Group established to push legal reform in Indonesia<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
The International Finance Corporation (IFC), the investment arm
\nof the World Bank, has set up a working group to monitor the
\nimplementation of law reform in Indonesia, according to a senior
\nexecutive.<\/p>\n
IFC director for East Asia and the Pacific Javed Hamid said on
\nFriday that the working group would propose concrete steps to the
\ngovernment to improve the functioning of the legal system in the
\ncountry.<\/p>\n
\"This (law reform) will help rebuild the confidence of private
\nsector investors and stem the current massive outflows of private
\ncapital from Indonesia,\" Javed told reporters following a half-
\nday discussion on law reform.<\/p>\n
The working group is chaired by noted-lawyer Kartini Muljadi
\nfrom Kartini Muljadi and Partners and has members that include
\njudges, lawyers, legal practitioners, legal academics and also a
\nnumber of businessmen.<\/p>\n
Javed said that legal uncertainty in this country had been one
\nof the main reasons for causing a capital outflow of around US$10
\nbillion per year since the 1997 financial crisis.<\/p>\n
In comparison, Indonesia enjoyed a private capital inflow of
\n$11.5 billion in 1996.<\/p>\n
\"The private sector will play a key role in the restoration of
\nthe investment flows that are crucial for the recovery of the
\ncountry's ailing economy,\" he said.<\/p>\n
He said that investors' willingness to invest in this country
\nwould largely depend on the ability of the government to create
\nlegal certainty.<\/p>\n
Javed acknowledged that most Indonesian legal products were
\ngood but their enforcement was weak.<\/p>\n
He noted, however, that some laws, particularly on the mining
\nindustry, were out of date and needed immediate improvement to
\nencourage new investors to return to this sector.<\/p>\n
Javed added that the IFC had resumed its support for some
\nprojects already in the pipeline.<\/p>\n
He, however, said that it would maintain a freeze on new
\nfunding to Indonesia until there was concrete evidence of
\nimprovement in the legal environment.<\/p>\n
\"We still accept that we have to suspend our operation until
\nwe see some improvement in the legal environment,\" he said.<\/p>\n
The IFC has been embroiled in legal disputes involving
\ncompanies it had invested in, particularly PT Panca Overseas
\nFinance Indonesia (POFI).<\/p>\n
An bankruptcy petition brought against POFI was rejected by
\nthe commercial court last year due to what the IFC suspects were
\nfictitious creditors voting in favor of POFI.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/group-established-to-push-legal-reform-in-indonesia-1447893297",
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"sponsor": "Okusi Associates",
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