State Control in Article 33 Must Be Interpreted Broadly

Muhammadiyah University of Jakarta law professor Ibnu Sina Chandranegara testifying as an expert for the Government at a judicial review hearing of the Job Creation Law, Thursday (2/1/2024). Photo by MKRI/Panji.

JAKARTA (MKRI) — The concept of state control in Article 33 of the 1945 Constitution must be interpreted broadly as a public law concept that prioritizes the people or sources of branches of production that control the lives of many people. This concept also shows that there is a mandate for the state to conduct policies, management, regulations, and supervision for the purpose of the greatest prosperity of the people.

This statement was made by Muhammadiyah University of Jakarta law professor Ibnu Sina Chandranegara in his testimony as an expert for the Government at a material judicial review hearing of Articles 38 and 42 of Law No.11 of 2020 on Job Creation Law on Thursday, February 1, 2024. The petition No. 39/PUU-XX/2022 was filed by 10 workers’ unions and 109 individuals, including the workers’ union of the state-owned electricity company PT Perusahaan Listrik Negara (Persero) or SP PLN, the workers’ union of Indonesia Power or PP IP, and the workers’ union of PT Pembangkitan Jawa Bali.

“Consequently, state authority in the form of concession licenses, formulation of legislation and regulations, and share ownership mechanism in the management or direct involvement in the management of BUMN (SOEs) is a necessity as a form of state control over important branches of production that control the lives of many people,” he said from the plenary courtroom.

Ibnu asserted that state control also experienced moderation when the Constitutional Court stated in its decisions on the involvement of the private sector in branches of production that are important and affect the lives of many people. The Court does not to reject or prohibit the private sector as long as it is still within the state’s control or in the sense that the state or government is still in control. Even if the involvement of national or foreign private sector is not prohibited, the involvement of the community independently or as cooperatives is not prohibited.

Manifestation of State Control

Furthermore, Ibnu said, there are many manifestations of state control, such as direct exploitation and control by the state or government. He added that exploitation or control by SOEs are possible as long as the state is still in control.

“With this framework, [in my opinion], the only manifestation that is not in accordance with the concept of state control according to Article 33 of the 1945 Constitution is when the form of exploitation and control of production sources that control the livelihoods of many people is left fully to the private sector by eliminating state control or full market mechanism,” he said before Chief Justice Suhartoyo and the other constitutional justices.

Based on this framework, Ibnu said, Article 42 point 6 of the appendix to the Job Creation Law does not constitute an unconstitutional manifestation. This is because several arguments, including the form of manifestation of control and exploitation in Article 42 point 6 of the Job Creation Law, refer to the possibility of manifestation of the state concept, i.e. direct control and exploitation by the state.

“Second, control and exploitation by SOEs the in the form of a single united action and, third, control by the private sector with a multilevel state control approach and as long as the state or government is still in control,” he explained.

Meanwhile, in his expert testimony, Tumiran, a professor of the Engineering Faculty of Gadjah Mada University, said that the electricity sector plays a strategic role in sustainable national development, especially to meet the needs to support the growing Indonesian economy.

“In an effort to meet the criteria so that electricity supply infrastructure can meet customer needs properly, the Government has a role in making regulations that are in line, so that the guarantee of customer electricity supply is guaranteed, the electricity business atmosphere is healthy, and electricity supply for the welfare of the community is also fulfilled,” he stressed.

On the same occasion, the Petitioners also presented two witnesses—employees of PT PLN Dedy Firmansyah Sembiring and Herdin Hironimus Zebua—who explained the situation where they worked during the blackout on Nias Island in 2016.

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Concept of “Controlled by the State” in the Supply of Electricity

CUNY Expert: Article 33 an Asset Against Energy Crisis

The Petitioners argue that the Job Creation Law regulates the supply of electricity for public interest to be unbundling. Prior to the a quo Law, Article 10 paragraph (2) and Article 11 paragraph (1) of Law No. 30 of 2009 on Electricity has been interpreted constitutionally through Constitutional Court Decision No. 111/PUU-XIII/2015 while the Electricity Law No. 20 of 2002 has been revoked by the Court on December 21, 2004 with Decisions 001-021-022/PUU-I/2003. Those Electricity Laws were ruled as such since the unbundling system in the supply of electricity was deemed unconstitutional. However, it is reenacted in the latest Job Creation Law.

The Petitioners believe that the substance of Article 10 paragraph (2) of the Job Creation Law is the same as that of Article 10 paragraph (2) of the Electricity Law, which the Court ruled conditionally unconstitutional through Decision No. 111/PUU-XIII/2015. They also argue that electricity is a crucial branch of production for the state that affect the livelihood of many was emphasized by the legislatures in the consideration letter a and the elucidation to Article 3 paragraph (1).

In addition, they believe that the unbundling system means that electricity supply business be separated into generation, transmission, distribution, and sales business. This clause practically commodifies electricity. They emphasized that electricity business activities that are carried out competitively by treating business actors equally and by separate or unbundled business entities are unconstitutional following the legal considerations of the Constitutional Court Decisions 001-021-022/PUU-I/2003. Therefore, in their petitum, they request that the two articles be declared unconstitutional.

Author       : Utami Argawati
Editor        : Lulu Anjarsari P.
PR            : Tiara Agustina
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, February 01, 2024 | 15:01 WIB 49