Principal Petitioner Albertus Magnus Putut Prabantoro and legal counsel Daniel Tonapa Masiku in the ruling hearing of the judicial review of Law Number 19 of 2003 on State-Owned Enterprises, Monday (26/11) in the Courtroom of Constitutional Court. Photo by Humas MK/Ifa.

The Constitutional Court (MK) rejected the entire petition for the judicial review of aw No. 19/2003 on State-Owned Enterprises (BUMN Law) in Decision No. 14/PUU-XVI/2018 that was read out in the ruling hearing on Monday (26/11) in the Plenary Courtroom of the Constitutional Court. In the case petitioned by Albertus Magnus Putut and others, the Court views that the objective of SOEs to pursue profits as stated in Article 2 paragraph (1) letter b of the BUMN Law does not conflict with the 1945 Constitution. 

The Petitioners argued that both articles had impaired their constitutional rights because the articles had been normatively abused and 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 showed the impacts of state equity participation in other SOEs, so the SOE would become a subsidiary of the other SOE. Thus, the provision 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. 

Regarding the argument of the Petitioners that SOE\'s objective to pursue profits as stated in Article 2 paragraph (1) letter b of the BUMN Law being contrary to the 1945 Constitution, the Court has given legal considerations in the Constitutional Court Decision No. 001-021-022/PUU-I/2003, dated December 15, 2004. In this decision, the Court is of the opinion that management functions (beheersdaad) are carried out through a shareholding mechanism and/or through direct involvement in the management of State-Owned Enterprises or State-Owned Legal Entities as institutional instruments through the state—in this case, the Government--utilizing its ownership over the sources of wealth to be used for the greatest prosperity of the people. Likewise, the state oversight function (toezichthoudensdaad) is carried out by the state—in this case, the Government—in overseeing and controlling the implementation of state control over important branches of production and/or controlling the lives of many people to be done for the greatest prosperity of all the people. 

"Based on the considerations of the Court, related to the purpose and objective of the establishment of SOEs as stipulated in Article 2 paragraph (1) of the BUMN Law, the purpose of establishing SOEs, which includes pursuing profits, does not reduce nor eliminate state control as referred to in Article 33 paragraphs (2) and (3) of the 1945 Constitution," Justice Palguna said. 

In relaion to the judicial review of Article 4 paragraph (4) of the BUMN Law, the Court is of the opinion that the point of the objection of the Petitioners is actually PP 72/2016. All arguments used as basis for supporting the Petitioners \'argument regarding the unconstitutionality of the phrase "stipulated by Government Regulation" in Article 4 paragraph (4) of the BUMN Law depart from the Petitioners\' analysis of the implementation of the provisions in PP 72/2016 that was claimed to have violated the Constitutional Court Decision No. 2/SKLN-X/2012 and Government statement in Case No. 62/PUU-XI/2013. Therefore, Justice Palguna added, if the Petitioners assumed that PP 72/2016 was against the law, including if it was deemed contrary to the decision of the Constitutional Court, then it would be outside the Court\'s authority to adjudicate.

"Because it is not a constitutionality issue of norms of a law but an issue of the implementation of legal norms, in this case the norm of Article 4 paragraph (4) of the BUMN Law that is further stipulated in Government Regulation, in casu PP 72/2016. Regarding whether or not there are problems in the implementation, it must be proven through a legal process and an authorized institution, not the Constitutional Court. Therefore, there is no relevance or urgency for the Court to further consider the Petitioners\' argument insofar as it relates to the issue of the implementation of the norm of Article 4 paragraph (4) of the BUMN Law as outlined in PP 72/2016 as argued by the Petitioners," said Justice Palguna. (Sri Pujianti/LA/Yuniar Widiastuti)