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Indonesia LawUpdate 2017

[December 2017]

Slow Consumption Decrease. The Indonesian BPS Statistic bureau released its report on the Indonesian economy growth for the third quarter 2017 at 5.06% down to the respective period of 2016 at 5.01% and still far below the expected figure 5.2 for 2017 State Budget - APBN Anggaran Pendapatan Belanja Negara. The major cause is a decrease of household consumption at 4.93% compared to the first and second quarter respective year 2017 at 4.95% and 4.94%. This shall mean that for two consecutive quarters people's purchasing power is slowing down, if not to be said to decrease where in fact, household consumption contribution to GDP is about 56 percent and a slight down of 0.2 percent certainly a significant double impact on economic growth. An example is on daily basis of consumption, such as growth in food and beverage consumption fell from 5.23 percent to 5.04 percent. Consumption of clothing and footwear also fell from 2.24 percent to 2.00 percent. In contrast, restaurant and hotel consumption rose from 5.01 percent to 5.52 percent. It is important to note that food is an irreplaceable basic necessity. The fall of aggregate growth of food and beverage consumption means that people prefer to save money, followed by the force to reduce food consumption which surpirsingly the latter figure now is 26% down from 38%.This is the same with decline in purchasing power (the Consumer Confidence Index - CCI) fell 3.1 points to 120.7 in October 2017. In job availability it shows pessimism became the main triggering factor where the index fell 5.8 points to 98.2. Statistic shows, there were 3.8 million people lost their jobs within the 6 month period of February 2017 to August 2017 only. In addition, where earnings index also fell 0.1 points to 114.5. Decrease in income index would have a direct impact on the decline in lower middle class consumption. Plus, the impact of the current policy to lifting electricity subsidies for 900 volt ampere against 19 million customers and households. Electricity bill payments doubled from Rp 80,000 per month to Rp 170,000 per month. this is the case for middle class. The middle upper classs experience a decrease in consumption index as shown by the ratio of consumption to income fell 0.7 percent to 65.7 percent. The portion of revenues used to repay loans also fell 0.3 percent to 14.1 percent.

[December 2017]

Award for Citizen Protection 2017. The Hassan Wirajuda Award, named after the ex-Indonesian Foreign Minister was delivered to 18 Indonesians for their effort to protect Indonesian nationals, their loyality dedication during duty empowered by their wide range of network and its contribution to public on the importance of protection. One particular was an Indonesian journalist who wrote on Siti Aisyah and Abu Sayaf has contributed a new horizon on how Indonesian abroad, survived. Currently there are 6 millions Indonesian abroad, where it is admitted most are illegal workers. One important issue is Indonesian migrants who work on board on foreign fishermen ships which is subject to modern slavery. Other unpredicted cases are also of evacuations at conflicting area. Statistic shows the Indonesian government has freed 205 Indonesian from death rows, succesfully handled 1.192 cases of onboard ships, repatriating 181/942 Indonesians and more than 16.000 from conflict area and materially Rp404 billion money was saved from migrants bank accounts. The other awardees was also given to entities namely Minister of Human Rights on Civil Registrar' Office, Indonesian Police Special Task of Human Trafficking and most importantly to the staffs at the Indonesian Embassies around the world who maintain the service from time to time.

[December 2017]

Appeal Court Rejected, cartel pricing must end. The Indonesian Appeal Court at the Local Court of North Jakarta on December 5 2017 rejected the appeal submitted by two Indonesian major motorcycle manufacturers Yamaha Indonesia Motor Manufacturing ('YIMM') and Astra Honda Motor ('AHM') and as such the court is in agreegemt with the decision rules by the Indonesian KPPU - Indonesia Commission for Fair Trade. KPPU in its decision 4/kppu-I/2016 last February rules both companies being wrongfull breaching article 5 Law 5 year 1999 on particular pricing arrangement for motorcyle 110cc-125cc where both considered as cartel pricing practices prohibited by such article.Both companies are fined each Rp25 billion (USD 1,88 million) and Rp22.5 billion (USD 1,7 million) to the Ministry of Finance. YIMM responded its plan to appeal to the Supreme Court as the final decision maker.

National Election Neutrality breaches by Government Officer. The Indonesian politic calendar of year 2018 will mark as the year of elections for provincial and local government held altogether in June 2018, whereas earlier findings sees a number of government officials/civil servants has been caught for being not neutrals to candidates along the year 2017. There are currently 27 civil servants where 18 has been caught breaching the law tough the government has repetitively warned for being neutral as stipulated under article 33 law number 5 year 2014. the above figre however still considered very low, nationally. the 10 month preparations nationally will manage 171 elections altogether at once on 27 June at 17 provinces, 39 cities and 115 municipals.

[November 2017]

Social Gap: Widening Gap of Social Economy. The releases from various stakeholders during the 'Human CapitalSummit 2017' in Jakarta November 2017 was from an Indonesian NGO - Forum on Indonesia Development (INFID) titled Industrial Revolution and its Effect on Wealth Gap in Indonesia', shows that the revolution itself was makred by the information technology advancment, artificial inteligence, genetic editing, and therefor new industry is concentrated more on capital than manpower. In the Indonesian case, it is characterized by the macinery controlled by skilled manpower which statistically 62% Indonesian manpower are those unskilled and as such potentially loss their job these days. By quoting Credit Suisse report, if 1% wealthiest man controls 45.6% wealth in 2012 means such figure has increased to 49.3% in 2016 only as a result. Whilst in return 40% population' wealth' has reduced to 2.1% to 1.3% in 2016. Further, report also shows that the world may potentially pose a threat loss of jobs to 7.1million workers globally in 2020 as a result of the industry revolution. Another research by an Indonesian economy scholar from Universitas Indonesia shows a double effect for each revolutions, namely capitalization and destruction. it is true new technology increase productivity and open new jobs, but in fact it also replaces old jobs then create jobless and create chaos to work system itself. The main key to respon to this is to increase human resources quality, and companies must open to younger workforces especially on government owned companies where their research shows only 51% personnel are prepared and ready for directorship in the state owned companies. this has been started in early 1990s reform where its philosophy has been switched to corporate from bureaucracy models. Another sources shares its view that learning from the right and best sources is important to obtain the best education and training result as a future investment for human resources.

[November 2017]

350,000 Jakarta Residents Unemployed. Poverty and social inequality are still one of the complicated posts that must be overcome by the holders of the Capital City policy. The BPS DKI - Greater Area Jakarta Central Bureau of Statistics released data that as of August 2017 there were 350,000 unemployed in Jakarta. The level of open unemployment 2017 vs 2016 in Jakarta has dropped to 1.02 percent by identifiying seven unemployed out of every 100 people. The real figure is  totaling 4,856,000/4,509,000 (or 7,14%/6,12% rate, respectively). BPS respondents were drawn from DKI residents aged 15 years and over. Open unemployment means that people do not work who are looking for work. They do not work because, among other things, they are looking for the right job, an excess of supply of labor from school graduates plus those terminated (PHK). The latter figure must also compete with non DKI residents. DKI residents are in total of 7.78 million residents with 4.51 million total working age with a breakdown of 4.01 million were full-time workers, 390,000 (part-time workers), and 110,000 (underemployed) and 350000 (unemployed). Out of that 4,51 million, 3,68 million or 81.72 percent (85.18% in 2016) Jakarta residents are working in the service sector such as social services, personal services and teachers. Other than services, there are  808,000 people (covering 17,92%) work in the manufacturing sector and 17,000 people (in agriculture, ornamental plants and fishermen). As for education, high school graduates and its equivalent are dominating the workforce with 1,952,000 (43.28%), high school/vocational/equivalent graduates (ranging from 18.83%), lower junior high school gradutes (11,3%), diploma graduates (6.56%) and bachelor degrees graduates (above 4.76%). The DKI Jakarta Manpower and Transmigration Office has long been maintaining a training center to improve its residents capacity through Vocational Training Center - Balai Latihan Kerja BLK, which inlcude number of trainings for computer technicians, electronic, automotive, fashion, catering and office secretaries with annual 7,000 BLK graduates in DKI. Students are those graduates of junior high, high school and vocational schools. the 2018 capacity will be increased to 13,000 participants including a new program called OK OCE training - One Sub-district, One Centre of Entrepreneurship) with a target to  create up to 4,000 entrepreneurs, annually. Although the open unemployment rate is quite high, Jakarta's economic growth in the third quarter of 2017 is quite encouraging with 6.29% growth, one of the highest (national rate: 5,5%) with gross domestic product reaching Rp415 trillion.

[November 2017]

WTO: Indonesia lost beef appeal case in WTO. The case was submitted by the Indonesian government in 2015 by releasing an arrangement to save local business but this was considered as harming the WTO Secission on beef which appeal was taken later in December 2016, but again Indonesia lost the case at this second round. The case was submitted by the US and New Zealand for particular compulsory license and permit being unlawful. The appeal WTO decision has resulted in the  increase of the volume of imported meat and therefore decrease the meat prices in the Indonesian market. Statistically in 2016 imports of beef and derivative products from the US into Indonesia has reached 10,783 tons with a value of USD 39.4 millionof which after Rupiahs currency the price of US imported meat reached around Rp 47,000 per kg at the level of importers (at the retail market is around Rp 116,000 per kg). In fact, in some areas, such as Banda Aceh, Tanjung Pinang, Tanjung Selor, and Jayapura, the price of beef can reach Rp 130,000 per kg. US beef prices are low due to subsidies. In the wake of 1995-2016, the US Department of Agriculture subsidized 10.3 l; billion dollars for farmers. Consequently, the price of meat the cattle in the US retail market is only 8.4 dollars per kg.

[October 2017]

Increased, the Indonesian Press Freedom Index. The index in Indonesia for the year 2017 is an objective situations at 30.out of 34 provinces in Indonesia. The figure score is 68,95 in 2017 (only for the province of Banten, North Sulawesi, West Jawa, West Sumatera, and Sulawesi (67,92 in 20016). Both scores remain within the scale 56 to 69 (adequately free, score 70-89 is for quite free, and 90-100 for a complete freedom), which points covers political, economy and law supports. The above figure, however remain with notes as most parts of Indonesia press in fact become less and less professional, namely an imbalanced sources of news, intolerant and narrowed doubtful views in a wide multi-cultured country like Indonesia. Other factors than mentioned above is known for 'strings attached' news-by media owned by corporate/conglomerate where press qualities are in question. The Indonesian Press Law year 1999 is considered very liberal for press for they need not to be licensed and worst in fact are low pay, in turn this may effect news quality broadcasted or published. The law 1999 on media itself require only a legal entity for a media to establish its media business  where there are only 1.800 entities are registered out of 47.000 unregistered that has the potential to spread hoax news.

[September 2017]

KPPU Appreciate Two Phrase Examined by the Constitutional Court - MK.  The deliverance of decision by the Indonesian Constitutional Court, Mahkamah Konstitusi- MK (Case number 85/PUU-XIV/ 2016) is upon the request by the Business Competition Supervisory Commission Republic of Indonesia - Komisi Perlindungan Persaingan Usaha KPPU for a Judicial Review of Law 5 year 1999 of Prohibition of Monopolistic Practices and Unfair Business Competition. KPPU found there are two phrases need to be clarified since it is against the 1945 Constitution of the Republic of Indonesia. The phrase is "other parties" (Article 22, Article 23 and Article 24) and the phrase "investigation" (Article 36 letter c, letter d, letter h, and letter i, and article 41 paragraph (1) and paragraph (2). Both phrases in the deceision now do not have binding legal force, particularly for the phrase 'investigation'  insofar it is not interpreted as "collection of evidence as material for examination" which the phrase must be interpreted as a collection of evidence as material for examination, not an investigation as referred to in Law No. 8 of 1981. The MK Decision strengthen the efforts to enforce business competition law and KPPU institutions.

[September 2017]

The Law in 2016: Decrease of Attention. The conclusion of insignificant caryying out laws by the administration is derived from the results of the Indonesian Legal Roundtable (ILR) research from the assessment of state documents in 20 provinces in Indonesia. This further detailed in a phrase saying that the very low performance in advancing the principles of the rule of law. The release of the 2016 rule of law index, uses five principles and 18 indicators involving 120 experts. The first principle is regarding the government's obedience to the law, whose indicators are government actions or actions based on the law. Both formal legality, with indicators of effective dissemination, dissemination of regulations and clarity of regulatory formulations, and stability of regulations. Third, is the principle of independent judicial power, with indicators of the independence of judges in judging and deciding cases, independence of management of judges' resources, independence of institutional policies, and independence of the influence of the public and mass media. Fourth is the principle of access to justice, the indicators of which are information disclosure, fast, affordable justice and legal assistance. And, finally, human rights principles, with indicators guaranteeing the right to life, guaranteed rights to be free from torture, guarantees not to be enslaved, guarantee of the right not to be imprisoned based on contractual obligations, rights not punished for non-crime, and guaranteeing the right to freedom of thought, religion and belief. Following the above 5 principles, the index value of the 2016 Indonesian law state decreased compared to the previous year of 0.01 points. The declining principles are formal legality -0.04 (5.77 in 2015),  principle of independent judicial power is down 0.04 (5.74 points in 2016), principle of access to justice with down 0.07 (5.50 points in 2015). Two other principles in considerations are of government obedience to law (5.62 points) and the principle of human rights (4.25 points), showing an increasing trend. Overall the 2016 index value is 5.31 points (5.32 points in 2015). Simply by saying 2016 is the year law stagnancy in advancing the principle of the rule of law. In a category of provincial points, among others are South Kalimantan (6.52), East Java (6.37), East Kalimantan (6.00) Maluku (5.95), Riau (5.94), West Nusa Tenggara (5.73), Sulawesi Middle (5.72), Bali (5.68), West Sumatra (5.49). Then Central Java (5.42), North Sumatra (5.37), South Sumatra (5.36), Lampung (5.12), DKI Jakarta (5,06), East Nusa Tenggara (5), South Sulawesi (4 , 9), North Sulawesi (4.77), West Java (4.35), and Papua (4.25). Three provinces qualifications, namely South Kalimantan, East Java, and East Kalimantan.

[August 2017]

Special Committee: Appointment of 17 KPK Investigators are Deviating Procedure. The 17 candidates from the police headquarters for the Anti Graft Commision, Komisi Pemberantasan Korupsi - KPK investigators are deviating KPK intenral rule after findings by the Special Committe of the Parliament. KPK earlier has formally requested the Indonesian Police Headquarters to dismiss 11 candidates who formally did not resigned from police institution prior to their appointment as investigator in KPK, which is compulsory in order to keep KPK independent. In addition, the KPK changed the rules for the maximum age from 56 to 60. Both important rules has been breached. Further there is no clearance of financial status of the 17 police candidates from the Indonesian Financial Auditor - Badan Pemeriksa Keuangan BPK.

[August 2017]

Economy 2017: Surviving within the year of Challenge. Indonesian economy in 2017 shows a significant slowdown where it only reached growth below 5.0%, far from the expected growth target 5.2 to 5.4%, annually. Economist suspect the major cause are commodities now are taken out from list as a promising export sources of income. Banking industry become more prudent as the result of increasing of non-performing loan that hits close to 5% in 2014 to 2016, thus this industry become more conventional in digging profits through levies in every means possible to survive in spite of loan growth figure at 8% level. Middle class purchase power also become less in spending, a real trend of holding expenses in line the choice not expect to save it in bank since the rates are very low as taxes are growing in numbers due to new tax laws. The new tax laws along 2016 and 2017 are to cover government huge expenditure. Business risk significantly increased and as result bank remain to maintain its high loan rates to keep the bank business survive. Loan growth reached only 21% the whole year. In some part of Indonesia the economy growth is even worst below 4.5% (4.43%) namely at the Sumatera island - the second largest economy representing 21.54% national economy. Third largest island is Kalimantan where growth is 4.67% with 8.1% national contribution. Java Island the most populous and economy driven island where Jakarta City is, representing 58.1% reached 5.51% growth (as a comparison to previous nationnal growth subsequently reaches over 6%, annually). Consumer confidence� remain low due to inflation between 3-5%, but usually experience a temporary short hits during the early year and mid year.

[July 2017]

Three Years of Food Sovereignty. The event for Food Sovereignty was attended by farmers from 51 districts, held subsequently at a number of universities from Syahkuala University in in Aceh to Bogor Agricultural Institute in Bogor followed by the Jakarta International Expo in October 2017, with total active participants of 1,373 people. There were many notes to take, such as poverty in rural areas was slightly declining from March 2014 to March 2017 (14.37% to 13.96% - BPS) or minus 0.41 percent. However, the above decrease remain too small than the economic growth of an average of constant 4.97% per year for the last three years with inflation 4%. Global growth and dripping effects to domestic farmers do not occur, while no better welfare of farmers (2.26 to 2.49) and food quality (0.57 to 0.67) as shown by a figure of a increased poverty severity index for the same periode, respectively. There a so called Farmer Exchange Rate - Nilai Tukar Petani NTP as one of the farmers 'indicators of decline decisions' the same period of Januari-September 2014-2017 (101.98 to 100,71 - BPS). NTP food crops was the lowest and decreased value in the same period (98.59 to 97.21). Thus, claims that the welfare of farmers increased in the last three years is not true. The decline in well-being are extremely felt in the field according to farmers during the plantation to harvest. The second most importat thing is agricultural data, where official data showed that the year of rice dry glans (GKG) harvest increased from 75.4 million tons to 79.14 million tons and 81.57 million tons (2015-2016-2017 - Ministry of Agriculture, 2017). If the data is true, the surplus was 11.3 million tons to 11.4 million tons and 11.2 million tons of rice (again 2015-2016-2017). This surplus should lead to the average national medium rice price bought of which was only at Rp 5,600 per kilogram and get worst the following respective years, whereas the price of national medium rice surprisingly increased sharp at the range of Rp 10,500-Rp 10,900 for almost the last two years in a row. In addition, if the data is correct, there will be the accumulation of rice stock at the end of 2017 by 33.9 million tons of sufficient rice to feed the whole population of the year for one year. These happens almost to all commodities.

[June 2017]

Taxes Burden to Farmers: Ministry of Finance Learns Exemption. The association of Commidities Indonesia conveyed the mesasge to the Ministry of FInanace due to the facs that 78% of the products are exported, namely cacao, coffee and rubber which recently are subject to 10% tax of added value applicable are without exemption. Out of the figure, 89% are ordinary village farmers of 6,69 million hectares land. In 2013 a new regulation number 197 on tax applied with norms, but in practice the village farmers bear the tax transferred by the buyers through deduction of price. In 2013 the Supreme Court empowers the minister to make regulation on tax for a good purpose, unfortunately the new tax did not meet its purpose knowing the impact that has caused a serious decrease of farmers productivity due to less and less profit they will earn each harvest (for tax matter) from 150.000 tonnes to 104.000 tonnes annually. The tax law 42/2009 do not and exclude tax impose towards main basic foods namely rice, corn, grain, sago, soybenas, salt, meat, egg, milk, fruits, and vegetables.

[May 2017]

Oil and gas 2017:Oil and Gas Problems. Following the oil boom era of 1970 to late 1980s as a major 60% national income source, the figure in the 90s slumped to only 4%-5% and now the role of oil as a major national income is replaced by taxes. Oil and gas income these days are volatile to the fluctuation of international market price. Unfortunately this lowdown has another problem: oil and gas lawmaking from the law 22 year 2001 remain under pressures for this law has been twice being under MK - Constitution Court examinations, namely decision 002/PPU-I/2003 and 35/PUU-X/2012. In the latter decision, MK annulled part of the Law 22/2001 the main core role of Badan Pelaksana BP the Executive Body where MK in its decision consider the legally improper-existence of the BP which role significantly completely hinder the role by the government or state in oil and gas business, namely hinderance to the government' sole control in appointing state owned-companies to manage oil and gas business. This means the government who constitutionally as the sole owner of the natural sources under the Constitution 1945 - UUD1945 was positioned equally with the contractor (G-B). In turn, this equality role put the government in chain to a limited role to regulate the industry. In its response MK decided to increase the government in a super ordinate position to G to B (instead of B to B)  by the role of SKK Migas (under the Ministry of Energy and Natural Resources) and put the other partner in business at a subordinate position as the MK meant. This substantially changed again the playing game rules where contractors are now back to its common business risks practice with a great burden of various business taxes, levies including business risks and no more 'assume and discharge' benefits. Cost Recovery also changed the point of view where this under new the tax law is considered part of State Budget. This new playing field of rules finds its lowest figure since 2010, where statistically exploration investment reached below 10% until today. The contractors perceive the new playing field is not attractive anymore. In its previous MK decision in 2003, the MK revoked the term of market price control and as such empower the Ministry to re-regulate to serve its purposes which is in line with the subsequent MK decision. Meanwhile, there are residual previous set of lower technical regulations beyond the Ministry Authority and still legally in power and overlapping the national policy of price control and inefficiency management, which in the end creates unhealthy business environment. The latter also indicates other supporting oil and gas business are less likely to invest such as in infrastructures oil and gas, transmission, oil refinery, storage and distribution. Such limitation of infrastructures has caused high importation at 50% of oil and 70% of gas only.

[July 2017]

Revision of Law on Broadcasting. The current Indonesian Broadcasting Law 32 year 2002 remain in force, however a new draft of bill is close to finalization but with a number of crucial notes. The main issue is commercialization, an archaic issue existed for the last 15 years where stakeholders noted that there remain a broadcast of sensational tv programs, low quality information and bad entertainment remain unregulated including praises to the owners of the private TV and worse is soft campaign for candidates during election. Public needs for a balanced and fair information are still neglected during the exisence of the law 32/2002 for 15 years.

[April 2017]

Indonesia GDP the Highest: A Counter Response. The Indonesian President unilaterally claimed in November 2016 that Indonesia GDP is the highest among the world's three highest economy after China, India and the US. That statement triggered journalist and economic analyst Jake van der Kamp curious to find out and his research turns out that Indonesia's economic growth is not as good as it was heralded by Joko wi. According to him, Indonesia's economic growth actually is way far from India, and even to Mongolia, Timor Leste and Papua New Guinea for the Asian region. Specifically for the Asian region, he counted 13 countries with the highest economic growth compared to Indonesia, which for Indonesia the figure was only 5.02 percent. Among others is India (7.5), Laos (7.4), Myanmar (7.3), Cambodia (7.2), Bangladesh (7.1), Philippines (6.9), China (6.7) Vietnam (6.2), Pakistan (5.7), Mongolia (5.5), Palau (5.5), Timor Leste (5.5) and Papua New Guinea (5.4). According to Jake, Indonesia as a solid country with 261 million people can not really to be compared to like Timor or Palau. Thus he further say there are only six countries in the world, especially for economic growth and unfortunately Indonesia is at the bottom of the six far behind India, China and Pakistan in the same 200 million people group of countries. Down to 100 million or more so Indonesia is out of radar. Downstairs again. Van Der Kamp asked Jokowi not to spit the wrong facts. He found, like many politicians around the world, the gross domestic product (GDP) figure is always used to reveal their best achievements, but not necessarily. According to him, economic growth cannot be compared to GDP and it is not right to make it equal. GDP has been a business or tool to rival world companies and see the velocity of money in a performance. However, the focus on GDP causes a number of things not to be audited, GDP does not show a balanced company balance sheet or profits and losses and there is no record of it, what is obtained is a part of the statement of cash flows. He make an analogy if a company buys a car that is expected to be used for five years, it will reduce one-fifth the cost of the car from its profits and net worth every year. With GDP, you can pretend that the vehicle continues forever. GDP has also been a trick used by corporate accountants, where the GDP number is separated from each component then adjusted for inflation, this accordingly shows the level of economic growth. He confirmed Indonesia GDP figure actual growth rates in remain two decimal digits 5.02 percent for Indonesia.

[April 2017]

Indonesian Court order Government Australia to appear for Mediation over 115 Indonesian Children held in Adult Detention Centres in Australia. The decision was made by the Indonesian Central Jakarta District Court ordering the Australian Government to enter mediation in a case involving 115 Indonesians who allege they were juveniles when they were detained in adult jails and detention centres in Australia. An Australian Lawyer is  legal representative for the 115 Indonesian children being detained with among other 31 were jailed in adult prisons in Sydney, Melbourne, Perth and Brisbane and 84 were held in detentions centres when they should by law immediately sent home, she alleges these children were under the age of 18 when they were convicted of people smuggling and detained as adults. The Australian Government responded that it is not subject to the jurisdiction of the Indonesian court. The court session began hearing the case in February 2017, but the Australian Government appeared by its legal representative for the first time after failed to appear on two previous occasions for mediation with an argument that as a sovereign state Australia is not subject to the jurisdiction of the court. The mediation session is part of the court proceedings in Indonesian. A very strong argument was posed by Lisa Hiariej that those Indonesian boys were also victims of the people smugglers and deserve compensation of USD 103 million for damages for the time they spent behind bars with adult criminals, where it is planned the money to be shared among the group for them to get the chance for an adequate education up to college. She found a proof that at the time of their jailing, the Australian Federal Police was using a controversial, and now discredited, wrist x-ray to determine age. Initially, the connected case was in July, where Western Australian court ruled Indonesian Ali Jasmin was a victim of a miscarriage of justice after he was tried and then jailed as an adult when he was just 13. He spent almost three years in Perth maximum security Hakea Prison, with no compensation. This led to other 155 juvenile being legally mis-carriaged by the Australian Police. For the Indonesian Court current proceeding, if the mediation fails, a panel of three judges ruled the case would return to their court at which point they will determine if they have the required jurisdiction. The next is hearing that lead to decision.

[March 2017]

Review of the Post Tax Amnesty Program. The program has ended after 9 months with various responses, rejection and reaches including a number of notes for the government. This special tax program aims at law upholding in increasing state income at its low budgets with tax amnesty on 4 indications targets (1) asset declaration, (2) repatriation, (3) money paid and (4) participation. Until its last day 31 March 2017 the figure collected reached Rp4,866 trillion being declared (Rp 3.678 T domestic, Rp 1.032 T foreign with Rp147 Trillion committed). This is a figure beyond the target the government claimed so far tough one may challenge the accuracy of the numbers, where it in fact was only Rp 135T or 82% of the target Rp165T were repatriated. A number of tax policy analyst noted that, first this program in nature is a temporary instead being a national continuation program in reaching tax potential, secondly, the program lost its main target to reach foreign repatriation tax potentials instead in fact it gain most on domestic tax potential which is likely 'tax hunting animals in a zoo'. The government is not prepared in providing necessary legal tools to reach those bulk of tax potential being kept for decades outside the Indonesian territory as there is no effective legal mutual cooperation between states concerned. Third the participants are far low than the real figure is: only 1 million tax holder participated out of 30 million registered tax holders and worst 20 other potential new tax payers are missed out completely. Fourth, the declared assets 60% are financial assets so far already pay its taxes regularly but do not report it in their annual tax report, where these good citizens are worried of for future double tax paying with no solid legal ground under the tax amnesty scheme. One of a senior tax officer told the media that the tax office lost almost 70% legal tax cases in tax court itself, causing further state loss to pay fines. Recently the finance minister herself is very aware that most taxman are likely to reach tax targets but unaware of legal avenues.

[January 2017]

Budget Education under Challenge. Both Indonesian Education Minister and Minister of Finance are in a tight discussion over the Rp400 trillion budget for education all levels all over Indonesia. The budget of education  according to minister of education is around Rp 416 trillion which are spread into 20 ministries for training and special institutes (Rp39 Trilion)and the remaining goes to education institutions for 12 years levels schools and all state/public universities, but minster of finance asked the fair distribution as there remain a number of public schools infrastructure in bad conditions as the figure shows that in 2006 the education budget was Rp175 trillion then doubled to Rp 400 trillion in 2016, a significant increase since its first adjustment to comply with the Constitution Court Decision in 2009 in line to the Indonesian Constitution 1945.Other ministers told the budget is also to built and to maintain new infrastructures, technology, equipments, research, productivity, trainings as the result are not prompt.






Indonesia Law Update 2016


(under construction)

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