The Cooperative Draft Bill Expands the Scope of Cooperatives in Rill Sector

The Draft Bill on Fourth Amendment to Law No. 25 of 1992 on Cooperatives (“Cooperative Draft Bill”) has been approved in the first-level discussion by the Legislation Body of the House of Representatives of the Republic of Indonesia (Badan Legislasi – “Baleg”). Baleg Chairman, Bob Hasan explained that the expansion of the scope of cooperatives in the form of business entities and the real sector is one of the key points of change in the Cooperative Draft Bill.

“For cooperatives that have developed, they can then establish a Limited Liability Company, but its authority will be outside the cooperative,” Bob told Hukumonline.

From the Cooperative Draft Bill document owned by Hukumonline, the expansion of cooperative businesses in the real sector is reflected in the addition of Articles 43C and 43D. Article 43C paragraph (1) explains that cooperatives in the real sector may carry out: a. joint procurement; b. joint production; c. joint marketing; d. management of intellectual property rights; e. business contracts to ensure market certainty for members’ products; f. downstream processing to increase added value; g. supply chain-based business development; and/or, adoption and innovation of technology.