Decree No. 40 of 2012 Issued by The Manpower Ministry of Indonesia on 29 February 2012 in Relation to The New Rules on Expatriate Executives in Indonesia

The Manpower Ministry of Indonesia has on 29 February 2012 issued Decree No. 40 of 2012 (the "Decree "), setting out the following list of corporate offices/positions that are closed to expatriates:-

1. Personnel Director (Direktur Personalia);
2. Industrial Relations Manager (Manajer Hubungan Industrial);
3. Human Resources Manager (Manajer Personalia);
4. Personnel Development Supervisor (Supervisor Pengembangan Personalia);
5. Personnel Recruitment Supervisor (Supervisor Perekrutan Personalia);
6. Personnel Placement Supervisor (Supervisor Penempatan Personalia);
7. Employee Career Development Supervisor (Supervisor Pembinaan Karir Pegawai);
8. Human Resources Administrator (Penata Usaha Personalia);
9. Chief Executive Officer (Kepala Eksekutif Kantor) ;
10. Personnel and Career Specialist (Ahli Pengembangan Personalia dan Karir);
11. Personnel Specialist (Spesialis Personalia);
12. Career Advisor (Penasehat Karir);
13. Job Advisor (Penasehat Tenaga Kerja);
14. Job Advisor and Counseling (Pembimbing dan Konseling Jabatan);
15. Employee Mediator (Perantara Tenaga Kerja);
16. Job Training Administrator (Pengadmiinistrasi Pelatihan Pegawai);
17. Job Interviewer (Pewawancara Pegawai);
18. Job Analyst (Analis jabatan);
19. Occupational Safety Specialist (Penyelenggara Keselamatan).

Numerous statements have been issued by the relevant ministries of Indonesia to clarify and explain the contents of the Decree, in particular concerning the position of "CEO", which we summarise as follows:-

1. The definition of "CEO" cannot be construed as also applying to the president director, who is automatically a member of the board since under the Manpower Regulation No. PER. 02 / MEN /III / 2008, expatriates are permitted to serve as company directors and commissioners.
2. The Decree is only intended to apply to mid-level positions in the human resources field.
3. The expression "CEO" in the Decree means the head of office administration or personnel, rather than the top officer of the company.
4. The Decree is not retroactive and that, as such, no existing appointments will be affected by it.
5. Since the Manpower Law (which provides the basis for the issuance of the Decree) does not establish any criminal sanctions for a breach of Article 46(2), violations of the Decree will most assuredly attract administrative sanctions, including in the immigration field. In addition, any decisions taken by a company official who is illegally appointed to a prohibited office might be exposed to legal challenges.