LIPPO-MAPLETREE - Lippo Malls Indonesia Retail Trust - Investor ...

Overview of relevant laws and regulations in IndonesiaREGULATION OF THE INDONESIAN ENVIRONMENTAL LAWS AND REGULATIONSEnvironmental protection in Indonesia is governed by various laws, regulations and decrees of which theProperties are subject, Under the Decree of State Minister for Environmental Affairs No. 17/2001 datedMay 22, 2001 concerning Business and/or Action Plans which must be completed with Analysis ofEnvironmental Impact, an Analysis of Environmental Impacts must be conducted on some of theProperties to study the major and significant impacts on businesses and/or activities planned in aparticular environment which will be needed for the process of making decisions on the execution ofthe businesses and/or activities. Pursuant to Government Regulation No. 27 of 1999 dated May 7, 1999concerning Analysis of Environmental Impacts, the Analysis of Environmental Impacts constitutes arequirement which must be fulfilled to obtain a license to conduct a business’ and/or activity from thecompetent authority. An Assessment Committee formed by the Indonesian government will evaluate theAnalysis of Environmental Impacts based on the framework of reference, the environmental impactassessment report, or AMDAL report, an environmental management plan (“RKL”) and an environmentalmonitoring plan (“RPL”). A framework of reference is the scope of the analysis of environmental impactswhich will be the result of scope-delineation. AMDAL is a careful and in-depth study of the major andsignificant impacts of a business and/or activity plan. RKL is a plan to handle the major and significantimpacts on the environment as the consequence of a business and/or activity plan. RPL is a plan to monitorthe components of the environment exposed to the major and significant impacts as the consequence of abusiness and/or activity plan.For other business plans which do not have to be completed with the AMDAL document, an EnvironmentManagement Efforts (“UKL”) and Environment Monitoring Efforts or UPL would have to be prepared.Under Law No. 23 of 1997 dated September 19, 1997 concerning Environmental Management, theProperties are also subject to regulations relating to the management of certain materials and waste andare required to obtain a licence in order to operate, and to reduce, process and accumulate such waste .Such licences may be revoked and operations may be required to cease if the regulations relating to suchwaste are violated.REGULATION ON MODERN AND PRIVATE MARKET BUSINESSUnder the Decision of the Minister of Trade and Industry of the Republic of Indonesia No. 107/MPP/Kep/2/1998, dated 27 February 1998 on the Provisions and Procedures for the Granting of Modern MarketBusiness Licences (“IUPM”), every company that engages in modern market business activities must beobligated to obtain a Modern Market Business Licence.Modern market is defined as markets established by government, private companies, and cooperatives inthe forms of malls, supermarkets, department stores and shopping centres, the management of whichmust be carried out in a modern manner that prioritises comfort in shopping with a single management,having relatively strong capital with use of fixed price labels. The IUPM is granted by the Minister of Tradeand Industry and is valid so long as the company engages in modern market activities. The IUPM is issuedbased on the domicile or location of the modern market and the company must obtain a new IUPM if thedomicile or location of the modern market is changed.The modern market is obliged to cooperate with small and medium scale enterprises and cooperatives andtraditional markets under a partnership pattern. If it fails to do this, a written warning letter will be given bythe Directorate General of Domestic Trade and the IUPM can be frozen for 6 months period as of theissuance of the warning letter.A Modern Market company that has obtained an IUPM is obliged to submit a report once every 6 months atthe latest on 15 July and 15 January to the Director General of Domestic Trade though the Minister of Tradeand Industry may from time to time request the company to submit a report on its business activities. Awritten warning will be given to a modern market company that has obtained an IUPM if, among otherthings, it does not submit the periodical report or carries out business that is not in accordance with itsIUPM. The IUPM can be revoked if it is obtained on the basis of incorrect or forged information, or if on thelapse of the period of the warning letter the company has not performed its obligations required above themodern market company or has been found guilty by a final and binding court decision of violation ofIntellectual Property or of committing a criminal offence.246