The judicial review hearing of Law No. 7 of 2014 on Trade to hear the expert for the Government, Monday (8/22/2021). Photo by Humas MK/Ifa.
Monday, August 22, 2022 | 16:32 WIB
JAKARTA (MKRI)—The Constitutional Court (MK) held another judicial review hearing of Law No. 7 of 2014 on Trade on Monday, August 22, 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 an expert for the president.
Ditha Wiradiputra said in order to control domestic sales of cooking oil, the Government had prohibited the export of crude palm oil (CPO) products, which are the raw materials for cooking oil products, in order to encourage business actors to supply sell domestically. Cooking oil scarcity in the country some time ago was driven by the fact that business actors preferred to sell abroad, where they could pick up a higher price.
“The high price of cooking oil on the world market has encouraged domestic cooking oil business actors to increase the selling price of domestic cooking oil, which in turn led to a fairly high price increase of cooking oil products,” said Wiradiputra, a law lecturer at the University of Indonesia (UI).
He asserted that the price hike had led to growing public anxiety, as the public depend on cooking oil raw materials for home and for business. This prompted the Government to intervene by pushing the price down, among others by imposing highest retail price (HET) for cooking oil. However, it was too low and could harm businesses, so cooking oil business actors held back the supply in the domestic market.
“Since cooking oil business actors held back their supply to the market, there was a scarcity of cooking oil products, which is an irony in a country that is the largest producer of cooking oil in the world,” he said.
Storage of Certain Amount and Period
Wiradiputra emphasized that if the Petitioner’s request was granted by the Court, it would be against Article 28A of the 1945 Constitution: “Each person has the right to live and the right to defend his life and existence.” If business actors are not allowed to store a certain amount cooking oil for a certain period in the midst of scarcity and price fluctuations, it would disrupt their production activities, which in turn would disrupt relevant parties related to the businesses,” he said.
He believed the Petitioner’s interpretation that Article 29 paragraph (1) of the Trade Law was an exception to the prohibition against storing certain amount of basic necessities for a period of time even during a shortage to be inaccurate. The word “in a certain amount and for a certain period,” he argued, was not an exception to Article 29 paragraph (1), but an explanation to optimize the article and did not contradict other legal norms.
Government’s Responsibility
Wiradiputra also explained that the government has a responsibility through policies and control of the trade, which aims, among others, to increase national economic growth and business opportunities, create jobs, allow smooth distribution, keep basic and essential goods available, and protect consumers.
He said the intent to change Article 29 paragraph (1) of the Trade Law from “Business actors 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 fluctuations, and/or trade restrictions in Trade of Goods” to “Storage of goods by business actors shall be prohibited in the event of a shortage of goods, price fluctuations, and/or when there are no constraints” could be viewed as an intent to shift the Government’s responsibility in trade to business actors.
The second paragraph of Article 29 does not expressly prohibit storage of cooking oil as a basic need. The second paragraph reads, “Business actors may store basic needs and/or essential goods in a certain amount and period of time as raw materials or auxiliary materials in the production process or as a supply of goods to distribute.” It is a further regulation of the first paragraph. Meanwhile, the third paragraph reads, “Further provisions on the storage of basic-needs goods and/or essential goods shall be regulated by a Presidential Decree.”
“Therefore, drafters of Law No.7 of 2014 created Article 29 paragraph (1) not to prohibit storing basic needs and/or essential goods in a certain amount and period when there is a shortage of goods, price fluctuations, and/or trade restrictions, because what lawmakers had an issue with was stockpiling by business actors that would make it difficult for consumers to obtain basic needs and/or essential goods,” Wiradiputra said.
Prohibition Against Stockpiling
Wiradiputra then responded to the claim that the phrase “in a certain amount and period of time” in Article 29 paragraph (1) of the Trade Law could lead to legal uncertainty. He argued that while it was a common assumption when one only read the norm, its elucidation and the second and third paragraphs of the article clearly showed the lawmakers’ intended legal construct.
“Article 29 paragraph (1) of Law No. 7 of 2014 is not intended to prohibit the storage of basic needs and/or essential goods in a certain amount and period during a shortage of goods, price fluctuations, and/or trade restrictions. What it prohibits is stockpiling that will keep consumers from obtaining basic needs and/or essential goods. The regulation of storing basic needs and/or essential goods is technical, because [they] not only concern commodities such as cooking oil but other basic needs and/or essential goods too,” he added.
Petitioner’s Concern
Wiradiputra stressed that there was no need for the Petitioner to fear that Article 29 paragraph (1) of the Trade Law was used by business actors to stockpile those goods during a shortage of goods, price fluctuations, and/or trade restrictions because Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition could protect him from such an action, which is not limited to only basic needs and/or essential goods but also any goods and services. He asserted that the concern was groundless.
Therefore, he added, that Article 29 paragraph (1) of the Trade Law is not unconstitutional. “So, there is no need to change [it],” he emphasized.
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
House Responds to Pecel Lele Vendor on Goods Scarcity
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, “Business actors 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 fluctuations, and/or trade restrictions 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 8/23/2022 20:50 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 22, 2022 | 16:32 WIB 198