Government pledges annulment of bothersome local regulations
Government pledges annulment of bothersome local regulations
Rendi A. Witular, The Jakarta Post, Jakarta
The central government pledged on Tuesday to immediately revoke
inappropriate regulations issued by local administrations that
have increased the cost of doing business in the country and
created a lack of legal certainty for investors.
The pledge was conveyed following criticism from a number of
business lobby groups and investors that the central government
has been largely powerless in preventing regional governments
from issuing inappropriate regulations.
"My ministry is currently working together with the Ministry
of Home Affairs to review a number of regional regulations that
have undermined our business climate," said Minister for Justice
and Human Rights, Hamid Awaluddin, in front of foreign and local
investors during the Infrastructure Summit, held to lure billions
of dollars in new investment to finance badly needed economic
infrastructure.
Hamid said that the ministry would review local regional
rulings that went against the interests of the public by creating
a high-cost economy.
In addition, regulations that contradicted higher rulings or
laws would also be revoked.
Hamid refused to disclose the number of these inappropriate
regional regulations, but according to the Ministry of Home
Affairs there are at least 100 such regulations.
Under existing laws, the Ministry of Home Affairs is the only
institution authorized to revoke local rulings, after a joint
review with the Ministry of Justice and Human Rights.
However, critics have said that these regulations have been
untouched due mainly to bureaucratic constraints and alleged
corrupt practices, particularly on the part of bureaucrats within
the Ministry of Home Affairs.
The regional autonomy drive launched a few years ago provided
greater power for local administrations in managing their
economic and social affairs, prompting many of them to issue
rulings to generate more income for their administrations, but
often at the expense of the business sector.
According to the autonomy law, local regulations are
automatically put into effect if there is no rejection from the
Ministry of Home Affairs within three months of the regulation
being issued.
Recently issued local regulations deemed inappropriate by the
business community include those affecting the management of
seaports and airports, and the acquisition of land for
infrastructure projects.
One such example is the lingering dispute between the Cilegon
municipality and state-owned port operator PT Pelindo that has
the authority over local seaports.
The East Java provincial government is also currently in
dispute with the Madura and Lamongan regents over the
construction of seaports in East Java.
Local administrations have been blamed for the sharp increase
in the price of land dedicated for infrastructure projects, by
issuing rulings that have led to price rises.
Hamid said that Minister for Home Affairs Muhammad Ma'ruf had
pledged to jointly review all inappropriate policies.
"I can assure you that the government is serious in resolving
legal problems experienced by investors," Hamid said.
During the investment forum, most investors also raised
concerns over the country's poor court system due to rampant
corruption, as well as the lack of legal and economic knowledge
of judges dealing with investment and business disputes.
Investors have proposed the possibility of obtaining legal
protection and guarantees directly from the government in
developing infrastructure projects.
Hamid said the government could not interfere in court
processes as courts are independent institutions.
"There is currently ongoing reform of the legal system by the
Supreme Court. We are optimistic that the court will be more
professional in coming years," said Hamid.