Govt sets up BAPMI to protect investors
Govt sets up BAPMI to protect investors
Dadan Wijaksana, The Jakarta Post, Jakarta
Minister of Finance Boediono introduced on Friday an arbitration
body that will serve as an out-of-court mediator to help resolve
investment disputes in the capital market, a step the minister
hopes will go a long way toward protecting investors.
Boediono said he expected the new body, called the Capital
Market Arbitration Body, or BAPMI, to perform with a high degree
of credibility in helping to regain investor confidence in the
local capital market.
"BAPMI will serve as a complementary institution to the
courts. But it must maintain its credibility to obtain the trust
of investors," he said.
The presence of BAPMI should help both investors and publicly
listed companies avoid having to go to court to settle disputes,
which would save them both money and time.
The Indonesian Investors and Securities Community (MISI)
hailed the establishment of BAPMI as a breakthrough, saying
investors had been waiting for a body like this.
"Investors will no doubt welcome this move," said MISI
chairman ND Murdani, pointing out that settling disputes via
BAPMI was expected to be speedier and less costly than the
courts.
The Capital Market Arbitration Body was established based on
Law No. 30/1999 on arbitration, and will join existing similar
institutions such as the Indonesian Arbitration Body and the Bank
Muamalat Arbitration Body.
To ensure effective and efficient dispute settlement, the
majority of BAPMI members will be independent professionals,
including some from the Capital Market Supervisory Agency.
The chairman of the new body is A. Zen Umar Purba, a senior
legal consultant for the capital market.
Boediono stressed the importance of BAPMI, particularly at a
time when the country's capital market has failed to become a
major investment target of both foreign and domestic investors.
"The Indonesian capital market should be able to become a
pivotal factor for economic recovery if it can lure plenty of
investors," he said.
He said the country's lack of progress in legal reform also
contributed to investor reluctance to look toward Indonesia as an
investment destination.
The country's commitment to legal reform has long been
questioned, with investors complaining about legal uncertainty
arising from everything from impotent regulations to the failure
to honor legitimate contracts.
Fresh in the memory of investors is the controversial decision
by the commercial court to declare the local unit of Canadian-
based insurance firm PT Asuransi Jiwa Manulife Indonesia
bankrupt. Following protests from the Canadian government and the
intervention of the Indonesian government, the Supreme Court
annulled the bankruptcy ruling.
"That (case) shows that the current pace of legal reform has
yet to live up to the people's expectations," Boediono said.
That is why, he added, the establishment of BAPMI as an
alternative for settling disputes should receive the full support
of all related parties, to help provide comfort to investors.
BAPMI Working Plan
1. Determine the organizational structure and culture of BAPMI in
accordance with existing rulings.
2. Develop sustainable programs aimed at promoting BAPMI among
capital market players.
3. Develop BAPMI in such a way as to cooperate with other similar
institutions, in accordance with Law No. 30/1999 on arbitration
and dispute settlement alternatives.