IBRA is legally weak, but needed: Supreme Court justice

JAKARTA (JP): The creation of the Indonesian Bank Restructuring Agency (IBRA) is legally weak, according to a Supreme Court justice, but its existence is urgently needed to retrieve the nation's assets.

"The substance of the 1999 government regulation regarding IBRA indicates the judicial authority of a body which is not judicial," Justice H.P. Panggabean said on Tuesday in a seminar discussing IBRA's powers.

IBRA was established as a special body to prevent further damage in the economic sector, but Panggabean said some refining is needed to improve the agency's legal foundations.

"One way is to change the status of government regulation No. 17 of 1999 into a government regulation in lieu of the law," Panggabean said.

He said a government regulation is not enough to form a body with such judicial authorities as IBRA has.

The existence of IBRA as a special body with special authority is stipulated in government regulation No. 17 of 1999, which originated from Banking Law No. 10 of 1998.

However, litigation lawyer Hotman Paris Hutapea said some major rulings in the government regulation go beyond the banking law on which the regulation is based.

"IBRA's power to issue a distress warrant which contains an execution power which has the same legal power as a court decision is excessive," Hotman said.

He also said that the agency's power to cancel the state court's attestment order on a property breached the principle of the law of procedure.

Hotman said that the regulation needed to be revised to comply with the rest of the legal system.

"However, I have to agree that justice is being upheld by the creation of IBRA, but at the expense of the law. This needs to be corrected," Hotman said.

A foreign business executive joining the seminar said on condition of anonymity that IBRA's significant role should require that the agency works to a high standard of professionalism.

"IBRA needs to have a very clear-cut philosophy, and know what the agency is going to do in a clear timeframe," he said.

Taufik M. Enre of IBRA's legal department defended IBRA's legal basis as adequate, saying that the creation of the agency was the result of banking problems which are so severe as to endanger the national economy.

"IBRA powers are within tolerable limits with regards to the noble interest of retrieving the nation's assets." Taufik said.

He also said that the creation of IBRA was not without prior consultation with the House of Representatives. (udi)