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Indonesian Law Update:


2008, 2007

[August 2008]

The News: 20 percent Annual Budget for Education Sector. The Indonesian Constitutional Court has its decision in 13 August demanding the Indonesian government to raise up to 20 percent of state annual budget allocated for education sector as  addresses by the Indonesian Constitution 1945. The budget shall raise from Rp 154.2 trillion to Rp 224 trillion next year, where in 2005 was Rp 78,5 trillion. The current 2008 budget of Law 16/2008 was challenged against the Constitution 1945, since Law 16/2008 provide only 15,6% budget portion. The budget is expected to meet education standard all over Indonesia. In line with the decision, two days priori to the 13 August 2008, the President addressed a speech confirming his administration to set higherbudget for education the next annual state budget 2009.

Legal Note: The Indonesian Constitutional Court decision and government commitment over 20% education budget for 2009 hailed positive responses from teachers and education institutions, particularly state owned-universities. People now noted that 57 state owned-universities (providing 99,360 seats for undergraduate degree leading bachelor degree, annually) all over Indonesia are receiving a very low budget since year 2000, compelling them to set out new independent financial and budgetary as allowed by the National Education Law through BHMN concept. Under the BHMN, 6 state universities (ITB, IPB, UI, UGM, Airlangga and USU) are free to set their own fees and tuitions, which is considered high. Other state universities follows later in 2004. Previously, students are fully funded by the government during 5 to 7 years study period, provided they passed the national examination. Unfortunately, such conception with fee orientation now provide more rooms for the haves but lesser portion below 20% of seats (out of 99,360) for the poor students, who  may not be able to pay high tuition as much as private universities. While it remain undisputable, that prior to the BHMN concept in 2004, the National Entry Exam to Indonesian State Universities are very tough, with annual from 400,000 contestants out of 750,000 high school graduates, the competition rate are 1 to 20 to 1 to 300 (depending on the reputation of state universities and favorite faculties), where the best and the brightest high school graduates are those who studied at state universities filling total 99,360 seats. As for its good reputation, state graduates received positive job market within and outside Indonesia, a university for thousands of foreign students, mostly from Malaysia who studied engineering and medicine. However, as a result of its current independent financial and policy, now state universities orientation are merely of benefit where bright students but poor are given limited access and seats, where in the future its reputation may be at stake.

[July 2008]

News: The Indonesian KPK - Corruption Extermination Commission Publicly  Displays Presents Received Part of Gratification. The presents and gifts are those reported and returned by government officers received from third party in relation to their duties as a public servant, including the member of the KPK, displayed at the lobby of the KPK Office in Jakarta. The presents are classified into gratification presents since it is reported and returned within 30 days to the KPK upon receiving. The aim is part of lesson to public that no exception can be made whatsoever for government officer receiving presents during his tenure as a public servant. More gratification presents will be displayed, according to KPK spokesman.

Legal Note: The idea to display presents part of gratification by KPK is an original  breakthrough by KPK. It is also a good lesson for public now to start adopting zero tolerance bribing government officers. Earlier last month, a number of anti corruption movement of individuals and organizations has suggested KPK to expand their task not only by enforcing anti corruption through law, but also through customary law. The main idea is to put social sanction by disgracing the corruptors displaying through media their corrupted wealth, family, lifestyle and their crimes. Further, the government has consider death penalty for corruptors to be included in the new bill of anti corruption. Basically, the implementation of this idea is an effective law as social tool and will bring a great social shift to build a strong, clean and respectable government.

[June 2008]

News: Indonesia - Timor Leste Concluded on Timor 1998. The result issued by Truth and Friendship Commission (KKP) established by both countries, primarily suggested, that both government institutions are those responsible for the human rights violation during the East Timor Poll between the pro-East Timor independence versus pro Indonesia integration in September 1999. Since 11 August 2005 the KKP team members recommendations are drawn in seven chapters and one special chapter, emphasize not on legal grounds, but more on the future commitments by both countries to set up a good relationship.

Legal Notes: The KKP recommendations presented in the absence of a number of foreign nationals and foreign countries including the UN who refused to witness during the incidents of 1998, since their direct involvement are clear and published. Most Indonesian people also believe, that natural resources of minerals at the Timor Gap between Indonesia and Australia are the main concern. The integration of East Timor into the 27th Province of the Republic of Indonesia in 1975 was not an issue until late 1980. After its independence, strong tie of culture and economy between Indonesian and Timor Leste, remain.

News:Temasek Sell all of its Shares in Indosat Cellular Provider to Qatar. Following the lost at the appeal court, Temasek of Singapore then sold all of its shares to Qatar Telecom. Temasek and its 8 subsidiaries has been found by KPPU for conducting unfair business through direct and indirect ownership and management at 2 major cellular provider in Indonesia, PT Indosat and PT Telkomsel.

Legal Notes: According to a number of lawyers and foreign investors, the decision by the Indonesia KPPU over the Temasek monopoly over the Indonesian cellular providers (80%) are not fair since the panel of judges ruled and make its own interpretation over a number of definition in the Indonesian Company Law 40/2007 in relation to shares. However, under legal teachings and laws in many legal system (where in Common law Judge-made-law are concept are highly appreciated and also acknowledged under the Indonesian law), the Indonesian judge(s) under the Indonesia Judicial Law has its own sole discretion in establishing a legal decision based on a thorough laws, arguments by the parties, legal facts, analysis and discussion by the panel of judge prior to the judgement. Secondly, it is a fact that Temasek through its 8 companies (most are paper companies) are in the monopoly position by taking control directly and indirectly over the company decisions. It is also known that Indonesia remain has its right to final vote in one of those companies, but again facts shown such right has been weakened indirectly for not being executed for years. The selling of shares to Qatar itself remain disputable since the selling are in contrary to KPPU decision that Temasek must sell to a number of shareholders maximum at 10% each to curb monopoly. Qtel or Qatar Telecommunication is known to be another arm's length to Temasek. According to the law and teaching, public interest shall prevail over private interest or transaction, therefore the transaction remain legally disputable in the eye of public law. The KPPU judges are known to be respectable and high qualified lawyers. The case now is at the Supreme Court awaiting for final ruling.


[December 2007]

Indonesian Police is the Most Corrupt Institution. Following the findings by the International Human Rights Commission (IHRC), where the Indonesian Police Institution is on top of human rights violation, now the International Transparency (TI) has its another findings. The score for Indonesia police is the highest of 4,2, compared to the Indonesian parliament and judicial body and political parties (4,1 and 4,0 respectively). The  key finding factors in Indonesia in 3 years in row 2005-2007, found the scores are
4,0-4,2-4,2 (police), 4,0-4,2-4,1 (parliament and judiciary) and 4,2-4,1-4,0 (political parties). The identified problems is of perception, where most people think corruption is defined only for state loss, far from the legal definition covering also bribe, authority misconduct, gifts, a promise to give, and others under the Indonesian Corruption Law. In respect to the corruption extermination by 6 independent and government institutions, the Indonesian Vice President Jusuf Kalla recently also shows his confusion of how confident Indonesia corruptors these days until found guilty by the court and imprisoned. The poll held in Indonesia with 1,010 respondents in big cities in Indonesia , out of 63,199 respondents at 60 countries held by TI.

Notes: Similar findings earlier in 2007 by an Indonesian national circulation-magazine pointed out that bad recruitment system caused cost paid for years, not only for the police institution, the government, but also public who found no benefit to seek help from the police. The findings further found that those who graduated the last tier from high school, mostly are those who took the seat at the police institution. Another findings by a small number of idealist pupils of young policemen during their final papers at the higher degree police school earlier in 2006, found that very low passing grade allows police candidates with strong nepotism connection and money to bribe, successfully took a seat. Low salary, nepotism, bribe, corruption and low capabilities lead the police institution as 'business partner' for private companies and individuals who are able to pay, instead as a public servant. Police performance is perceived very low, as low as public attorneys and judges. Its set of failures to perform are the result of its recruitment. 10 years after reformation 1998, the small numbers of police reformist plays only small change in the police institution. The new draft of Indonesian Criminal Laws, in respond to police incapability, will reduce police roles in many case involving high intellectuality and morality. The police will left to only task involving petty crimes in the community.

[November 2007]

President Susilo Bambang Yudhoyono calls Indonesian to National Heroes Day rememberance. The speech addressed during the National Heroes Day 10 November 2007 in Surabaya, East Java.

Legal Note: 10 November 1945 will always be remembered by Indonesians for  bloodshed war by Indonesians, part of its resistance against the attempt to recolonize Indonesia by the 30,000 British Gurkha troops in Surabaya following the death of  Brigadier Malaby's death shoot by Indonesians 30 October 1945. The British troops' command was centralized at room 33 of Yamamoto Hotel in Surabaya of East Java, where the Dutch joined the attack plan. The British Major General Mansergh confidently warned Indonesia to surrender, or else they will attack and take over Indonesia in 3 days on 10 November. However, such typical over confidence, did not materialized in Indonesia. In turn the British troops lost it in 21 days of war against Indonesians. The war itself was pictured as the bloodiest wars ever after the World War 2, where ten of thousands British Gurkha bodies were found. Unlike other countries in the region who surrendered and receive its independence as a gift and maintained the colonialist identities, legal system, language and culture, this success of Indonesian historical heroic war is only part of other wars by Indonesian republicans fighting to protect the Indonesian soil and hit back various attacks such as from the China Emperor and Kublai Khan in 1270, the Dutch in 1900 and Japan in 1945.

[October 2007]

Indonesian Constitution Court Rejected the request on Death Penalty Review. The panel of judges of 9, on 30 October ruled the rejection to review the substance and to annul a number of articles on death penalty. The Court ruling are on the ground the law of death penalty under the Narcotic Law 22/1997 do not necessary in contrary to the Indonesian Constitution. Death penalty is considered still applicable under the Indonesian law. The applicant are 5 of Australian Bali Nine facing death penalty for drug possessions in Bali.

Legal note: Bali has long become the heaven for Australians' destination for holiday, business or other purposes such as hideaway. Like most other tourist destinations, in spite of the benefit tourism business, locals are aware of the potential threat of cultural differences, crimes and moral hazards brought by foreign tourists. Balinese, like many other Indonesians, are tolerable. However, crimes are an exception, where many tourist are not aware of the existence of the national law and adat law (Balinese customary law). The Australian Government should from time to time to remind their nationals to be more aware, behave, respect the local laws and Indonesian laws during their stay in Indonesia.

[September 2007]:

News: The Indonesian Supreme Court Final Appeal Ruled Time Incorporated and 6 journalist and correspondents to pay Tort for Defamation. The final appeal rulings by the Indonesian Supreme Court number 3215/pdt/2001 publicly announced by the judge panels of three, where Time Incorporated and 6 journalists and correspondents remain wrong for defamation against the goodfaith of Soeharto, the former President of the Republic of Indonesia. Time chairman Donald Morisson and other 6 journalists is fined of Rp1 trillion (USD 9,9 billion) altogether, and must express in writing an apology at national and international circulation media for its misleading and defamation publication edition on 24 May 1999 volume 153 number 20. Time exposed the wealth of Soeharto and family of USD 15 billion, title 'How Indonesia's Longtime Boss Built a Family Fortune', presented by 4 of Time Inc. journalists John Colmey, David Liebhold, Lisa Rose Weaver, and 2 Indonesian correspondents Zamira Lubis and Jason Tedjakesuma. This ruling turns out the previous two lower court rulings, where the Supreme court make an approach of tort for defamation under civil code as requested by Soeharto's lawyer, instead of other articles of the civil code or the law on press and freedom speech, which the defendant legally assumed. The basis for court rulings are on "the act against the law through improper, insufficient and wrongful publication".

Legal Notes: To a number of parties, the ruling is unfair, unjust in the name of freedom of speech as been delivered by the defendants' legal counsel. Unfortunately, the Indonesian freedom of speech under the law of Press, the Time publication did not meet a balance and responsible coverage, therefore is unfair to its readers, Indonesians in particular who witness. As been said by an Australian journalist who stayed in Asia for 40 years including in Indonesia for 15 years, western and Australian journalist coverage on Indonesia lost its soul and far from the facts. Australian in particular, fails to understand their true Indonesia friends. It is also publicly known that most major media is owned by single majority shareholder of western big corporations, where news is treated as a media for profit and business and political purposes instead of factual basis. He also reminded Indonesia to empower its public relation for the benefit of Indonesia' good faith in the eye of the international community. According to Indonesian minister of Trade in a press conference, surprisingly most of the western press has never visited Indonesia though they have released a number of investigation on Indonesia.

News: Indonesia and Russia Concluded Set of Mutual Cooperation Agreements. The 8 sectors of cooperation in sport, energy, mining (USD 4 billion), infrastructure, telecommunication, aviation and defense are expected soon to increase Russia' investment from USD 600 million to USD 1 billion.  The signing by both Presidents took place in Jakarta during the official state visit of the President of the Federation of Russia Vladimir Putin, early this month.

Legal Note: Indonesia has become a potential country in the region to develop war crafts since the availability of technologies and human resources since 1980, such as PT INTI (telecommunication), PT PAL (shipyard and ship manufacturing), PT PINDAD (war devices and armoured machines manufacturing), PT KAI (railways, trains and signals manufacturing), Lapan (airspace and satelites manufacturing)  and PT Dirgantara or PT IPTN - (civil aircraft manufacturing).




Indonesian Law Update:

Legal Notes


[October 2010]

Attorney’ General Dismissed. The dismissal by the Indonesian President Susilo Bambang Yudhoyono was legally-related to the Indonesian Constitution Court (MK) ruling late September 2010, upon citizen lawsuit against the government for the illegal official term of the current Hendarman Supandji as the Chairman of the Attorney General. MK explains, the Chairman tenure shall officially legally be made in parallel with the President’s term, where in fact it was illegal Supandji had not been officially re-appointed by the President acting as the Head of the State. MK further explained the case was not a failure of the law, but merely an administration mal-practice. Indeed, MK had added a so-called term ‘sex reconfirmation’ to the article 22 (1) sub d Law 16 2004 of the Indonesian Attorney General, reaffirmed the Law is not in contrary to the Constitution 1945 (conditionally constitutional).

Legal Note: the Indonesian Constitution Court - MK decision has set out a new paramount decision in the history of Indonesia in the era of reformation since 1998, where a citizen can immediately dismiss a highest rank government officer through legal procedure and fair trial. Secondly, it is also interesting to know that at this point, the president had never intervene law jurisdiction during and after the court sessions, even the said Attorney General’ seat is under President’ exclusive and highest authority to appoint (acting as Head of the State). According to an interview weeks after the decision made, the MK Chairman admitted he only once responded to the president’ call three days after the ruling day, after a number of missed calls on the same day. President himself asked whether his personal comprehension is in line with the MK judgement. Three days later, the President dismissed the Chairman of the Attorney General. The series of breathtaking sessions has shown that the balance between of the Trias Politica has been well maintained and respected by respectable Indonesian stateman.

[September 2010]

Public Universities an elite for the non-haves students. The statistic released by an education analyst shows that the number of poor students to access public universities has decreased significantly from over 10% (in 1980-1990) to only 4,19% in 2008. While the rich students has reached significantly to 32,4%, respectively. The research is based on so-called Disparity Raw Figure based on students economy background based on the 2003-2008 Census. The major cause is the Education Law 2003 released earlier to allow Reputable Indonesian (National) Public Universities to allow the rich to enter with less qualification, less competitive method and money-base entry. To solve the problem, it is necessary all public universities to back to low cost-basis with more government budget. Further, the entry must be transparent at once with trusted technology system which is accessible all over Indonesia.

Legal Note: Thank to the Indonesian Constitutional Court who in early 2010 has annulled the Law of Education 2003 and Law of Education Institution 2009 to fulfill public need of a good and reputable public school and public universities. Both laws regarded derive characteristic as public servant but driven as private entities, where cost and budgeting is included, and emphasize on money-orientation. Therefor, the both law brought less access to the poor who composed 60% of Indonesians, who is well known where most intelligent students are from. The above research released of lesser portion from over 10% to less than 5% within 8 years, is the fact as a result of both laws. The Constitutional Court itself earlier ruled that the government must obey the law 18/2006 on State Annual Budget 2007, to meet the 20% Educational Sector, annually. The Government then fulfilled it in the 2008 State Annual Budget. Indonesian Public Universities has long been known to its long -proven reputation for its high competitiveness entry (5% to 12% probabilities), research and publication, student-lecture ratio, and best job market nation-wide and international. Some education expert suspect that both annulled law is part of a grand design to weaken Indonesian human resources.

[May 2010]

The Indonesian Fair Trade Commission - KPPU Called For Temasek Penalty Payment. Temasek, a Singapore company is subject to pay Rp. 30 billion penalty following the rejection over verdict review by the Indonesian Supreme Court over the cross ownership case in Indosat and Telkomsel, both Indonesian major telecommunication company who Temasek own significant shares.  The rejection indicated Temasek’s legal rights meet its last resort. The decision to pay has been since December 2009 expected to be carried soon after the rejection.

Background: The case initialized in November 19 2007, KPPU ruled that Temasek’ shares ownership in both telecommunication service company, Telkomsel and Indosat, violated Law 5/1999 on Restriction on Monopoly and Unfair Trading. Temasek, beyond reasonable doubt, was found guilty in violating article 27 a Law 5/1999. According to the article, business person is restricted to possess majority shares in same types companies with same main business activity, same market, one business person or group whom control 50% of market segment or particular services or goods. AS a result, KPPU ordered Temasek Holdings to end its shares ownership at both companies by releasing all its shares in one company or by reducing 50% ownership in each company, not later than two years after the verdict has been declared final and binding. Reluctant to hear the verdict, Temasek Holding Ltd, ST Telemedia Pte Ltd, STT Communications Ltd. (STT), Asia Mobile Holding Company Pte Ltd (AMHC), Asia Mobile Holdings  Pte Ltd, Indonesia Communications Limited, Indonesia Communications Pte Ltd, Singapore Telecommunications Ltd, Singapore Telecom Mobile Pte Ltd, appeal the verdict to Central Jakarta District Court. In fact, Court strengthened KPPU’s decision. Supreme Court also rejected their appeal through MA verdict Number 496 K/Pdt. Sus/ 2008 at 10 September 2008. Temasek was ordered to release its shares in Indosat and Telkomsel. Temasek agree to release it, but the release was given to Qatar Telecom, one of Temasek partner companies, through STT. Still, Temasek also must pay Rp.15 Billion penalty to State. Temasek states its pursuance to the verdict and waiting the paying order from the Court, since the verdict is still a publication, said Deputy of Corporate Secretary, Ersyah Marianto. PT Telkomsel Tbk. as the holding company and majority-share holdes of Telkomsel mentions its intention to study the verdict. The verdict however will effecting shares ownership in Telkomsel, and coordination for further steps is needed, said Vide President Marketing and Communication Telkom, Eddy Kurnia.


[December 2009]

The news: Poll of Indonesian Human Rights Practices. The Indonesian respondents are posed with choices of satisfied, unsatisfied, and abstain for their level of  satisfaction over the government performances in various area of life. The respondents are of the opinion that the lowest is for equality before the law with 16,1% (for satisfied), 81,6% (for unsatisfied) and 2,3% (for abstain), while the next lower figure is for proper  job (21,9%-77,3%-0,8%), proper education (35,3-63,5-1,0), proper housing (36,4-61,4-2,2), proper health (40,0-59,2-0,8), proper security (40,5-57,1-2,4), adequate freedom to unite (43,5-44,5-12,0), proper food (45,7-53,2-1,1).

Legal note: For over six decades, Indonesia has acknowledged Human Rights in its Constitutions, and as a consequence of a number of UN Human Rights Convention, Indonesian Government has ratified a number of UN Human Rights-related Conventions, namely the Convention on Elimination of Race Discrimination 1965 in 1999, Convention on Civil Rights and Politics 1966 (in 2005), Convention Economy, Social and Culture 1966 (2005), Convention on Elimination of Discrimination Against Woman 1979 (1984), Convention Against Torture 1984 (1998), Convention on Rights of Child 1989 (1990) and Convention on Protection for Migrant Workers 1990 (in progress). However, challanges remains since unlike other country in the region with less complications, Indonesia has with 230 million population spread into 13,000 island with over 550 different ethnics and 60 different major dialogues in 33 provinces with 30 different political parties. Further, the wide range of social-economy-education figure, keeps the challenge remain from time to time for any administration to solve. The reformation 1998 however still seen as a strong foundation to keep moving.

[November 2009]

The news: Ex Head of Banten High Attorney Office Found Guilty For Arresting Prita The Indonesian Attorney General Office Inspector found guilty 3 of the 7 public attorneys involved in the of Ms. Prita Mulyasari case, for the disciplinary violation during the arrest and detain.

Legal Note: The Prita case in May 2009 increased mass rages due to the lack of capabilities and insensitive moves by the general attorney officers and policemen in interpretation and applying the laws of the Indonesian consumer protection rights, law of media, law of IT and the human rights. Prita, a patient of a private hospital spread to ten of her close friends due to her lost of one sight as a result of medical malpractice by the Omni International Hospital in Banten Region, West Java, a city 70 km away west of Jakarta. Unfortunately her email triggered legal action by the Omni hospital brought her to jail, while Prita herself is pregnant, supported by the police and public attorney officers. The typical of most Indonesian policemen and public attorneys lack of understanding the law due to its very limited intellectual capabilities has brought the case nation-wide of strong criticism to totally reform the recruitment, to increase the human resources quality and capabilities, including reform of moral hazard, to serve better the community.

[August 2009]

The News: KPK Lead, a Picture of Bad : Performance of AGO. The statement was addressed by the Chief of High Court at West Java, whereas most corruption cases are taken over from the AGO by the KPK and succeeded to resolve it.

Legal note: good governance through government reformation has seriously  been the agenda and adopted by the current administration of President Susilo Bambang Yudhoyono since he took the seat in 2004. Such pressure are from various and large stakeholders in the community. The people judged the performance through recruitment mechanism, where transparency is a must and must free from nepotism and collusion, as been performed by the KPK, Department of Foreign Affairs, Department of Finance, Judicial Committee, Anti Monopoly Commission,  and most Commission, where good result is seen through its excellent performance as a public service. However, such program become slip service agenda only at the AGO and other government judicial instruments, including the police institution.

[March 2009]

Government Departments Slashed Down: Suggestion. The suggestion is based on the incomparable and inefficient of state budget to its outcome, performance and result of the said departments, such as the Department of Women Empowerment. The said department is perceived as very low and useless. In most developed countries, there are less than 20 departments only, where in Indonesia reached total 34 Ministries (of 21 Departments, 10 Coordinating Ministries and 3 State Ministries). The over capacity of departments and ministries are also seen merely as power consensus between political parties and the incumbent to maintain their existence and political presence. As part of the idea, the minister Government Officer Empowerment also emphasize to change the structure but most importantly is to change the mindset of the government officer from being the 'power holder' into 'people servant', from 'the authority' to 'take the role'.

Legal Note: Since the power shift of reformation in 1998, numerous attempt to change the mindset of government officers has been implemented, from compulsory of annual wealth report, taxation, fair and transparent recruitment, merit systems, to signing of pact of integrity, but only small progress been made. So far, a number department since 2004 has been a pilot project where success implementation has find its result trough fair, competitive, and transparent recruitment at the Central Bank, Department of Foreign Affairs, Department of Finance, KPK, the Judicial Committee, and the Constitutional Court. The said institutions has outperformed other departments, where the qualified, the best and the brightest staffs are those who took the seat, and enjoyed better salaries and privileges, including the pride of the right attitude to serve and to work hard. Most importantly are their willing to listen and to act.



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