Relationship between International & Domestic Law
Combatting of Corruption: Mutual Legal Assistance (MLA) in Criminal Matters between the Republic of Indonesia and the Swiss Confederation
The Treaty on Mutual Legal Assistance (MLA) in Criminal Matters between the Republic of Indonesia and The Swiss Confederation has entered into force after Indonesia ratified the law through Law No. 5 of 2020. Switzerland has also completed its domestic ratification process.
This bilateral agreement regulates legal aid cooperation, which is expected to strengthen the tracking, freezing, and confiscating of assets resulting from crimes. This broad scope of mutual criminal assistance is essential for supporting the criminal law process in the requesting state. The MLA agreement between Indonesia and Switzerland is critical considering that Switzerland is the world’s financial center and is known as a country that vigorously protects the confidentiality of people who keep their assets in Switzerland.
The MLA agreement can also combat crimes in the fiscal sector, including tax fraud or other tax crimes committed by Indonesian citizens or legal entities. Another critical aspect of the Republic of Indonesia – The Swiss Confederation MLA Agreement – is the application of the retroactive principle that allows requests for mutual legal assistance to be made against criminal acts whose legal process begins before the entry into force of this Agreement. Applying this principle will undoubtedly benefit the Government of the Republic of Indonesia to recover assets or state losses more optimally from the proceeds of criminal acts placed in Switzerland. It is alleged that many perpetrators of criminal acts from Indonesia have hidden their assets in Switzerland.
Gregorius Sri Nurhartanto
Indonesia and the World Bank Sign Milestone Agreement on Emission Reductions
Indonesia’s Ministry of Environment and Forestry and the World Bank’s Forest Carbon Partnership Facility signed a revolutionary agreement on 27 November 2020. Based on the agreement concerning emission reduction payments, Indonesia will receive payments based on 22 million tonnes of CO2 emission reductions in East Kalimantan. Reducing emissions in the region is essential in helping countries reach their climatic and environmental goals. This agreement is a testament to Indonesia’s continued efforts to reduce deforestation and protect forests. This program builds a positive movement and provides opportunities for governments, civil society organizations, communities and businesses to work together. Although fieldwork takes place in the state, the work on the ground will occur in one province. The results of the Indonesia program will help achieve the goal of reducing deforestation and forest degradation and maintaining Indonesia’s keeps in tract with green development.
Indonesia’s emission reduction program in East Kalimantan, with a population of approximately 3.5 million, aims to reduce deforestation on rainforests and 12.7 million hectares of biodiversity-rich land. This initiative also supports many endangered species by helping improve land management and local livelihoods, improving forest licenses, increasing the number of small plantations, promoting community-based planning, protecting the habitat. According to the World Bank: “Indonesia has committed to cutting up to 41 percent of its greenhouse gas emissions with international support by 2030, as well as accelerating sustainable development in its national development plan. This agreement will provide unprecedented support to achieve these ambitious goals.” (The World Bank, “Indonesia and the World Bank Sign Milestone Agreement on Emission Reductions,” Press Release, (8 December 2020), https://www.worldbank.org/en/news/press-release/2020/12/08/indonesia-and-the-world-bank-sign-milestone-agreement-on-emission-reductions.)
Sri Wartini
Coral Triangle Center (CTC) Renews MoU with Indonesia’s Ministry of Marine Affairs and Fisheries
The CTC has extended its Memorandum of Understanding (MoU) with the Republic of Indonesia’s Ministry of Marine Affairs and Fisheries (MMAF) for the next five years. With the signing of the agreement, the CTC has pledged to continue to support the Government of Indonesia in strengthening the management of Marine Protected Areas (MPAs) and sustainable fisheries and building capacity for staff and organizations. The MoU was signed on 21 December 2020 by CTC Rili Djohani’s Managing Director and Antam Novambar, MMAF Secretary-General of the Republic of Indonesia. This document is part of the CTC. At least five types of support mentioned their commitment to MMAF. Support for the Coral Triangle Initiative (CTICFF) on Indonesian coral reefs, fisheries, and food security, and establishing and managing effective MPAs and MPA networks.
In addition, the CTC will develop the capacity of key stakeholders involved in the establishment and management of MPAs, the capacity development of local fisheries advisors on marine conservation and sustainable fisheries management in Indonesia and enhance Fisheries Control Area (WPP). The Fisheries Management Institutions in the Indonesian Fisheries Management Areas (LPP WPPNRI) oversees this matter. Specifically, CTC’s support for MMAF in the Republic of Indonesia will be concentrated in the seven provinces of Lampung, West Java, Bali, West Nusa Tenggara, East Nusa Tenggara, Maluku and North Maluku. CTC has actively supported numerous activities related to establishing MPAs, capacity building of MPA staff and organizations, and sustainable fisheries in almost every state of Indonesia. Since 2010, CTC has helped restore 387,000 acres of critical marine habitat by establishing five community-based MPAs in the Nusa Penida Islands in Bali, Ay-Rhun, Lease, and Buano islands Maluku, and the Sula Islands in North Maluku.
To facilitate this partnership, both CTC and MMAF have agreed to monitor and evaluate activities at least annually regularly. Therefore, both parties can thoroughly assess their overall annual activity, gather experience, and best practices, and then decide on actions that need to be continued or further improved. Following the MoU’s signature, the CTC has signed detailed joint agreements with the Directorate General of Marine Spatial Planning (Ditjen PRL), the Bureau of Research and Human Resources (BRSDM) and the Bureau of Research and Human Resources (Ditjen PT) of MMAF. Through cooperation, CTC is expected to contribute to Indonesia’s coastal and marine conservation and biodiversity.
Sri Wartini
Treaties
Indonesia’s Ratification of the Nairobi International Convention on the Removal of Wrecks
Indonesia has three sea lanes rights of archipelagic called Alur Laut Kepulauan Indonesia (ALKI), regulated in Government Regulation No. 37 of 2002 on the Rights and Obligations of Foreign Ships and Aircraft in carrying out the island’s sea lanes through the Archipelago Sea lanes that were set aside. ALKI is an international shipping lane based on the recognition of an archipelagic state regime stipulated in Articles 52–53, Chapter IV of the 1982 Convention on the Law of the Sea. Moreover, Indonesia is one of the archipelagic states between India and the Pacific oceans known to be one of the busy sea lanes and is widely passed by international shipping. Such conditions increase the possibility of ship accidents that can interfere with the safety of the marine environment, both for the marine environment and human security.
Accordingly, the Government of Indonesia ratified the Nairobi International Convention on the removal of wrecks (2007) by Presidential Regulation No. 80 of 2020 on the Ratification of the Nairobi International Convention on the Removal of Wrecks (2007)2007 as a commitment to improve the safety and security of shipping and protection of sea voyages. This convention addresses the dangers posed by ship skeletons that threaten shipping safety and the marine environment and provide legal certainty to the arrangement of responsibility and compensation for the removal of ship skeletons. The remains of the shipwreck will cause dangers and disruption for coastal countries, including their economy, such as fishery activities, tourist activities, and dangers to the marine health ecosystem. The dangers posed by ship skeletons may also cause accidents to other transportation as well. The Nairobi International Convention on the Removal of Wrecks explains how state parties should act when the accident occurred.
On the other hand, the Government of Indonesia, prior to the ratification of the Nairobi Convention already had a law regulating the shipwrecks which is stipulated in Law No. 17 of 2008 on Shipping, Articles 203 (1) and 32. Law No. 17 of 2008 explains in more details on how the shipowner must be responsible when an accident occurs. The ratification of this Convention aims at Indonesia’s participation in international relations and Indonesia’s goodwill in the shipping safety and marine environment.
Rehulina
International Economic Law
Indonesia/Australia – Comprehensive Economic Partnership Agreement / IA-CEPA
The IA-CEPA is a comprehensive agreement between the Government of Indonesia and Australia based on existing multilateral and regional agreements, including the ASEAN-Australia-New Zealand Free Trade Area Development Agreement (AANFTA), which came into force on 5 July 2020.
The IA-CEPA covers goods trade agreements covering tariff and non-tariff aspects, provisions on the origin of goods, customs procedures and trade facilities, technical barriers to trade, sanitation and phytosanitary. In addition, trade-in services covered by the IA-CEPA includes employment, financial services, telecommunications, and professional services, such as investment, electronic commerce, competitiveness policies, economic cooperation, and institutional arrangements and frameworks.
Indonesia has ratified the agreement through the issuance of Law Number 1 of 2020 concerning Ratification of the Indonesia-Australia Comprehensive Economic Partnership Agreement (Indonesia-Australia Comprehensive Economic Partnership Agreement) on 28 February 2020, which is recorded in the State Gazette of the Republic of Indonesia of 2020 Number 67 and also in an additional Sheet Republic of Indonesia Number 6476.
Three implementing rules support the IA-CEPA: (1) the Regulation of the Minister of Trade Number 63 of 2020 concerning Provisions on Origin of Indonesian Goods and Provisions for Issuance of Certificate of Origin for Goods of Indonesian Origin in the Comprehensive Economic Partnership between Indonesia and Australia; (2) the Regulation of the Minister of Finance Number 81/PMK.10/2020 concerning the Determination of Import Duty Tariffs in the Context of Approval of the Indonesia-Australia Comprehensive Economic Partnership; and (3) Minister of Finance Regulation Number 82/ PMK.04/2020 concerning Procedures for Imposing Import Duty Tariffs on Imported Goods Based on the Indonesia-Australia Comprehensive Economic Partnership Agreement. The IA-CEPA consists of a Preamble, 21 Chapters (including 15 appendices), 2 Appendices, 2 Memorandums of Understanding, and 5 Side Letters.
Akbar Kurnia Putra
Indonesia/South Korea – Comprehensive Economic Partnership (IK-CEPA)
The IK-CEPA is a comprehensive agreement between the Government of Indonesia and the Government of South Korea, which came into force on 5 July 2020. The signing of the cooperation was carried out on the sidelines of the High-Level Conference Commemorating the 30th Anniversary of the ASEAN-South Korea Partnership (ASEAN-RoK Commemorative Summit).
The IK-CEPA negotiations consist of six working groups: trade in goods, services, investment, provisions of origin of goods, customs procedures and trade facilities, cooperation and capacity building, and institutional and legal issues.
From this agreement, Indonesia will gain market access for industrial, fishery, and agricultural products in the South Korean market. On the other hand, Indonesia will provide market access for industrial raw materials to facilitate South Korean investment in Indonesia. South Korea will open job opportunities for Indonesian professionals and experts in the service sector. Meanwhile, Indonesia will provide increased market access for the construction, distribution, online games and health services sectors.
Moreover, South Korea will eliminate up to 95.54% of its tariff posts for trade in goods while Indonesia will eliminate 92.06% of its tariff posts. Based on this agreement, the two parties will agree on reducing tariffs and other various trade facilities as well as mutually beneficial partnerships. Indonesia and Korea also agreed to activate the IK-CEPA based on the main principles, namely ensuring that the agreement will provide the best, mutually beneficial, and comprehensive results including trade in goods and services as well as in other fields. This initiative signifies the strong determination of the two governments to create a conducive environment for expanding two-way trade and investment, as well as maximizing the potential of economic partnerships.
Some Indonesian products which tariffs will be eliminated on are raw materials for lubricating oil, stearic acid, t-shirts, blockboard, dried fruits, and seaweed. Meanwhile, Indonesia will also eliminate tariffs for several products such as gearboxes of vehicles, ball bearings, paving, wall tiles, and unglazed. Through this agreement, Indonesia will also provide tariff preferences to facilitate South Korean investment in Indonesia for 0.96% of tariff posts of Indonesia’s total imports from South Korea. Likewise, South Korea will eliminate tariffs for 97.3% of its imports from Indonesia, while Indonesia will eliminate tariffs for 94% of its imports from Korea.
With in-services trade, Indonesia and South Korea are committed to opening more than 100 sub-sectors, including the construction sector, postal and courier services, franchises, computer-related services, as well as facilitating the movement of intra-corporate transferees (ICTs), Business visitors (BVs), and Independent Professionals (IPs).
In order to regulate the implementation of the IK-CEPA, the Government of Indonesia has issued several related regulations, including the following: (1) the Presidential Regulation of the Republic of Indonesia Number 11 of 2007 concerning Ratification of the Framework Agreement on Comprehensive Economic Co-Operation Among the Government of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea; (2) the Minister of Finance Regulation No. 75/PMK.011/2007 dated 3 July 2007 regarding the determination of import duty rates in the ASEAN-Korea Free Trade Area framework, effective 1 July 2007; (3) the Minister of Finance Regulation No. 131/PMK.011/ 2007 dated 30 October 2007 concerning Amendments to Regulation of the Minister of Finance Number 75/PMK.011/2007 concerning Stipulation of Import Duty Tariffs within the framework of the ASEAN-Korea Free Trade Area which has retroactive effect since 1 July 2007; (4) the Minister of Finance Regulation N. 41/PMK. 011/2008 dated 3 March 2008 concerning Stipulation of Import Duties within the ASEAN-Korea Free Trade Area framework which has retroactive effect since 1 January 2008; and (5) the Regulation of the Minister of Finance Number 236/PMK.011/2008 dated 23 December 2008 concerning Tariffs of Import Duty in the ASEAN-Korea Free Trade Area effective 1 January 2009.
Akbar Kurnia Putra
Indonesia/Chile – Comprehensive Economic Partnership Agreement (IC-CEPA)
The IC-CEPA Agreement was signed on 14 December 2017 between the Minister of Trade of the Republic of Indonesia and the Minister of Foreign Affairs of Chile. The purpose of this agreement is to promote equitable economic growth and development by creating new opportunities for workers and businesses as well as improving the living standards of the people of the two countries, stimulating business actors to target non-traditional markets, and making Chile a hub for Indonesian export products in Latin America.
On 19 February 2019, the IC-CEPA ratification process was completed. On 10 August 2019, following the entry into force of the agreement on 11 June 2019, the IC-CEPA Instrument of Ratification (IoR) exchange was carried out. For Indonesia, this agreement process was carried out through Presidential Regulation of the Republic of Indonesia Number 11 of 2019 concerning the Ratification of the Comprehensive Partnership Agreement between the Republic of Indonesia and the Government of the Republic of Chile.
Accordingly, Chile will remove tariffs on 7,669 products, and Indonesia will remove tariffs on 9,308 products. The Indonesian products that receive a 0% tariff on the Chilean market are agricultural products, fishery products, and manufactured products. Meanwhile, Chilean products that receive a 0% tariff on the Indonesian market are agricultural and fishery products, mining products, and industrial products.
Through the Ministry of Trade and the Ministry of Finance, Indonesia issued implementing regulations ranging from procedures for issuing certificates of origin for Indonesian goods to the stipulation of special import duties for imports from Chile. The regulation in question is Regulation of the Minister of Trade Number 59 of 2019 concerning Provisions and Procedures for Issuing Certificates of Origin for Goods from Indonesia. The regulation governing the making of an IC-CEPA (SKA) or Certificate of Origin Form (COO) is required so that Indonesian exporters have guidelines for obtaining IC-CEPA preferential tariffs. SKA can be obtained from SKA issuing agencies spread across Cities, regencies, and provinces in Indonesia, which can be seen on its homepage (http://e-ska.kemendag.go.id/home.php/home/ipska page). The regulations launched by the Ministry of Finance are Minister of Finance Regulation Number 105/PMK.010/2019 concerning the Determination of Import Duty Tariffs in the context of IC-CEPA and PMK Number 109/PMK.04/2019 concerning Procedures for Imposing Import Duty Tariffs on Imported Goods Based on Agreements. or International Agreement.
Akbar Kurnia Putra
Indonesia and Mozambique – Preferential Trade Agreement (PTA)
The Preferential Trade Agreement between Indonesia and Mozambique is the Indonesian government’s first Preferential Trade Agreement (PTA) with an African region country, a free trade agreement with non-traditional partner countries. Negotiations were carried out on the side events of the IORA (Indian Ocean Rim Association) meeting in March 2017.
The agreement process was completed after three rounds of negotiations. The PTA with Mozambique is not only limited in terms of reducing tariffs but can strengthen south-south cooperation. One of the urgencies of this agreement is to increase the competitiveness of Indonesian products in the Mozambique market and strengthen the domestic industry. With PTA, Indonesia’s main export products will get a preference for lower import duty rates, which will increase Indonesia’s competitiveness. In addition, Indonesia can make Mozambique a liaison country in the East and South African region.
Indonesia’s trade agreement with Mozambique is still a PTA, which only regulates a limited number of agreements expected to foster mutual trust and business certainty between the two countries. PTA is a trade agreement that is limited to trade in goods and covers some of the potential products of the two countries. PTA is expected to provide rapid economic benefits and impact and increase trade between the two countries. This collaboration is the realization and a follow-up of the meeting between Indonesian President Joko Widodo and Mozambique President Filipe Jacinto Nyusi on the sidelines of the 2017 Indian Ocean Rim Association Summit in Jakarta.
With the PTA, Mozambique will give tariff preference for 217 tariff posts to Indonesia, while Indonesia will commit to 242 tariff posts. Mozambique’s tariff posts will receive tariff preferences such as palm oil products, margarine, rubber soap, paper products, footwear, furniture, and agricultural products. Meanwhile, Indonesia’s products include cotton, nuts, sunflower seeds, aluminum seeds, cotton, fishery products and vegetables.
After the PTA is signed, the next stage is ratifying the international agreement (ratification) in accordance with the domestic provisions of each country so that they can be enforced. For Indonesia, the ratification process is completed when the Law or Presidential Regulation (Perpres) concerning the ratification of PTA and the Regulation of the Minister of Finance has been issued. After the ratification is complete, the two countries will send a diplomatic note informing each other that the ratification process has been completed. The PTA is valid for 60 days as of the exchange of diplomatic notes.
Akbar Kurnia Putra
Indonesia / The United Arab Emirates – Comprehensive Economic Partnership Agreement (IUAE-CEPA)
On 2 September 2021, Indonesia began negotiations on a partnership agreement with the United Arab Emirates. The Minister of Trade of Indonesia and the Minister of Foreign Trade of the United Arab Emirates started the negotiations by signing a joint statement regarding the launch of the IUAE-CEPA negotiations. The first round of negotiations will be scheduled for 2–4 September 2021.
The CEPA is important to Indonesia and the UAE for three major reasons. First, historically, CEPA is Indonesia’s first negotiation with a country in the Gulf Region and this is the first negotiation for the UAE with trading partners in Asia. Second, Indonesia and the UAE, as the two leading economic powers, need to strengthen cooperation so that they can complement each other, especially during this challenging pandemic when breakthroughs are needed to encourage the two countries’ economies. Third, CEPA is expected to be a partnership or cooperation between the government (G to G), between business actors (B to B) and the people of the two countries.
The IUAE-CEPA aims to increase the economic growth of the two countries by increasing market access for trade in goods, services, and investment. This partnership will treat each other as good partners based on mutual respect, taking into account each other’s sensitivities and different levels of development in negotiations.
Indonesia cooperates with the United Arab Emirates because the UAE, as a member of the Gulf Cooperation Council (GCC), is one of the non-traditional export markets that serves as an international trade hub to the Middle East, Africa and European market destinations.
Indonesia targets to complete a comprehensive economic partnership agreement in less than a year. This trade agreement will be dominated by metal commodities, gold jewellery, and automotive cars. Indonesia also has attractive products, such as palm oil, cloth, and paper. In addition, products for food security at the regional level maintain food production with a sustainable supply through regional agriculture. This agreement will make Indonesia more connected to world trade.
Akbar Kurnia Putra
Indonesia – Job Creation Law – Omnibus Law
Job Creation Law was validated on 5 October 2020 by The House of Representatives and promulgated on 2 November 2020 to create job opportunities and to serve as a medium of invitation for foreign and domestic investment by cutting short the requirements and regulations for business permit and land acquisition. Since the Job Creation Law is only 1.187 pages long, it has also been included as the Omnibus Law. Including the Job Creation Law into the Omnibus Law made it possible for its prior 80 Laws and more than 1.200 articles to be revised.
Hence, the revision eradicates ineffective articles. This breakthrough is required to fix the business climate, reconstruct horizontal and vertical policies that clash, develop Indonesia’s regulation index, overcome the hyper-regulation phenomenon and inefficient policies, and the sectoral laws often not synchronized. The primary purpose of the Job Creation Law is to encourage investments, accelerate economic transformation, coordinate capital-region policies, administer convenience in business, tackle regulation problems that overlap each other, and diminish the sectoral ego.
Indonesia has envisioned becoming one of the 5 top countries with the most robust global economy and having a Gross Domestic Product (GDP) of Rp.27 million per capita per month by 2045. The Job Creation Law aims to create a conducive investment climate. In addition, it will absorb more labour force so that unemployment will decrease, create a high potential for economic growth, and boost the worker’s productivity.
The Job Creation Law has some strategic policies. Those policies endorse the investment ecosystem and business activities, protection and welfare of workers, convenience, empowerment, and protection of Micro, Small, and Medium Enterprises (UMKM). Apart from those, the other policy focuses on sustaining governmental investments and national strategic projects. As a result, the Investment Coordinating Board registered the realization of investment in the period of January–September 2020 reaches Rp 611.6 trillion, where it has met 74.8% of the 2020 target, which is Rp 817.2 trillion. With that achievement, investment realization has created jobs for 861.581 Indonesian Workforce from 102.276 investment projects.
Amid the current COVID-19 pandemic, the global economy, without excluding Indonesia, is experiencing contraction up to a recession. This condition results in surge numbers of unemployment all over Indonesia. The number of the available workforce – from Aceh to Papua – who is currently inquisitive for job employment is around 7 million. The batch of job opportunities per year is approximately 2.9 million, not to mention the COVID-19 pandemic that has impacted the workers’ circumstances. The Ministry of Manpower of the Republic of Indonesia database shows that 3.5 million workforces received a Termination of Employment. On the other hand, the Indonesian Chamber of Commerce and Industry recorded that around 5 million people had obtained Termination of Employment. Therefore, as the data illustrates, the sum of jobs that the government should prepare is around 15 million.
Alongside, the government has implemented the Online Single Submission (OSS) system, which is managed by the Central One-Stop Integrated Service in Investment Coordinating Board. All permits will be integrated through this OSS system to minimize any overlapping dossier between the central and other regions. With the reinforcement of the OSS system, it is speculated to reduce Indonesia’s Incremental Capital Output Ratio (ICOR), which will extend to the proliferating of Indonesia’s economic competitiveness. At the moment, Indonesia’s ICOR is at level 6.8. With Omnibus Law on Job Creation, it is deduced that there will be shrinkage in ICOR to a level below 4.
The preconditions for investments were remodelled to be more practical with the assistance of the Job Creation Law. The first and foremost is to determine the business sector capital investment, which is utilized for advertising and pushing the investment. The investment criteria cover technology upon its satisfactory qualities, enormous investment, digital-based platforms, and formulation of creation. Secondly, the business activities of UMKM are offered to associate with the foreign capital cohort. Thirdly, Foreign Capital Investment status is merely linked to the boundary of foreign ownership. Last but not least, a minor precondition is deleting the requirement provision in the Sector Law because the Presidential Regulation will systemize it on Investment Business Activity.
Upon the Job Creation Law, which the government validated, it is contemplated that propelling positive quality investments would affect the absorption of the workforce and intensify the economic growth in Indonesia. The article that regulates foreign capital investment has been revised based on the Job Creation Law draft.
Job Creation Law delivers innovations that enhance the possibility of stimulating investments that have become more liberal for Indonesia’s megaproject. As a brand-new policy that was fundamentally caused by the global COVID-19 pandemic circumstances, which was comprehending the economic recession, its flow of foreign investments is surmised to have the capability of helping Indonesia to accomplish the megaproject realization of constructing infrastructures for Indonesia in advance of 2024.
M. Reza Syariffudin Zaki
Siti Halimah Indrani Anwar
Indonesia and Regional Comprehensive Economic Partnership (RCEP)
The Regional Comprehensive Economic Partnership (RCEP) is a trade agreement between ASEAN countries and its FTA partner countries. RCEP holds several superiorities, such as providing colossal business opportunities for the East Asia region to conceive “The World Largest Trading Bloc.” These countries are distinguished by exhibiting almost half of the world’s population and contributing approximately 29% of the world trade. Fifteen of those countries are China, Japan, South Korea, Australia, New Zealand, Brunei Darussalam, Cambodia, Indonesia, Laos, Singapore, Malaysia, Myanmar, Philippines, Thailand and Vietnam. Furthermore, RCEP cultivates the competitiveness front, trading network and more prominent market access for the countries contributing to this agreement. The RCEP agreement will be officially enforced if at least six ASEAN and 3 ASEAN trade partner countries have conveyed their ratification document to the ASEAN secretary-general or ASEAN secretariat.
The RCEP agreement came into effect on 1 January 2022. RCEP, introduced in 2011, was Indonesia’s notion that erupted whilst entrusted with the obligation as ASEAN’s leader throughout 2011. The initiative emerged as a response to the insistence from the Dialogue Partners on a Free Trade Agreement (FTA), particularly the People’s Republic of China and Japan. Equally eager as that of the ASEAN members, both partners demanded that ASEAN embody an FTA that promptly involves all its FTA partners. In 2011, Indonesia managed to persuade and ensure other members of ASEAN to officialize the RCEP concept as an ASEAN initiative and overture the proposal to all its Dialogue Partners of FTA in November 2011, which was at the cusp of Indonesia’s led administration in ASEAN.
Through comprehensive and intensive discussions in 2012, the ASEAN country leaders and its 6 FTA partners announced that 10 ASEAN countries and 6 of its FTA Partners, formally including India which has now exited from the partnership, would commence the discussion of RCEP in 2013. Accordingly, all of those countries vouched for the Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership as the reference in holding the RCEP negotiation. The first negotiation was held on May 2013, in Brunei Darussalam, then held several times until November 2020. Indonesia led and participated in the negotiations, to be precise, represented by the General Director of Negotiation and International Trade, Ministry of Trade. Indonesia was appointed by the other 15 participating countries as the Head of the RCEP Negotiation Committee and was obliged to be the ASEAN coordinator. Protracted negotiations that consumed time, energy and thoughts finally reached an agreement on 15 November 2020. Unfortunately, because India decided to recant at the end of the negotiations, the signing was solely accomplished by 15 countries.
The denouement of the RCEP negotiations yielded an agreement with 14.367 pages, divided into 20 chapters, 17 annexes and 54 schedule commitments that bind 15 country members without a side letter. The final agreement regulates the following: Initial Provisions and General Definitions (Chapter 1), Trade in Goods (Chapter 2), Rules of Origin (Chapter 3), Customs Procedure and Trade Facilitation (Chapter 4), Sanitary and Phytosanitary Measures (Chapter 5), Standards, Technical Regulations, and Conformity Assessment Procedures (Chapter 6), Trade Remedies (Chapter 7), Trade in Services (Chapter 8), Temporary Movement of Natural Persons (Chapter 9), Investment (Chapter 10), Intellectual Property (Chapter 11), Electronic Commerce (Chapter 12), Competition (Chapter 13), Small and Medium Enterprises (Chapter 14), Economic and Technical Cooperation (Chapter 15), Government Procurement (Chapter 16), General Provisions and Exceptions (Chapter 17), Institutional Provisions (Chapter 18), Dispute Settlement (Chapter 19), and Final Provisions (Chapter 20) as the closing policy.
Implementation of RCEP in Indonesia will certainly bring forth a challenge because of its regulatory burden. Post-RCEP ratification, Indonesia has to implement RCEP policies into its national law. In the execution of RCEP, Indonesia granted commitment to 11 out of 12 WTO service sectors. One of the sectors covers trade in goods and services, including financial services, telecommunication, professional service, investment, economic and technical collaboration, intellectual property, rivalry, dispute resolution, e-commerce, small and medium business, and other technical fields.
Indonesia has possessed an act related to trade in goods and services. For instance, Indonesia passed the following laws: Law No. 36 of 1999 about telecommunication and Law No. 36 of 2014 about Health Workers in professional services. Indonesia constitutes a liberalization commitment for 104 sub-sectors from 11 committed service sectors. Liberalization commitment is dominantly constructed with the limitations under rules over service sectors committed. Among the abundance of service sectors viewed as vital are Health, Tourism, Construction, Transportation, and Telecommunication. These service sectors that are considered vital can be demonstrated from two dimensions: first, the ones that are strong by the offensive. The service business actors are considered capable of competing with other businesses from other countries in the international market. For example, in the construction sector, tourism and transportation, the business actors are more than qualified and able to compete in the international market. The second dimension is the defensive dimension, where the business actors may not yet be prepared to compete in the international market. However, the actors assents able to compete domestically. For the second dimension, health, as well as telecommunication, may fall under this category. may become an example.
Nevertheless, what about the sectors that are not considered “vital” yet are still included as the components of Indonesia’s commitment to the RCEP? First, a little paradigm clarification is essential where service sector liberalization does not instantly permit the holistic service sector to be enterprised commercially without limitations. Liberalization adjusts all service stakeholders to initiate the game’s rules, enabling them to assure and protect interested parties, be it the government or business actors. Moreover, the consumers would feel the secured impact unequivocally. Further, with such a framework, the government, as the authority and the negotiator in the RCEP negotiations, has prepared commitments to protect sector business actors on domestic services. Thus, if the sector is not adequate to compete, the commitment for the sector will be directed to strengthen other sectors that have been in the commitment. The sectors are obligated to form partnerships with local business actors or perhaps other speciality preferences specific regions in Indonesia.
One of the benefits of using a positive list approach or GATS style in the scheduling commitment is that the Party receives laxity to set specific sectoral boundaries without referring to the existing domestic rules applied. As a result, a positive list approach in giving service sectors commitment has become the standard practice for developing and underdeveloped countries, which generally have not possessed a stable domestic rules framework. Indonesia also implemented this, keeping in mind that not all committed service sectors have already acquired domestic rules. Therefore, the absence of domestic laws for several specific service sectors is because the service sector is still unfamiliar to Indonesia.
The commitment scheduling in a non-conforming measures approach or negative list is composed of maintaining the commitment level as accomplished in the positive list approach. So that even if some service sectors still have no domestic rules, the committed service sectors are already enclosed by boundaries stated in the commitment. Indonesia’s strategy to realize the liberalization of RCEP services by regulation may not need further preparation other than the ratification process. It is then decided in the hands of the individuals who practice the service businesses to develop the opportunity they have obtained to utilize RCEP commitment, whether for domestic market protection concerns or the expansion of Indonesia’s service products market. Indonesia’s commitment shall always refer to the applicable domestic rules. One of the functions of domestic law is to protect domestic service suppliers from foreign suppliers. One of which is related to the natural person, immigration rules, transfer policies in knowledge/technology, and positions for foreigners.
M. Reza Syariffudin Zaki
Siti Halimah Indrani Anwar
Indonesia Investment Authority – Government Regulation of the Republic of Indonesia No. 74 of 2020
The contemporary direction of Indonesia’s investment policy is increasingly convincing with the establishment of the Investment Management Institute. This institution that functions as an investment accelerator and strengthens the economy was established according to the Government Regulation No. 74 of 2020 concerning Investment Management Institutions. Government Regulation No. 74 of 2020 is a derivative of Law No. 11 of 2020 concerning Job Creation, which stipulates a Government Regulation on Investment Management Agencies. The Investment Management Institute is an Indonesian legal entity entirely owned by the government and is responsible to the President. As stipulated in the Government Regulation, the Investment Management Institute is also known as the Indonesia Investment Authority (INA).
INA is an institution given unique authority in managing Central Government Investment as referred to in the Job Creation Law. INA can place funds in financial instruments, handle asset management activities, cooperate with other parties – including trust fund entities – determine potential investment partners, provide and receive loans, and/or administer assets. Additionally, the main objective of INA is to improve and optimize the value of investments that are managed in the long term to support sustainable development. As Indonesia’s Sovereign Wealth Fund (SWF), INA is a financial vehicle that the state may use to regulate public funds. Through the investments made by SWF in state-owned funds, Indonesia expects that economic stabilization will be progressed.
The main challenge for INA is strengthening the foundation of the national economy, which is also Indonesia’s vision for 2045. This vision aims to make Indonesia a country with high economic growth and one of the world’s great economic powers. This vision is achievable with the support of four pillars: the development of human resources and mastery of science and technology, sustainable economic development, equitable development, and national resilience and governance. There are challenges and a need for collaboration in realizing the existence of sustainable economic development. One solution is by focusing on economic growth. However, to achieve economic growth, funding is needed, which the government cannot fully meet. Therefore, investment from the public and the private sector is needed to close the gap between the development needs and the government’s fiscal capacity.
The INA also has a primary objective in fulfilling funding capacity. As the various available investment schemes and the limited funding capacity of the business world or state-owned enterprises are suspected of causing the stalling in the funding scheme, the, INA will develop investments in various sectors, such as toll roads, airports, ports, and others. Therefore, it is to be questioned whether governmental policies regarding investment have not been effective so far. The government has implemented various alternative schemes to encourage the participation of the community and business entities, such as the implementation of the Government and Business Entity Cooperation’s scheme and other creative financing schemes. However, in the reality, the scheme still faces many obstacles and challenges.
Based on these issues, it is necessary to fulfil national development financing that involves investors from abroad, primarily through Foreign Direct Investment (FDI). However, based on the World Bank data, Indonesia’s FDI fluctuates every year, and the amount in the last five years was stagnate. In addition, the percentage of Indonesia’s FDI to Gross Domestic Product is also still far below other ASEAN countries. The management and ranks of INA are required to have great solutions and innovations. The presence of INA is devoired to respond to the revenues and advantage of Indonesia’s abundant wealth. Of course, this is an added value and concrete promotion for world investors. INA can take the opportunity to attract world investors to participate in national projects, such as using a joint venture scheme, cooperation in the field of mutual funds, collective investment contracts and others. Seeing the noble purpose of establishing INA, it is necessary to balance the aspects of good governance, also known as good corporate governance and transparency. Specifically, audits at INA are merely performed by public accountants registered with the Audit Board and the Financial Services Authority. This issue, of course, raises the fundamental question of why the Audit Board and the Financial Services Authority did not participate or provide room for the continuity of the audit process at INA. We all know that Audit Board and the Financial Services Authority is a high state institution in the Indonesian constitutional system which has the authority to examine the management and responsibility of state finances.
In terms of ideal governance, INA is requisite to avoid any behavior lacking transparency due to the insufficiency of space for public participation in its implementation. Furthermore, the issue of corruption in the public service sector and the complexity of the bureaucratic process must be litigated without exception. Next is the investment of assets and the transfer of state capital. Government Regulation No. 74 of 2020 reiterates that state assets and state-owned enterprise assets can be transferred to INA and executed precisely and transparently in the transfer process. This is a concern because state assets are often lost after transfer. To minimize or even avoid the risk of losing the State assets, Article 46 of the Government Regulation No. 74 of 2020 accounts for such a risk by making sure that assets are evaluated periodically. For INA to optimize its functions – to forestall issues that perhaps erupted, precisely in terms of assets – all assets transferred shall be remedied first. If it is optimal in terms of asset superintendence and management, INA is inevitably able to accommodate enormous amounts of funds and generate liquidity for national development.
M. Reza Syariffudin Zaki
Siti Halimah Indrani Anwar
Plan of Action for the Indonesia-Australia Comprehensive Strategic Partnership (2020–2024)
The Government of Australia and the Government of the Republic of Indonesia signed the “Plan of Action for The Indonesia-Australia Comprehensive Strategic Partnership (2020–2024)” in Canberra on 10 February in the year 2020. The two states agreed to implement a comprehensive Indonesian-Australia strategic partnership, in accordance with the applicable national laws, regulations and policies of both states, intensive bilateral economic development, and political and security cooperation. Both states are determined to implement the Indonesia-Australia Comprehensive Strategic Partnership. Building on Indonesia and Australia 2017 Joint Declaration on Maritime Cooperation. Furthermore, the two states also agreed to carry out the Plan of Action to implement the Joint Declaration on Maritime Cooperation. It was signed on 16 March 2018 to realize mutual economic and security benefits in the maritime domain, maritime security and safety, connectivity, and the sustainable management of marine resources and improve information sharing to understand the region’s full range of maritime security challenges.
There are five pillars of the CSP that have been agreed upon. The five pillars are: Enhancing our economic and development partnership; connecting people; Securing our and the region’s shared interests; Maritime cooperation; and contributing to Indo-Pacific stability and prosperity. However, in this study the fourth pillar regarding Maritime Cooperation will only be discussed. Maritime cooperation is critical for both states to shared strategic, security, safety, environmental and economic interests. Priority areas include supporting a rules-based maritime order, strengthened by international law; maritime security architecture and border protection; information sharing to combat transnational organized crime at sea; regional and coastal interconnectivity; reliability, safety, and efficiency of shipping in the region; protection of the marine environment; and sustainable management of marine resources including efforts to combat illegal, unreported, and unregulated (IUU) fishing.
In addition, the plan of action is also aimed to promote and implement maritime security, freedom of navigation, free trade, the exercise of self-control, failure, or threat of use of force, and peaceful resolution of conflicts based on international law, particularly the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and the relevant standards and instruments of the International Maritime Organization (IMO). Furthermore, the cooperation highlighted the need to develop mutual trust and confidence, practice self-restraint in activities, avoid actions that may affect a situation, and avoid actions. The plan of action also enhanced further bilateral and regional commitment with critical regional partners Indonesia-Australia-India trilateral involvement in maritime cooperation through the Extended ASEAN Maritime Forum (EAMF) and the Indian Ocean Rim Association (IORA).
Notably, the maritime security cooperation agreement agreed upon between the two states can be presented as follows: Promotion of regional maritime cooperation through existing regional architectures such as regional action plans to promote responsible fishing practices and to combat Unreported and Unregulated Fishing in the Region (RPOA-IUU), signed in 2007 and Strengthening maritime security cooperation through intensive cooperation between relevant maritime law enforcement authorities to combat cross-border crimes. Regional cooperation by strengthening bilateral cooperation in the fight against IUU fishing and strengthening regional cooperation is to address cross-border challenges, including crime in the fishing sector, conducted by IORA members. Moreover, it is also to promote maritime safety and security in the region by strengthening regional cooperation to address trans-boundary challenges, including crimes in the fisheries sector; to improve capacity building on maritime awareness, predominantly in regard to maritime security, through information sharing, technical training and exchanges and to conduct coordinated patrols and maritime security desktop exercises between Badan Keamanan Laut Republik Indonesia (BAKAMLA), the Indonesian Coast Guard (IDNCG) and the Australian Border Force, as well as between Tentara Nasional Indonesia (TNI) and the Australian Defence Force (ADF); To enhance cooperation and coordination among law enforcement agencies and other related government agencies in combating the illicit production, manufacturing and trafficking of drugs in the region; Enhance naval engagement in regional and multilateral forums to promote shared maritime interests and commitments; Enhance and promote maritime cooperation through various regional and multilateral fora, such as the Heads of Asian Coast Guards Agencies Meeting.
Sri Wartini
Human Rights
The Right to Health Implementation during Pandemic Era
Presidential Decrees No. 10 and No. 11 of 2020 determined the spread of Corona Virus Disease 2019 (COVID-19) as both a public health emergency and a non-natural disaster. To address the pandemic, the government reiterates its observance of the International Health Regulation and World Health Organizations’ recommendations that imply the concern for the right to health. Moreover, Indonesia is also a state party to the International Covenant on Economic, Social, and Cultural Rights, which recognizes the right to health, and its inherent meaning, including availability as an essential element in addition to accessibility, acceptability, and quality (GC CESCR No. 14).
A judicial review was submitted before the Constitutional Court of the Republic of Indonesia requesting some provisions covered in Law No. 4 of 1984 concerning Outbreak of Infectious Diseases (Law 4/1984) and Law No. 6 of 2018 concerning Health Quarantine (Law 6/2018) to be declared against the 1945 Constitution of the Republic of Indonesia (1945 Constitution) and subsequently to be decided null and void. The petitioner argues that Art. 9 (1) of Law 4/1984 determines that certain officers who carry out countermeasures’ outbreaks may be given appreciation for the risks borne in carrying out their duties. According to the petitioner, this article hindered the government’s obligation to ensure that those officers are entitled to get the appreciation. The petitioner also argues that Art. 6 of Law 6/2018 that determines the responsibility of central and regional governments for the availability of the necessary resources in the implementation of Health Quarantine must be interpreted differently. The law includes the availability of personal protective equipment for all health workers on duty; incentives for medical and non-medical personnel on duty who work with COVID-19 patients; compensation for families of Health Workers who died while on duty; and COVID-19 screening resources for the entire society with fast check flow.
In the Decision No. 36/PUU-XVIII/2020, dated 12 November 2020, the Constitutional Court considered that Law 4/1984 has a broad scope that gives flexibility for policymakers to create implementing rules according to the characteristics or impacts of the outbreak. The flexibility is implied in issuing several Minister of Health decrees concerning granting incentives and death compensation for health workers handling the pandemic. The Court also considers that the petition on Law 6/2018 will narrow and create legal uncertainty due to redundancy with health quarantine resources, particularly health quarantine facilities and supplies, as provided in Articles 71 to 78, in particular Article 72 paragraph (3) of the Law. Therefore, the Court rejected the Petitioners’ petition due to the lack of legal reasoning.
I Made Budi Arsika
Reporting of the Implementation of International Human Rights Treaties and Mechanisms
The Decree of Coordinating Minister for Political, Legal, and Security Affairs No. 99 of 2020 establishes a Working Group for the Reporting of International Human Rights Main Instruments and Mechanisms that involve relevant ministries and institutions. The decree was issued to improve several delays in submitting periodic reports on implementing main international human rights treaties. The working group is assigned to coordinate the planning, preparation, implementation, and submission of Indonesia’s reports on critical international human rights instruments and mechanisms to address this concern. They are conducted by taking into consideration the national interests and organizing dissemination, technical guidance, monitoring, and evaluation of the implementation of the report. The working group focuses on four thematic issues, i.e. civil and political rights; economic, social, and cultural rights; the rights of vulnerable groups; and International Human Rights Mechanisms.
I Made Budi Arsika
International Humanitarian Law
International Humanitarian Law in Papua
Indonesia has ratified the twin international covenants of human rights, which are the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil and Political Rights through Law No. 11 of 2005 and Law No. 12 of 2005. In the process of ratifying the two twin covenants, Indonesia has made a reservation on Article 1 of both Covenants. Therefore, Indonesia does not recognize the right of self-determination for the tribes or territories of the Unitary State of the Republic of Indonesia to separate and become independent from Indonesia. This phenomenon also applies to the Papua region that wants to separate itself from Indonesia, especially by the Free West Papua Organization. According to Indonesia, the United Nations officially recognized the Papua region as part of Indonesia’s territory through the Free Act Choice in 1969.
The Free Act Choice was a poll held from 14 July to 12 August 1969 to determine the status of the western Papua Island, which belonged to the Netherlands or Indonesia. The United Nations recognized the results of the Act itself in Resolution 2504 (XXIV) of the United Nations General Assembly. The UN envoy, the Australian envoy, and the Dutch envoy all witnessed the implementation of the Act of Free Choice. Based on the Act of Free Choice results, the people of West Papua wanted to join the Unitary State of the Republic of Indonesia. The results of the Act of Free Choice were brought to the UN General Assembly and on 19 November 1969, the UN General Assembly accepted and approved the results of the Free Act Choice. However, there are parties, even today, who oppose the Act’s legitimacy.
For those Papuans who want to separate themselves involving armed conflict, the Indonesian government has designated them as groups participation in acts of terrorism. This statement was conveyed by the Coordinating Minister for Political, Legal and Security Affairs Mahfud MD, on 29 April 2021, who emphasized that the government had categorized the Papuan Armed Criminal Group and all organizations and people who were members of it and who supported the movement as terrorists.
Gregorius Sri Nurhartanto
Management of National Resources for National Defense in Indonesia
To implement the national defense system, the Government of the Republic of Indonesia has issued Government Regulation of the Republic of Indonesia Number 3 of 2021 concerning Implementing Regulations of Law Number 23 of 2019 concerning Management of National Resources for National Defense. National Defense is all efforts by the Government to defend the sovereignty of the state, the territorial integrity of the Republic of Indonesia, and the safety of the entire nation from threats and disturbances to the integrity of the nation and state.
The main component for implementing the national defense system is the Indonesian Army Forces which is ready to carry out defense tasks. The reserve component is a national resource that has been prepared to be deployed through mobilization to enlarge and strengthen the powers and capabilities of the main component. The supporting component comprised of national resources will increase the power and capability of principal components and reserve components. Management of supporting components includes structuring and coaching activities involving the Defense Ministry in collaboration with ministries/agencies and local governments.
The form of guidance in fostering State Defense Awareness is all efforts, actions, and activities carried out in providing knowledge, education, and/or training to citizens to develop attitudes and behavior and instill the fundamental value of state defense. The Government of the Republic of Indonesia is concerned with the trained citizens program, meaning the citizens who are trained and organized in government institutions or non-governmental institutions in accordance with the needs and objectives of the organization who are ready to become components of the national defense. Of course, this does not contradict the contents of the 1949 Geneva Conventions, which the Government of Indonesia has ratified through Law Number 59 of 1958 and the basic principles of international humanitarian law.
Gregorius Sri Nurhartanto