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Indonesian language requirement for contracts
In less than a month before his second inauguration, President Joko “Jokowi” Widodo issued a regulation on the use of Bahasa Indonesia in an attempt to clarify provisions of the 2009 Language Law.According to the Law, the use of Indonesian is mandatory in agreements or contracts involving Indonesian parties. If non-Indonesian parties are involved in such agreements, the agreements can “also” be written in English or in the national language of the non-Indonesian parties.
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The presidential regulation confirms the logical conception in the Language Law, namely, that the foreign language version is intended as the equivalent or the translation of the Indonesian version so that parties share the same understanding. (JP/Rafaela Chandra)
I
n less than a month before his second inauguration, President Joko “Jokowi” Widodo issued a regulation on the use of Bahasa Indonesia in an attempt to clarify provisions of the 2009 Language Law.
According to the Law, the use of Indonesian is mandatory in agreements or contracts involving Indonesian parties. If non-Indonesian parties are involved in such agreements, the agreements can “also” be written in English or in the national language of the non-Indonesian parties.
There are three points in the presidential regulation that will largely influence how business contracts (with non-Indonesian parties) are made.
First, the timing for the use or execution of Indonesian-version contracts or agreements. Second, the prevailing language in the case of inconsistencies and finally, the absence of legal consequences that should have been addressed in the regulation.
The presidential regulation confirms the logical conception in the Language Law, namely, that the foreign language version is intended as the equivalent or the translation of the Indonesian version so that parties share the same understanding.
It implies that the parties must first prepare the Indonesian version beforehand. Consequently, the parties should also execute the Indonesian version of the agreement at least at the same time as the foreign language version.
Confirmation of this conception may be a game-changer for it might transform what has been customary thus far, whereby parties execute the Indonesian version days after the execution of the English version.
