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Indonesian Law Update:


[December 2004]


Articles on Gas and Oil Law Ammended. The Judges of the Indonesian Constitutional Court amended part of the law, 3 articles of 12(3), 22(1) and 28(2)  of the Oil and Gas Law 22/2001, considering those articles have no legal ground and are against the Indonesian Constitution. The revoked articles are considered the principle or ground of the law.

Law on Electricity Revoked. The Law 20/2002 on electricity is revoked by the Indonesian Constitution Court on 15 December 2004. The previous Law 15/1985 remains and become in force on 15 December 2004. The ground was that the Law 20/2002 is in contrary to the Constitution 1945 and injured people's constitutional right. The right to appeal is not possible. Currently, the Court is also in session for request to revoke the Water Resources Law 2004 as requested by 7 NGOs.


[November 2004]

WTO Sanction to US. The WTO on 24 November 2004 will release its ruling to put a sanction valued at USD 40 to 50 million to US products to challenge Byrd Amendment, which is considered unfair in trade. This will apply to US products ranging from textile to sweet corn entering the 25 European Union market. Japan is also considering to retaliate by imposing levy of USD 80 millions to all US products into Japan. This ruling will apply in 2005 if the US do not revoke the illegal US Anti Dumping Law. (Reuters)

Investment. Coordinating Minister of Economy Aburizal Bakrie said, that BKPM (Investment Coor-dinating Board) will play its new role mainly as a promotional entity for investment and a single-entry for all licensing for investment. This new role differs from past bureaucratic single- roof where licensing will take 150 days compared to single- entry system that slash down bureaucracy and license will be obtained within 20 days. (Source: Kompas 13/11/2004).

Extradition and Sea Territorial Demarcation. Indonesia and Singapore talks over on sensitive issues between two neighboring countries on adjacent sea territorial lines, extradition, mining and lifting ban on sea sand exports. Talks held in Jakarta, 8 November 2004. A Joint Cooperation Council will be established to further discuss the issue. This the second visit of PM Lee Hsien Loong to Indonesia after the inauguration of President Susilo Bambang Yudhoyono in October 2004. (Source: Kompas 9/11/2004).

Territorial Demarcation. The Government of Indonesia shall set up new laws on Territorial Demar-cation between the adjacent countries, according to the Lemhanas Governor (Council of State Defense). This law is to avoid from past case of loosing two islands of Sipadan and Ligitan which case won by Malaysia in 2002, based on the ICJ rulings. Currently, the applicable law is Space Arrangement Law 24 year 1992 and other Government Regulations which is deemed less accomodated and less updated. (Source: Kompas 9 Nov 2004).


[October 2004]

Employment. Minimum Provincial Wage - MPW (UMP) is set at Rp 711.843 (USD 80,00) per month applied in Special District Jakarta in 2005, challenged refusals from 7 Labor Associations, which compeled to raise it to the minimum of Rp 759.953 per month, which earlier requested the number of Rp1,2 millon (USD 133) per month to accommodate high living cost in Jakarta for 55 life components compared to 43 life components. This Provincial Government Decision no 2515/2004 was signed earlier by Governor Sutiyoso. The MPW is adjusted annually. In 2006 new Sectoral Minimum Wage will be applied for labor prosperity.


[September 2004]

Law of the TNI. the Indonesian Parliament pass new bill on Indonesian National Military Law (UU Tentara Nasional Indonesia - TNI). The law emphasize more on the professionalism of the Indonesian Military Force.

Limitation of Gratification to Public Officers. New laws will be released on limitation of gratification for government and public officers. Penalty and years of imprisonment applies to both wrong doers. This law aims to avoid from bribery and  to put more public control on public officers in the spirit of good and clean government of Indonesia.

Public Prosecutor Watch. the Indonesian Parliament agreed to release new laws on the possibility to establish an independent body to watch over the Indonesian public prosecutor while on duty, to avoid public prosecutor from deviation conducting the laws. Currently, some NGO are also watching over the Indonesian courts proceeding and the judges.



Indonesian Law Update:


 [December 2005]

Law of Medical Services Released. The law 29/2005 released on 20 October 2005. Licensing for medical practitioners are the core issues, followed by the patient's protection. Graduates of medical school will be subject to serve in the remote area in Indonesia to support government health program.

Nokia will establish its Technology Center. According to Nokia' Country Director of PT Nokia Networks, the center is situated in Bandung, Indonesia, established on the first semester 2006. The center will serve as a center for competence development and technology transfer for custodian, staffs, and Indonesian local partners.

Law on Teacher and Lecturer, Released. The law will be in force in 2007 and oblige a tight qualification to obtain a license for teachers and lecturers within the next 10 years. The law also emphasize the welfare of teachers and lecturers by doubling its salaries. Currently, there are 2,7million teachers at public and private schools, excluding 261.000 additional teachers and 600.000 contract teachers all over Indonesia. There are at least 1 million high school graduates, annually, which only 75,000 seats per year are available at public universities and 500,000 seats at private universities all over Indonesia.

Pertamina go for efficiency. The only Indonesian state oil company will soon restructure its human resources management, by slash down half of its staffs within 1 year. It is admitted that past staffs recruitment at many state-owned companies were not transparent and has a strong indication of collusion and nepotism. This is due to efficiency to respond global competition.

Violance towards Human Rights Activist, increased. According to an Indonesian human right watch activist institute, 125 out of 152 violance cases in 2004 mostly were by the police against student activists, compared to 30 cases in 2003.

750 Foreign Investment Companies from 6 Countries Suspected for False Tax Assesment. The companies are also suspected for money laundering and transfer pricing. This is the government report based on Tax Directorate research. The name of the companies soon will be released.


[November 2005]

Draft of Law of Freedom of Acces to Public Information will soon be released. The draft of the said law (since 2001) will empower the people to be involved in public decision making process and avoid public and government officers from corruption-collusion and nepotism through the enforcement of the access of public informations by public. The law will also impose government officer for 6 months of improsenment and 5 million fine for any case to hinderance to access the public information.

Draft of Law of Intelligence under Talks. The law mainly aims as a legal basis for the Indonesian secret agents operation and counter-terrorism. The law will allow not only the police, but also the Indonesian government agents to arrest a terrorism suspect for 3x24 hours, anyone residing within the territory of Indonesia.

Seven Indonesian Suspected Judges for Corruption under Investigation of Indonesian Judicial Comittee. The said report are based on thorough investigations conducted by ICW (Indonesian Corruption Watch) and MaPPI (the Society to Monitor Indonesian Courts) covering the said judges' friends, family & home, inner circles, workplaces, where they found strong indication and evidences of unreported ownership of luxurious properties to the government. An example is, a judge owns 7 luxury houses, 5 luxury cars.


[October 2005]

60 Permits for Investigations of Suspected for Corruption. The 60 permits are the number of permits issued by the President Susilo Bambang Yudhoyono during his term since October 2004, for its government official for criminal investigation by the police. This is to respond community reports for government officials involved in corruption, covering 8 members of the house, 4 governors, 32 local chiefs, 8 deputy of local chiefs, 6 majors, and 1 deputy of majors.

Poll on Court Distrusts. Following the KPK action against bribe case in the Indonesian Supreme Court a week ago, a recent poll held at 10 major cities in Indonesia by a national circulation newspaper shows that 72% to 92,2% respondents believe that Indonesian judges are prone to be bribed or involved in KKN (Collusion-Corruption-Nepotism), between 57,75% to 84% respondents also believe that money can buy court rulings, and 82,8% believe that a number of lawyers/advocates at the court are involved in the bribery. The two days poll was participated by 859 respondents, however the said result do not represent the real opinion in the community.

Government of Indonesia ratified two international covenants. The two covenants are  'the civil and political rights' and 'the economic, social and culture'. Indonesia joint them as the 155 and 152 member, respectively. The Phillipines, Thailand and Vietnam are the only other member in the ASEAN region.

KPK searched the Indonesian Supreme Court Office. KPK (the Indonesian Corruption Eradication Commission) then arrested 5 staffs and a lawyer who happen to be an retired High Court Judge accused for involvement of bribe to a supreme court judge panelist, which is against the law no.19/1999. KPK seized money of USD 400.000 and  Rp 800million from their offices. KPK actions is within the plan to execute investigations of hundreds of KKN (Corruption-Collusion-Nepotism) cases in Indonesia, supported by the wide spread community.

Chinese sailor shot at Arafuru Sea. The Sailor was shot by the Indonesian Navy, which ship and sailors was found on the Indonesian waters of Arafuru Sea suspected for fishing. The action raised a protest from the PRC Government but the Indonesian Navy claimed they have followed a hot pursuit procedure under the UNCLOS III 1982. 


[September 2005]

Poll on Quality of Life in Indonesia. The Indonesians perceive that equal justice has improved 11% these days compared to December 2003, according to a recent poll held by an Indonesian national circulation newspapers. Social relation, freedom of speech, access to education and security remains the same. Access to get a job, savings, and household income decreased between 5 to 11%. The figure is based on poll 859 respondents over 17 years of age at 10 major cities in Indonesia, and do not however represent the whole country perception.

Bribe Case on Trial. Court' staffs and a regristrar officer together with an Indonesian lawyer are on trial for bribe of board of judges on a high political case of corruption by a provincial governor. In another case, the Indonesian Judicial Commission, after an investigation of a board of judges in a decision of a dispute of election votes, has recommended the Supreme Court to suspend a judge from its duty in court for 1 year. More other tens of cases on bribe are now on court trial sessions.

Malacca Strait Security Task Forces. Indonesian government and Malaysian government refused Singapore's proposal to privatize the security issues within the area of Mallaca Straits. Currently, the said security in the area are held by the adjacent coastal countries.

Court ruled over Bank Corruption. Life sentence was ruled in absentia toward another Indonesian bank criminal for corruption of a state owned bank fund of Rp 1,24 trillion (USD 1,24 billion) in 2004. The said person now stay and live in Singapore, following other 12 fugitives Indonesian bank criminals. Talks between both governments of Indonesia and Singapore for extradition are at the final stage.

Oil Smuggling. 58 oil smugglers were arrested, 5 foreigners from Singapore, Korea, PRC, including 18 staffs of Indonesian state owned enterprise, Pertamina. They smuggled the subsidized oil directly from Indonesia's oil wells in Borneo to the adjacent countries. 7 Pertamina officers already dismissed and now under police investigation.

15 Indonesian Police Officers personal Bank Account are Suspected. The KPK suspected that their personal bank accounts are abnormal, which one of them have almost USD 900 million. Half of the suspected are still active, some are retired, some are high rank police officers. KPK suspicions are related to the report from the community of their illegal businesses, such as protection money, illegal lodging, abuse of authority, and gambling, which business are now under serious attack by the new appointed Police Chairman. Recently, the Indonesian KPK also seized a number of Indonesian personal bank account in the Switzerland suspected from illegal sources.


[August 2005]

Signing of Peace Agreement between GAM and the Republic of Indonesia. The signing took place in Helsinki, Finland in August 15, 2005. The basic principal is, that GAM (the Free Aceh Movement) acknowledge them as part of the Republic of Indonesia. In turn, Indonesia will grant more access in law and justice, politics and economy for Aceh Province and will open access to ex GAM 3000 members to reintegrate with the majority of the Aceh community. GAM movement was since 1976 and caused security instability in Aceh'.

Committee on Truth and Reconsiliation. This committee was established under the initiative of President Susilo Bambang Yudhoyono and President Xanana Gusmao, to take effect of the previous initial agreement on December 14 2004. This committee will respond on human rights violation in East Timor after referendum of 1998 instead to bring the case to court.

Drugs Trafficking. Again, another 25 yrs old Australian woman from Adelaide, was caught by the Indonesia police in Bali at the premise of Garuda Wisnu Kencana pond for bringing illegal drugs. She follows other 12 Australians earlier arrested for the same case in Bali.

7 member of the Judicial Committee.  Members are inaugurated by President Susilo Bambang Yudhoyono. The committee' first tasks are to compile data of 6000 Indonesian Judges all over Indonesia.


[July 2005]

PT Microsoft Indonesia collaborate research with Indonesian Universities. The collaboration of 9 research focuses are with the Indonesian engineers at two universities are, Institut Teknologi Bandung in Bandung and Institut Teknologi Sepuluh November in Surabaya. This is part of Microsoft budget on research at the amount of USD 2 billion.

Financial Auditors Dismissed for Receiving Bribes: The 15 auditor dismissed due to evidences for misconduct of authority by receiving bribes from some State Companies during routine financial session. Other hundred Indonesian government officials also imposed the same discipline for receiving bribes since 2001.

PT Dirgantara Indonesia new contract to manufacture parts of the new Airbus A380. PT Dirgantara Indonesia, an Indonesian national airplane manufacturer (previously known as PT IPTN), concluded a contract with British Aerospace to manufacture wing parts of the new Airbus A380, called as the Inboard Outer Fixed Leading Edge. The contract is valued of USD 60,2 millions for 318 units of the said passenger airplane.

Commission of Public Attorneys, appointed. 7 appointed members of the Indonesian Commission of Public Attorneys was determined by the President of the Republic of Indonesia through Presidential Decision number 116/M/2005 earlier this month, after selected from 206 applicants. Two of the members was a Public Attorneys officers, others are advocate, NGO activist, lecturer, and community members.


[June 2005]

Indonesia and Japan signed the EPA - Economic Partnership Agreement.  Following the visit of President Susilo Bambang Yudhoyono to Japan last May, both countries agree to cooperate in an Free Trade Arrangement (FTA) Plus in the form of EPA. Sectors covered are trade of goods, services, government procurement, freedom of movement of persons, investment, intellectual property rights, investment and dispute settlement. Indonesia is the last country dealing with FTA in the region, ASEAN in particular.

Microsoft will establish its 5th Software Center in Indonesia. Following the visit of President Susilo Bambang Yudhoyono in the US and meet with the founder of Microsoft Company Bill Gates, Microsoft will start to cooperate with Indonesian government, private entities, and academics to set up its software business in Indonesia for Indonesia and the region. Other Software Centers are in the US, Great Britain, China and India. Infrastructure are now under preparation.

Indonesia and Australia will come to prisoner exchange agreement. The agreement is also for benefit of Indonesia, which in fact there are a number of Indonesians abroad are imprisoned for drug trafficking in France, Colombia, Peru, Chile, and Argentine. Prisoner exchanged shall be those who had been ruled by the local courts. This Prisoner Exchange Agreement with Australia is with regard to the recent case of an Australian women caught and sentenced 20 years in prison for drug trafficking in Denpasar, Bali, including other 8 Australians under investigation for the same case.

7 Judicial Committee Candidates. Indonesia will soon have its Judicial Committee, after hundreds applicants being selected, finally there are 7 candidates to be proposed to the parliament. The main task are to make recommendations to the Indonesian High Court and to watch judges during their duty, all over Indonesia.


[May 2005]

Indonesian Traditional Fishermen imprisoned in Australia. According to Fisheries and Marine Resources Department of the Republic of Indonesia, since 1995 at least 3,900 Indonesian traditional fishermen arrested, some imprisoned and one is found dead, including 27 traditional ships burned down (since mid April 2005), by the Australian Coast Guard, disobeying the initial procedure of 'Hot Pursuit' under UNCLOS III 1982. International Law of the Sea allows traditional fishermen to catch fishes at any waters, according to an activist of West Timor Care Foundation, who published the evidence of the incidents. Australia claimed its territorial waters up to 20 miles from the coastline. UNCLOS III 1982 stipulates 12 miles.

Indonesian Constitutional Court rules 46 Judicial Review Requests. In general, the court sessions usually go between 2 to 8 until decision is made within 8 months, in 2003. Out of the 48 rulings, 16 requests was granted, 14 request unaccepted and 10 requests denied. This do not include 252 cases dispute over election results. The Indonesian Constitutional Court ruling was based on the authority to make judicial reviews over a law in contrary to the constitution, dispute over elections results and dispute over public authority, on the ground of the Indonesian Constitution 1945.

Indonesia and Singapore Agree over Hazardous Waste. Indonesia and Singapore has come into agreement in Geneva over hazardous waste with regard to the Basel Convention, to re-export them back to Singapore. The said 1,149 tons in 1,762 jumbo bags confirmed by international scientist, containing radioactive was silently entering the Galang Island (part of Batam Island), Indonesia in July 2004.

New Chairman of BKPM. The President of the Republic Indonesia has appointed new chairman for the Indonesian Investment Coordinating Board (BKPM), Mr. Muhammad Lutfi, who was the chairman of the Indonesian Young Entrepreneur Association (HIPMI). Mr. Lutfi is also member of the Forum WTO Indonesia.

Draft of Foreign Investment Law. The Minister of Finance of the Republic of Indonesia has send the draft of foreign investment law (RUU PMA) to the Indonesian parliament for review and approval. Some issue for the new bill will are, to reduce investment application process into 30 days, assurance that foreign investment will not be nationalized (except through passing new laws by the parliament), and more access for foreign businessmen on working permit and immigration. The bill is expected to pass this year.


[April 2005]

Member of Indonesian Election Committee (KPU) caught for bribe attempt.  An Indonesian member of the KPU has been caught by an under cover Indonesian official of KPK for an attempt to bribe an Indonesian Financial Controller Authority (BPK) of Rp 150 million during financial investigation of the said committee. During the initial investigation, most of KPU staffs and some of the member of the parliament are involved.

Public Prosecutor/District Attorney Commission. At least 66 lawyers candidate recruited during the second stage to be appointed to sit as a member of the Public Prosecutor Commission of Indonesia. The main tasks of the Commission are to watch closely to avoid deviation of duty and authority of the Public Prosecutors and make recommendation to the General Attorneys Office. Currently, 14 candidate members of the Judicial Commission are also under recruitment.

Law of the Sea. The Malaysian delegation for negotiation on Ambalat block, during the meeting with the Indonesia delegation in Denpasar Bali, admitted that Indonesia has stronger legal position under the United Nations Convention on the Law of the Sea (UNCLOS) III 1982 for the ownership of Ambalat XYZ Block oil reserve, located near the adjacent countries Indonesia and Malaysia. Indonesia has built lighthouse at the premises and the Indonesian marine troops remains around the premises. Previously in March 2005, Malaysia claimed XYZ Ambalat Block of gas and oil reserve as part of their territory under the Malaysian Map 1997. The Block is legally part of the territory of Indonesia under the UNCLOS III 1982. Only archipelagic state (e.q. Indonesia, Chile, the US) may take particular sea base line under the UNCLOS III 1982.

Telecommunication. New investment in telecommunication services regulation will be released, that foreign investor ownership will be limited to 49% only. However, the government still prefer to keep up to 95% foreign ownership to investments with high technology and high investment in infrastructure content only, under the PP 20/1995.

Deficit Grows. Trade between Indonesia and China has grown significantly, where the figure for China export to Indonesia in 2003  was USD 2,39 billion increase to USD USD 3,4 billion for oil and gas and non-oil and gas products in 2004. Indonesia suffered from loss of USD 261 million from non-oil and gas export to China. Guangzhou contribute 40% of total export, followed by Shanghai (30%) and Beijing (20%).


[March 2005]

Maritime Piracy. Some ships crossing the Mallaca Strait were pirated. The adjacent countries, Indonesia, Singapore and Malaysia, soon take action to secure the area. Two alleged ships has been identified and confirmed registered in Malaysia.

Labor. Some Indonesian and European NGO will bring a case to the ILO and ICJ for a Human Rights violation against Malaysian construction employers and Malaysian Government for not paying thousands of Indonesian construction workers who had not been paid for works they have done for months. Malaysia will replace Indonesian workers from Bangladesh and Vietnam. Other nearly one thousand Indonesians working in Malaysia as lecturers for Malaysian Universities, scientists, technicians, analysts, and medical doctors, remain.

Illegal Lodging. Indonesia has caught some 16 criminal illegal lodgers stealing Indonesian wood forests in Kalimantan and Papua. Woods are exported to Singapore, China and Europe. 15 of them are non-Indonesian or foreign nationals, including 3 Malaysians.


[February 2005]

Extradition Law. President Susilo Bambang Yudhoyono and Singapore PM held talks over extradition for 12 Indonesians bank owners ruled as criminals by the Indonesian court who are now residing in Singapore, who stole the Indonesian government loan liquidity at 112 trillion Rupiah (USD 12,07 billion) during the crisis 1998. The trend is positive, the next signing of agreement is planned in March 2005. Some Indonesian bank criminals also stay in Australia.


[January 2005]

55 Draft of Bills. The Indonesian parliament and government will release 55 new bills consisting of  laws (Undang-undang), 22 amendment of laws, and 6 ratification of international conventions in 2005. The total number of the proposed new laws for 2005-2009 are 284.

Foreign Lawyers. New RI-MLHR regulation issued on the requirement of the use of foreign lawyers in Indonesia, which requires recommendation from Indonesian Advocate Organization, prove of individual Indonesian tax file number (NPWP), obligation to teach law for 10 hours per month within 12 months, limited to deliver legal services of foreign laws (other than Indonesian laws) or international laws, and will only act as an expert or staff in an Indonesian Law Firm.

Anti Corruption. New Government Regulation (Perpu) will be released, called the 'Acceleration Action to Exterminate Extraordinary Corruption'. The law is tougher, covering corruption and bribe by and/or towards any public officials, civil person and non-civil persons, which are subject to serious criminal charge. The KPK has the authority to revoke passport, tapping any communication means, blocking bank accounts and arrest persons within 24 hours without notice anyone regardless their nationality residing in Indonesia. Bribery to public officers is also subject to criminal charge, a penalty of Rp 200 million to Rp 1 billion and 4-20 years imprisonment, live sentence in jail up to death sentence.

Monsanto Case. KPK (the Indonesian Corruption Eradication Commission) is now evaluating and will take serious action based on a report from the United States Department of Justice (US DOJ) for the report of bribery by US based Monsanto Company through the subsidiary company  PT Monagro Kimia, who bribed 140 Indonesian public high officials at least USD 700,000 during  1997-2002. The public officials are subject to law PP number 30/1980. The US DOJ based on the US Foreign Corrupt Practices Act fined Monagro  Company at the amount of USD 1,5 million payable to the Indonesian Capital Market Supervisory Board (BAPEPAM) and US DOJ. (Kompas)

Buyat Case. The Indonesian government is preparing to file civil and criminal case  against PT Newmont Minahasa Raya for environmental degradation in North Sulawesi, through poisonous material disbursement to Buyat  Bay. Some foreign nationals of the board of the company are arrested and are subject to criminal charges. (Kompas)

200 Corruption Charges. More than 200 corruption charges against Indonesian public officers from Governors to Chief of Districts and member of people' representatives, 100 cases are now under investigation, some other 100 cases on trial, some ruled and imprisoned. The Indonesian KPK is also planning to take actions against public prosecutors, police and judges for corruption charges in mid 2005.


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