Sharia Regulation Based on MUI Edict Guarantees Legal Certainty
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Chief Justice Anwar Usman and the constitutional justices entering the courtroom for the material judicial review hearing of Law No. 21 of 2008 on Sharia Banking, Wednesday (3/16/2022). Photo by Humas MK/Ifa.


Wednesday, March 16, 2022 | 15:36 WIB

JAKARTA, Public Relations—The Sharia Banking Law accommodates the sharia principles that the people believe, through POJK (Financial Services Authority Regulations). In fact, the removal of the Indonesian Ulema Council’s (MUI) role and delegating the regulation on material rights in sharia banking transactions to the OJK (Financial Services Authority), which is not legitimized based on Islamic law, will lead to the change of the meaning of sharia principles. Thus, the Government believed that the Petitioner’s petition would actually obscure and eliminate sharia principles that have been implemented properly.

Such was the testimony of the Ministry of Finance’s Secretary-General Heru Pambudi on behalf of the Government at a material judicial review hearing of Law No. 21 of 2008 on Sharia Banking on Wednesday, March 16, 2022 in the plenary courtroom of the Constitutional Court (MK). The case No. 65/PUU-XIX/2021 was filed by Rega Felix, who challenges Article 1 point 12 and Article 26 paragraphs (1), (2), and (3) of the Sharia Banking Law.

“The institutional arrangements in the a quo article, including the regulation of sharia principles based on the MUI fatwa [edict] have [provided] legal certainty for sharia banking activities. If the authority of sharia principles within the MUI is transferred to the OJK, which does not have the competency in this matter, it will create legal uncertainty and eliminate the specificity of implementing sharia legal principles,” Heru said before Chief Justice Anwar Usman and the other eight constitutional justices.

Heru detailed that the Sharia Banking Law only contains points on the application of sharia principles in sharia banking transactions. Considering that economic transactions continue to develop, technical matters have been properly regulated in the implementing regulations of the a quo law through POJKs concerning the operation of commercial bank products. The contradiction between ownership rights based on sharia principles and nonconventional provisions, including in the ownership of state assets used for the issuance of sharia securities, is not a ground to declare the Sharia Banking Law unconstitutional, he asserted. This is because different regulations are at play and the issues raised by the Petitioner constitutes an issue of implementation. Therefore, the Government was of the opinion that the ownership right of an object and its surety can be petitioned to the MUI or the OJK.

Before concluding the hearing, Chief Justice Anwar Usman informed the parties that the next hearing would take place on Thursday, April 11, 2022 at 10:00 WIB to hear the Bank of Indonesia (BI) and the OJK as Relevant Parties.

Also read:

Stipulation of Sharia Banking Principles Challenged 

Petitioner Revises Material Judicial Review Petition of Sharia Banking Law 

House Explains MUI’s Authority Over Fatwa on Sharia Banking 

The material judicial review case No. 65/PUU-XIX/2021 on Sharia Banking Law was filed by Rega Felix. At the preliminary hearing on Thursday, January 6, the Petitioner asserted his constitutional loss due to the ambiguous sharia banking provision. He claimed that Article 1 point 12 and Article 26 paragraphs (1), (2), and (3) of the Sharia Banking Law allows the Indonesian Ulema Council (MUI) and the Bank of Indonesia (BI) or the OJK (Financial Services Authority) to delegate unspecified authority to a lower-level provision or what is known as delegasi blangko, which has led to disharmony of the regulations on sharia banking as well as legal uncertainty.

He believes that the a quo law in general only regulates sharia banking, but not the principles of transactions in sharia banking (especially ownership right). As such, sharia principles that must be regulated in a law is not regulated in the a quo law. Instead, through Article 26 paragraphs (1), (2), and (3), it delegates the authority to form regulations to the MUI to issue a fatwa (edict), which is then further regulated in a BI or OJK regulation after the enactment of Law No. 21 of 2011 on the OJK.

Due to the ambiguous interpretation of the regulation, he added, it seems as if the OJK could forsake regulating those principles in a POJK (OJK regulation). This delegasi blangko and dualism of authority have led to public perception of dichotomy between the state and religious law, compelling them to believe “it is better to follow religious law than state law.” On the other hand, he said, the practices of sharia banking constitute undisguised riba (usury) that is common among conventional banks. This, he asserted, is because there are many conflicting notions in the state law.

The Petitioner stressed that this must be addressed, or it would lead to the ruin of sharia banking due to weak foundation. He believes this has harmed his constitutional rights as a sharia banking customer.

He also argued that Article 26 of the a quo law “has forced” MUI, BI, or the OJK to regulate something that is supposed to be regulated in a law.

Therefore, in his petitum, the Petitioner requested that the Court order lawmakers to form a law that regulates material rights in sharia banking transactions or to amend the Sharia Banking Law in relation to that matter.  

Writer        : Sri Pujianti
Editor        : Nur Rosihin Ana
PR            : Tiara Agustina
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 3/17/2022 09:09 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.


Wednesday, March 16, 2022 | 15:36 WIB 251