“The Enactment of the Omnibus Law and its Amendments to the Aviation Law”
On 2 November 2020, the Indonesian Government enacted Law Number 11 of 2020 on Job Creation (the “Omnibus Law”). The Omnibus Law itself was passed by the Indonesian House of Representative on 5 October 2020.
The objective of the enactment of the Omnibus Law is to attract more investment and make it easier to conduct business in Indonesia by simplifying or removing certain requirements and impediments. For such purpose, the Omnibus Law has amended more than 70 Indonesian sectoral laws, including aviation sector.
The laws and regulations which would take particular attention under this alert are concerning aviation under Law Number 1 of 2009 (“Aviation Law”).
We will focus on the important notes on amendments to the Aviation Law, as follows:
IMPORTANT NOTES ON AMENDMENTS TO THE AVIATION LAW
There are some notable changes to the Aviation Law under Omnibus Law, mainly related to the aircraft licensing in Indonesia. The government is focusing to simplify certain requirements related to aircraft licensing in Indonesia in order to attract more investors to enter into aviation business in Indonesia. Other notable changes are related to the change of authority. Through the enactment of Omnibus Law, the government has made an effort to centralize the licensing within the Central Government, which were previously under Regional Governments and/or the Minister of Transportation. Centralizing the licensing through the Central Government will allow for more simplified processes and will reduce inconsistent and overlapping regulations between the Regional and Central Government.
Detail of substantive changes to the Aviation Law are as follows:
Aircraft Licensing in Indonesia
Aviation Law regulates the requirements to obtain various aircraft licensing in Indonesia, whether the licenses that need to be obtained by the aircraft operator, licenses attached to the aircraft, or other licenses related to the aviation business in Indonesia. However, by the enactment of Omnibus Law, certain provisions and requirements to obtain several aircraft licensing in Indonesia have been removed, among other the technical and/or administrative requirements to obtain: (i) Certificate for Aircraft Manufacturer (Article 19); (ii) Certificate of Registration (Article 26); (iii) Certificate of Airworthiness (Article 37); (iv) Air Operator Certificate (Article 42); (v) Operating Certificate (Article 43); (vi) Certificate of Aircraft Maintenance Organization (Article 48); (vii) License for Aircraft Personnel; (viii) License for Navigation Personnel.
The administrative requirements to obtain this business license also has been removed through Omnibus Law (Article 109).
Minimum Aircraft Requirement
Previously, under Aviation Law, the operator requires to (i) own minimum 5 (five) aircraft for scheduled commercial air transportation; (ii) own minimum one (1) aircraft and possess minimum 2 (two) aircraft for non-scheduled commercial air transportation; and (iii) own minimum one (1) aircraft and possess minimum 2 (two) aircraft for cargo commercial air transportation. However, under the Omnibus Law, the minimum aircraft requirement which shall be owned and possessed by operator no longer specified. Omnibus Law only mentioned the obligation of operator to own and possess aircraft in certain number.
It is stated under Omnibus Law that the guidelines and procedures to obtain the above-mentioned licenses will be further regulated under Government Regulation. However, up to the issuance date of this alert, such guidelines and procedures are yet to be announced by the government. The absence of the implementing regulation has raised the question as to which requirements are now applicable to obtain such licenses, considering there is contradiction to some requirements regulated under Omnibus Law and implementing regulation of Aviation Law. Based on verbal confirmation from the Minister of Transportation officer, if there is any discrepancy between requirements under Omnibus Law and implementing regulation of Aviation Law, then in practice, the implementing regulation of Aviation Law will still prevail to the extent the Government Regulations which governed the guidelines and procedures to obtain the above-mentioned licenses have yet to be issued.
Based on the above explanation, unfortunately, even though the Omnibus Law has come into effect, certain provisions may not be implemented immediately and effectively, thus require relevant implementing regulation through further rules and legislation.
We expect that further implementing regulation will give clarity on more detailed requirement and the government body authorized for the aircraft licensing in Indonesia.
We hope the above explanation is sufficient.
Please note that the information contained in this alert should be only used as a general guideline with respect to the subject hereof and may not contain legal advice for your specific cases. The information herein should not be used or relied upon in regard to any particular facts or circumstances without seeking legal advice from us. We will not be liable nor be responsible for any consequences, damages or other similar forms which may be suffered by any party who had used or relied upon this alert.
If you require further information on the new regulation, please do not hesitate to contact:
Nurjadin Sumono Mulyadi & Partners
Vera Noviani Harwanto
Annysa Ayu Putri
Andika Immanuel Simatupang