Constitutional Justice Daniel Yusmic P. Foekh (panel chair) opening the preliminary hearing of the judicial review of Law No. 4 of 2023 on the Financial Sector Development and Reinforcement, Thursday (9/7/2023). Photo by MKRI/Ifa.
JAKARTA (MKRI) — The Constitutional Court (MK) held the preliminary hearing of the material judicial review of Article 1 point 1, Article 8 point 1, Article 8 point 2, and Article 2 paragraph (1) of Law No. 4 of 2023 on the Financial Sector Development and Reinforcement (P2SK) on Thursday, September 7, 2023 in one of the panel courtrooms. The case No. 95/PUU-XXI/2023 was filed by Inri Januar, a law lecturer. The hearing was presided over by Constitutional Justices Daniel Yusmic P. Foekh (panel chair), Suhartoyo, and Enny Nurbaningsih.
Legal counsel Oktoriusman Halawa said that Article 8 point 1 and Article 2 of the P2SK Law are in violation of Article 28D paragraph (1) of the 1945 Constitution and the Constitutional Court Decision No. 25/PUU-XII/2014. “The unconstitutionality of the existence of the [OJK (Financial Services Authority)] is supported by the removal of the legal basis of its authority, which is Article 34 of the Bank of Indonesia Law and its elucidation. The removal is [shown] through Article 9 point 19 of the P2SK Law,” he said.
Shift of Central Bank’s Authority
Halawa explained that the OJK receives its authority from the transfer of part of the authority of the central bank Bank of Indonesia (BI) to the OJK. The transfer is regulated in Article 34 paragraph (1) of the BI Law, which reads, “The task of Bank supervision shall be performed by an independent supervisory board for the financial services sector to be established by law.”
Theoretically, an institution’s authority comes from statutory laws through three means: attribution, delegation, and mandate.
Halawa further explained that due to the removal of the legal basis for the OJK’s authority in the BI Law, if the OJK continues to exercise its authority, it is in violation of the principle of the rule of law as regulated in Article 1 paragraph (3) of the 1945 Constitution. In addition, it will result in legal uncertainty, which is against Article 28D paragraph (2) of the 1945 Constitution. Another legal uncertainty is that the OJK’s legal status is based on Article 8 point 2 of the P2SK Law, which further affirms the OJK’s unconstitutionality.
In the petition, the Petitioner also asserted that the authority of supervision must remain or be returned to BI as a central bank tasked with stabilizing rupiah, maintaining the stability of payment systems, and maintaining the stability of the financial system in order to support sustainable economic growth. As an impendence agency, BI has the authority to regulate or issue regulations to implement laws that apply to all of the nation and state. As such, it can issue regulations that impose administrative sanctions. This is affirmed in Article 1 point 8 of BI Law, which reads, “Bank Indonesia Regulation shall be a legal provision which is prescribed by Bank Indonesia and binds every individual or entity and publicized in the State Gazette of the Republic of Indonesia.”
Provisional Petitum
The Petitioner also requested that the Court hand down a provisional decision on the legal basis of the OJK’s authority given the juridical basis of the OJK Law has been annulled since the promulgation of the P2SK Law on January 12, 2023.
As such, the Petitioner believes all of the OJK’s decisions and legal acts since that date must be declared not legally valid and, to prevent even more decisions and legal acts by the OJK—which comes from the state budget—all activities and operational actions by the OJK must be terminated and be taken over by BI.
Justices’ Advice
In response, Constitutional Justice Suhartoyo advised the Petitioner to affirm the articles challenged. In the posita, he wrote Article 1 point 1, Article 8 point 1, Article 8 point 2, and Article 2 paragraph (1), but mentioned different norms in the petitum.
“Which [of the norms] are being challenged? Requesting an alternative ruling would shift this. Please review that. In the petitum, you mention Article 8 point 2 and Article 2 paragraph (1). The alternative is Article 8 point 1, Article 1 point 1. Which ones? In a petitum requesting an alternative [ruling], the choice would be [to request that the Court declare the norms] entirely unconstitutional and the alternative would be conditionally unconstitutional. The norms must be the same. If they are different, you must clarify this. Do not request an alternative [ruling] for different norms,” he said.
Meanwhile, Constitutional Justice Enny Nurbaningsih advised the Petitioner to refer to the Court’s decisions on omnibus laws. She also highlighted his profession as a lecturer who teaches theories on legislation and constitutional law.
“What is the relevance of teaching about OJK? This is not clear. If he has an issue about academic freedom, he could make an analysis to eliminate his confusion. Please proof what the Petitioner has done. As a lecturer teaching constitutional law, there is too much distance between the norms petitioned and the presumed loss. What is the causality? It has not been shown. Except if you bring a financial agency that the OJK supervise [as another petitioner],” she stressed.
At the end of the hearing, the panel informed the Petitioner that he had 14 workdays to revise the petition and submit it to the Registrar’s Office no later than Wednesday, September 20, 2023.
Author : Utami Argawati
Editor : Nur R.
PR : Muhammad Halim
Translator : Yuniar Widiastuti (NL)
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.
Thursday, September 07, 2023 | 14:20 WIB 183