New bill allows documents to be stored on microfilm

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)