Experts presented by the Petitioners, Bernaulus Saragih and Koeniatmanto Soetoprawiro, delivering their expertise in the judicial review of the Law on State-Owned Enterprises (BUMN) on Wednesday (18/4) in the Plenary Courtroom of Constitutional Court. Photo by Humas MK/Ganie.

In terms of business operation, BUMN (SOEs) have not considered the public welfare because the purpose of their establishment is to pursue profits. The phrases contained in Article 2 paragraph (1) letters a and b and Article 4 paragraph (4) of the BUMN Law indicate that SOEs prioritize seeking profits. This was conveyed by Bernaulus Saragih as an expert presented by the Petitioners in the follow-up judicial review hearing of Law No. 19/2003 on State-Owned Enterprises (BUMN Law), Wednesday (18/4). 

Furthermore, the forest management expert of Mulawarman University of Banjarmasin, explained in terms of environmental preservation, BUMN is a government machine in impoverishing the people in the area as well as the natural resources producers such as oil and gas, coal, forest, and so on. Bernaulus also questioned what was wrong with SOEs in Indonesia. "Is there something wrong with our SOEs? Yes, the purpose and its supervision are wrong so SOEs tend to be exploitative," he explained before the hearing presided over by Chief Justice Anwar Usman in the Plenary Courtroom of the Constitutional Court. 

Bernaulus explained about 17 regions in Indonesia with the largest oil and gas potential, with 11 regions state SOEs as exploiters of natural resources in Indonesia because they have not bring benefits for the local community. Another example is East Kalimantan, producer of oil and gas, which was predicted to run out of oil in 2024. "In case of natural resources that are non-renewable, it is very unfortunate if they run out and our next generations lose them," he explained. 

Educating the Nation

On case No. 14/PUU-XVI/2018, Professor of the Faculty of Law of the Parahyangan Catholic University, Koerniatmanto Soetoprawiro, provided his views by emphasizing the meaning of the article and the objectives of the establishment of SOEs. According to Koerniatmanto, based on Article 23C of the 1945 Constitution and the Constitutional Court Decision No. 48/PUU-XI/2013, SOEs in state property management are separated in order to educate the nation and promote general welfare. "In principle, the management of separated state assets, including SOEs, must be regulated by law. Thus, the phrase “arranged with government regulations” in Article 4 paragraph (4) of the BUMN Law are contradictory to the intent of Article 23C of the 1945 Constitution," he explained as expert for the Petitioners. 

Albertus Magnus Putut Prabantoro and partner as Petitioners of case No. 14/PUU-XVI/2018 argue that both articles impair their constitutional rights as citizens. They claimed that the articles were normatively abused and it led to the issuance Government Regulation No. 47 of 2017 on the Equity Participation of the State of the Republic of Indonesia in State-Owned Limited Liability Company. In the government regulation, also known as PP Holding BUMN Tambang, shares of three SOEs are transferred to PT Indonesia Asahan Aluminum Persero (Inalum). The three SOEs are PT Aneka Tambang Tbk (Persero), PT Timah Tbk (Persero), and PT Bukit Asam Tbk (Persero).

In addition, the Petitioners claimed the implementation of Article 4 paragraph (4) of the BUMN Law shows the effect of state equity participation in other SOEs, so the SOE becomes a subsidiary of the other SOEs. This provision has eliminated the SOE and can be categorized as a new privatization model due to the transformation of SOE into SOE subsidiary without the mechanism of the state budget and House approval. (Sri Pujianti/LA/Yuniar Widiastuti)