Foundations law to take effect as of next month
Foundations law to take effect as of next month
Fabiola Desy Unidjaja, Fitri Wulandari, The Jakarta Post,
Jakarta
The government has dismissed rumors it has issued a presidential
decree delaying the implementation of the much-protested law on
foundations, saying the law would take effect on Aug. 6 as
planned.
"There is no presidential decree delaying the implementation
of the law," Erman Rajagukguk, the deputy secretary of the
Cabinet, told The Jakarta Post on Wednesday.
There had been rumors a presidential decree had been issued
postponing the implementation of controversial Law No. 16/2001,
which was approved by the House of Representatives on Aug. 6 of
last year.
The rumors likely began because of plans by the government to
amend the law, which has been strongly criticized by various
parties worried that the law would effectively give the
government control over social work traditionally carried out by
public institutions.
Critics say the law will restrict the ability of social and
religious foundations to carry out their work.
Allegations that former president Soeharto and his associates
used their labyrinthian foundations to amass and hide wealth,
apparently inspired the government to draft a law to more
stringently control foundations.
In a speech to legislators when submitting the draft of the
law on June 26, 2000, Minister of Justice and Human Rights Yusril
Ihza Mahendra said the law was urgent because foundations had in
the past been abused by members to gain personal wealth or for
commercial interests.
"Foundations are no longer only performing social, religious
and humanitarian services, but are also being abused by their
caretakers, officials and supervisors to gain wealth, or for
commercial interests and to evade taxes, which inflicts losses to
third parties, society and the state," Yusril said.
But the new law is seen by some as threatening the existence
of foundations that are carrying out social and religious work.
The law, however, does provide a five-year transitional period
for existing foundations to adjust their organizations to meet
the new requirements laid out in the law.
The director general of laws and regulations at the Ministry
of Justice and Human Rights, Abdul Gani Abdullah, said recently
the government was planning to revise the law.
The chairman of House Commission II for law and legal affairs,
A. Teras Narang, confirmed the government recently proposed to
the commission that possible revisions to the law be discussed
before it came into effect next month.
But he said legislators had yet to receive a draft of the
revised version of the law.
"We have not received a draft of the revisions or any news
from the government over planned revisions.
"Also, it will be difficult to discuss the revisions because
the House will end its session on July 19," Teras told the Post.
He said if the government wanted to discuss revisions to the
law, it would have to be done following the Annual Session of the
People's Consultative Assembly, which will take place from Aug. 1
to Aug. 12.
Contentious points of Law No. 16/2001:
1. Establishment of foundations must be approved by the Ministry
of Justice and Human Rights.
2. Foundations are not allowed to distribute revenue to members
of their board of patrons, executive board or board of
supervisors.
3. Foundations' assets, in any form, cannot be taken over or
distributed directly or indirectly to the board of patrons,
executive board or board of supervisors, or foundation employees.
4. Members of foundations who violate Article 5 of the law will
face criminal charges that carry a maximum penalty of five years
in prison.
5. Foundations' executive boards are obliged to produce financial
and activity reports annually.