Indonesia Legal Profile

Indonesia possesses a civil law system influenced by customary law. The hierarchy of laws was defined in 2000 by the People’s Consultative Assembly as the following: the constitution, statutory law, government regulation, presidential decree, regional regulation, and traditional laws.

The House of Representatives not only holds legislative power, but also the authority for the state budget and represents the people in supervising and checking executive power. The Regional Representative Council’s, or Senate, authority is confined to preparing bills and recommendations, but without voting rights, largely relating to the regional functions of Indonesia and the management of economic resources. The congregation of both houses has the power to amend the constitution and impeach the executive.

Judicial independence is enshrined in Article 24 of the Constitution. The judicial branch of government is formed by the Supreme Court and the Constitutional Court, with the former being the highest court of appeal in regard to criminal, civil, commercial, religious, and military courts. For civil, commercial and criminal law, secular courts are largely predominant, Muslims may opt for Sharia courts to rule on matters of personal status.

Nevertheless, in Aceh province, Sharia law applies in full, including its extension to criminal law. Although de jure independent, in reality the judiciary is open political intervention, particularly the Constitutional Court which has one third of its judges nominated and appointed by the President. Corruption is also rife within the judiciary, particularly bribery; anti-corruption legislation is poorly enforced. Indeed, in both 2013 and 2017 a Constitutional Court judge was arrested for corruption, with the former being found guilty and handed a life sentence.

The Indonesian Civil Code 1847 has a broad scope and governs a range of topics including personal status law, assets, contracts, nullification, as well as obligations and monetary loans. Commercial and business life is regulated by the Commercial Code 1847 as well as the more recent Limited Liability Companies Act 40/2007, which defines business entities and the rules applying to them.

Indonesia also has a swathe of labour relation laws, such as the Industrial Relations Law, Union Law, Work Safety Law and Social Security Law. However, the Act Concerning Manpower 13/2003 is the comprehensive law on employee-employer relations. The Penal Code 1982 is the primary criminal law, with the exception of Aceh, and includes basic anti-corruption measures. The Law on Eradicating Criminal Acts of Corruption criminalises major corrupt practices, but not facilitation payments.

Indonesia is party to numerous international treaties, including the Geneva Conventions, Framework Convention on Climate Change and its subsequent additions, the International Covenant on Civil and Political Rights as well as the New York Convention 1958. Indonesia is also a member of the Association of Southeast Asian Nations, Organisation of Islamic Cooperation, World Trade Organisation and the Islamic Development Bank.

Indonesian legislation does not state where international law is positioned within Indonesia’s legal hierarchy and commentators have criticised Indonesia for its failure to comply for with international treaties, including those focused on human rights and international trade.

References

http://www.nyulawglobal.org/globalex/Indonesia1.html#sourcesoflaw.

http://www.nyulawglobal.org/globalex/Indonesia1.html#judiciary.

http://www.business-anti-corruption.com/country-profiles/indonesia.

http://www.refworld.org/cgi-bin/texis/vtx/rwmain?page=category&docid=3ffbd0804&skip=0&category=LEGAL&coi=IDN&querysi=civil&searchin=fulltext&sort=date.

https://www.scribd.com/doc/98386130/KUHD-English; http://irmadevita.com/wp-content/uploads/2008/04/company-law-uu-40-2007.pdf.

http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=64764&p_country=IDN&p_count=574&p_classification=01.02&p_classcount=2.

http://publicofficialsfinancialdisclosure.worldbank.org/sites/fdl/files/assets/law-library-files/Indonesia_Corruption%20Eradication%20Law_1999_en.pdf; http://www.business-anti-corruption.com/country-profiles/indonesia.

http://law.emory.edu/eilr/content/volume-28/issue-1/recent-developments/international-law-indonesian-legal-system.html#section-6f8b794f3246b0c1e1780bb4d4d5dc53.

http://www.imf.org/external/datamapper/PCPIEPCH@WEO/IDN.

http://www.coface.com/Economic-Studies-and-Country-Risks/Indonesia.

https://www.state.gov/e/eb/rls/othr/ics/investmentclimatestatements/index.htm?year=2017&dlid=269817#wrapper.

https://www.gov.uk/government/publications/overseas-business-risk-indonesia/overseas-business-risk-indonesia#bribery-and-corruption; https://www.business-anti-corruption.com/country-profiles/indonesia.

http://www.doingbusiness.org/data/exploreeconomies/indonesia.

https://www.state.gov/e/eb/rls/othr/ics/investmentclimatestatements/index.htm?year=2017&dlid=269817#wrapper.

https://www.gov.uk/government/publications/exporting-to-indonesia/exporting-to-indonesia#challenges-doing-business-in-indonesia.

https://www.cia.gov/library/publications/the-world-factbook/geos/id.html.

https://globaledge.msu.edu/countries/indonesia/risk; https://www.gov.uk/foreign-travel-advice/indonesia.

https://www.transparency.org/news/feature/corruption_perceptions_index_2016; http://www.business-anti-corruption.com/country-profiles/indonesia.

http://www.imf.org/external/datamapper/NGDPD@WEO/IDN; http://www.imf.org/external/datamapper/NGDP_RPCH@WEO/IDN.

https://www.cia.gov/library/publications/the-world-factbook/geos/id.html.