Chief of Foreign Construction Services Business Entity Representative Office

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Chief of Foreign Construction Services Business Entity Representative Office

Author : Adinda Rifdahtama S.H. & Clara Angela A. Sipangkar, S.H., M.H.

Before Law No. 2 of 2017 concerning Construction Services (“Law 2/2017”) applied, Construction Services regulated in Law No. 18 of 1999. There are several amendments related to construction’s investment mechanism especially regarding licensing. As for amendment that will be discussed in this article is about Chief of Foreign Construction Services Business Entity Representative Office or often referred to as BUJKA Representative Office.

Before further discussion regarding current law related to Chief of BUJKA Representative Office, it is necessary to be explained first that before the enforcement of Law 2/2017, foreigner could be placed as Chief of BUJKA Representative Office, with the obligation to place Indonesian worker in a position equals to management and engineering. That regulation changed after the enforcement of Law 2/2017. Law 2/2017 states that highest leader of BUJKA Representative Office should be occupied by Indonesian. This regulation can be seen from Article 33 paragraph (1) letter e Law 2/2017 which states that:

“must appoint Indonesia citizen as highest leader of the representative office.”

However, Law 2/2017 does not explain in detail regarding definition of highest leader. To know the types of leader in BUJKA Representative Office, first it will be explained that in National Construction Services Development Board of Indonesia Regulation No. 1 of 2015 concerning Foreign Construction Services Business Entity Registration (“Perlem LPJK 1/2015”) mentioned that there are 2 (two) Persons in Charge in BUJKA Representative Office, which are:

  • Business Entity Person in Charge (Penanggung Jawab Badan Usaha - “PJBU”); and
  • Engineering Person in Charge (Penanggung Jawab Teknis - “PJT”).

PJBU is chief of BUJKA Representative Office who fully responsible to BUJKA Representative Office, meanwhile PJT is someone who was appointed by PJBU to responsible to engineering and operational of BUJKA Representative Office. With the capacity of PJBU and PJT as Person in Charge in BUJKA Representative Office, can be assumed that highest leader in BUJKA Representative Office are PJBU and PJT.

Based on information that we got from representative of Ministry of Public Work and Public House in Capital Investment Coordinating Board, currently foreigner can occupy one of the positions, either PJBU or PJT. That matter still refers to Perlem LPJK 1/2015 because until this article issued, Minister of Public Work and Public House Regulation (“Permen PUPR”) concerning implementation of Law 2/2017 has not issued yet. In terms of PJBU occupied by foreigner, the PJT must be occupied by Indonesian or otherwise. However, need to be noted that if Permen PUPR regarding implementation regulation of Law 2/2017 has been issued, then that Permen PUPR shall applied for the status of Chief of BUJKA Representative Office appointment.

In implementation, this amendment raises an objection to foreign investor who wants to establish BUJKA Representative Office in Indonesia. Because the existence of that regulation, then foreign investor will take more time to look for Indonesian worker who has skill and comprehension that qualified regarding foreign investor’s business activity. However, from the issuance of that regulation, it can be known that Law 2/2017 prioritize Indonesian worker in construction services business activity in Indonesia with the intention of human recourses and development skill interest in Indonesia especially in construction services field.

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