Constitutional Justice Daniel Yusmic P. Foekh delivering a public lecture at the Sumatera Institute of Technology (ITERA), Lampung Province, Friday (9/8/2023). Photo by MKRI/Bayu.
LAMPUNG (MKRI) — State control, as set forth in Article 33 of the 1945 Constitution, has a broader meaning than the civil law notion of ownership. State control is a concept of public law related to the principle of popular sovereignty adopted in the 1945 Constitution, both in the politics and economy.
The statement was made by Constitutional Justice Daniel Yusmic P. Foekh when delivering a public lecture to the Sumatra Institute of Technology (ITERA), Lampung Province on Friday, September 9, 2023.
He explained that if the notion “controlled by the state” is only interpreted as ownership in the civil (private) sense, then it is insufficient to use that control to achieve the goal of “the greatest prosperity of the people,” which means that the mandate to “achieve public welfare” and “social justice for all Indonesian people” in the Preamble to the 1945 Constitution cannot be realized.
Based on that description, the notion of “controlled by the state” or “state control” must be interpreted to include a broad sense derived from the concept of the sovereignty of the Indonesian people over all sources of wealth—“earth, water, and natural resources contained therein”—including the notion of public ownership by the collective people.
“If the branches of oil and gas production, which are also natural resources contained in the Indonesian earth as referred to in Article 33 paragraph (3) of the 1945 Constitution, are considered by the Government and the House of Representatives (DPR) no longer important for the state and/or control the lives of many people, [their] regulation, administration, management, and supervision can be left to tthe market,” Justice Foekh said.
However, he added, if the branches of production are considered by the Government and the House of Representatives still important for the state and/or control the livelihood of many people, then the state or the Government is still required to control relevant branches of production by regulating, managing, and supervising them so that they are truly used for the greatest prosperity of the people. The notion of control also includes civil ownership as an instrument to maintain the level of state/Government control in the management of those branches of production.
Development of Agrarian Laws
In this public lecture, Justice Foekh also explained that “agrarian” in Basic Agrarian Law (UUPA) is essentially the same as “space” in Law No. 26 of 2007.
Agrarian laws (agrarisch recht) are the entirety of legal provisions, both civil law, as well as constitutional law (staatsrecht) and also administrative law (administratief recht), that regulate relationships between people and legal entities, with the earth, water, and airspace in the entire territory of the state. It also regulates the authorities derived from these relationships.
Land and Land Rights Under the UUPA
In land laws, in countries that use the so-called azas accessie or “the principle of attachment”, buildings and plants that exist on and are an integral part of the land are “part” of the land. Legal actions that apply to the land also apply to plants and buildings on the land.
According to Justice Foekh, we apply customary law called “the principle of horizontal separation (in Dutch: horizontale scheiding). It means buildings and plants are not part of the land. Therefore, the right to land does not automatically include the ownership of buildings and plants on it.
“Legal actions performed may apply to the land only. Or they may only apply to the buildings and/or plants [on the land], which are then dismantled (“adol bedol”) or remain on the land in question (“adol ngebregi”). The legal actions can also apply to the land and buildings and/or plants on it, in which case what is intended must be clearly stated,” he said.
Constitutional Court’s Interpretation
Justice Foekh also explained the Constitutional Court’s interpretation in Decision No. 001-021-022/PUU-I/2003 on the judicial review of Law No. 20 of 2002 on Electricity. In the decision, the Court argued that in order to save, protect, and further develop state-owned enterprises (BUMNs) as assets of the state and nation to be more sustainable in providing electricity to the people, nation, and state of Indonesia, both commercial and non-commercial aspects as a form of state control, Article 16 of Law No. 20 of 2002—which instructs the system of separation/division of business of electricity (unbundling system) with different business actors—will make BUMNs worse off, which will lead to the unreliability of electricity supply to all levels of society, both commercial and non-commercial.
The Petitioner’s expert explained at the hearing the empirical experience in Europe, Latin America, Korea, and Mexico, where the unbundling system is not profitable in restructuring the electricity business and not always efficient, and instead became a heavy burden on the state. Therefore, the Court ruled it contrary to Article 33 of the 1945 Constitution.
The Court also believes that until today the legislatures also consider electricity an important branch of production for the state and controls the livelihood of many people, so according to Article 33 paragraph (2) of the 1945 Constitution must remain controlled by the state, in the sense that it must be managed by the state through state companies funded by the Government or in partnership with national or foreign private companies, which includes loan funds from within and outside the country or by involving national/foreign private capital with a good partnership system and mutual benefits. This means that only state-owned enterprises can manage electricity business while national or foreign private companies only participate if invited to cooperate by BUMNs, either by partnership, shares, capital loans, etc.
The issue is does the state-owned company that manages electricity only mean the state-owned electricity company PLN or can it be shared with other state-owned companies, even with regional-owned enterprises (BUMDs) in accordance with the spirit of regional autonomy? The Court believes that if PLN is still capable and can be more efficient, there is nothing wrong if PLN controls it. But if that is not the case, it can also share the task with other BUMNs or BUMDs with PLN as a “holding company.”
Author : Utami Argawati
Editor : Nur R.
Translator : Tahlitha Laela/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.
Friday, September 08, 2023 | 16:00 WIB 118