Outsourcing Service Agreement Template for Indonesia

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Key Requirements PROMPT example:

Outsourcing Service Agreement

"I need an Outsourcing Service Agreement for my Jakarta-based manufacturing company to engage an Indonesian service provider for facilities management and cleaning services, with service commencement planned for March 2025."

Document background
The Outsourcing Service Agreement is essential for businesses operating in Indonesia that wish to engage external service providers for specific business functions. This document is designed to comply with Indonesian regulations, particularly Law No. 13 of 2003 on Manpower and its implementing regulations, which set strict requirements for outsourcing arrangements. The agreement covers all crucial aspects of the outsourcing relationship, including service scope, performance metrics, compliance requirements, and worker protections. It is particularly important given Indonesia's specific restrictions on which activities can be outsourced and the mandatory protections required for outsourced workers. The document includes provisions for both domestic and international service providers, addressing language requirements, dispute resolution mechanisms, and regulatory compliance specific to the Indonesian jurisdiction.
Suggested Sections

1. Parties: Identification of the service provider and service recipient, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, business relationship, and purpose of the outsourcing arrangement

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Scope of Services: Detailed description of the outsourced services to be provided, ensuring compliance with Indonesian regulations on permissible outsourcing activities

5. Term and Renewal: Duration of the agreement, commencement date, and renewal terms

6. Service Provider's Obligations: Comprehensive list of service provider's responsibilities, including compliance with Indonesian labor laws

7. Service Recipient's Obligations: Responsibilities and obligations of the service recipient, including provision of access and information

8. Personnel Requirements: Specifications regarding the qualification, training, and management of outsourced personnel

9. Performance Standards: Service levels, quality metrics, and performance measurement criteria

10. Fees and Payment Terms: Pricing structure, payment schedule, invoicing requirements, and tax considerations

11. Compliance with Laws: Obligations to comply with Indonesian labor laws, social security requirements, and other relevant 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: Allocation of risks, limitation of liability, and indemnification obligations

15. Termination: Grounds for termination, notice requirements, and consequences of termination

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

17. General Provisions: Standard boilerplate clauses including notices, amendments, and language requirements per Law No. 24 of 2009

Optional Sections

1. Insurance: Required when specific insurance coverage needs to be maintained by either party

2. Data Protection: Required when personal data processing is involved in service delivery

3. Business Continuity: Required for critical services requiring disaster recovery and business continuity planning

4. Change Control: Required for complex services where formal processes for changes to services are needed

5. Transition Services: Required when complex handover or exit transition periods are necessary

6. Anti-Bribery and Corruption: Required when dealing with government contracts or multinational corporations

7. Force Majeure: Optional but recommended for long-term agreements to address unforeseen circumstances

8. Non-Competition: Required when there are specific competitive concerns to be addressed

9. Security Requirements: Required when services involve access to sensitive systems or facilities

Suggested Schedules

1. Schedule 1 - Service Specifications: Detailed description of services, deliverables, and technical requirements

2. Schedule 2 - Service Levels and KPIs: Specific performance metrics, measurement methods, and reporting requirements

3. Schedule 3 - Fee Schedule: Detailed pricing structure, rate cards, and payment terms

4. Schedule 4 - Personnel Requirements: Qualifications, experience levels, and specific requirements for key personnel

5. Schedule 5 - Approved Subcontractors: List of pre-approved subcontractors if applicable

6. Schedule 6 - Implementation Plan: Timeline and milestones for service implementation

7. Schedule 7 - Contact Details and Escalation Matrix: Key contact persons and escalation procedures

8. Schedule 8 - Required Insurance Coverage: Specific insurance types and coverage amounts

9. Appendix A - Form of Performance Report: Template for regular performance reporting

10. Appendix B - Security Protocols: Detailed security procedures and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Information Technology

Manufacturing

Business Process Operations

Facilities Management

Human Resources

Logistics and Supply Chain

Customer Service

Financial Services

Healthcare

Telecommunications

Retail

Industrial Services

Mining and Resources

Construction

Relevant Teams

Legal

Procurement

Operations

Human Resources

Compliance

Risk Management

Finance

Supply Chain

Business Development

Facilities Management

Contract Administration

Project Management Office

Relevant Roles

Chief Executive Officer

Chief Operating Officer

Chief Financial Officer

Legal Counsel

Procurement Manager

Operations Director

Human Resources Director

Compliance Officer

Contract Manager

Project Manager

Facility Manager

Supply Chain Manager

Risk Manager

Business Development Manager

General Counsel

Operations Manager

Service Delivery Manager

Industries
Law No. 13 of 2003 on Manpower: The primary labor law in Indonesia that provides the fundamental framework for employment relationships, including provisions on outsourcing arrangements and worker protections
Minister of Manpower Regulation No. 19 of 2012: Specific regulation on outsourcing conditions and requirements, defining which business activities can be outsourced and the procedures for outsourcing implementation
Indonesian Civil Code (KUHPerdata): Provides the basic legal framework for contracts and agreements in Indonesia, including contract formation, validity, and enforcement
Law No. 40 of 2007 on Limited Liability Companies: Regulates corporate entities in Indonesia, relevant for establishing the legal status and requirements of the contracting parties
Government Regulation No. 35 of 2021: Implementing regulation for fixed-term employment agreements, outsourcing, working hours, and employment termination
Law No. 25 of 2007 on Investment: Relevant for outsourcing agreements involving foreign service providers, governing foreign investment and business activities in Indonesia
Law No. 24 of 2009 on National Flag, Language, Emblem and Anthem: Requires agreements involving Indonesian parties to be drafted in Indonesian language (bilingual versions are permitted)
Minister of Manpower Decree No. 100 of 2004: Regulates the implementation of fixed-term employment agreements, which is relevant for outsourcing arrangements
Law No. 11 of 2020 on Job Creation (Omnibus Law): Recent comprehensive law that amended various provisions related to business, including changes to labor laws and outsourcing regulations
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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