The
Indonesian legal system is complex because it is a confluence of three distinct
systems. Prior to the first appearance of Dutch traders and colonists in the
late 16th century and early 17th century, indigenous kingdoms prevailed and
applied a system of adat (customary) law. Dutch presence and subsequent
colonisation during the next 350 years until the end of World War II left a
legacy of Dutch colonial law. A number of such colonial legislation continue to
apply today. Subsequently, after Indonesian declared independence on 17 August
1945, the Indonesian authorities began creating a national legal system based
on Indonesian precepts of law and justice.
These
three strands of adat law, Dutch colonial law and national law co-exist in
modern Indonesia. For example, commercial law is grounded upon the Commercial
Code 1847 (Kitab Undang-Undang Hukum Dagang or Wetboek van Koophandel), a relic
of the colonial period. However, commercial law is also supplemented by a large
number of new laws enacted since independence. They include the Banking Law
1992 (amended in 1998), Company Law 1995, Capital Market Law 1995, Antimonopoly
Law 1999 and the Oil & Natural Gas Law 2001. Adat law is less conspicuous.
However, some adat principles such as “consensus through decision making”
(musyawarah untuk mufakat) appear in modern Indonesian legislation.
Constitutional
Structure
To
understand modern Indonesia’s legal system, some background must be given
regarding the Indonesian constitutional structure. Indonesia is a unitary
republic established pursuant to the constitution declared at independence,
commonly called the 1945 Constitution (Undang Undang Dasar 1945). During the
32-year period when Soeharto was in power, the 1945 Constitution was never
amended.
After
his resignation in May 1998, the 1945 Constitution was amended four times - in
October 1999, August 2000, November 2001 and August 2002. Among other things,
these amendments deal with far-reaching issues such as limitations on the
powers and term of office of the President; decentralisation of authority from
the central government to provincial and regional governments; and the creation
of additional constitutional bodies such as the House of Regional
Representatives (Dewan Perwakilan Daerah) and the Constitutional Court
(Mahkamah Konstitusi). Proposals for future amendments, some of which deal with
equally weighty matters, are currently being discussed.
The
1945 Constitution provides for a number of constitutional bodies. Two of the
most important are the People’s Consultative Assembly (Majelis Permusyawaratan
Rakyat or MPR) and the House of People’s Representatives (Dewan Perwakilan
Rakyat or DPR). The DPR is 500-strong and consists of elected and appointed
representatives. Its main function is to make legislation and hold the
President and his ministers accountable. The DPR meets during sessions
scheduled throughout the year.
The
MPR currently has almost 700 members comprising all the DPR members, appointed
individuals representing the provinces, and other nominees. Constitutionally,
the MPR is the supreme state body. Only the MPR has the power to amend the Constitution.
It meets more infrequently, typically on an annual basis (constitutionally, it
must meet at least once every five years). It issues policy statements in the
form of resolutions (ketetapan) as well as the broad outline of state policy
(Garis Besar Haluan Negara or GBHN). The country’s overall economic plan is
included in the GBHN.
Whereas
the MPR previously elected the President and Vice-President, recent
constitutional amendments stipulate that the President and Vice-President are
to be directly elected by the people. The first direct elections for the
presidency and vice-presidency are expected to take place in 2004. Presidential
powers have also been circumscribed to some extent by recent constitutional
amendments. Also pursuant to these amendments, a person can only be elected as
President or Vice-President for a maximum of two consecutive terms of 5 years
each. Nevertheless, the Presidency is still a powerful position in that the
President is the head of state and head of government as well as the supreme
commander of the armed forces.
Legislation
Modern
Indonesian legislation come in a number of forms. The variety in categories and
sources of legislation is a big hurdle for foreigners seeking to understand
Indonesian law. In an effort to clarify the status of various types of
legislation, in August 2000 the MPR issued the following official hierarchy of
legislation:
•
1945 Constitution (Undang-Undang Dasar 1945)
•
MPR Resolution (Ketetapan MPR)
•
Law (Undang-undang)
•
Government Regulation Substituting a Law (Peraturan Pemerintah Pengganti
Undang-undang)
•
Government Regulation (Peraturan Pemerintah)
•
Presidential Decree (Keputusan Presiden)
•
Regional Regulation (Peraturan Daerah)
In
practice, there are other legislative instruments in current use. They include
Presidential Instructions (Instruksi Presiden), Ministerial Decrees (Keputusan
Menteri) and Circular Letters (Surat Edaran). Unfortunately, at times there are
inconsistencies between specific legislative instruments.
Once
promulgated, legislation is published in the State Gazette of the Republic of
Indonesia (Lembaran Negara Republik Indonesia). Certain types of legislation
such as Laws and Government Regulations are accompanied by an official
explanatory memorandum called the Elucidation (Penjelasan). The Elucidation is
published in the Supplement to the State Gazette (Tambahan Lembaran Negara) and
is generally authoritative for purposes of interpretation. In addition to the
State Gazette, there is a sister publication called the State Report (Berita
Negara) which contains government and public notices.
Courts
The
Indonesian judicial system comprises several types of courts under the
oversight of the Supreme Court (Mahkamah Agung). Following the civil law
tradition of The Netherlands, Indonesian courts do not apply the principle of
precedent which is so familiar among common law jurisdictions.
Most
disputes appear before the courts of general jurisdiction, with the court of
first instance being the State Court (Pengadilan Negeri). There are about 250
State Courts throughout Indonesia, each with its own territorial jurisdiction.
Appeals from the State Court are heard before the High Court (Pengadilan
Tinggi), of which there are around 20 throughout Indonesia. The High Court is a
district court of appeal. Appeals from the High Court and, in some instances
from the State Court, may be made to the Supreme Court located in Jakarta. The
Supreme Court can hear a cassation appeal (kasasi) which is a final appeal from
lower courts. It can also conduct a case review (peninjauan kembali) if, for
example, new evidence is found which justifies a re-hearing.
In
1998, the Indonesian authorities established the Commercial Court (Pengadilan
Niaga). Initially, the Commercial Court is tasked to handle bankruptcy and
insolvency applications. Its jurisdiction can be extended to other commercial
matters. Appeals from the Commercial Court proceed direct to the Supreme Court.
There is also a State Administrative Court (Pengadilan Tata Usaha Negara) which
hears administrative law cases filed against the government.
In
the 2001 constitutional amendments, provision was made for the creation of the
Constitutional Court (Mahkamah Konstitusi). Among other matters, the
Constitutional Court has the jurisdiction to hear cases involving the
constitutionality of particular legislation, results of a general election, as
well as actions to dismiss a President from office.
Government
From
the geographical perspective, the nation is divided into provinces and the
three special districts of Yogyakarta in central Java, Aceh in Sumatra, and the
capital district of Jakarta. Each province is administered by a provincial
government with its own representative assembly (Dewan Perwakilan Rakyat Daerah
or DPRD). The provincial government is headed by a Governor, who is appointed
by the President. As a result of the regional autonomy legislation enacted in
2000 and implemented gradually from 2001, greater autonomy and powers are being
devolved to regional authorities. Overall, the administrative structure is as
follows:
Territory Head
Nation
(Negara) President (Presiden)
Province
(Propinsi) Governor (Gubernur)
District
/ Municipality (Kabupaten / Kotamadya) Regent / Mayor (Bupati / Walikotamadya)
Sub-district
(Kecamatan) Sub-district Head (Camat)
Ward
(Kelurahan) Ward Chief (Lurah)
Village
(Desa) Village Chief (Kepala Desa)
From
the operational perspective, the country is administered chiefly through
government departments. A department is equivalent to a ministry. The typical
departmental structure from an operational basis is as follows:
Unit Head
Department
(Departemen) Minister (Menteri)
Secretariat
(Sekretariat) Secretary General (Sekretaris Jenderal)
Inspectorate
(Inspektorat) Inspector General (Inspektur Jenderal)
Directorate
(Direktorat) Director General (Direktur Jenderal)
Division
(Badan) Head of Division (Kepala Badan)
Centre
(Pusat) Head of Centre (Kepala Pusat)
Bureau
(Biro) Head of Bureau (Kepala Biro)
Apart
from ministers who oversee individual departments, there are a number of senior
ministers, called Coordinating Ministers (Menteri Koordinator), who each
oversee a number of related portfolios. In addition, there are other officials
holding ministerial rank, including the Attorney-General (Jaksa Agung), the
Secretary of State (Sekretaris Negara) and the Commander of the Indonesian
Armed Forces (Panglima Tentara Nasional Indonesia).
Legal
Professionals
There
are at least three distinct branches of legal professionals in Indonesia. They
are the notaries, advocates and legal consultants. A notary (notaris) is a
legally trained semi-public official appointed by the Department of Justice
& Human Rights (Departemen Kehakiman dan Hak Asasi Manusia) to notarise
deeds (akta). The semi-public nature of a notary’s office arises because he is
a government appointee who, at the same time, conducts a private professional
notary practice.
A
notarised deed, also called an authentic deed (akta otentik) is a formal deed
prepared by and executed before a notary. At law, some legal documents require
notarised deeds. Notarisation verifies that the deed is properly executed by
the parties and, at law, the deed is conclusive proof on the matters to which
it refers. To establish a company, for example, requires the assistance of a
notary since the deed of establishment (akta pendirian) must be executed in his
presence.
Since
a notary is a government appointee, he does not provide legal advice to parties
appearing before him. The parties to a transaction should have obtained
independent legal advice and agreed upon the matters contained in the deed
prior to appearing before the notary. In this way, the notary acts as a neutral
party who prepares, witnesses and authenticates documents, and subsequently
archives the signed original in his office. At present there are about 140
notaries throughout Jakarta. Parties are free to engage any notary they desire
to authenticate their documents. Many notarial fees are charged in accordance
to a scale issued by the Department of Justice & Human Rights although the
fees for some matters are negotiable.
Advocates
(pengacara) are lawyers in private practice with formal legal training. They
are the Indonesian equivalent of attorneys in the United States and barristers
and solicitors in England. Many advocates focus on litigation although others
also provide general legal advice. Due to the limited size of many of their
practices, advocates in smaller firms may not have sufficient expertise to
provide commercial law advice on international business transactions.
Legal
consultants (konsultan hukum) began to emerge as a distinct group of legal
professionals in the late 1960s and early 1970s, when foreign investors started
to venture into Indonesia in significant numbers. Most of them are also
advocates although they tend to refrain from accepting litigation cases. Many
legal consultants have completed advanced legal training overseas and prefer to
specialise in providing legal advice and documentation for corporate,
commercial, banking and cross-border matters.
Researching
Indonesian Law
Those
undertaking Indonesian law research face the major hurdle of sourcing relevant
legal material. Indonesian legal information is not widely available through
print or online media, although recent improvements in the latter are making
significant progress to the benefit of researchers. The main print media are
the Government Gazette and its sister publications. The problem is that these
publications are often behind schedule. The Government Printing Office (Pusat
Penerbitan PNRI) also publishes individual legislation on a case-by-case basis.
Although these are useful and relatively inexpensive, they are not entirely
error-free.
The
other print media providing legal materials are books, journals and other
publications. Most are in the Indonesian language and their standards of
presentation and analysis vary. Many of these publications are available only
in Indonesia or in specialist Indonesian collections in overseas libraries.
Online
media promises to be a useful means to make Indonesian legal material more
readily available to the public. Certain Indonesian government departments are
beginning to make available on their websites key legislation in their
respective fields of interest. For a listing of government departments with websites,
see the section on Useful Links, below. The best free website currently
available for law seems to be the site maintained by Hukumonline, a partially
USAID-funded project operated by a local non-profit group based in Jakarta.
Hukumonline provides most of the past and current legislation which can be
viewed onsite. Operating since 2001, this website is updated regularly and
contains useful legal information.
One
major limitation of Indonesian legal materials from most print and online
sources is that they are presented in a non-consolidated form. For example, a
statute like the Banking Law 1992 is available as it was first enacted in 1992.
Its major revision, the Banking Amendment Law 1998, is available as a separate
statute. Most publishers do not make the effort of consolidating the
amendments, with the result that researchers have to undertake their own
“cut-and-paste” effort to create a consolidated legislation. Another obvious
limitation with many Indonesian print and online sources is that they publish
their material almost entirely in the Indonesian language. This creates a major
stumbling-block for foreign researchers who are not familiar or fluent with the
language.
Indonesian
Business Legislation Online
In
an effort to overcome some of the problems with sourcing Indonesian
legislation, there is a new Indonesian-English online subscription service
available from Indobizlaw, based in Singapore. Indobizlaw Online
(www.indobizlaw.com) has on its database key business legislation including critical
ones such as the Company Law 1995, Banking Law (Consolidated) 1998,
Antimonopoly Law 1999 and Oil & Natural Gas Law 2001. Each legislation is
available in its Indonesian text together with a high-quality English
translation. Moreover, a piece of legislation is consolidated wherever possible
to take into account legislative amendments. As the Indobizlaw Online database
expands over time, this should facilitate research into Indonesian business
legislation for the benefit of English-speaking business and academic
researchers.
Useful Links
Below
are some useful websites of various Indonesian government bodies and sources of
Indonesian law. The information provided in these websites, as well as the
links themselves, are subject to change without notice; so it is prudent to
check them regularly for changes.
State Organs
People's
Consultative Assembly: (http://www.mpr.go.id/h/index.php)
House
of People’s Representatives: (http://www.dpr.go.id)
Cabinet,
Key Departments & Department-level Agencies
Cabinet:
(http://www.dfa-deplu.go.id/new/grcabinet.htm)
Department
of Foreign Affairs: (http://www.dfa-deplu.go.id)
Department
of Home Affairs: (http://www.depdagri.go.id)
Department
of Defence: (http://www.dephan.go.id)
Department
of Justice & Human Rights: (http://www.depkehham.go.id)
Department
of Finance: (http://www.depkeu.go.id)
Department
of Mines & Energy: (http://www.setjen.dpe.go.id)
Department
of Agriculture: (http://www.deptan.go.id)
Department
of Forestry: (http://www.dephut.go.id)
Department
of Transportation: (http://www.dephub.go.id)
Department
of National Education: (http://www.pdk.go.id)
Attorney-General’s
Office: (http://www.kejaksaan.go.id)
Research
& Technology Agency: (http://www.ristek.go.id)
National
Development Planning Agency: (http://www.bappenas.go.id)
State
Secretariat: (http://www.ri.go.id)
Lion
Air: (http://www.tiket.com/pesawat/tiket-lion-air)
Capital
Investment Coordinating Board: (http://www.bkpm.go.id)
Bank
Indonesia: (http://www.bi.go.id)
Source: http://www.llrx.com
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