Hearing of case No. 1/PUU-XVI/2018 reviewing the Law on Deposit Insurance Agency (LPS), Monday (12/2) in the Courtroom of the Constitutional Court. Photo by Humas MK/Ganie.

The hearing of the judicial review of Law No. 24/2004 on Deposit Insurance Corporation (LPS Law) on Monday (12/2) afternoon had to be postponed. The House (DPR) and the Government were unable to attend to deliver statements in the hearing of Case No. 1/PUU-XVI/2018. 

"Our agenda today is to hear the statements of the House of Representatives and the President. The House is not present, so the only thing left is the President\'s statement. But there is a letter signed by Ms. Tio, Head of the Legal Aid Bureau of the Ministry of Finance that requests for the postponement of the hearing because the Government is not ready to deliver statement in the hearing," said Chief Justice Arief Hidayat as chairman of the session. 

The Government, represented by Tio Serepina Siahaan, asked for another two weeks to deliver their statement. However, the attorney of the Petitioner, Iqbal Tawakal Pasaribu, asked for one week for the Government to deliver their statement. "We ask for one week so that it won’t be too long and drawn out, Your Honor," said Iqbal. 

Consequently, the Panel of Justices of the Constitutional Court decided that the next hearing of judicial review of the LPS Law be held in two weeks. "Okay. Then the next hearing is two weeks from now, on February 26, 2018, at 11:00 a.m. with the agenda of hearing the statements of the House of Representatives, the President, as well as examinations of experts and witnesses presented by the Petitioners," Arief added. 

The Deposit Insurance Agency (LPS) as Petitioner reviews Article 6 paragraph (1) letter c, Article 81 paragraph (3), and Article 33 paragraph (4) of the LPS Law. Article 6 paragraph (1) letter c reads, "In carrying out its duties as stipulated in Article 5, the LPS has the following authorities: to manage LPS assets and liabilities." Article 81 paragraph (3) reads, "The LPS shall be responsible for the management and administration of its entire asset." 

The Petitioner claims that the articles do not provide legal certainty and are contradictory to Article 28D Paragraph (1) of the 1945 Constitution that every person has the right to fair legal guarantee, protection, and certainty. in addition, the article is seen as contrary to the principle of the rule of law in Article 1 paragraph (3) of the 1945 Constitution.  As we know, one of the principles of a state law is guarantee of legal certainty. 

According to the Petitioner, the LPS cannot refuse payment from liquidated banks in the form of receivables. Because if LPS refused, it would incur losses. The receivables keep old receivables active with interest and penalties, if not paid within a certain time limit, as this will result in the increase of receivables from the principal and interest and fines. 

The LPS has the authority of write off for systemic bank debtors in crises, as regulated in the Law of Financial System Crisis Prevention and Handling (PPKSK Law). Meanwhile, for non-systemic bank debtors, there is no explicit authority of write off in the LPS Law, especially Article 6 paragraph (1) letter c and Article 81 paragraph (3). (Nano Tresna Arfana/LA/Yuniar Widiastuti)