Document background
The Factory Agreement serves as a fundamental document for establishing manufacturing operations in Indonesia, governed by Indonesian law and regulations. This agreement is essential when setting up production facilities, whether as a new operation or restructuring existing facilities, and is particularly relevant for both domestic and foreign investments in Indonesia's manufacturing sector. The Factory Agreement needs to comply with Law No. 3 of 2014 on Industry, labor regulations, and environmental requirements, while addressing operational specifics such as production capacity, quality standards, and facility management. It's commonly used when establishing manufacturing partnerships, setting up production facilities in industrial estates, or formalizing manufacturing arrangements between parties. The document typically includes comprehensive provisions for operational requirements, regulatory compliance, risk allocation, and dispute resolution mechanisms specific to the Indonesian legal context.
