An international agreement is based on international law and regulates public interests and does not bind private legal entities. As a result, an international agreement belongs to the domain of public law. Meanwhile, cooperation contracts (KKS) made by the Government through the Executive Agency for Upstream Oil and Gas Activities constitute production-sharing contract forms so that they do not belong to the international agreement category as regulated in Law Number 24 Year 2000 regarding International Agreements.

This confirmation was conveyed by Lukman Hakim Saifuddin, a Member of the People’s Legislative Assembly of the Republic of Indonesia (DPR-RI) acting as DPR’s attorney when presenting the official statement of DPR-RI with respect to the petition for judicial review of Law Number 22 year 2001 regarding Oil and Natural Gas (Oil and Gas Law) in the courtroom of the Constitutional Court, Wednesday (7/11). Lukman also confirmed that the 1945 Constitution gives supervisory jurisdiction on international agreements to DPR as an institution, not to its personal members.

Relating to the status of the Petitioners who are also members of DPR as the law-making State institution, Lukman is of the opinion that the Petitioners’ effort to file a petition for judicial review of the Oil and Gas Law against the 1945 Constitution to the Constitutional Court is inappropriate. “If the Petitioners consider the Oil and Gas Law is in conflict with the Constitution, the Petitioners, as members of DPR which has the right to propose draft laws, had better file a petition for a legislative review at DPR,” he advised. “As a result, the Petitioners do not meet the legal standing requirements as regulated in Article 40 Paragraph (1) of the Constitutional Court Law,” he added.

The petition for judicial review of Article 11 Paragraph (2) of the Oil and Gas Law was filed by Zainal Arifin, Sonny Keraf, Alvin Lie, Ismayatun, Hendarso Hadiparmono, Bambang Wuryanto, Dradjad Wibowo and Tjatur Sapto Edy. These 8 Petitioners are also DPR RI members from various factions. They consider the provisions to be in conflict with the 1945 Constitution, because the provisions make the Government c.q. the Executive Agency for Upstream Oil and Gas Activities to have the obligation of only informing DPR of every cooperation contract (KKS) on production sharing of natural resources exploration and exploitation conducted with contractors, especially foreign contractors. According to the Petitioners, with the coming into effect of such provisions, as Members and/or part of DPR-RI, they have been deprived of their constitutional rights to give consent or to refuse to give consent on the cooperation contracts.

Apart from hearing DPR’s statement, the court also heard the statements of the Experts presented by the Petitioners and the Government. Ryad Areshman Chairil, an expert in oil and natural gas and oil and natural gas contracts who was presented by the Petitioners, said that oil and gas cooperation contracts had widespread impacts and effects on social life. According to Ryad, it could be seen from the Consideration Part of the Oil and Gas Law which states that oil and natural gas are strategic non-renewable natural resources that are controlled by the state and that are vital commodities controlling the livelihood of the public and playing important roles in the national economy so that their management to create peoples’ prosperity and welfare to a greatest extent. 

Furthermore, Ryad also explained that cooperation contracts had brought impacts on state finance burden. Operational expenses incurred by contractors or usually referred to as cost recovery, when contractors had succeeded to produce oil and gas for commercial purposes, will be reimbursed by the state. “From drilling cost to administration cost. For that reason, it is necessary for DPR to exercise supervision on such cooperation contracts,” he explained.

Another Expert of the Petitioners, Muhammad Said Nisar, explained that international law is a law made by countries as the winners of war to protect their interests. “Every capital that goes out of advanced industrial country is guarded by international law principles,” he said. He also said that cooperation contracts do not stand on their own and that they are bound by other regulations such as international trade agreements. 

Meanwhile, Hikmahanto Juwana, an international law expert presented by the Government explained that international law subjects are states and international organizations as well as other international legal entities having the capacity to enter into agreements with states. On the contrary, international business agreements are not part of the international law, even though the governments have roles in such agreements.

“In an international business agreement such as an oil and gas cooperation contract, the state becomes the subject of international private law, not the subject of international law. The popular term is the state as a trader,” Hikmahanto said. Therefore, he continued, cooperation contracts are not included in the category of “other international agreements” as regulated by Article 11 Paragraph (2) of the 1945 Constitution so that prior supervision by DPR will not be necessary.

In line with this opinion, another Government’s expert, Zen Umar Purba, is of the opinion that the provision of Article 11 Paragraph (2) of the Oil and Gas Law is not in conflict with the 1945 Constitution because cooperation contracts are not parts of international agreements. Accordingly, said Zen Umar, the Petitioners’ constitutional rights have not been impaired by the existence of such provision. [ardli]