POLICY BRIEFS
AUSTRALIA INDONESIA
GOVERNANCE RESEARCH PARTNERSHIP
Making law in regional parliaments
M Nur Sholikin
Simon Butt
POLICY BRIEFS
Making law in regional parliaments
Australia Indonesia Governance Research Partnership Crawford School of Economics and Government
ANU College of Asia and the Pacific The Australian National University
POLICY BRIEF 5
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POLICY BRIEFS Contents
Making law in regional parliaments 1
M Nur Sholikin Simon Butt
About this policy brief
Regional government regulations (perda) are strategic legal instruments that support development in Indonesia’s regions. The success of regional autonomy in improving development and democracy in the administration of government depends heavily on local parliaments enacting perda. Regional legislatures and executive governments must produce high-quality perda which provide legal frameworks for social responsibility, and the advancement and empowerments of the regions. Article 18(6) of the Constitution gives regional governments power to enact perda and other laws to implement regional autonomy and to co-operate with the central government. It remains for the local government, citizens and private sector to take advantage of this constitutional guarantee.
Improving the legal framework relating to perda, and increasing the capacity of regional government institutions and officials and supporting local parliaments are preconditions for good regional lawmaking. The involvement or participation of the community in the regional legislative process is critical so as to ensure that laws are in the best interests of the majority of citizens. Just as a perda can support regional development, it can also hamper it, such as if the perda closes channels for investment flowing into the region or impedes the empowerment of the community empowerment. Because perda are produced through political processes, particularly in local parliaments, they are highly susceptible to partisan interests.
About the authors
M Nur Sholikin is Deputy Director of Documentation and Information at the Pusat Studi Hukum & Kebijakan Indonesia (Centre for Indonesian Law & Policy Studies, or PSHK), one of Indonesia’s most widely-respected legal research institutions, where he has worked as a researcher for almost five years. He also lectures on Indonesian law at the University of Indonesia. Sholikin has been involved in many research projects leading to publications, including projects relating to corruption, the legislative process, legislative performance and public participation.
Simon Butt is a Senior Lecturer at Sydney University Law School, where he teaches Indonesian Law, Intellectual Property, Dispute Resolution in Asia, and Law and Investment in Asia. He has published widely on a number of areas of Indonesian law and is currently working on several research and book projects relating to Indonesian legal institutions and Indonesian law. His research and consultancy interests include law-making, policy and law, corruption, Islamic law, human rights law, the judiciary, the rule of law and the legal implications of regional autonomy in Indonesia.
Acknowledgments
The authors would like to acknowledge significant contributions to this research made by the following project partners.
Vivi George of Swara Parangpuan in Mana
• do
Nurholis of Lembaga Kajian Keislaman dan Keilmuan Majid in Banjarmasin
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Siti Maryam Rodja of Pusat Studi Hukum dan Kebijakan Indonesia in Jakarta
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Rizky Argama, Assistant researcher
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Introduction
This research focuses upon perda (local laws) issued by regional governments, both executive and legislative, in Jakarta, Banjarmasin and Manado between 2004 and 2008.
Since Indonesia embarked upon regional autonomy, it has gone from being one of the world’s most authoritarian and centralised states to one of its most democratic and decentralised. A primary feature of regional autonomy has been the granting of power to make laws over a wide variety of issues from the central government to regional governments. Well over 1,000 regional lawmakers and executive officials have received extensive lawmaking powers under this process.
This research analysed local policy-making processes, with a focus on public participation; whether policy is effectively translated into local laws; and mechanisms for the review of perda by the Minister of Home Affairs and the Supreme Court.
Public participation, policy development and lawmaking
Many international donors have supported decentralisation in Indonesia and elsewhere in the world, arguing that it improves democracy, for a number of reasons. One is that that democracy will be enhanced because local governments are inherently more responsive and accountable to their constituencies than would be a central government, given that they will usually be in closer proximity to their constituents than central government. Decentralisation is also said to have potential to improve the ‘allocative efficiency’ of public resources, thereby improving the delivery of government services at the local level. Local government will be, it is presumed, more knowledgeable about local affairs than a central government. Local government is, therefore, thought to be better equipped than a central government to tailor government activities to meet the needs of local communities. Consistent with these core democracy-related rationales, Article 53 of the Law on Making Laws (Law No 10 of 2004) and Article 139(1) of the 2004 Autonomy Law provide for public participation in the lawmaking process. These laws state that the community has a ‘right’ to provide input, oral or written, ‘in the preparation or deliberation’ of a statute or a perda.
This study has found, however, that these potential democratic benefits have been largely lost in the lawmaking processes employed by local lawmakers in some regions. Although the community has the right to participate, its members are not given the opportunity to exercise that right. The right is, therefore, largely a legal mirage. We found that, in the target regions, policymakers and lawmakers almost never attempted to consult with their constituents to determine whether particular laws were necessary and, if so, what they should contain. Even citizens or businesses which know that a lawmaker is considering including a particular
Making law in regional parliaments
M Nur Sholikin Simon Butt
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policy in a law might have difficulties accessing relevant information. Public access to information relevant to the lawmaking process, including relevant policy documentation and draft laws, was generally inadequate. Cost-benefit analysis of regulation was rarely performed before enactment, meaning that sometimes very significant burdens were placed on business and citizens, bringing very little perceptible benefits.
The study found also that local governments were unlikely to put together detailed regulatory impact statements in which the likely effect or ramifications of proposed laws were contemplated. Instead, laws were conceived and enacted almost in a vacuum; and then were ‘socialised’ – that is, the government attempted to inform citizens of the new law and its key principles. This was top-down imposition of policy and law rather than popularly-inspired reform. As a result, local laws met a perceived need only by chance; and the public responded to a perda only if, after enactment, it created controversy within the community.
Representative content?
Some perda have been praised as being well-written and innovative, providing impressive yet affordable services to citizens including health care, or setting meaningful environmental standards. Many others, however, have been criticised for being unclear, unnecessary, misdirected, exploitative of citizens and investors or even unconstitutional.
It is arguable that, had constituents been adequately consulted, they might have requested very different types of laws to those their local governments have passed. Previous studies have highlighted the propensity of some local governments to use their new lawmaking powers primarily to raise revenue – through the imposition of taxes (pajak) and user-charges (retribusi). Many of these levies appear to have been issued in breach of national law – specifically, Law No 18 of 1997 on Regional Taxes and User Charges and its amending Law (No 34 of 2000). This national law limits the types of taxes and user charges that local governments can impose. Other perda, usually purporting to regulate ‘public order’ (ketertiban umum), seem to attempt to encroach upon the private lives of citizens, imposing alien or otherwise inappropriate concepts of morality or propriety upon them. Examples of these types of law include the Tangerang City Perda No 8 of 2005 on Prostitution. This law drew significant media attention both in Indonesia and worldwide, when it was used as the legal basis for the detention of Lilis Lindawati, a three-month pregnant mother of two, who, in February 2006, was picked up on suspicion of prostitution while waiting for a bus at around 8 o’clock at night. Another example of perda which critics argue is inappropriate and intrudes ‘too far’ into the private lives of citizens include the recently-enacted Qanun or Perda issued in Aceh which, as is well known, imposes stoning as a punishment for adultery.
This study confirmed that, in the regions studied, the majority of perda related to
‘internal issues’, such as regional finance, tax and user-charges and the institutions of government; the ‘public interest’ or ‘public benefit’ was largely neglected. Of the 30 perda produced by the Manado local government, only one was related to the public interest: the Perda on Public Services. Of the 110 perda from Banjarmasin, only 13 related to the public interest or benefit – 5 perda regulated ‘public order’
and eight ‘public services’. In Jakarta, there was a wider variety of types of perda, more of which related to the public interest, but they were still less in number than perda which regulated the internal affairs of regional government. There
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was one on culture; four on health; one on public order; one on tourism; two on public services; one on education and four on the environment. This points to a significant problem in local legislative politics: the type of regulations produced often reflect the concerns of those who hold legislative power at the local level, rather than their constituents.
Under-utilised?
The research found that in the three regions studied - Banjarmasin, Manado and Jakarta – local lawmakers appeared to underutilise their lawmaking powers. From 2004-2008, the Manado local parliament issued 30 perda; the Jakarta parliament 54; and the Banjarmasin parliament 110. The framework for regional autonomy appears to anticipate that local lawmakers exercise their lawmaking powers more regularly than they do in practice. As mentioned, the amended Constitution and the regional autonomy laws provide lawmakers with wide-ranging lawmaking powers. The Law on Lawmaking emphasises the importance of perda for the development and advancement of the regions and specifically empowers local governments to pass laws to take advantage of the ‘special’ characteristics of their regions. Manado and Banjarmasin, for example, have tourist industries. Yet, the Manado and Banjarmasin local governments have not enacted a perda to push the growth of tourism in their respective regions.
Executive-dominated lawmaking?
We found also that the executive had far greater capacity – in terms of knowledge and experience – in drafting laws than the legislature. Local executives have legal departments, which can provide legal advice; some can even offer drafting services.
By contrast, legislators do not generally have access to such services and are not given capacity support for their institutions. Legislators have a wide variety of educational backgrounds and many of them do not understand issues relating to law and regulation. One result is that, armed with superior knowledge and experience, the executive often dominates the perda-making process. Indeed, this study found that the vast majority of perda produced between 2004-2008 were initiated by the executive branch of local government, rather than the legislature.
In Jakarta, for example, all perda produced were initiated by the executive.
Further, the capacity imbalance tends to undermine the checks and balances that the legislature might otherwise provide in respect of the performance and work of the executive.
Legislative drafting
This research found that the legal drafting skills of a large proportion local lawmakers are largely poor, resulting in laws which are so unclear in both purpose and content as to be unworkable. Even if acceptable policy is developed absent sufficient consultation and analysis, that policy is unlikely to be translated effectively into legal form. Those who read the law might, therefore, be mystified as to its intent, purpose, or requirements. Citizens and officials alike might be unable to understand its terms. This can have serious ill-effects. Laws which seek to provide services or other benefits to citizens might fail to do so. Laws might be so unclear as to make it difficult for citizens and businesses to understand them, and, therefore, comply with them. Internal contradictions, and inconsistent use of legal definitions and other terms, too, might make compliance difficult or impossible.
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We suspect that common drafting practice – found in respect of national laws also – might significantly contribute to this general lack of clarity. Stakeholders and interested parties, whether government or non-government agencies, often contribute policy that, they argue, a particular law should contain. Common practice is, however, for stakeholders to propose this policy in the form of a draft law, presumably on the basis that its terms, or at least some of them, might be simply adopted by parliament, if it agrees with the underlying policy. Unfortunately, this practice tends to conflate the policy-development and legal drafting processes – processes which are treated as quite separate in other countries, for good reasons.
Legal drafting is a highly technical and specialised skill: without experience and guidance it is very difficult to do well. It is best for the battle over content to be fought and settled before legal drafters are called in, so that attention can be concentrated on the way the law is expressed in order to convey its purpose. In this way, the legal language used to express the policy is less likely to be muddied by political process.
Review of perda
If even a small proportion of perda issued by local lawmaking bodies Indonesia- wide suffer one or more of these reported flaws, then ‘problematic’ perda might number in the hundreds or thousands. If, as it is commonly suspected, the proportion is higher, then regional autonomy is creating nothing short of legal chaos. Clearly, there must be an effective mechanism to review potentially defective perda and invalidate them if deemed necessary.
There are currently two mechanisms for the review of perda: what we call bureaucratic review by the Minister of Home Affairs (MOHA), and judicial review by the Supreme Court (Mahkamah Agung, or MA). This study analysed 500 Decisions of the Minister of Home Affairs from 2006-2008 which invalidated perda; and 16 Supreme Court cases. We found that, unless the perda seeks to impose a tax or user charge (retribusi), the MOHA or MA was highly unlikely to invalidate it, or even review it with any vigour. The MOHA and the MA have, in practice, allowed local governments to pass laws regulating any subject matter – regardless of their potential perversity or injuriousness for citizens or business, or their inconsistency with higher-level laws – provided that those laws do not seek to raise revenue for local governments.
This ‘hands off’ approach puts law at risk of becoming almost entirely irrelevant in decentralised Indonesia. It has, in effect, given free reign to local governments to act as they please; to act unrestrained by law, provided that they do not seek revenue in so doing. It is undermining what little progress Indonesia has made, at the national level since Soeharto’s fall, towards the rule of law – the Indonesian Negara Hukum (state based on law) – under which the state, including local governments, must itself comply with the law when performing its functions.
Bureaucratic review
Regional lawmakers must send their perda to the central government within seven days of enactment. The central government is to review the perda against two criteria: whether the perda breaches the ‘public interest’ (kepentingan umum) or contradicts a ‘higher law’ (peraturan perundang-undangan yang lebih tinggi) (Article 145(2) of the 2004 Regional Autonomy Law). Provincial perda are reviewed by a team established by the MOHA. If, according to the team, the perda breaches the public interest or a higher law, then the MOHA can invalidate it. District
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and municipality perda, on the other hand, are reviewed by a team established by the provincial government in which they sit. This team can recommend the invalidation of district and municipality perda to the Minister of Home Affairs who can invalidate the perda, if deemed necessary. Significantly, the central government’s right of review expires after 60 days (Article 145(3)); if it does not invalidate the perda within this time, then the perda continues in force by default (Article 145(7)).
Different procedures apply for the review of perda which set local government budgets, impose regional taxes or user charges, or relate to spatial planning. These types of perda need central government pre-approval.
The bureaucratic review process does not appear to work effectively, for several reasons identified in previous research:
Concerns have been raised that the central government allows through
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too many perda, that, on their face contradict central government laws or breach fundamental human rights standards, simply because it lacks the capacity to review all of the perda it receives.
Reports indicate that some regional governments are not conveying
•
their new perda to the central government. The result is that perda which, if submitted and reviewed, may well have been invalidated, instead bypass the review mechanism altogether.
Third, some local governments are said to have refused to rescind
• perda
that the central government has invalidated.
Our research shows that bureaucratic review has been used exclusively to review and invalidate perda which require citizens or institutions to provide, to a local government, payments—whether in the form of tax, user charges or some other impost—that the central government has prohibited by national statute. All 500 perda that the MOHA invalidated from 2006-2008 imposed such payments.
The reason for the central government’s preoccupation with tax and retribusi perda is unclear. Perhaps one plausible explanation is the central government, hobbled by resource limitations, must be selective in the laws it chooses to review and that, in order to protect its own revenue streams, it has decided to focus upon perda that impose tax and retribusi. Perhaps the central government has a genuine concern to ensure that citizens and businesses are not overly encumbered by local revenue-raising laws. Alternatively, and consistent with the apparent spirit of regional autonomy, this focus might reflect a conscious central government policy decision to allow local governments to pass laws unhindered, except in these areas. After all, one of the primary purposes of regional autonomy seems to be to give power to the regions to regulate their own affairs. What political currency would the central government have to gain, or lose, from interference, even if the perda has a largely detrimental effect upon the populace it seeks to govern?
Invalid invalidations?
This study has shown that all perda that the MOHA has revoked were deemed to conflict with a ‘higher-law’. Yet the legal instrument used to invalidate these perda – a Decision of the MOHA – is, itself, not mentioned on Indonesia’s hierarchy of laws. It is commonly presumed in Indonesian legal circles that, because it comes
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from a senior central government official, a Ministerial Decision trumps a perda.
There is, however, simply no legal basis for such a presumption. The 2004 Autonomy Law explicitly requires that perda be invalidated by Presidential Regulation; and the legal instrument which purports to allow that perda be invalidated by MOHA Decision – MOHA Regulation No 53 of 2007 – cannot override the 2004 Law, which is a statute enacted by Indonesia’s national parliament and, therefore, clearly of a higher legal status on the hierarchy. Ironically, then, local governments might have grounds to challenge the legal basis for the 500 Perda invalidations.
This would, however, require adjudication by the MA which, this study can hardly be relied upon to provide well-reasoned and convincing decisions in review cases.
Judicial review
Unlike the MOHA, the Supreme Court has reviewed perda which do not concern raising revenue. This is largely because it does not choose the types of cases that come before it. Rather it hears cases that applicants—citizens or businesses—ask it to hear. This study shows, however, that like the MOHA, the MA reliably strikes out only tax or retribusi perda.
The MA perda review cases fell into roughly four categories:
Citizens challenging revenue-raising
1. perda. The MA upheld two challenges
brought by citizens against perda which imposed retribusi or a tax on the basis that the perda contradicted Law No 18 of 1997 as amended by Law No 34 of 2000. In these cases, the MA seems to have picked up revenue-raising Perda that have bypassed the MOHA’s review processes or otherwise have escaped the MOHA’s attention.
Local governments challenging MOHA invalidation of their revenue-raising 2.
Perda. The MA heard appeals by local governments against the invalidation of their perda by the MOHA. In these three cases, the MA upheld the MOHA’s Decision in which the perda were invalidated, and simply adopted the reasons provided in the MOHA Decision: that the perda was in breach of Law No 18 of 1997 as amended by Law No 34 of 2000. In Decision No 03 P/HUM/2009, the MA adopted almost the same reasons as had the MOHA in its Decision, verbatim for three out of four paragraphs.
Challenge to
3. perda which do not concern revenue-raising. Our study shows that the MA is likely to allow these types of perda to stand. In the cases studied, this was often problematic, because the MA was prepared to uphold the perda without attempting to test whether the perda was consistent with higher- level laws. Rather, the MA seemed content to declare simply that regions have power to make policy and encase them in the legal form of a perda.
Concluding that the MA was not at all concerned with the substance of the perda, provided that it did not seek to impose revenue for local governments, might be overstating the effect of these decisions. But it is accurate to say that, in the vast majority of the non-revenue perda cases the MA heard, the Court did not engage in any real analysis of the perda to determine whether it might or might not be in breach of a national law. This approach significantly undermines the value and purpose of the judicial review of perda.
Case dismissed because not lodged within 180 days of
4. perda being enacted.
The MA has significantly restricted the availability of the judicial review it provides of perda. In two regulations, issued by the Chief Justice of the
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Supreme Court in 1999 and 2004, the MA has placed a time restriction on the lodgement of judicial reviews of all laws, including perda. The effect of these regulations is as follows: if an application for judicial review is not lodged within 180 days of the formal enactment of the perda, then the Court will refuse to review it. The decisions studied reveal that the MA strictly observes this time restriction. Of the 16 decisions, four were lodged outside this period—
one only five days late—and the Court refused to consider them. The Court paid no regard to the importance of the legal issues raised in the applications.
Unless it begins to provide more compelling reasoning for allowing controversial non-revenue-raising perda to remain on the books, and unless it removes this limitation period, citizens and government are likely to, if they have not already, discount the Court as a viable forum in which to test perda. Local lawmakers will be able to continue to pass thousands more laws with impunity and the Indonesian legal system will descend further into legal chaos.
Recommendations
Public participation in the local lawmaking process
The participative democracy implicit in regional autonomy, and required by law, appears to be a desirable policy objective. However, many local governments, in practice, are not providing its necessary pre-requisites.
Public consultation should occur early in the process of policy development.
1.
The form of consultation should be flexible, but related to the stage at which a proposal has reached. For example, early in the policy development process the agency should seek to inform the public about the problem, alternatives and possible solutions; as the proposal proceeds towards finalisation targeted consultation with stakeholders, aimed at developing consensus should occur.
At all stages, the public should be given access to information about the 2.
proposal – so that the public can better understand the proposal and the basis for it, and make meaningful input into policy development.
Drafting of perda
Legal drafting training must be conducted, with a focus on making local 1.
lawmakers aware of other options apart from regulation and distinguishing between policy formation (the political process) and legal drafting (the technical legal process).
Effective drafting manuals to ensure consistent use of language and 2.
terminology within laws of particular local governments.
Providing greater assistance to local governments during
3. perda development
and drafting. In this regard, local governments can seek the assistance with the drafting of perda from the Department of Law and Human Rights, through its regional offices.
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Review of perda
The MOHA should allocate more resources to the review of
1. perda, including
perda which do not seek to raise revenue. The MOHA’s review team should be enlarged to include local representatives and should meet more regularly.
Alternatively, consider the establishment of an independent body to review 2.
perda as against national laws.
Consider reinstituting pre-enactment
3. perda review for all types of perda.
Expand jurisdiction of Constitutional Court to review
4. perda.
Require MA judges to provide more detailed reasons for upholding or 5.
invalidating perda.
Remove the 180 day limitation period for lodgement of applications for 6.
judicial review of perda.
Address the questionable legality of using MOHA decisions to invalidate
7. perda.