Indonesia: The New Hot Spot?

In a blog posting that we wrote back in September on Singapore, we noted that for at least one firm, client interest in investing in resource-rich Indonesia was keeping the legal market in Singapore “extremely buoyant.”  Now it appears that some firms want to go one step further by establishing a foothold directly in Indonesia.  In the last month, two firms have announced tie-ups in Indonesia.  O’Melveny & Myers launched a formal association with commercial law firm Tumbuan & Partners and the UK’s Stephenson Harwood is about to launch a tie-up with Christian Teo Purwono & Partners, according to The Lawyer.  And this follows on the exclusive association that Allen & Overy established with Ginting & Reksodiputro, in 2010.

While international firms are still not permitted to have their own offices in Indonesia (many handle Indonesian work from offices in Hong Kong and Singapore), there is growing interest in the region.  Law firms and their corporate clients are attracted by work in the oil & gas, mining and natural resources sectors, as well as infrastructure projects.  With over 245 million people, Indonesia is the fourth largest country in the world by population, with an annual growth rate expected to be 6.4 percent this year.  Private consumption, investment in construction, increased commodity and agricultural exports, and growth in the manufacturing sector have all been contributing factors. Interest was heightened further following the enactment of the country’s 2009 mining law, which attempts to provide more regulatory certainty and to encourage new investment in the sector.  The law also removes most of the distinction between Indonesian and foreign investors.

Of course, many law firms have been active in the region for some time.  Among them are Herbert Smith and its 10-year affiliation with Hiswara Bunjamin & Tandjung and Baker & McKenzie’s association with Hadiputranto, Hadinoto & Partners, considered one of Indonesia’s leading law firms.  Australian firms are also prominent, many having established associations with local firms for 20 years or more. They include:

• Allens Arthur Robinson in association with Widyawan & Partners, a firm specializing in natural resources, infrastructure, banking and project finance
• Minter Ellison in a long-standing relationship with Makarim & Taira S
• Freehills in association with Soemadipradja & Taher since 1993
• Blake Dawson allied with Oentoeng Suria & Partners beginning in 2010 and before that with Soebagjo Jatim Djarot

Other firms with associations in Jakarta include UK firms, Norton Rose Group (Susandarini & Partners) and IP firm Rouse (Suryomurcito & Co.).

Posted by Marianne Purzycki