August 17th is Indonesia’s independence day. In this special month, our current edition tries to address subjects significant to the country in terms of law reform. How the Constitutional Court plays their significant role in the country’s democratisation process seems to be taken for granted by other state institutions. Or the fact that returning to the state guidelines policy, which undermines the participating process from the public, is not the best way for development. Plus, selecting future justices for the Supreme Court should not only be a transparent process but should also be based on individual merit.
These are just samples from our special edition in August. By selecting several significant subjects, we hope our concern on the importance and the future of law reform in Indonesia is shared with our readers.
The LRWD Team


Constitutional Court

Disregarding Constitutional Court Decisions Will Cost the Constitution Itself

The initial conception of the Constitutional Court was to strengthen checks and balances between state institutions; and foremost to protect citizen’s constitutional rights. The presence of the Constitutional Court gave solutions to previous constitutional problems from the prior regime. Moreover, the Constitutional Court gives way to people who want to challenge a particular law they consider violating their constitutional rights.

Since 2003, the Constitutional Court has granted 187 judicial review cases. The problem is, state agencies usually don’t respond positively to Constitutional Court decisions. Several examples are, first, Constitutional Court Decision No.01-021-022/PUU-I/2003, which was vacated by President Regulation No. 55/2005 regarding the liberalization of the electricity supply market. Second, Decision No. 10/PUU-VI/2008, which was overruled by Law No. 8/2012 regarding residency requirements for the Regional Representative Council. Third, Decision No.34/PUU-XI/2013, which was deviated by Supreme Court Regulation No. 7 2014 regarding the opportunity for convicted persons to apply a judicial review more than once. Also, Decision No. 82/PUU-XI/2013, which was waived by the Gorontalo Regent Circular No. 200/BKBPP/182/IV/2015 concerning the rules for not facilitating or giving assistance to unlisted organizations. By establishing regulations with content disregarding Constitutional Court decisions, such gestures from the executives could be perceived as ignoring the Constitutional Court.

How the executive branch responds to the Constitutional Court displays an attributed approach common in Indonesian bureaucracies called the “sectoral ego”. Using the “sectoral ego” logic, by complying with the Constitutional Court, agencies are considered to lose respect from other institutions. Actually, the Constitutional Court has tried to make their decisions more executable and with less inconsistencies by providing decision models. The first one would be applying the constitutional conditional model, like in decision No. 10/PUU-VI/2008 regarding e-voting in local elections. The second is applying the unconstitutional conditional model, like in decision No. 4/PUU-VII/2009 on limitations for candidates in the local parliament who were once convicted and sentenced to more than 5 years. The limited constitutional model is reflected in Constitutional Court Decision No. 016/PUU-IV/2006 while establishing the Corruption Court. The formulating new norms model is reflected in Constitutional Court decision No. 5/PUU-V/2007 on independent candidates in local elections.

However, these Constitutional Court decision models are not enough to guarantee positive responses from the executives. Reflecting on this, there are several suggestions towards ensuring the consistency of Constitutional Court decisions. First, reminding the state agencies that they should comply with the Constitutional Court decision, as practiced by former Chief Justice of the Constitutional Court, Jimly Asshidiqie, who sent a letter to President Susilo Bambang Yudhoyono, in which he posed the consistency of Presidential Decree No. 55/2005.  Second, using a structural approach by forming open forums consisting of members of the executive branch and Constitutional Court, who will evaluate how the Constitutional Court decisions are being implemented. The idea was presented by Christopher F. Zorn in his book “Deliberative Democracy and the Institution of Judicial Review”. Third, by giving the Constitutional Court a constitutional complaint just like in South Korea. Fourth, by criminalizing those who waive Constitutional Court decisions, just like in Thailand. (MRW)



Criminal-Related Policies within 18 Years of Reform

The 1998 reformation covered all sectors and was not only related to the political field. The reformation was not just a momentum that occurred once and finished; it is an ongoing process. In the legal sector, the 1998 reformation was the starting point to encourage democratization of the law and more protection of human rights. During the 18-year journey of the reformation, the situation has shifted to the opposite side for the worse; an increasing number of criminal sanctions being continuously produced is a tell-tale sign.

From 1998-2014, there were 1.601 criminal acts that have been arranged in various legislations; as many as 885 are criminal acts that have previously existed, while the remaining 716 are new. The increasing number of new criminal acts in law means more deeds being prohibited and threatened with sanctions for those who violate it. More arrangements of criminal acts means a bigger role of the State in controlling the behavior of its people. At a certain point, there is large potential towards the violation of human rights.

The perception that a law cannot be enforced if there is no sanction needs to be demolished. Sanctions are created to resolve problematic behaviors when another method has been implemented and has turned out to be unsuccessful. The formulation of sanctions should also be clear, not inflict multi-interpretation, and not violate a person’s right in the slightest way. At the end of the day, criminal-related policies in the framework of political legislation needs to be formulated by legislators themselves. To achieve this goal, the government needs to draw up guidelines for criminal-related policies. These guidelines would be useful as a reference to determine which deeds will be set as criminal acts and how heavy the sanctions are to be imposed. Therefore, the determined criminal sanctions are not too excessive and not cause insecurity towards society. The government will be able to build the politics of criminalization through these criminal-related policies guidelines. (MSG)


Legal Policy

Democratization of Regional Election in Post-Reform Era

Regional elections held in order to elect local leaders directly is one aspect of democratization in Indonesia post 1998. The phrase “democratically elected” in Article 18E of the constitution could lead to a multiple interpretations; whether those running for office should be directly elected by the people or by the parliament. Direct regional elections is one form of democratization in Indonesia, especially in the post-reform era. Debates about the regional election as an electoral regime (Rezim Pemilu) or local government regime (Rezim Pemda) has paved the way for regional election mechanisms in Indonesia. The phrase ‘elected democratically’ in the Article 18E of the Constitution led to multiple interpretations on whether representatives should elected by the people or through a representative mechanism through the Regional House of Representatives (Dewan Perwakilan Rakyat Daerah/DPRD). However, recent dynamics show that the Government insisted that regional elections should be done directly by the people.

Regional elections also provide the opportunity for independent candidates to compete for office. This means it opens more doors for those wanting to run and provides alternatives for the constituents. However, in terms of election result disputes, Constitutional Court Decision No. 97/PUU-XII/2013 made the Constitutional Court no longer have the authority to settle any regional election disputes. A specific tribunal would be established, according to Law No. 8/2015, to settle election result disputes. Until such a tribunal is established, the Constitutional Court is still going to handle election disputes.

In December 2015, Indonesia already simultaneously held its first local elections. There are three lesson to be learnt from the first experience. First, in several regions, there was minimal participation and regeneration from political party cadres. Blitar, Tasikmalaya and North Timor Tengah are examples of regions that did not have candidates for mayors. The irony is, the Government did not anticipate such situations, thus creating even more challenges. Second, the election dispute threshold creates a problem since most disputed cases are rejected because they do not pass the maximum allotted count of 2%. Third, the Local Election Law is not comprehensive enough to anticipate maladministration and election felony since suspected felons are still able to run for office.

Despite recent developments being positive towards democratization, conducting the local election itself is not immune from challenges that, if inadequately responded, could tarnish the young democracy itself. The local election implementation is still unable to escape corruption and unmerited political dynasties. Corruption cases involving Akil Mochtar, the former chair in the Constitutional Court, was a local election one. One of the contributing factors is the law on elections and local elections. Both laws were made in a relatively short time, resulting in minimum evaluation from stakeholders. On top of that, it is mandatory to improve the election law regime. In fact, proper codification is urgently needed to make the election law responsive to contemporary challenges, especially towards local elections that were held simultaneously since December of 2015. (IHM)


Constitutional Law and Politics

Why Returning to the Guidelines of State Policies (GBHN) is a Setback for Indonesia

The idea to revive the Guidelines of State Policies (Garis Besar Haluan Negara – GBHN) has become stronger. It was based on arguments posed by Indonesian Democratic Party of Struggle Chairperson, Megawati Sukarnoputri, in early 2016 during her party’s annual meeting. According to Megawati, the development direction after the GBHN was revoked is unclear and has drifted from the Pancasila and the 1945 Constitution. Such an assessment, however, is a questionable one. However, the question arises whether a period of fifteen years is enough to assess the implementation of fundamental towards the Constitution, let alone to return provisions to its original state. There has to be a more thorough assessment to measure whether or not the current development planning is working out well rather than just accusing it of being unclear based on sentimental reasons.

There are two dimensions that cannot be separated when discussing GBHN as a tool of development in Indonesia. The first one views the GBHN as an instrument of development planning and the second one views the GBHN as a symbol of supreme power of the MPR (Majelis Permusyawaratan Rakyat/People’s Consultative Assembly). As an instrument of development, the guidelines have been used since the time of President Sukarno up until President Soeharto. The development directives was decided by the President and confirmed by the Assembly (MPR) through MPR Regulations (Ketetapan MPR/TAP MPR). After 1998, the MPR released Regulation Number IV/MPR/1999 on the Guidelines of State Policies for the 1999-2004 Period. In their Regulation, the Assembly appointed the President and House of Representatives (Dewan Perwakilan Rakyat/DPR) to design the National Development Program (Program Pembangunan Nasional/Propenas) and the Annual Development Plan (Rencana Pembangunan Tahunan/REPETA), which contains the National Budget (Anggaran Pendapatan dan Belanja Negara/APBN). In 2000, Law No. 25/2000 on the National Development Program for the 2000-2004 Period was enacted. After Law No. 25/2000, the development planning process was based on Law No. 25/2004 on National Development Planning System.

The GBHN is not only correlated with the development planning direction, it also represents the MPR as the institution who holds the highest authority in interpreting the GBHN. Designing the GBHN implies that the MPR has the authority to evaluate the development process, which includes evaluating how the Executive exercises power. According to Article 6 Paragraph 2 of the Constitution, the MPR has the authority to elect the President and Vice President. Despite there being no explicit line in the Constitution, the MPR is considered to also have the power to oust both the President and the Vice President.

Back in 1967, the MPR was able to discharge President Sukarno and also President Abdurrahman Wahid in 2001. The MPR states that both presidents were ousted based on the argument that both did not implement state policies and should be held accountable for it since they held the mandate from the MPR. By stating “not implementing state policies’, it clearly refers to the GBHN and its interpretation becoming monopolized by the MPR. Such arrangements do not follow the logic of the checks and balances principle in contemporary Indonesian constitutional law. After the amendment in 2002, the MPR still holds the power of swearing in for both the President and the Vice President.

The idea to return the power back to the MPR in designing the country’s development program would make the MPR the sole interpreter of the development process. Such a decision would provide a base for further power, which poses state agencies to be held liable for the way they carry out development programs to the MPR. Providing the MPR with a new power regarding the country’s development program will hold back Indonesia from being consistent with the presidential system it tries to uphold. (FN)


Legal Policy

Post-Reform Economic Regulations and Policies in Indonesia

Eighteen years of reform has been ongoing since 1998. One of the main causes of the collapse of the New Order regime was a terrible economic crisis due to our fragile economic foundation. Although controversial, the involvement of the International Monetary Fund (IMF) to support this Republic in fact unmasked that fragility, including from regulatory aspects as the foundation of Indonesia’s economic policy. There are a number of related legal regulations in the field of economics that are relevant to be presented, but due to limited writing space, we will discuss the most important and influential towards the direction of economic policy in Indonesia. Throughout the 18-year reform, there are at least three notes regarding the direction of economic regulations and policies, which are: (1) the beginning of the reform, (2) the reform of investment and corporate law, and (3) trade and investment liberalization.

In the early days of reform, at least three important laws were passed; (1) Government Regulation in Lieu of Law No. 1/1998 on Bankruptcy (Bankruptcy Law), (2) Law No. 5/1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition (Anti-Monopoly Law), and (3) Law No. 8/1999 on Consumer Protection (Consumers’ Law). These regulations also gave birth to three new agencies, namely the Commercial Court, the Business Competition Supervisory Commission (Komisi Pengawas Persaingan Usaha/KPPU), and the Consumer Dispute Resolution Body (Badan Penyelesaian Sengketa Konsumen/BPSK) respectively. All three agencies are still running well up to now.

Five years after the reform, Law No. 19/2003 on State-Owned Enterprises (SOEs) was promulgated. At this point, privatization began. Although a company is a state-owned enterprise, its status is equated with private companies and SOEs are encouraged to compete in order to achieve growth. Law No. 25/2007 on Investment (Investment Law) and Law No. 40/2007 on Limited Liability Companies (Company Law) are important regulatory changes after the reform. The Investment Law encourages domestic and foreign investments to Indonesia in order to improve the economy. It replaces Law No. 1/1967 concerning Foreign Direct Investment and Law 6/1968 on Domestic Investment that are no longer relevant in the current situation.

Another thing that should be of concern is the allegation that the reformation has given birth to neo-liberalism. Is this true? Not entirely. Economic liberalization has started since Indonesia signed the Agreement Establishing the World Trade Organization (WTO agreement) in 1994 and ratified the WTO agreement in the same year. It all happened during the Soeharto era. Indonesia is bound to open the tap of foreign investment and trade to other countries in certain sectors where Indonesia has committed to open. The reformation era was basically implementing commitments that Indonesia had already signed in the previous regime.

Two years before the signing of the WTO agreement, Indonesia signed a Common Effective Preferential Tariff (CEPT) in 1992, which opened the door for the liberalization of trade, services and investment on the regional level. The CEPT became the forerunner of the birth of the ASEAN Economic Community in 2015. The openness of business sectors is the result of Indonesia’s commitment on international and regional levels. In addition towards strengthening the competitive level of Indonesia, this commitment is carried out to prevent Indonesia from economic isolation.

The challenge that arises is regarding the protection of domestic economic interests. For regulators and policy makers, openness is a necessity. However, protection is also an obligation. Efforts to protect the interests of national businesses without undermining potential for foreign investment should be done through the making of proportionate regulations and policies. The efforts should be done by paying attention to situational contexts and the characteristics of each type of business.

Last but not least, an important question that has to be answered by all of us is whether Indonesia’s economic policies has been in accordance with Article 33 of the 1945 Constitution or has it strayed afar? Of course, further study is needed on this matter; this article does not provide answers to that question. (MFA)


Supreme Court and the Judiciary

The Recruitment, Promotion, and Mutation System of Judges in Post-Reformation Era

The vision of the Indonesian Supreme Court (Mahkamah Agung/MA), “The Realization of a Glorious Indonesian Judiciary” is still far from its expectations. Judicial officials, ranging from clerks to judges, have been subjected as suspects in post-reformation graft cases by the Corruption Eradication Commission (Komisi Pemberantasan Korupsi/KPK), injuring the public’s trust in the judicial institution. One of the efforts on judicial reform, namely the management and development of human resources -especially judges- to create professional personnel, is worth scrutinizing. What should be primarily highlighted are matters related to the implementation of the recruitment, promotion, and mutation system.

In managing judges, the Supreme Court does not work by themselves. The Judicial Commission (Komisi Yudisial/KY) was mandated by the Constitution to maintain and uphold the honor, dignity, and behavior of judges. Another authority mandated to the Judicial Commission is to work side-by-side with the Supreme Court to recruit judges from the district courts. Unfortunately, this mandate has never been implemented.

The Judicial Commission’s authority to participate in the recruitment of judges was questioned by the Association of Indonesian Judges (Ikatan Hakim Indonesia/IKAHI) and had finally been revoked by Constitutional Court (Mahkamah Konstitusi/MK) Decision No. 43/PUU-XIII/2015. The Constitutional Court considered that the Judicial Commission’s role in the recruitment process was an intervention and would damage the judicial independence system. Meanwhile, the independence of the judicial authority requires equalization through the checks and balances mechanism by the Judicial Commission. The centralization of power under the Supreme Court as the sole institution with recruitment authority and potentially bearing arbitrariness was being ignored.

After the Constitutional Court Decision, the Supreme Court at the end of 2015 proposed the recruitment of 750 candidates for district level judges, consisting of 500 for district courts, 225 for religious courts, and 25 for administrative courts. Because the proposal had not been responded by the government, the Supreme Court issued Supreme Court Regulation No. 6/2016 on the Establishment and Designation of the Supply and Procurement of Judges. On the one hand, the Supreme Court’s initiative to establish that regulation in order to meet the needs of justice seekers should be appreciated. On the other hand, the directive from the Supreme Court answers the need for more judges in district, religious and administrative courts, yet undermines the Judicial Commission’s role in the selection process.

Besides problems of the recruitment system, what also questionable is the implementation of the promotion and mutation system. Initially, the promotion and mutation system of judges was aimed to: 1) fill the formation void of a court; 2) refresh judges; 3) minimize corruption, collusion, and nepotism; 4) provide experience; 5) create planned, gradual, objective, and fair careers; and 6) be used as reward/punishment tools.

But so far, the implementation has not been based on objective criteria and promotions were based more on seniority. The longer a person has been appointed as a judge, the greater their chances for promotions and transfers. There are even judges who were given sanctions but still received promotions. One of the reasons behind those happenings is that the promotion and mutation system is not integrated with the supervision system. To improve the promotion and mutation system, the mechanism should be based on a merit system.

The recruitment, promotion, and mutation system of judges are only some of the challenging aspects from human resources development in the post-reformation era. There are still many other challenges that need to be resolved by the Supreme Court in order to improve the Indonesian court system as a whole. (EDA)



Recent Developments on Freedom of Association Law in Indonesia

After President Soeharto stepped down from his presidency in 1998, there have been various law reform efforts conducted in Indonesia, including the constitutional amendments of 1999, 2000, 2001, and 2002, to better guarantee and protect the civil liberties and political rights of citizens. Reform efforts were also conducted in the civil society sector, more specifically also in the legal framework regulating Civil Society Organizations (CSOs).

One of the first efforts was when the Government of Indonesia initiated the Bill on Foundations in 2000 as a follow up to the Letter of Intent with the International Monetary Fund (IMF). The intention is for the Government of Indonesia to strengthen the framework for auditing Indonesian Foundations in receiving state funds, including foundations related to the military and to ex-President Soeharto. Since a foundation is an entity used by thousands of CSOs in Indonesia, the impact of the law was far broader than just towards foundations linked to the military or Soeharto. The Foundation Law was enacted in 2001 and then revised in 2004 as a response towards the public protests.

Reform efforts were also conducted in the taxation sector. Since 2006, several CSOs conducted policy advocacy activities towards establishing a tax exemption and tax deduction system for CSOs in Indonesia. In 2008, the new Income Tax Law was enacted, providing limited tax exemption and tax deduction for income or contributions.

The challenges towards Freedom of Association for CSOs in Indonesia started when the Government and Parliament began to discuss the revision of the 1985 draconian law on Societal Organizations (Organisasi Kemasyarakatan/Ormas). This was the law that was created in 1985 by Soeharto’s New Order regime to control and repress CSOs for the sake of political stability.

There were massive protests against the revisions of the bill. Persyarikatan Muhammadiyah, one of the biggest religious-based organizations in Indonesia (with more than 30 million followers) was against the bill and stated that the bill was using a totalitarian perspective. The National Commission on Human Rights urged the Government and Parliament not to pass the bill. The Commission stated that the bill was against Human Rights Principles and potentially become a threat towards the Freedom of Association in Indonesia. The law was enacted on 2 July 2013 by 311 votes to 50.

It is important for Indonesia to improve the legal framework. The general framework should be based on the Foundation Law (for non-membership-based organizations) and the Association Law (for membership-based organizations). The Law on Societal Organizations should be revoked, not revised.

Since 1994, the Ministry of Law and Human Rights has been discussing the Bill on Associations. The draft Bill sprang from a unified draft law entitled the “Bill on Foundation and Association.” In 2001, because of the influence of the IMF, a separate Bill on Foundations was prepared and enacted as the Law on Foundations.

The enactment of a new Law on Associations is a crucial step toward strengthening the legal framework for associations. To achieve this, the Ministry of Law and Human Rights must be more active in promoting the Bill on Associations. The Ministry must coordinate with the Ministry of Home Affairs to establish a conducive legal framework for CSOs in Indonesia. The challenge is that, in practice, the so-called “sector-ego” may prevent a ministry from “disturbing” another ministry’s program. The discussion of the Bill on Associations will surely overlap with the discussions on the Bill on Societal Organization since both relate to membership-based organizations.

Indonesia needs to adopt a more enabling approach toward CSOs in Indonesia. The approach should be towards facilitating and improving the quality of the legal environment, not towards limiting and repressing civil society. CSOs are crucial and play an important role in a democratic country. (EN)

Download: LRWD_2016_edisi khusus