New bill allows documents to be stored on microfilm

JAKARTA (JP): Companies are to be allowed to use microfilm and possibly electronic means to store their financial records, according to a new bill on company documents now before the House of Representatives.

Speaking on the bill before a plenary session of the House yesterday, Minister of Justice Oetojo Oesman said that inventories recorded on paper were becoming more costly for companies while paperless business transactions were growing.

"Efficiency in company document management is becoming more important...And efficient document management will help create a conducive climate for businesses," Oetojo said.

To reduce costs, he explained, companies would be allowed to use advanced technology for document storage. Article 12, clause 1 of the new bill, however, would limit document storage to microfilm, in addition to paper.

"This limitation is based on the consideration that microfilm guarantees the originality of the contents of the transferred documents," he said.

A number of countries including Japan, Germany, South Korea, Sweden, Switzerland, Thailand and the United States have legalized microfilm as a document storage medium.

Oetojo said the new bill, when enacted, would possibly allow document storage in mediums other than microfilm. However, such mediums must be able to guarantee the originality of the documents.

He said that other mediums which may meet such a criteria included Compact Disc Read Only Memory and Compact Disc Write- Once-Read Many.

Article 12, clause 2, states that documents stored on non- paper mediums must first be printed then the printed version committed to microfilm or another approved medium.

To guarantee that all documents stored on microfilm are original, the transfer of these documents must be legalized by the courts, as stipulated by the bill's article 14.

Oetojo explained that the new bill would replace a number of articles from colonial commercial law (Wetboek van Koophandel). He added that the bill, which was presented to the House on April 3, would complement the 1995 Company Law which has been in effect since April 7, 1996.

Necessary documents

Under article 11, clause 1 of the bill, companies incorporated in Indonesia would be required to record their business transactions in the Indonesian language and in rupiah denomination.

"Any recordings using foreign languages can only be carried out after the companies get consent from the Minister of Finance," Oetojo said.

He said the bill would require companies to store their documents relating to financial statements for 10 years. This conforms with the 1994 Tax Law and the 1995 Customs Law.

He contended that the 10-year requirement for document storage was not too long, considering that a number of advanced countries apply a similar requirement.

Japan, Germany, South Korea, Sweden, Switzerland and Thailand, for instance, also require incorporated companies to store their documents for ten years. The United States and Britain require document storage for six years only.

Oetojo said the 10-year storage requirement would apply to documents relating to companies' annual financial statements, profit and loss statements, accounts, daily transactions and journals.

Documents not relating to companies' financial affairs do not have to be stored. The decision to store such documents is up to the companies. (rid)