House, govt drop FTZ bill deliberation

The Jakarta Post, Jakarta

The House of Representatives and the government have decided to halt the month-long deliberation of a bill on free trade zone (FTZ) status for Batam Island after both sides fail to come up with a compromise on several key articles.

Surya Dharma Ali, chairman of the special House committee tasked to deliberate the FTZ bill, said both the House and the government agreed to drop the bill, causing another uncertainty for the business community.

"We are very disappointed with the result. Both the government and the House remain stern on their stance," said Surya.

Surya said, however, several legislators would try to seek approval from the House plenary meeting on Sept. 14, to be able to proceed with the deliberation of the bill alone without the involvement of the government.

The unexpected decision was taken after several key ministers met with the House Commission V for trade and industry late on Friday to report the results of their meeting with President Megawati Soekarnoputri, and try to offer a compromise.

The bill, which has been hanging in the balance since 2001, is supposed to be endorsed at a House plenary session on Sept. 14.

Minister of Justice and Human Rights Yusril Ihza Mahendra said there was no other way for both the House and the government than to drop the deliberation process, and leave it to the upcoming new government and legislators.

"We have discussed our differences (with the legislators) with the President. From the discussion we have come up with a decision to drop the bill due to significant disparity between us and the House over several key articles," said Yusril.

He pointed out that one of the disputed articles in the government-proposed bill is a plan to limit the FTZ status only in certain industrial areas on the island, known also as "enclave FTZ", while the House recommends the whole of Batam Island be granted full FTZ status.

The other disputed article was on the authority to manage seaports and the airport in Batam. The government wanted such authority to remain in the hands of the central government, while the House insisted that the authority should be held by the local administration.

Regarding the plan by several legislators to deliberate the bill without a consent from the government, Yusril said that it would be against the 1945 Constitutional Law which stipulated that the House must deliberate laws together with the government.

"If there is no consent from the government, the House cannot force itself to pass the bill. That will be against the law. We just don't want the bill to contain flaws," said Yusril, who is a stout ally of presidential candidate Susilo Bambang Yudhoyono.

The House, which is empowered by the Constitution to draw up a bill, had actually completed its own draft a few years ago. But the government rejected it, and instead drafted its own version, which was completed earlier this year.

A further delay in defining Batam's FTZ status carries will prolong uncertainty for the business community on the island -- one of the most modern investment destinations in the Asia- Pacific region and located only 20 kilometers from Singapore.