Outsourcing Contract Agreement Template for Indonesia

The Outsourcing Contract Agreement serves as a critical legal framework for businesses operating in Indonesia who wish to engage in outsourcing arrangements. This document is essential for compliance with Indonesian regulations, particularly the Manpower Law and its implementing regulations, which place specific requirements on outsourcing relationships. It is typically used when a company wants to outsource non-core business activities to specialized service providers, whether domestic or international. The agreement must address mandatory provisions under Indonesian law, including worker protection, business licensing requirements, and service delivery standards. It's particularly relevant in the context of Indonesia's evolving regulatory landscape, especially following the implementation of the Job Creation Law (Omnibus Law) which introduced significant changes to the outsourcing framework.

1. Parties: Identification of the service provider and service recipient, including their legal status and registered addresses

2. Background: Context of the agreement, business purpose, and confirmation that the provider meets Indonesian outsourcing requirements

3. Definitions: Key terms used throughout the agreement, including specific Indonesian legal and regulatory terms

4. Scope of Services: Detailed description of outsourced services, ensuring they comply with Indonesian regulations on permissible outsourced activities

5. Term and Renewal: Duration of the agreement and conditions for renewal, considering Indonesian regulatory requirements

6. Service Provider's Obligations: Core responsibilities including service delivery, compliance with labor laws, and maintenance of necessary licenses

7. Service Recipient's Obligations: Responsibilities including access provision, cooperation, and payment obligations

8. Personnel Requirements: Specifications for outsourced workers, including compliance with Indonesian labor regulations

9. Compensation and Payment Terms: Fee structure, payment schedule, and currency considerations

10. Performance Standards: Service levels, KPIs, and quality requirements

11. Compliance with Laws: Specific provisions ensuring compliance with Indonesian labor and outsourcing regulations

12. Confidentiality: Protection of confidential information and trade secrets

13. Intellectual Property Rights: Ownership and usage rights of IP created during service provision

14. Liability and Indemnification: Risk allocation and protection mechanisms

15. Termination: Grounds and procedures for contract termination, including regulatory requirements

16. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law provisions

17. General Provisions: Standard clauses including notices, amendments, and severability