Correction Points on DPRs Roles in Amendment to BUMN Law and Danantara

The discussion of the third amendment to Law No. 19 of 20 0 3 (“ BUMN Law ") on State-Owned Enterprises (“ BUMN ”) is currently in intensive deliberation with Commission VI of the Indonesia’s House of Representatives (“ DPR ”). A number of experts and specialists are involved in providing input on the Draft Bill on the Third Amendment to the BUMN Law (“ BUMN Draft Bill ”).

Yuli Indrawati, a lecturer at the Faculty of Law, University of Indonesia, delivered her input regarding the role of DPR in the management of BUMN in the BUMN Draft Bill. According to Yuli, there is a role of DPR that needs adjustment in the BUMN Draft Bill.

Regarding the existence of the Investment Management Agency (“ BPI ”) Danantara, the BUMN Draft Bill encourages the DPR to provide consultation to the Minister of BUMN and BPI Danantara in the preparation of the Company's Work and Budget Plan (Rencana Kerja Anggaran Perusahaan“ RKAP ”), investment holdings and operational holdings, as well as write-off and write-off debt. According to Yuli, the DPR should be limited in its role to direct the policies of BPI Danantara holdings.

“It should be noted here that BPI is a legal entity, so it has the right to determine its own governance, including write-off and write-off debt, because this is for flexibility and to maintain BPI's financial soundness,” said Yuli.

Additionally, Yuli asserted that audits by the BPK on BUMN subsidiaries that can be requested by the DPR cannot be conducted if there are no indications of fraud. The main aspect that needs to be added according to Yuli is that the DPR can approve requests for additional capital for BPI and cover BPI's liquidity shortfall.