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A Consortium Agreement sets out the rules and responsibilities when multiple companies join forces to tackle a large project in Indonesia. It's commonly used for major infrastructure work, energy projects, or government tenders where sharing resources and expertise makes more sense than going it alone.

Under Indonesian law, these agreements spell out each member's financial stakes, work responsibilities, and how they'll handle profits or losses together. The document also covers important details like project leadership, decision-making processes, and how members can join or leave the group - essential elements for complex projects governed by regulations like the Construction Services Law No. 2/2017.

Consider a Consortium Agreement when your company needs to partner with others on major Indonesian infrastructure or construction projects that exceed your individual capabilities. This agreement becomes essential for government tenders requiring specialized expertise, substantial funding, or complex technical resources that no single company can provide alone.

The timing is crucial when forming joint ventures for large-scale public works, energy projects, or transportation developments. Indonesian regulations, particularly for state-funded projects, often require formal consortium structures. Having this agreement in place before submitting bids helps clarify roles, protect interests, and ensure compliance with local partnership requirements.

• Horizontal Consortium: Used for infrastructure projects where partners contribute equally and share management control - common in toll road or airport developments
• Vertical Consortium: Partners take different roles based on expertise, with a clear lead company - typical in construction projects with contractors and specialists
• Project-Specific Consortium: Formed for a single venture like a government tender, dissolving after completion
• Long-Term Strategic Consortium: Ongoing partnerships for multiple projects, often seen in energy sector developments
• Local-Foreign Consortium: Structured to meet Indonesian investment regulations requiring local partner participation in specific sectors

• Lead Company: Usually the largest or most experienced partner who initiates the Consortium Agreement and coordinates the overall project execution
• Member Companies: Partner organizations contributing specific expertise, resources, or local market access to fulfill project requirements
• Legal Counsel: Corporate lawyers who draft and review agreements to ensure compliance with Indonesian partnership laws and sector-specific regulations
• Government Agencies: Regulatory bodies that approve consortium structures, especially for public infrastructure projects or restricted sectors
• Project Managers: Key personnel responsible for implementing the agreement's operational framework and coordinating between consortium members

• Project Scope: Define the venture's exact objectives, timeline, and deliverables in clear, measurable terms
• Partner Details: Gather complete legal information, licenses, and track records of all participating companies
• Resource Allocation: Document each member's contributions, including financial commitments, equipment, and personnel
• Management Structure: Outline decision-making processes, voting rights, and leadership roles within the consortium
• Regulatory Requirements: Check sector-specific Indonesian regulations and required permits for consortium operations
• Exit Strategy: Plan conditions for membership changes, project completion, or early termination scenarios

• Identification Section: Full legal names, addresses, and registration details of all consortium members
• Purpose Clause: Clear statement of consortium objectives and scope aligned with Indonesian business laws
• Contribution Details: Specific financial, technical, and resource commitments from each member
• Governance Structure: Decision-making procedures, voting rights, and management responsibilities
• Profit Sharing: Formula for distributing profits, losses, and liabilities among members
• Dispute Resolution: Clear mechanisms following Indonesian arbitration laws
• Term and Termination: Duration, exit provisions, and project completion criteria

A Consortium Agreement differs significantly from a Business Acquisition Agreement in both purpose and structure. While both involve multiple parties and complex transactions, they serve distinct business objectives in Indonesia's legal framework.

• Purpose and Duration: Consortium Agreements create temporary partnerships for specific projects, while Business Acquisition Agreements facilitate permanent ownership transfers
• Resource Sharing: Consortiums maintain separate member identities with shared resources, whereas acquisitions merge entities completely
• Control Structure: Consortium members retain individual autonomy while coordinating efforts; acquisitions transfer full control to the buyer
• Risk Distribution: Consortiums spread project risks among members, but acquisitions concentrate all risks with the acquiring company
• Regulatory Requirements: Consortiums face project-specific oversight, while acquisitions must comply with Indonesian merger and acquisition laws