A legal aid institution and a number of non-governmental organizations are to challenge the constitutionality of the recently enacted Investment Law, which they claim will prejudice the interests of the people.
"We will ask the Constitutional Court to review five articles of the neo-liberal Law No. 1/2007 on Investment," Indonesian Legal Aid Institute Foundation (YLBHI) chairman Patra M. Zen said Wednesday during a public discussion on the new legislation at the headquarters of the Institute for Global Justice, a Jakarta NGO.
A number of NGOs have also thrown their support behind the challenge to the law, which supersedes the 1967 Foreign Investment Law and the 1968 Domestic Investment Law.
"We hope the Indonesian Democratic Party of Struggle (PDI-P), the National Awakening Party (PKB), labor unions and farmers' unions will join us in court," he added.
According to Patra, the five articles to be challenged are article 1, which allows foreign investors to set up 100 percent self-owned companies; article 8, which allows foreign investors to repatriate their profits; article 12, which increases the number of sectors in which foreign investors can operate; article 15 on the responsibilities of investors; and article 19 (in conjunction with article 22), which permits foreign investors to use land for up to 95 years.
Economist Revrisond Baswir from Yogyakarta's Gadjah Mada University argued the new investment legislation gave away too much to foreign investors.
He said foreign investors should not be allowed to operate in areas that directly affected the livelihoods of the majority of the people, such as those related to telecommunications services, electricity and drinking-water supplies.
The 1967 Foreign Investment Law restricted non-nationals from investing in sectors such as telecommunications, nuclear energy, drinking water and electricity as they were crucial to the people's livelihoods, he said.
"But one violation after another against the 1967 legislation was allowed. For instance, state-owned telecommunications firm Indosat sold nearly half of its shares to a Singaporean company. The government now wants to use the 2007 Investment Law (which was enacted later) to legitimize such violations," he said.
Revrisond claimed that the new Investment Law would do more harm than good, despite the fact that the government argued foreign investment was essential for creating jobs.
"Empirical studies show that foreign investment only results in employment rationalization, which will, in turn, cause an increase in unemployment, rather than creating more jobs as promised by the government," he claimed.
Meanwhile, Bonnie Setiawan, an executive of the Institute for Global Justice, said that his organization and 45 other NGOs supported the foundation's legal challenge to the legislation.
He expressed the hope that the PDI-P and PKB, which staged a walkout during the House plenary session that enacted the law on March 29, would also join in the challenge.
The PDIP's head of legal affairs, Firman Jaya Daeli, told The Jakarta Post separately that the party would be prepared to support the constitutional challenge to the new legislation.
"We are ready, if asked, to join the people in challenging this law as it represents a major political threat," he said. (06)
Find Article by Date