Regulatory Reform in Indonesia A Legal Perspective Prof. Dr. Widodo Ekatjahjana Kai Hauerstein Dr. Daniel Heilmann (Eds.) Regulatory Reform in Indonesia A Legal Perspective Prof. Dr. Widodo Ekatjahjana Kai Hauerstein Dr. Daniel Heilmann (Eds.) Hanns Seidel Foundation Regulatory Reform in Indonesia A Legal Perspective Published by Hanns Seidel Foundation Cooperation with The Ministry of Law and Human Rights Directorate General of Legislation Editors (Eds) Prof. Dr. Widodo Ekatjahjana Dr. Daniel Heilmann Kai Hauerstein ISBN 978-602-98099-0-9 Infringement Sanctions Article 72 Section 19 Year 2002 on Copyright 1. Anyone who intentionally violated and without the right to perform action as meant in Article 2 Paragraph (1) or Article 49 Paragraph (1) and Paragraph (2) shall be subjected to sanction in terms of imprisonment for minimum 1 (one) month and/or penalty of minimum IDR 1,000,000.00 (one million rupiah), or shall be subjected to sanction in terms of imprisonment for maximum 7 (seven) years and/or penalty of maximum IDR 5,000,000,000.00 (five billion rupiah). 2. Anyone who intentionally broadcasting, displaying, distributing, or selling to public a creation or copyright or right infringement product relating to those as meant in Paragraph (1) shall be subjected to sanction in terms of imprisonment for maximum 5 (five) years and/or penalty of maximum IDR 500,000,000.00 (five hundred million rupiah). Hanns Seidel Foundation The Hanns Seidel Foundation (HSF) is a German non profit foundation, committed to the promotion of the values of humanism and democracy. HSF has more than fifty years of experience in civic education in Germany, and it has established international project offices all over the world. The HSF office in Indonesia was established in 1993. Since then projects and programs have been jointly implemented with domestic and international partners. The main pillars of HSF‘s work are the justice and democracy sectors, in which HSF focuses on training and capacity-building, exchange programs, political dialogue, and public awareness raising. The promotion of democracy and the rule of law is pursued in co-operation with local partners, amongst them notably the Constitutional Court of the Republic Indonesia and the Ministry of Justice and Human Rights. Within its mandate, the HSF Jakarta supports, for example, the local cooperation partners in the areas of capacity-building and knowledge transfer for civil servants. The Hanns Seidel Foundation works in the service of democracy, peace, and development. This means that the vision and mission are to improve, strengthen, and utilize human capacities – always taking into account the social, political, cultural, and economic realities in Indonesia. Regulatory Reform in Indonesia A Legal Perspective | i ii | Regulatory Reform in Indonesia A Legal Perspective Table of Contents Foreword ................................................................................................................ ix About This Book ..................................................................................................... xi Part 1: Context and Analysis: Twenty Years of Regulatory Reform Kai Hauerstein .........................................................................................................1 Abstract ...................................................................................................................2 1. Catalysts for Regulatory Reform ......................................................................4 1.1. Introduction ..............................................................................................4 1.2. The Asian Financial Crisis and The Downfall of Suharto ............................5 1.3. Decentralization ........................................................................................5 1.4. Competitiveness ........................................................................................6 2. Regulations and Methodology for Gap Analysis .............................................8 2.1. Regulations: Purpose and Types ...............................................................8 2.2. Regulations and Their Hierarchical Order .................................................9 2.3. Regulatory Quality ..................................................................................14 2.3.1. Development: From Red Tape to “Smart” Tape ..........................14 2.3.2. Regulatory Quality Criteria ..........................................................15 2.3.3. Approaches Towards Better Regulations .....................................16 2.4. Regulatory Process: Entry Points for Regulatory Reform Measures ...............18 2.5. Methodology Gap Analysis and Key Findings ..........................................22 3. Criteria for Assessing Regulatory Reform (SHOULD) .....................................24 3.1. Complying with Negara Hukum (Rule of Law) ........................................25 3.2. Providing access to regulations ...............................................................25 3.3. Improving the Quality of Regulations on National and Sub-National Level ........................................................................................................26 3.4. Improving the Review and Harmonization of Regulations ......................26 3.5. Improving the Implementation of Regulations .......................................27 4. Stock-Taking of Regulatory Reform Measures (IS) .........................................27 4.1. Regulatory and Policy Framework for Regulatory Reform ......................27 4.2. Institutional Framework for Regulatory Reform .....................................31 4.3. Donor support .........................................................................................36 5. Key Issues: Assessing the Difference Between IS and SHOULD .....................38 5.1. Mandate “Negara Hukum” .....................................................................39 5.1.1. Dominating Role of the Executive: Wide-Ranging Legislative Powers Through Broad Framework Laws .....................................40 5.1.2. Weak DPR: Unproductive, Inexperienced, and Corrupt ...............42 5.2. Access to Legal Information ....................................................................43 Regulatory Reform in Indonesia A Legal Perspective | iii 5.3. Regulatory Quality ..................................................................................45 5.3.1. National Level ..............................................................................46 5.3.2. Sub-National Level .......................................................................53 5.4. Regulatory Evaluation: Review and Harmonization ................................59 5.4.1. Administrative Review of Regulations .........................................60 5.4.2. Judicial Review ............................................................................66 5.4.3. Informal Justice System Harmonizing Conflicting Regulations Other Disputes ............................................................................69 5.5. Implementation of Regulations ...............................................................71 5.5.1. National Level ..............................................................................71 5.5.2. Sub-National Level .......................................................................72 6. Way Forward: Recommendations for Addressing Identified Gaps ...............74 6.1. Towards Complying with “Negara Hukum” .............................................76 6.2. Towards Improving Access to Regulations ..............................................77 6.3. Towards Improving Regulatory Quality ...................................................78 6.4. Towards Improving Regulatory Review ...................................................82 6.5. Towards Improving Regulatory Implementation .....................................86 Legal Terminology and Citation .............................................................................88 Bibliography ...........................................................................................................89 List of Acronyms and Abbreviations ......................................................................92 Part 2: Selected Analysis of Key Issues on Regulatory Reform .................93 I. Efforts to Improve the Performance of the Indonesian House of Representatives in the Formulation of Quality Laws Agus Riewanto ................................................................................................95 1. Introduction ..............................................................................................96 2. Arrangement of the National Legislation Program ...................................98 3. The Low Number of National Legislation Product ....................................99 4. Efforts to Improve Legislation Productivity .............................................104 4.1. Changing the Orientation of the People’s Representative .............104 4.2. Eliminating the Factions at the House of Representatives of the Republic of Indonesia .....................................................................106 4.3. Finding Balance in the Role of the House of Representatives and the House of Regional Representatives of the Republic of Indonesia ......................................................................107 4.4. Paving the Way for the President’s Right to Veto ...........................108 4.5. Strengthening Public