Foreigners need legal certainty for investment
JAKARTA (JP): Indonesia needs to improve its legal infrastructure to assure more legal certainty for foreign investors operating in the country and for overseas firms doing business with domestic partners, lawyers say.
In a meeting with World Bank representatives yesterday, Todung Mulya Lubis of the Jakarta Lawyers Club said legal corruption is the biggest problem facing by Indonesia.
"If we cannot mend the problem, I'm afraid the Indonesian law will never be used for governing international business agreements," Mulya said.
Besides Lubis, other members present at the meeting were lawyer Amir Syamsuddin and Erman Rajagukguk, a lecturer at the law school of the University of Indonesia. Representatives from the World Bank included judges Roberto Mac Lean and Teresa Genta Fons and resident executives Pieters J. Evers and Farukh Iqbal.
Mulya, a legal advocate for foreign firms, noted that foreign businessmen prefer using the laws from their home countries, to Indonesian law when making business agreements with local partners.
When settling many international business disputes, foreign counterparts do not want the cases brought up to Indonesian courts because they just do not trust the courts here.
"Indonesian courts are not regarded as independent as the judges themselves are not independent. They (the judges) are governed under two different bosses with different interests," Mulya said, referring to the Ministry of Justice and the Supreme Court.
He suggested that the judges be freed from the government's touches and thus be responsible only to the Supreme Court. "The Ministry of Justice should deal only with legal policies," he said.
Mulya, quoting a former Senior Judge Asikin Kusumah Atmadja, said that over 50 percent of Indonesian judges are corrupt and that mafia elements are operating in courts across the country.
"What can you do if there is collusion among lawyers, judges, legal brokers and prosecutors?" Mulya asked.
He also noted that foreign businessmen do not reckon the Indonesian arbitration body for business dispute settlements. The body itself is not popular among Indonesian businessmen because the Indonesian Chamber of Commerce and Industry does not give it real support.
GATT
Erman Rajagukguk specified that Indonesia should be better equipped with proper legal frameworks to face free trade under the new General Agreement on Tariffs and Trade (GATT) which will come into effect in 1995.
He said Indonesia has to review its investment laws which differentiate between foreign and domestic investors. Under the new GATT, such different treatments are not allowed.
The country also has to create new laws on corporations, stock markets, fair competition, protection of small and medium businesses, anti-dumping as well as property, especially the one governing the property ownership by foreign people or agencies.
Minister of Trade Satrio B. Joedono said that he will submit bills on fair competition, protection of small businesses and protection of property rights to the House of Representatives some time next year.
Meanwhile, Chairman of the Capital Market Supervisory Board Bacelius Ruru said yesterday that he will submit a draft bill on the stock market to the government by the end of this month. He predicted that the bill will be submitted to the House by early next year. (rid)