Govt opens companies' management to expats

Govt opens companies' management to expats

JAKARTA (JP): The government has opened almost all positions
within the boards of directors and the boards of commissioners of
companies partly or wholly owned by foreign investors to
expatriates.

The simplification of procedures for hiring expatriates for
management positions is stipulated in Presidential Decree
No.75/1995 dated Nov. 9 which took effect immediately.

Only the post of personnel director at wholly foreign-owned,
joint ventures and national companies is closed to expatriates.

This was the first time that a presidential decree regarding
the procedures for the recruitment of expatriates specifically
stipulated particular positions open to foreigners.

Presidential Decree No.23/1974 which was revoked by the latest
ruling contained only general guidelines for the categories of
occupations open to expatriates and empowered the manpower
minister to handle the technical details.

The latest regulation also stipulates that companies wholly
owned by foreign investors can appoint expatriates to the boards
of directors and commissioners.

"However, appointments to the boards of directors and
commissioners of companies partly owned by foreigners or wholly
owned by Indonesians shall be based on the agreement of the
shareholders," the new ruling states.

The latest ruling was issued apparently to provide legal
certainty for the appointment of management and supervisors
especially at wholly foreign owned companies.

Wholly foreign-owned enterprises have only been allowed to
operate for the last two years after the deregulation of the
investment sector in the country.

The latest ruling also allows for the appointment of
expatriates to the boards of directors of domestic companies
whose operating licenses are not administered by the Investment
Coordinating Board (BKPM). Enterprises in this category are
allowed to appoint only Indonesians to their boards of
commissioners.

The new presidential decree authorizes the manpower minister
to decide which occupations are closed or open to expatriates
only for a specified period of time.

The lists of occupations closed or open to expatriates shall
be reviewed every three years, the ruling says.

The Manpower Ministry's data on April, 1995, showed that the
number of expatriates working in Indonesia reached 30,266. They
were employed in the sectors of manufacturing (50 percent),
mining (12 percent), trade (11 percent), forestry (seven percent)
and others (20 percent). They occupied positions ranging from
technicians to management.

Chief of legal bureau of the Ministry of Manpower Basani
Situmorang said that the new ruling should be understood in the
context of the 1958 law on the employment of foreign workers.

Basani said that the minister of manpower would shortly issue
a list stipulating the positions below directors and
commissioners which are still open to expatriates.

"The minister will also issue a new decree regulating the fee
imposed on all foreign workers in the country," she said, adding
that the amount has yet to be set.

According to Ministerial Decree No 143A, issued in 1991, all
foreign workers are obliged to pay US$150 each time they renew
their working permits.

Basani reaffirmed that all companies employing foreign workers
are obliged to undertake training programs so Indonesians can
eventually replace the expatriates. (rms)