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There has always been uncertainty around the data localisation requirement in Indonesia, which refers to the requirement in Government Regulation No. 82 of 2012 on Implementation of Electronic System and Transaction (“Regulation No. 82”).
Under Regulation No. 82, an electronic system operator that provides a public service must place its data center and disaster recovery center in Indonesia (refer to our previous e-bulletin for further details). However, Regulation No. 82 does not define “public service”, meaning that it has been difficult for electronic system operators in Indonesia to determine whether or not they are subject to the requirement.
The Ministry of Communication and Information Technology (“MOCIT”) has recently issued a draft amendment to Regulation No. 82 (“Draft Amendment”) which, amongst other things, amends the data localisation requirement.
The proposed new data localisation requirement
The Draft Amendment has gotten rid of the uncertainty caused by the idea of “public service” by removing this concept from the law altogether. Also, the threshold for triggering the data localisation requirement is higher (i.e. fewer people will fall under the data localisation requirement under Regulation No. 82) as only strategic electronic data must be placed and processed by electronic system operators at data centers and disaster recovery centers located in Indonesia. “Strategic electronic data” is defined as electronic data that affects in a strategic way the sustainability of the state’s administration and the state’s defense and security.
Therefore, any electronic data other than strategic electronic data may be placed and processed offshore by the electronic system operators if the Draft Amendment becomes law.
The result of the Draft Amendment (if it becomes law and subject to any further amendments or clarification from the relevant authorities) is that the processing of data by electronic system operators in Indonesia would no longer be subject to the data localisation requirement unless the data being processed meets the new definition of strategic electronic data.
While there has been no official announcement on when the Draft Amendment is to be enacted, we understand that it is likely to be issued early next year.