House Commission III Arteria Dahlan at the judicial review hearing of Law No. 7 of 2014 on Trade, Monday (8/1/2021). Photo by Humas MK/Bayu.
Monday, August 1, 2022 | 16:38 WIB
JAKARTA, Public Relations—The Constitutional Court (MK) held another judicial review hearing of Law No. 7 of 2014 on Trade on Monday, August 1, 2022 in the plenary courtroom, presided over by Chief Justice Anwar Usman and the other eight constitutional justices. The petition for case No. 51/PUU-XX/2022 was filed by Muhammad Hasan Basri, a pecel lele vendor. The hearing had been set to hear the House of Representatives (DPR) and the Petitioner’s expert.
House Commission III Arteria Dahlan said at the hearing that the increasingly open world food trade or free market had caused the domestic price of food products affected by international prices. This and supply and distribution problems had caused the price of food commodities, especially strategic foods such as rice, soybeans, beef, chilies, and shallots to fluctuate.
“So that food production can be sustainable and public needs of food can be met, the Government must protect the community and farmers from price fluctuations, such as corn prices during the harvest, which slightly soar outside of harvest,” said Arteria virtually.
One of the Government’s efforts was stabilizing food prices so that farmers as producers had profitable results and the public as consumers were able to buy food at affordable prices. In addition, food price stabilization policies play a role in strengthening food security, economic resilience, and national political stability.
Arteria further emphasized that Article 29 paragraph (1) of the Trade Law was an effort to prevent price fixing by businesspeople where they determine the amount of basic goods in important payments in the market, differentiate prices, and/or sell at such low prices amid crisis conditions or national scarcity so as to kill other business actors (predatory crisis).
He said Article 29 paragraph (3) of the Trade Law stipulates that technical provisions be further regulated by a presidential regulation (perpres). Based on this mandate, Presidential Regulation No. 71 of 2015 on the Stipulation and Storage of Basic Needs and Important Goods has been issued and amended by Presidential Regulation No. 59 of 2020. With Presidential Regulation No. 71, goods and basic necessities are defined as goods that concerns the livelihoods of many people and factor into the people’s welfare. Meanwhile, important goods are defined as strategic goods that play an important role in determining national development.
Based on Article 29 paragraph (1), Arteria explained, a certain amount and time is the amount below the reasonable limit that exceeds the supply or willingness to meet the market and wait a maximum of three months based on the average sales per month under normal conditions.
“Thus, the provision of Article 29 paragraph (1) of the Trade Law provides protection to consumers considering that the prohibition is intended to anticipate business actors from committing violations of the storage of basic necessities and/or essential goods exceeding the specified amount and time. The parameters of a certain amount and time are set to provide guarantee, protection, and legal certainty for entrepreneurs in conducting their business,” said Arteria.
Arteria also explained that the lack of supervision and storage of the distribution of goods was a problem in the prevention of fraud by business actors, which could result in violations and price hikes. Therefore, ideally, the National Police’s Food Task Force and law enforcement officers must take firm action against the perpetrators. Violation of Article 29 paragraph (1) of the Trade Law is subject to sanctions as stipulated in Article 107 of the Trade Law.
Arteria emphasized that such violations apply not only to cooking oil, but to trade commodities in general. Storage violations above the specified amount and time limits are reinforced in other laws and regulations and specifically regulate the trading community.
Potential Stockpiling
Meanwhile, Zainal Arifin Mochtar as the Petitioner’s expert said based on Article 29 paragraph (1) of the Trade Law, as long as there is no shortage of goods, price fluctuations, and or trade traffic barriers, business actors can stockpile. The article actually refers to a case of shortage.
He asserted that as long as there is no shortage of goods, people are allowed to stockpile, even though paragraph (1) seemed to allow stockpiling. Moreover, it could be dangerous if goods that concern the lives of many are stockpiled. People then assume that because Article 29 specifically prohibits stockpiling at a certain time, it is okay to stockpile.
“That clause causes the pecel lele vendor to not profit because when he bought [ingredients] he was indeed allowed to stockpile for production reasons but he obtained it at very high prices. And even if he had wanted to hoar, the price was already quite high. And that’s why some pecel lele vendors could not sell, because the price of oil was quite high,” he said.
Zainal asserted that Article 29 paragraph (1) had opened up opportunities for stockpiling and even limited stockpiling in certain circumstances and for a certain period of time, but the impact was bigger for big-scale businesspeople and distributors. It even put pressure on pecel lele vendors, the last in the supply chain of goods.
“The two paragraphs must be supplemented with more detailed regulation that it is forbidden to stockpile under certain circumstances; that what is most guaranteed first is price stability, not an opportunity for stockpiling. So, people who produce such as pecel lele vendors can actually stockpile within a certain period of time but of course at a more controlled price,” he added.
He believed the phrase “in a certain amount and time” was associated with the phrase “shall be prohibited from stockpiling” in Article 29 of the Trade Law, meaning that the act of stockpiling basic necessities and/or other important goods is against the law if it is carried out under certain conditions, for both production and distribution, even though it is still within reasonable limits. Precisely because of abnormal conditions, basic needs or other important goods should be distributed to meet public needs.
“The formulation of these norms will only benefit big market players and distributors, [based on what] I read at the beginning. In addition, it allows deviations to occur to obtain the maximum profit for production and maintaining the availability of goods,” Zainal said.
Also read:
Cooking Oil Scarcity Compels Pecel Lele Vendor to Challenge Trade Law
Pecel Lele Vendor Revises Petition on Trade Law
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Expert’s Testimony Came Late, Court Delays Hearing for Trade Law
The petition for case No. 51/PUU-XX/2022 was filed by Muhammad Hasan Basri, a pecel lele vendor, who challenges Article 29 paragraph (1) of the Trade Law, which reads, “Businesspeople shall be prohibited from stockpiling basic need goods and/or essential goods in a certain amount and time in the event of scarcity of goods, price volatility, and/or traffic constraints in Trade of Goods.”
At the preliminary hearing, the Petitioner asserted that Article 29 paragraph (1) of the Trade Law had impaired his constitutional rights due to irregular distribution and storage of cooking oil, which led to scarcity and price hikes. “Although the norm contains prohibition, distributors are able to store cooking oil in certain quantity and period of time. This is what we challenge, Your Honors, the norm relating to certain quantity and period of time,” said legal counsel Ahmad Irawan.
He added that cooking oil scarcity made it difficult for the Petitioner to do his business. Meanwhile, high price would affect the Petitioner’s buying power and the prices of his products, thus hindering his business.
“Scarce or expensive cooking oil, based on logical reasoning, can put the Petitioner out of business. If [so], the Petitioner and his family cannot earn decent living, while as a citizen, pursuant to Article 27 paragraph (2) of the 1945 Constitution, he is entitled to decent work for humanity,” he stressed.
In the petitum, the Petitioner requested that the Court declare Article 29 paragraph (1) of the Trade Law unconstitutional and not legally binding.
Writer : Utami Argawati
Editor : Nur R.
PR : Raisa Ayudhita
Translator : Yuniar Widiastuti (NL)
Translation uploaded on 8/2/2022 12:22 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.
Monday, August 01, 2022 | 16:38 WIB 228