Foreign lawyers face Indonesia ethics test

October 16, 2013 8:32 am

Foreign lawyers face Indonesia ethics test

By Ben Bland in Jakarta

From corrupt judges to dodgy lawyers and capricious verdicts, Indonesia’s legal system is widely acknowledged to be in crisis. But amid a climate of growing economic protectionism, Indonesia’s bar association has a new target in its sights: foreign lawyers. Although they are banned from practising Indonesian law and can only work as international legal consultants, the bar association is proposing a new requirement that foreign lawyers must pass an ethics exam in Indonesian if they want to keep working in the country.That could be bad news for high-earning Jakarta-based partners at top international firms such as Norton Rose, Allen & Overy and Herbert Smith Freehills, who have profited from the boom of the past decade without spending too much time buried in Indonesian grammar text books.

“It seems like another protectionist measure but it’s absurd given that we’re not allowed to practise Indonesian law,” said one foreign advocate in Jakarta. “Not many of us are fluent in Indonesian so if this proposal is enforced, many would have to leave.”

As in other emerging markets, the cohort of 50-60 international lawyers in Indonesia have played a crucial role in facilitating cross-border investments, resolving international disputes and advising on complex corporate restructurings.

But economic nationalism has been on the rise in southeast Asia’s biggest economy ahead of next year’s elections, with many politicians vowing to curb foreign influence.

Otto Hasibuan, chairman of the Indonesian advocates association (Peradi), which regulates lawyers alongside the government, said the proposed new requirement was not driven by protectionism but the desire to create “fair treatment for all”, as Indonesian lawyers must sit the ethics exam.

“If we wanted to protect our lawyers, we would not allow foreign lawyers to practise here,” said Mr Hasibuan, a high-profile lawyer who is defending Indonesia’s chief justice following his recent arrest on allegations of bribery.

Peradi will make a final decision on the suggested measure at a board meeting in the next two weeks.

I can read and write Indonesian and it makes it easier for me. Somebody who understands the language and culture better can actually make a difference

– Azman Jaafar, a partner at Taylor Wessing

Behind closed doors, many foreign lawyers have been lobbying against the proposal, arguing that they already face tough restrictions such as the obligation to perform 120 hours of pro bono work a year, and the requirement for international firms to second their partners to affiliated local firms rather than set up standalone offices.

They also point out that the proposed clampdown comes as some neighbours such as Malaysia are opening their market to foreign lawyers.

However, not all are opposed to it.

Azman Jaafar, a partner at RHTLaw Taylor Wessing in Singapore who spends two weeks a month working in Jakarta, said that he understood the rationale behind having the exam in Indonesian.

“You can see it as an attempt to make it difficult for people taking it to pass but there’s also a cultural element to it,” he said. “I can read and write Indonesian and it makes it easier for me. Somebody who understands the language and culture better can actually make a difference.”

But he urged Indonesia to clarify the rules in order to reduce the confusion that so often surrounds legal issues and undermines investor confidence.

“The difficulty with restrictions [in Indonesia] is not knowing what they are and not knowing what’s going to happen next,” he said. “Are they going to tighten the noose?”