Lecturer of Economics of the University of Surakarta R. Agus Trihatmoko as petitioners’ expert in the judicial review of the Law on State-Owned Enterprises (BUMN), Wednesday (2/5) in the Plenary Courtroom of Constitutional Court. Photo by Humas MK/Ganie.

When company shares are released by the Government into a holding company, it will result in direct losses to the State. Such was conveyed by the Lecturer of Economics of the University of Surakarta, R. Agus Trihatmoko, as the Expert presented by Petitioners No. 14/PUU-XVI/2018 in a follow-up hearing of Law No. 19/2003 on State-Owned Enterprises (BUMN Law) on Wednesday (2/5) at the Plenary Courtroom of the Constitutional Court.

According to Agus, the losses are caused by the State losing its economic profits directly because the value of the assets has moved to a holding company. "In one case, a holding may do a strategic camouflage by selling assets or ownership of its shares to other parties in order to show the value of corporate profits," said Agus.

In addition, Agus said that government management of SOEs is capitalist in nature because it was influenced by the liberal economic system due to the implementation of the BUMN Law so that the a quo norm deviates from the substance of Indonesia\'s economic constitution. He said that in the economic paradigm, Article 2 paragraph 1 letter of the BUMN Law along the phrase "state revenue in particular," meaning the State has an orientation to exploit the economy through the role of SOEs. This, said Agus, indicates that there is a conflict with the nature of emancipation and the participation of every element of the economic actors of the society philosophically on the principle of kinship and togetherness. While Article 2 paragraph 1 letter b of the BUMN Law along the phrase "pursuing profits," Agus explained that it means SOEs prioritize on profits on capitalistic capital through the ownership of government business groups.

"So, it is true that the Government becomes a ruling group of SOEs in capitalism without public participation as the foundation of the economy to also be sovereign. So, the a quo article has deviated from the substance of the philosophy of the Indonesian Economic Constitution that follows the paradigm of cooperation in accordance with Article 33 of the 1945 Constitution," said Agus before the hearing presided over by Chief Justice Anwar Usman.

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.

Before closing the session, Justice Anwar said the following hearing would be held on Wednesday, May 23, 2018 at 10.00 a.m. to hear the statement from the Petitioners’ Expert. (Sri Pujianti/Yuniar Widiastuti)