House Receives Problem Inventory List for Cooperatives Bill

The government has submitted the Problem Inventory List (DIM) for the Cooperatives Bill to the House of Representatives (DPR). The list includes provisions on the formation of a Cooperatives Deposit Insurance Corporation (LPS Koperasi) and the development of the Red and White Cooperatives (Koperasi Merah Putih).

Minister of Cooperatives Ferry Juliantono stated that the Bill on the Fourth Amendment to Law Number 25 of 1992 on Cooperatives is expected to be completed this year, given that the legislation is 34 years old and considered no longer relevant. “We have submitted the DIM and will now wait for the process. We will hold another joint meeting with Commission VI,” Ferry said.

One of the main substances of the Cooperatives Bill is the establishment of the LPS Koperasi, which will provide deposit insurance for members of Savings and Loans Cooperatives (KSP) and/or Sharia Savings, Loans and Financing Cooperatives (KSPPS). Ferry explained that the proposed institution would be placed under the Ministry of Cooperatives (Kemenkop). “But that certainly requires a joint decision, especially with the Minister of Finance, because there are state budget (APBN) consequences,” Ferry noted.

Furthermore, Ferry said the government is also proposing to include discussions on the development of the Red and White Cooperatives in the Bill. “We will include specific chapters and articles regarding the Red and White Cooperatives in the Cooperatives Bill,” he stated.

During the agenda for delivering the government’s views at a working meeting with House Commission VI, the Gerindra Party politician conveyed that the government supports and appreciates the DPR’s proposal regarding the revision of the Cooperatives Law and is ready to discuss the regulatory changes in subsequent meetings.

The revision of the Cooperatives Law has been mandated since 2014 as an implication of Constitutional Court Decision No. 28/PUU-XI/2013. While waiting for a comprehensive revision, the Cooperatives Law underwent revisions to several articles through the Omnibus Law on Job Creation in 2020, followed by another partial revision through the Omnibus Law on Financial Sector Development and Strengthening (PPSK) in 2023.

After examining the Cooperatives Bill, Ferry said there are several crucial issues that need further discussion, including the formation of the LPS Koperasi. The LPS Koperasi will be granted the authority to formulate and establish technical policies for implementing deposit insurance and to execute deposit insurance. “The planned establishment of this institution is expected to increase the confidence of members and the public in using savings services at cooperatives without fear of defaults by cooperatives, as occurred in 2020,” Ferry said.

Additionally, the Cooperatives Bill will also regulate the establishment of an institution that administers licensing, regulation, and supervision of cooperative savings and loan businesses. Other issues deemed to require further discussion include the adoption of digital technology by cooperatives, criminal sanction provisions to protect the interests of cooperative members and the wider community, as well as provisions regarding the ecosystem and the role of the government.

Meanwhile, Deputy Chairman of House Commission VI Eko Hendro Purnomo stated that the refinement of Law Number 25 of 1992 is being carried out to provide a legal framework capable of encouraging cooperatives to be healthier, stronger, independent, professional, adaptive, and competitive. The Bill on the Fourth Amendment to Law Number 25 of 1992 on Cooperatives, Eko said, consists of 118 amendment points and 3 transitional articles that substantially contain various important improvements to the national cooperative system.

“Through this Bill, House Commission VI hopes that cooperatives can increasingly play a role as the pillars of the national economy, strengthen the people’s economy, expand public access to financing and more productive business activities, and ultimately, the goal is to improve the welfare of members and the wider community,” said the figure familiarly known as Eko Patrio.

The DIM will subsequently be discussed in an internal meeting of the Working Committee (Panja), with the results of the discussion to be presented at the next Commission VI Working Meeting.