11 ASIAN LEGAL BUSINESS – AUGUST 2024 WWW.LEGALBUSINESSONLINE.COM government budget need to be allocated to the health sector. In a bid to enhance the efficiency of the national government’s health expenditure, the New Health Law has now replaced the mandatory spending allocation for healthcare with a performance-based budgeting system. The allocation budget will be set out in the Health Sector Masterplan, a document that will be determined by the president and the central government. “This masterplan will guide the allocation of resources and the achievement of specific objectives,” explains Siregar, but noting that the details of the master plan are still unclear at this stage. This arrangement has also given rise to questions on whether the abolition of mandatory health sector spending will affect public-private partnerships (PPP) or investment opportunities in healthcare infrastructure and services in Indonesia. Siregar acknowledges that by removing mandatory health sector spending, a PPP project’s structure of investment in healthcare infrastructure and services may be affected. “But based on the precedents, the government support will generally be tailored to the project’s needs,” she says. NEW GUARDIAN In a move that is expected to receive endorsement by the public, the New Health Law has tasked a new disciplinary council, or majlis, with addressing the throning issue of medical malpractice. “In case of an indication of unlawful conduct in health services, the relevant medical or health personnel must first seek the preliminary recommendation of an assembly (majlis) to be formed by the Minister of Health that will be responsible for the professional disciplinary matters,” notes Siregar. The disciplinary council is supposed to give its recommendation after receiving a written request from the investigators of the Indonesian national police. The recommendation will address the question of whether an investigation may be conducted. The council will also have the power to impose sanctions. “According to New Health Law, a medical or healthcare practitioner whose negligence results in a patient suffering severe injury shall be subject to imprisonment for up to three years or a fine of up to 250 million rupiah or $15,720; or death, for which the penalty is imprisonment for up to five years or a fine of up to 500 million rupiah,” notes Siregar. But the new law hasn’t been clear about the interpretation of “mistakes” and “negligence.” “This lack of clarity could lead to different interpretations and judicial discretion, posing potential challenges in the implementation of the new regulations,” says Siregar. In addition, “There is also a question as to whether this medical liability provision is also applicable to the overseas-trained healthcare professionals who is practicing in Indonesia and how to enforce it,” she adds. BROUGHT TO YOU BY WILLIAM HENDRIK & SIREGAR DJOJONEGORO A conversation with Zippora Siregar and Stefy Yully Nataly Can you provide specific examples of recent healthcare-related cases or transactions your firm has handled in Indonesia? What were the key challenges and how did your team overcome them? Within the last few years, we have handled numerous. We assist and advice in healthcare transactions, particularly on mergers and acquisitions, financing and cooperation between the Indonesian and International healthcare providers. We are also the key player in the preparation and development of the Specific Economic Zone Project in healthcare sector (the “SEZ Project of Healthcare”). The SEZ Project of Healthcare marks the development of healthcare in Indonesia through its aim promoting Indonesia as a medical tourism destination by attracting foreign patients to seek healthcare in Indonesia. As one of the Indonesian Government’s top goals, this project not only collaborates with prestigious international healthcare providers but also offers an attractive tax incentive package for investors under the Specific Economic Zone (SEZ) framework. One of the key challenges is finding legal certainty in the Indonesian healthcare law and its implementing regulations. Hence, this poses a challenge to provide a strong position of legal advice for our client. Nonetheless, the Indonesian Government’s recent enactment of Law Number 17 of 2023 (‘New Health Law’) and the issuance of amendment of detail implementing regulations in the ministry level or organization body also need to be made in order to be in line with the spirit of New Health Law and GR 28 of 2024. To circumvent any challenges in relation to the implementation of the new laws, our team undergoes continuous training and maintain open lines of communication with the relevant regulatory authorities to ensure that our advice is aligned with the latest laws of the Indonesian healthcare. What unique expertise or resources does your firm offer that sets you apart from other law firms when it comes to handling healthcare matters in Indonesia? One of our firm’s specialization is in the healthcare sector in Indonesia. The firm specializes through our unique blend of expertise and resources. We have a deep understanding of both the local regulatory framework and the complex regulatory of national and international healthcare standards. Our team includes professionals with extensive experience in the financing, project development and acquisition of companies within the healthcare sector. We are also active within the healthcare sector and actively communicate with the key players to get some insights on any update of the legal issues. Government Regulation Number 28 of 2024 (‘GR 28 of 2024’) as its implementing regulation demonstrate a significant commitment to advancing the healthcare sector. However, since it is something new, these legislatives still need to be tested in practice. These legislative should provide clear guidelines and reinforce legal certainty, creating a stable and promising environment for investment and innovation. In addition, an adjustment and 1 - Zippora Siregar, Senior Partner E: zippora.siregar@whsdlaw.com 2 - Stefy Yully Nataly, Partner E: stefy.nataly@whsdlaw.com William Hendrik & Siregar Djojonegoro (“WH&SD”) W: www.whsdlaw.com 2 1
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