Indonesian Law Digest

Industrial Relations, the Industrial Relations Court, and the Interim Law - Implications
The House of Representatives (DPR) has recently passed Government Regulation in lieu of Law (Interim Law) No. 1 of 2005 as Law No. 2 of 2005, and this codifies the postponement of the implementation of Law No. 2 of 2004 on Industrial Relations Dispute Settlement (the “PPHI Law”). On coming into force the PPHI Law will repeal the previous Labor Dispute Settlement Law, No 22 of 1957 (the “LDS Law”). The repeal of the LDS Law means that the previous dispute settlement mechanisms such as the Central and Regional Dispute Resolution Committees (P4P and P4D) will become obsolete (see ILD of 11 April 2005).
Government Administration, Administrative Tribunals - Good Governance
In this era of reform, increasing democratization of the governance process, and a drive to eradicate corruption across the board, the State Minister for State Administrative Reforms has made available a Draft Bill on Government Administration (the “Draft”) that is currently subject to internal debate within the Department. Each of the above elements has been criticized at some point in time as failing or not reaching the levels expected to showcase real reform. Yet, the release of this Draft which is currently subject to internal debate evidences a growing commitment to gaining as much input into the legal drafting process as possible.
Arbitration, Interpretation, Precedent, and the Position of the Supreme Court
Arbitration is a developing area if Indonesian law in spite of the fact that the principles of arbitration have long been recognized in Indonesian law. Nevertheless, decisions at the District and Supreme Courts evidences a developing jurisprudence and precedent on both domestic and foreign arbitral awards, particularly foreign arbitral awards and their subsequent enforcement in Indonesia. This ILD will focus on both domestic and foreign arbitral awards and differences in their respective enforcement in Indonesia. It is important to note that there is a significant and critical distinction between the terms jurisprudence and precedent. Jurisprudence refers to the philosophy of law and precedent to the decisions handed down by higher courts that are binding on lower courts. However, in the Indonesian context “yurisprudensi” is the decisions of higher courts that establish a base position on either an interpretation or a factual scenario that is expected to be followed by lower courts. Yurisprudensi is usually translated as jurisprudence and is often the source of much confusion for non-Indonesian lawyers in determining whether it is in fact jurisprudence or precedent.
Changing the Paradigms - Promotion & Prevention vs. Cure & Rehabilitation
'Tis the season for legislative action' although it is fair to say that any legislative action on the 2005 National Legislative Program is a welcome change from the slow pace to date. The 2005 parliamentary sessions have so far seen 24 pieces of legislation begin the process to enactment. However, the House of Representatives (DPR) has not yet passed one of those pieces of legislation into law. This means that the DPR still has 55 bills to debate and pass if it is to meet the legislative agenda that has been set in the National Legislative Program. It is expected that the DPR will pass only a fraction of the agreed National Legislative Program, possibly as few as 16 bills.
Maritime Liens, Mortgages, Hypothecs, and Charges - Commercial Shipping - Legal Certainty to Drive Increased Investment and Trade
The International Convention on Maritime Liens and Mortgages although completed on 6 May 1993 did not come into force until 5 September 2004, as Article 19(1) explicitly states that the Convention comes into force 6 months after the 10th State expresses its consent to be bound by the provisions of the Convention. Nigeria was the 10th State to express this consent to be bound by the provisions of the Convention and currently there are 21 States that have consented or acceded to the Convention. Of these 21 States only 1 State, the Syrian Arab Republic has made a Declaration. This Declaration states only that Syria's accession to the Convention does not entail any recognition of Israel nor does it give rise to any obligations upon Syria to have dealing with Israel. It is interesting to note that Israel is not a signature to this Convention nor has it expressed any intention of acceding to the Convention.
Expropriation of Land Compensation v. Fair Price - Who Should Decide
The debate over compensation and fair price, although seemingly an academic one, is important as it is likely to be a trigger for an escalating number of land disputes between the Government and legal land title holders. PP 36/2005 recognizes that the most appropriate means of resolving the expropriation issue is through mutual discussion leading to a mutually satisfactory result for both parties with respect to a fair price for the land. However, it is worth noting that the balance of power in this negotiation or discussion process resides with the Government for a number of reasons. The most important of which is that even when the title holders refuses to accept the offer made by the Government, the Government still has the authority to expropriate the land and commence development of the land and let the matter be resolved in court. This authority could be cynically interpreted to infer that the Government does not need to negotiate in good faith as ultimately it will get the land anyway.
Expropriation of Land - The Legal Framework – A Court Challenge
Land expropriation is not a new phenomenon in Indonesia and the recent enactment of Presidential Regulation No. 36 of 2005 on Land Expropriation for Development in the Public Interest (“PP 36/2005”) is not some legal anomaly but rather an extension or refinement of the current laws in this sector to reinforce the public interest over the rights of individuals. Nevertheless, the enactment of PP 36/2005 as a replacement for the earlier Presidential Decree, No. 55 of 1993 (PD 55/1993), has been quickly and definitively criticized as a repressive development in the regulatory framework covering the land sector. The majority of this criticism focuses on the arbitrary authority that the Government now has to forcibly evict landholders with registered and legal title to land with no guarantee that a fair price will be paid for the expunging of their rights to their land.
Expropriation of Land Individual Rights v. Public Interest
The public interest is the primary consideration of PP 36/2005 and means that the only land that may be expropriated under the provisions of this Regulation must fall within the public interest categories listed in it. In contrast to PD 55/1993 which included 14 public interest categories, PP 36/2005 now includes 21 public interest categories. This is a significant increase in the amount of land that potentially falls within the gambit of public interest development thereby increasing the likelihood of land expropriation and land disputes. The question that arises as a result of this expansion of the public interest is whether it really is in the public interest or whether the interests being regulated here are the interests of others, such as investors.
Capital Investment in Jakarta Regional Autonomy v. One Roof Services
The Government of Jakarta has recently issued Governor Regulation No. 15 of 2005 on Implementing Guidelines for the Supervision and Control over the Implementation of Capital Investment (“Reg. 15/2005” or the Regulation) to ensure that the investment climate in Jakarta is as conducive as possible for both foreign and domestic capital investment. Reg. 15/2005 highlights a number of critical and important issues that affect and will continue to affect the capital investment climate in Indonesia as investors become increasingly wary of the difficulties in determining who the responsible authorities are with respect to the approval and supervision of capital investment expenditure within Indonesia.
Broadcasting in Indonesia - The Regulatory Framework Takes Shape
The broadcasting regulatory framework is becoming increasingly complete with the passage of time. It is one of the many subtle intricacies of Indonesian law that the full regulatory picture does not take shape until the government and other appointed authorities issue implementing regulations and guidelines as required by the primary law. In this case, Law No. 32 of 2002 on Broadcasting (“Broadcasting Law”) has been in force since its enactment. Nevertheless, the strict interpretations of the Articles of the Broadcasting Law have required that the broadcasting community wait until implementing regulations were issued as well as guidelines and other directives by the Indonesian Broadcasting Commission (“KPI” or Komisi Penyiaran Indonesia), of particular interest has been the broadcasting guidelines relating to content. This decision on broadcasts standards and content was issued on 30 August 2004 however implementing regulations continue to be issued, the most recent of which were issued on 18 March 2005.
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