2013 INDONESIAN LAWS IN REVIEW

OverviewDespite pockets of positive developments, overall 2013 was not a good year for Indonesia which saw slow economic growth, a weak rupiah exchange rate against the US dollar, and a tumultuous scandal involving what had been up until the time of the incident one of the most respectable judicial institutions in the nation, the Constitutional Court. These issues are expected to linger into Indonesia’s 2014 political year and be inherited by the new Indonesian President and whichever party obtains the majority seats in the Parliament following the election.The slow economic growth was seen as mainly being caused by the Government’s failure to create a multiplier effect in the national economy, in which many infrastructure development projects did not commence due to financing reasons. In the first quarter of 2013, only 5.6 percent of IDR 194 trillion (US$20 billion) that was allocated for capital expenditure was disbursed. These circumstances deterred new job creation and hindered the growth of businesses dependent on government spending. In comparison, in 2012, the government managed to disburse 79.6 percent of IDR 176 trillion from the allocated capital expenditure.The case involving Akil Mochtar, the Chief Judge of the Constitutional Court, is rated as one of the most shocking scandals of 2013 as the Constitutional Court was considered by many Indonesians as the most transparent and corruption-free judicial institution in the nation.Slow progress was not only apparent in the economic sector, but also in the law making process. Law makers had planned to prioritize the enactment of 70 laws in 2013, but were only successful in enacting 27. This malaise in the legislative process contributed to Indonesia’s slow economic growth particularly for the many sectors that were depending on new legal infrastructure to support their businesses.This edition of Indonesian Law Digest (“ILD”) will review headlining laws that were enacted in 2013, reviewing also the 2013 National Legislation Program (“Prolegnas”) as well the 2014 Prolegnas.Types of Draft BillsThere are three types of draft bills under the National Legislation Program (Program Legislasi Nasional): draft bills prepared by ministries within the President’s executive branch (Government initiatives), draft bills prepared by the House of Representatives (House initiatives), and draft bills categorized as open for discussion.Bills categorized as open for discussion include ratification of international treaties, the state budget, establishment of new regions, enactment of government regulations in lieu of a law, and the impact of Constitutional Court decisions. Additionally, this classification approach categorizes laws based on whether they are: newly introduced, amendments, or improvements that will repeal and replace a previous law.The 2013 National Legislation Program (Prolegnas)According to Articles 16 and 17 of LawNo. 12 of 2011on the Establishment of Laws and Regulations, plans to enact a new law require the House to include the plan in the National Legislative Program.Based on House of Representatives Decree No. 04/DPR Rl/11/2012-2013 on the National Legislation Program - 2013 Prioritized Draft Bills, the 70 legislative priorities that were to be passed as bills in 2013 were on: