Joint Operation Agreement Template for Indonesia

The Joint Operation Agreement is a crucial document used in Indonesian business transactions where two or more entities wish to collaborate on specific projects or business activities without creating a separate legal entity. This agreement type is particularly relevant in sectors with foreign investment restrictions or local content requirements, providing a framework for cooperation while maintaining separate legal identities. The document must comply with Indonesian investment laws, including Law No. 40 of 2007 (Company Law) and Law No. 25 of 2007 (Investment Law), and typically includes detailed provisions on operational control, profit sharing, risk allocation, and regulatory compliance. Joint Operation Agreements are commonly used in infrastructure projects, natural resource exploitation, and other sectors where combining complementary capabilities and resources is advantageous.

1. Parties: Identification and details of the parties entering into the joint operation

2. Background: Context and objectives of the joint operation arrangement

3. Definitions and Interpretation: Key terms used in the agreement and rules for interpretation

4. Scope of Cooperation: Detailed description of the joint operation activities and project scope

5. Duration: Term of the agreement including commencement date and conditions for extension

6. Contributions and Ownership: Parties' respective contributions (assets, capital, resources) and ownership arrangements

7. Management and Control: Governance structure, decision-making processes, and operational control

8. Rights and Obligations: Detailed responsibilities and rights of each party

9. Financial Arrangements: Revenue sharing, cost allocation, accounting procedures, and banking arrangements

10. Personnel and Employment: Staffing arrangements, secondment terms, and employment responsibilities

11. Intellectual Property: Ownership and usage rights of IP brought into or created during the joint operation

12. Confidentiality: Protection and handling of confidential information

13. Representations and Warranties: Standard and specific warranties given by each party

14. Compliance and Permits: Regulatory compliance requirements and responsibility for obtaining permits

15. Liability and Indemnification: Allocation of risks and indemnification obligations

16. Force Majeure: Events constituting force majeure and consequences

17. Termination: Grounds for termination and consequences

18. Dispute Resolution: Process for resolving disputes including jurisdiction and governing law

19. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment