011 which restores the
authority to issue SSP activities permits/licenses under Minister of Transport
or Director General of Sea Transportation.

12

Under these regulations, competent authorities require license of principal

business to issue licenses of special port (construction and operation) since
special port may only be utilized as support to principal business and granted
in certain conditions as set out in article 111 GR 61/2009 jo. Article 3 PM
51/2011.
Special port may also be used to support subsidiarys business which has to
be akin to the principal business of holding company and/or support the
supplies of raw materials and equipments of such subsidiary (article 3 (2) PM
51/2011).
(2)

Stipulation of Special Local Port Area (Penetapan Lokasi Pelabuhan

Khusus Lokal)
The Company holds the following Stipulation of Special Local Port Area:
Decree of Regent of Paser No. [*] dated [*] which granted an area for Special
Local Port to the Company with provisions:
(a)

[*]

Note:
Pursuant to KM 55/2002 jo. PM 51/2011, the stipulation of special
port/terminal area is under the authority of Minister of Transport. The
application has to be filed to the Minister of Transport through Director
General of Sea Transportation and the stipulation shall be issued by the
Minister. This particular Stipulation was issued by Regent of Paser which
contravened the regulations. On the other hand, we also note that there are
still local or regional regulations (Peraturan Daerah) regulate that the
authorized officer to stipulate special port/terminal area is Regent (for special
local port) or Governor (for special regional port). These regulations are
supported by Government Regulation No. 38 of 2007 concerning
Government Affairs Division amongst the Government, Provincial
Government and Local Government (Pembagian Urusan Pemerintahan
antara Pemerintah, Pemerintah Daerah Provinsi, dan Pemerintah Daerah
Kabupaten/Kota) and Circular of Minister of Transportation (Surat Edaran
Menteri Perhubungan) No. 07 of 2000 concerning Details of Authorities of
Regency/Municipality in the Transportation Sector with respect to the Local
Autonomy (Rincian Kewenangan Kabupaten/Kota di Sektor Perhubungan
Dalam Rangka Otonomi Daerah), both which in fact still draw multi
interpretation in the implementation. This conflict of substance among
regulations in local/regional and national level may cause legal uncertainties.
In legal point of view, the Company shall proceed in accordance with higher
regulations.
(3)

Special Port Construction Permit (Izin Pembangunan Pelabuhan

Khusus or IPPK)
The Company holds the following Special Port Construction Permit:
Decree of Regent of Paser No 552.3/030/DISHUBKOMINFO/III/2011 dated
March 3, 2011 which granted Special Port Construction Permit (IPPK) with
the following details:
Company Name

: PT MESRA COALINDO

President Director

: Yusi Ananda
13

Address

: Jl. Pahlawan No. 1 RT. 26, Samarinda

Location of Construction
Location
District
Regency
Province

: Adang River
: Long Ikis
: Paser
: East Borneo

Area Coordinate

: 010 38 18,5 LS 1160 14 50,7 BT

(a)

This IPPK was granted for private interest purpose of the Company
in supporting loading/unloading product and equipments for coal
mining.

(b)

In constructing the special port, the Company has obligations to:

(c)

(4)

i)

obey the prevailing laws and regulations in port affairs, water

transportation, navigation safety, environment management
and other regulations with respect to its principal business;

ii)

be responsible for the impacts arising from and during the

construction;

iii)

provide shipping navigational infrastructures, shipping lane

and other facilities required to ensure navigation safety and
fluency of ships and goods traffic in accordance with the
IPPK.

IPPK can be revoked if the holder:

i)

has not performed the construction within 1 (one) year

following the issuance of IPPK;

ii)

cannot complete the construction within 3 (three) years

following the issuance of IPPK;

iii)

violates its obligations or covenants as set out in the IPPK

and the prevailing regulations.

(d)

Transport, Communication and Informatics Service Office of Regency

of Paser enforces supervision and technical control in the
implementation of IPPK.

(e)

The Decree of the Regent is valid from the date of its enactment.
Amendments will be made if there are mistakes in the enactment.

Special Port Operation Permit (Izin Operasi Terminal Khusus or IOPK)

The Company holds the following Special Port Operation Permit:
Decree of Regent of Paser No 552.3/03/DISHUBKOMINFO/III/2011 dated
March 30, 2011 which granted Special Port Operation Permit (IOPK) with
the following details:
Company Name

: PT MESRA COALINDO

Principal Business

: Coal Mining
14

Address

: Jl. Pahlawan No. 1 RT. 26, Samarinda

Tax File Number

: 02.756.796.5-722-00

(a)

the abovementioned is licensed to operate a special local port

located in Nipah Ulo River, Village of Kerayan Makmur, District of
Long Ikis, Regency of Paser, Province of East Borneo with
specification:
i)

ii)

Dock:
Type
Size
Construction
Fender
Bolder
Depth

: Warf/Jetty
: 8m x 12 m
: wood
: .24.00 m
: 18.00 m
: 5,31 6,20 m

Coordinate

: 010 38 18,5 LS 1160 14 50,7 BT

As barge facility for private interest in supporting loading/unloading of

products and equipments for coal mining business.
(b)

The holder has the obligations as follows:

i)

comply with the prevailing laws and regulations concerning

port, water transportation and traffic, safety, environment
sustainability, and regulations from other authorities
regarding principal business;

ii)

maintain shipping navigational infrastructures, shipping lane,

and other facilities required to ensure navigation safety and
fluency of ships, goods traffic and the convenience of
governmental duties in special port/terminal;

iii)

provide storage for waste or other substances of ships which

can be contaminant;

iv)

take full responsibility of the operation of the special local

port;

v)

report monthly operational activities to Regent of Paser

through Transport, Communication and Informatics Service
Office of Regency of Paser.

(c)

IOPK for the Company is valid as long as the Company still performs
its principal business;

(d)

IOPK can be revoked/declared no longer valid if:

i)

the holder is in breach of its obligations or covenants;

ii)

the location is no longer in accordance with Spatial Layout

Plan of Regency of Paser;

iii)

the holder utilizes the special port for commercial or public

use, unless with permission issued by Transport,
Communication and Informatics Service Office of Regency of
Paser on behalf of Regent of Paser;
15

(e)

Transport, Communication and Informatics Service Office of Regency

of Paser enforces supervision and technical control in the
implementation of IOPK.

(f)

The Decree of the Regent is valid from the date of its enactment.
Amendments will be made if there are mistakes in the enactment.

Note:
The Company had obtained IPPK and IOPK in 2011 prior to the enactment of
PM 51/2011, therefore, the issuance of IPPK and IOPK should be bound by
KM 55/2002 jo. KM 55/2007.
We have yet to receive monthly report of the Companys operational
activities.
(5)

Other Documents Relating to the Port Activities

(a)

Letter No. S.23/BPKH IV-3/2011 concerning Clarification of

Coordinates dated January 7, 2011, issued by Head of Board of
Stabilization of Forest Area Region IV, Directorate General of
Forestry Planology, Ministry of Forestry, addressed to the Director of
PT Jasa Tambang Nusantara. This Letter describes the results of
study of status/function of forest area designed for construction of
special port of PT Mesra Coalindo in District of Long Ikis, Regency of
Paser, East Borneo Province. The studied area is not encumbered
by on Areal Penggunaan Lain (APL). APL is defined in Regulation
No. P.50/Menhut-II/2009 issued by Minister of Forestry as areas
which are not forest area.

(b)

Minutes of Inventory and Identification of Issues of Forest Area in

Reserve Forest of Teluk Adang in relation to the Construction Plan of
Special Port and Stock Pile of PT Mesra Coalindo, dated April 16,
2011, signed by Examiners Team, the Companys Head of Mining
Technical, and acknowledged by Regional Technical Service Unit of
Forestry Planology Balikpapan. This minute records that from Global
Positioning System (GPS) observation, the coordinates of the
planned area is outside of Reserve Forest of Teluk Adang, and on
APL area. The examiners recommend that the Company, in
constructing the special port and stock pile, attends to the boundaries
signs and the Company is obliged to create signs or announcement
boards or prohibitions of encroachment of forest area along the port
areas adjacent to the Reserve Forest of Teluk Adang.

Note:
These permits regarding special port activities imply that the permits were granted as
supports only to the principal business of the Company which in IPPK mentioned as
coal mining. The special port may only be used by the Company for its own private
interest to support the transportation of coal mining products. Therefore, the
Company may not transfer the aforementioned functions of the special port to other
companies as it would be a violation to article 124 GR No. 61/2009 jis. Article 19 and
21 PM 51/2011.
We note that the Company applied for the licenses of special port using PT Jasa
Tambang Nusantaras map of mining area and coordinates list as stated in Letter No.
S.23/BPKH IV-3/2011 concerning Clarification of Coordinates dated January 7, 2011.
16

However, JTN was not a subsidiary of the Company, although they might be
affiliated, hence the issuance of the licenses was potentially incompliant with the
regulations which accentuated that special port may only be constructed and used in
support of the principal business. Moreover, we were provided with UKL and UPL
documents of the special port, which state that the special port would be used to
support coal mining business of the Company (point 1.1 jo. point 2.3.2 of the UKL and
UPL document), but we were not provided with the licenses of the principal business
(coal mining business) inter alia Mining License (Izin Usaha Pertambangan) of the
Company.
3.4

Agreement Regarding Port Activities

We were not provided with any document relating to this matter.

3.5

Environment Licenses
We were provided with technical documents of Environmental Management Attempt
(Upaya Pengelolaan Lingkungan or UKL) and Environmental Supervision Attempt
(Upaya Pemantauan Lingkungan or UPL). We have yet to receive the approval of
the UKL and UPL.

4.

ASSETS, LIABILITIES AND LABORS

4.1

Assets
Pursuant to Financial Statement of PT Mesra Coalindo as per December 31, 2011,
the Company had the following assets:
(1)

Fix Assets
(a)

Acquisition Cost

Rp580.000.000,-

Note:
We have not received legal documents relating with this matter.
(2)

Other Assets
(a)

Deferred Licensing Cost

Rp620.000.000,-

(b)

Deferred Operating Expenses

Rp612.000.000,-

(c)

Related Parties Receivables

Rp2.585.000.000,-

Note:
We were not provided with legal documents evidencing Companys
assets.
4.2

Liabilities
Pursuant to Financial Statement of PT Mesra Coalindo as per December 31, 2011,
the Company had no liabilities.
Note:
We were not provided with legal documents evidencing Companys liability.
17

4.3

LABORS
Legal Background
Law No 13 year 2003 concerning Employment (Law No.13/2003) defines 2 (two)
kinds of Employment contract which are:
(a)

Employment contract for specified time.

An employment contract for a specified time shall be made in writing and
must be written in the Indonesian language with Latin alphabets. Employment
contract for a specified time, if not made in writing, shall be regarded as an
employment contract for an unspecified time. Employment contract for a
specified time cannot be made for jobs that are permanent by nature.
Employment contract for a specified time may be made for a period of no
longer than 2 (two) years and can only be extended one time that is no longer
than 1 (one) year.

(b)

Employment contract for unspecified time.

An employment contract for an unspecified time may require a probation
period for no longer than 3 (three) months. During the probation period the
entrepreneur is prohibited from paying wages less than the applicable
minimum wage.

Note:
We were not provided with any document relating to this matter.
5.

TAXATION
We were not provided with any document relating to this matter.

6.

LITIGATION
This Section is based upon inquiries made to: the District Court of Samarinda, District Court
of Sangatta, the Administrative Court of Samarinda, the National Arbitration Council of
Indonesia, the Industrial Relation Court in the District Court of Samarinda, the Commercial
Court of Surabaya and the Tax Court, which are the courts with jurisdiction over JDG.
Search Result for the Company
Attachment 2: contains the Letter of Statement which we have received as at the date of this
Report which indicates that the Company has never been registered as a party to:
A.

any civil or criminal proceedings in the District Court of Samarinda pursuant to

Statement Letter No. W18-I1/84/HK.02.1/IV/2012 issued by the Deputy Registrar of
District Court of Samarinda on June 1, 2012;

B.

any civil or criminal proceedings in the District Court of Sangatta since Januari 2009
up to June 6, 2012, pursuant to Statement Letter No. W18-U7/21/KH.01.06/V/2012
issued by the Deputy Registrar of District Court of Sangatta on June 6, 2012;

C.

any administrative proceedings in the Administrative Court of Samarinda up to June

4, 2012 pursuant to Statement Letter No. W2-TUN2.5/446/HK.06/VI/2012 issued by
the Registrar of Administrative Court of Samarinda on June 4, 2012;
18

D.

any arbitration proceedings in the National Arbitration Council of Indonesia pursuant

to Statement Letter No.12.797/SKB/VI/BANI/WD issued on June 5, 2012;

E.

any industrial dispute proceedings in the Industrial Relations Court in District Court of
Samarinda, pursuant to Statement Letter No. W18.U1/143/PHI.02.1/VI/2012 issued
by the Deputy Registrar of Industrial Relations Court in the District Court of
Samarinda on June 1, 2012;

F.

process of bankruptcy, suspension of indebtedness in the Commercial Court/District

Court of Surabaya since January 1, 2010 up to June 5, 2012, pursuant to Statement
Letter No. W.14.U1.Pdt.SK.Niaga/247/VI/2012/03 issued by the Registrar of the
District Court of Surabaya on June 5, 2012; and

G.

any tax proceedings in the Tax Court up to June 8, 2012, pursuant to Statement
Letter No. KET-747/SP.5/2012, issued by Secretary General of Tax Court on June 8,
2012

19

Attachment 1: List of Documents Received

List of documents of PT MESRA COALINDO

NO.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

12.

13.
14.
15.
16.
17.
18.

Name of Documents
Deed No. 81, dated January 29, 2008
Decree No. AHU-19158.AH.01.01 Tahun 2008
Decree No. AHU-48360.AH.01.01Tahun 2011
Statement Letter No. 503/09/Permb-DM/02/2012, dated February 22, 2012, issued by
Head of sub-district of Dadi Mulya
Taxation Registration No. PEM-507/WPJ.14/KP.0203/2008, dated February 27, 2008
Companys Tax File Number No. 02.756.796.5-722.000, dated February 27, 2008
Certificate of Company Registration No. 17.01.1.71.03372, dated March 10, 2008
Business License (Surat ljin Usaha Perdagangan) No. 4368/17-01/PK/III/2008, dated
March 6, 2008
Decree of Regent of Paser No. 552.3/029/DISHUBKOMINFO/I/2011 dated January 12,
2011
Decree of Regent of Paser No 552.3/030/DISHUBKOMINFO/III/2011 dated March 3,
2011
Decree of Regent of Paser No 552.3/03/DISHUBKOMINFO/III/2011 dated March 30,
2011
Letter No. S.23/BPKH IV-3/2011 concerning Clarification of Coordinates dated January 7,
2011, issued by Head of Board of Stabilization of Forest Area Region IV, Directorate
General of Forestry Planology, Ministry of Forestry, addressed to the Director of PT Jasa
Tambang Nusantara
Maps of Examined Area of Special Port PT Mesra Coalindo as attachment to Letter No.
S.23/BPKH IV-3/2011 concerning Clarification of Coordinates dated January 7, 2011.
Minutes of Inventory and Identification of Issues of Forest Area in Reserve Forest of Teluk
Adang in relation to the Construction Plan of Special Port and Stock Pile of PT Mesra
Coalindo, dated April 16, 2011
Environmental Management Attempt (Upaya Pengelolaan Lingkungan or UKL) and
Environmental Supervision Attempt (Upaya Pemantauan Lingkungan or UPL)
In House Financial Statement PT Mesra Coalindo per December 31, 2011
Identity Card No. 64.7203.030765.0005 (Yusi Ananda)
Identity Card No. 3172061607641001 (Tjoetjoe Sandjaja Hernanto)

20

CONCLUSIONS AND RECOMMENDATIONS

If you are to complete the Project, we would recommend you;

A.

B.

to clarify:
1.

Decree of Regent of Paser No. 552.3/029/DISHUBKOMINFO/I/2011 dated January

12, 2011 (Stipulation of Special Local Port Area or Penetapan Lokasi Pelabuhan
Khusus Lokal);

2.

Decree of Regent of Paser No 552.3/030/DISHUBKOMINFO/III/2011 dated March 3,

2011 granted Special Port Construction Permit or Izin Pembangunan Pelabuhan
Khusus (IPPK);

3.

Decree of Regent of Paser No 552.3/03/DISHUBKOMINFO/III/2011 dated March 30,

2011 granted Special Port Operation Permit or Izin Operasi Terminal Khusus
(IOPK).

to require the Company to obtain the Approval of UKL-UPL.

21