12 May 2023
New Regulation Consolidates and Expands Shareholder Rights in Indonesian SOEs
On 3 March 2023, the Ministry of State-Owned Enterprises (“MSOE”) issued Regulation No. PER-2/MBU/03/2023 (“Reg. 2/2023”), which revokes 20 other regulations and came into force on 24 March 2023.
The new regulation is part of a broader effort to streamline oversight and governance at Indonesia’s state-owned enterprises (“SOE”). To date, this streamlining process has resulted in a total of forty-five regulations on SOE oversight and governance being reduced to just three: (i) Reg. No. PER-1/MBU/03/2023 (which deals with special assignments and SOE social and environmental responsibility); (ii) Reg. No. PER-3/MBU/03/2023, (SOE internal management and human resources), and (iii) Reg. 2/2023.
Reg. 2/2023 brings together measures relating to the governance of SOEs, risk management, assessment of SOE soundness, strategic planning, guidelines for significant corporate actions, IT management and application, and reporting, which were previously scattered across 20 different regulations. In this ABNR Legal Update, we will focus on the rights that Reg. 2/2023 affords to:
In addition, Reg. 2/2023 sets out detailed rules governing significant SOE corporate actions, which include: 1) equity investments by the state; 2) restructuring; 3) merger, acquisition, consolidation, spin-off, dissolution, and liquidation; 4) privatization; 5) collaborative venture; 6) procurement of goods and services; 7) write-off or assignment of state-owned fixed assets; and 8) hedging. Previously, these were governed separately by a number of different regulations. As the rules are highly technical in nature, they are beyond the scope of this update.
B. SOEs and Shareholder Rights
Reg. 2/2023 now recognizes 9 general shareholder rights and related obligations on SOEs (compared with 5 under Reg. 1/2011). The full list of shareholder rights and related SOE obligations is as follows:
C. ABNR Commentary
Reg. 2/2023 now brings together under one umbrella a host of regulations on SOE corporate governance and significant corporate actions, thereby helping to clarify the rules and facilitating compliance. With SOEs continuing to account for some 30% of the Indonesian economy, the ongoing regulatory simplification process in the state-owned sector is warmly to be welcomed.
By partner Mr. Ayik C. Gunadi (email@example.com), senior associate Mr. Novario Hutagalung (firstname.lastname@example.org), and associate Ms. Nindi Saskia (email@example.com).
This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.
 Ministry of State-Owned Enterprises Regulation No. PER-2/MBU/03/2023 on Guidelines for Corporate Governance and Significant Corporate Actions in State-Owned Enterprises. / Peraturan Menteri Badan Usaha Milik Negara No. PER-2/MBU/03/2023 tentang Pedoman Tata Kelola dan Kegiatan Korporasi Signifikan Badan Usaha Milik Negara.
 Ministry of State-Owned Enterprises Regulation No. PER-01/MBU/2011 on Good Corporate Governance of State-Owned Enterprises, as amended by Ministry of State-Owned Enterprises Regulation No. PER-09/MBU/2012 on the Amendment of Ministry of State-Owned Enterprises Regulation No. PER-01/MBU/2011 on Good Corporate Governance of State-Owned Enterprises. / Peraturan Menteri Badan Usaha Milik Negara Nomor PER-01/MBU/2011 tentang Penerapan Tata Kelola Perusahaan Yang Baik (Good Corporate Governance) Pada Badan Usaha Milik Negara sebagaimana telah diubah dengan Peraturan Menteri Badan Usaha Milik Negara Nomor PER-09/MBU/2012 tentang Perubahan atas Peraturan Menteri Negara Badan Usaha Milik Negara Nomor PER-01/MBU/2011 Tentang Penerapan Tata Kelola Perusahaan Yang Baik (Good Corporate Governance) Pada Badan Usaha Milik Negara.