PDI attacks new deregulatory measures as unconstitutional

PDI attacks new deregulatory measures as unconstitutional

JAKARTA (JP): The Indonesian Democratic Party (PDI) yesterday
attacked the government's newest economic deregulation package,
which opens the door wide to foreign investors, as violating the
spirit of the 1945 Constitution.

PDI's Central Executive Board in a statement yesterday called
on the government to reverse its decision and promised that its
faction in the House of Representatives, despite its minority
position, will fight to repeal the PP20/1994 regulation.

"We feel that the intention and the spirit of Article 33 of
the 1945 Constitution obliges the state to control all branches
of production that are vital to the state and affect the
livelihood of many people.

"The PP20/1994 uses this formulation but turned its meaning
around, that is allowing foreign companies to take control as
long as Indonesia has a five percent equity," said the statement,
jointly signed by Deputy Chairman Kwik Kian Gie and Secretary
General Alexander Litaay.

The PP20/1994 allows foreigners into sectors which have until
now been jealously guarded by the government on the grounds that
they are considered strategic.

These sectors include ports, power generation,
telecommunications, sea transportation, education, aviation,
water supply, railways, nuclear power and the mass media.

The regulation has raised questions on the constitutionality
of PP20/1994 which many found to contradict existing legislation.
The mass media, for example, is regulated by the 1982 Press Law
which clearly bars foreigners from owning any share in the
country's press and broadcasting industry.

Contradictions

PDI also found contradictions between PP20/1994 and the 1967
Law on Foreign Investment and the 1968 Law on Domestic
Investment.

PDI, the smallest of the three political organizations in
Indonesia, includes factions from the remnants of the now defunct
Indonesian Nationalist Party (PNI).

President Soeharto in the past two weeks has defended the
government's stand of allowing big corporations to run some of
the country's giant industrial projects as monopolies, saying
that their financial and management muscle is needed to handle
such major ventures.

Soeharto said Article 33 of the Constitution states that the
government should control vital branches of production but makes
no mention of ownership. He also gave assurances that the
government has ways of controlling big corporations.

The PDI statement declared that the government is now
stretching that argument further to justify the entrance of
foreign companies into these same strategic sectors.

There must be proper guidelines to distinguish "control" and
"ownership", it argued. (emb)