Law Firm Suwarsit, Purgito, Susilo & Partners

Pada masa sekarang, globalisasi telah menjadi sorotan sekaligus menjadi masalah yang menjadi tantangan bagi Indonesia. Kehadiran Negara-negara maju yang ikut berkompetensi di sektor perekonomian liberal dengan kekuatan ekonominya, tentu lebih kuat apabila dibandingkan dengan Negara berkembang seperti Indonesia. Perusahaan-perusahaan multinasional dalam menjalankan usahanya di negara penerima modal selain memberikan dampak positif kepada Negara penerima modal, pada faktanya dapat pula memberikan dampak negatif. Dampak negatif yang dimaksud keberadaan perusahaan multinasional selain Negara penerima modal hanya sebagai pelayan Negara pemberi modal, keberadaan perusahaan asing disektor pertambangan mineral dan batubara dapat merusak dan menghabiskan sumber daya alam Indonesia.

Sumber daya alam Indonesia di sektor pertambangan mineral dan batubara ini penting untuk keberlanjutanya demi generasi bangsa, melatarbelakangi sumber daya pertambangan mineral dan batubara adalah salah satu sumber daya alam yang tidak dapat diperbaharui, sehingga penggunaanya perlu dibatasi dan di pertimbangkan akan keberlanjutanya. Alasan lain keberadaan sumber daya pertambangan mineral dan batubara, sebagai salah satu sumber daya alam, penguasaanya ada pada Negara. Hal ini telah diatur dalam Pasal 33 Ayat (3) Undang-Undang Dasar Republik Indonesia 1945, yang secara tegas berbunyi “bumi, air, dan kekayaan alam yang terkandung didalamnya dikuasai Negara dipergunakan sebesar-besarnya untuk kemakmuran rakyat”.

Pasal 33 Ayat (3) Undang-Undang Dasar Republik Indonesia 1945, menurut Peneliti dapat menjadi budaya hukum terkait kedaulatan Negara Indonesia terhadap sumber daya alam yang mewakili rakyatnya untuk dapat mewujudkan kesejahteraan, hal ini sebagaimana tafsir Peneliti terhadap pendapat Prof Ade Saptomo yang menjelaskan bahwa budaya hukum selain nilai bersama, telah meberikan alasan selain dapat dimaknai sebagai nilai bersama, budaya hukum menjadi seperangkat gagasan, norma yang menjadi pedoman berucap, berperilaku, dan bertindak sesuai dengan sebagian besar warga masyarakat.

Kedaulatan Negara terhadap sumber daya alam merupakan amanah konstitusi dan hasil kesepakatan seluruh rakyat Indonesia, karena dengan sampai dengan saat ini keberadaanya tetap dipertahankan meskipun sudah lebih dari 50 (lima puluh) tahun merdeka, maka dari itu Negara harus mempergunakan sebaik-baiknya sehingga dapat  mewujudkan kesejahteraan terhadap rakyatnya sehingga dapat sejalan dengan budaya hukum masyarakat Indonesia, sedangkan  intepretasi kedaulatan negara sebagai cara mewujudkan kesejahteraan terhadap rakyatnya dapat dilakukan dengan diterbitkanya Undang-Undang.

Undang-Undang di sektor sumber daya pertambangan mineral dan batubara saat ini telah diatur melalui Undang-Undang Repubik Indonesia Nomor 4 Tahun 2009 Pertambangan Mineral dan Batubara, maupun perubahanya yaitu Undang-Undang Republik Indonesia Nomor 3 Tahun 2020 tentang Pertambangan Mineral dan Batubara. Kedua undang-undang ini, pada salah satu pasalnya yaitu Pasal 112 secara singkat mengatur keberadaan perusahaan asing atau mengurangi jumlah perusahaan asing di sektor pertambangan mineral dan batubara dengan cara mewajibkan modal yang divestasi/dijual kepada pihak Indonesia.

Bebebrapa perusahaaan asing di sektor pertambangan mineral dan batubara dapat seperti PT Freeport Indonesia, PT Kaltim Prima Coal maupun PT Newmont Nusa Tenggara. Ketiga perusahaan asing tersebut telah menjalankan kewajibanya dengan mendivestasikan sahamnya kepada pihak Indonesia, seperti salah satu perusahaan yang berhasil diakuisisi yaitu PT Freepot Indonesia oleh PT Inalum selaku perusahaan milik Pemerintah Indonesia.

Negara dalam mewujudkan kesejahteraan disektor sumber daya alam, dengan memberikan kedaulatanya kepada salah satu di sektor pertambangan mineral dan batubara sudahlah tepat, karena intepretasi kedaulatan Negara terhadap sumber daya pertambangan mineral dan batubara yang dilakukan melalui regulasinya telah berhasil membatasi perusahaan asing dengan cara menjual atau mendivestasikan sahamnya kepada pihak Indonesia.

Abstract

The mandate from the Article 112 of the Law Number 4 of 2009 concerning Mining essentially oblige foreign investor with share ownership of more than 51% to divest his shares to Indonesian Participants. Foreign investors in the mineral and coal mining sector in Indonesia, such as in case of PT Freeport Indonesia Company, PT Newmont Nusa Tenggara and Churchill Mining, are not running their obligation to divest shares in a good manner. Several divestment cases occurred in Indonesia shows that the divestment regulation cannot provide order to the public. On the other hand, despite that the rules on divestment are not specifically regulated, however its provision is scattered in various rules and regulations in the divestment that has close connection with Investment. The initial penetration of foreign direct investment in Indonesia referred back to the juridical basis as of 1967, it is necessary to conduct further analysis on the regulation to understand the fault at law in arranging the divestment regulation in Indonesia currently.

Keyword: Divestment, Foreign, Mining, Regulation, Indonesia

Introduction

Law Number 4 of 2009 concerning Mining is the amendment made to the law in the mining business in Indonesia, it replaces the Law Number 11 of 1967 concerning Main Provisions of Mining which is considered as no longer appropriate to cover the necessity of Indonesia as a nation today.[1] The Law Number 4 of 2009 concerning Mining contains main ideas of handing over the control on the Mineral and coal as non-renewable resources to the state and to give the authority to develop and effectuate them to the central and regional Government along with the business actors. Then, the Government will further give opportunity to the business entities in the form of Indonesian legal entity, cooperatives, individual businesses, or local society to work on the mineral and coal according to the licenses they have obtained, in correspondence with the regional autonomy, given by either the central and/or regional Government based on their respective authority.[2]

The Indonesian government is putting endeavor to be in favor Indonesian participants in giving the said opportunity through the enactment of Article 112 of the Law Number 4 of 2009 concerning Mining, which oblige the foreign investors to divest their shares to Indonesian participants. The precise wordings of the said Article is that “After 5 (five) years of operation, business entities holding Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK), which shares are owned by foreign subject(s), have the obligation to divest its shares either to the central Government, regional governments, state-owned enterprises, regional-owned enterprises, or national private business entities.”

Divestment of shares involve offers of total foreign shares to be sold to Indonesian participants.[3] In the mineral and coal sector, divestment of shares in Indonesia has never been running well, for instance in the case of Churcihll Mining[4], PT Freeport Indonesia,[5] and PT Newmont Nusa Tenggara.[6] Even though here, the law should have functioned as the tool to create order and justice.[7] In connection to the Divestment rules in Indonesia, it is apparent that the function to create order to the society has not yet been achieved.

Mining works are not easy to put into realization, since the activities in this sector need huge investments, high technologies, good managerial skills, as well as long duration of time to produce excellent mining materials.[8] There has been no specific rules regulating the divestment, however, the provisions are scattered into various rules and regulations.[9]

Divestment has close connection with the Investment.[10] Capital investment, or in other word, investment. The entrance of foreign direct investment in Indonesia is inseparable with the juridical ground rules of 1967 emerging after the independence of Indonesia. Regulation on the capital investment and other regulations are possible to come into existence with the balance deriving from several provision rules of divestment. Some provisions for the divestment in the national law of Indonesia is interesting to be taken as research, in order to seek way out from the vacuum of and/or fault at Divestment rules in Indonesia particularly in the mineral and coal sector. This article is using legal analysis approach against the rules and regulations precisely with respect to the Divestment in Indonesia.

1. Analysis on the Divestment of Foreign Shares in the Indonesian National Law After 1967.

Divestment has a close connection with the investment/capital investment made by the foreigners to certain field of business. Along with investment/capital investment there will be decrease of capital/divestment to the business. In order to develop the economy, one of the ways taken by the Indonesian Government is to invest capital either using domestic or foreign sources. The entrance of foreign capital in Indonesia after the independence was dating back to 1967, and it has tight correlation with the divestment regulation.

It is a given that the Indonesian Government has no intention to be dependent to the foreign capital it has received. This intention elaborated in the basis of considerations in the drafting of the Law Number 1 of 1967 concerning the Foreign Capital Investment.[11] Then, the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment briefly explains that companies fully established by foreign capital has the obligation to give participation for domestic capital after certain duration of time. This indirectly means that foreign investor must reduce its number of shares to be owned by Indonesian subjects.

The intention of this regulation in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment as affirmed in its Paragraph (2) is to encourage the foreign investors to divest their shares to enable the domestic investors to participate in their companies.

Divestment as referred in the Article 27 Paragraph (1) and (2) of the Law Number 1 of 1967 concerning the Foreign Capital Investment does not determine the minimum number of shares that must be sold. The absence of this regulation raise interpretation among the foreign investors that they are permitted to sell as least as possible. Besides the number of shares, the Law Number 1 of 1967 concerning the Foreign Capital Investment also has no elaboration on the duration of time for the performance of this obligation, whether at the time they obtain the Mining Business License (IUP) or at the time this license is expired.

The multi-interpretation on the regulation regarding the number of shares obliged to be divested by the foreign investors and the absence of duration of time for the divestment in the rules and regulations, particularly in the Law Number 1 of 1967 concerning the Foreign Capital Investment, will put domestic parties at lost as the receiving country for the capital. However, this does not applicable in absolute manner.

Article 3 Paragraph (2) and (3) of the Government Regulation Number 17 of 1992 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment, explained briefly that the capital for Indonesian participants might be increased to at least 20% (twenty percent) from the whole value of capital in the shares of the company within 10 (ten) years since the company starts its production. Then the capital in the number of shares for the Indonesian participants might be enhanced to be at least 51% (fifty one percent) from the whole value of capital in the shares of the company within the duration of 20 (twenty) years as of the company come into production. Such number of shares and duration applied to foreign capital investment companies with the capital value no lesser than US$ 250,000.00 (two hundred fifty thousand United States Dollar).

Besides the number and duration of the obligation, the foreign investors must at least own a capital of US$ 50,000,000.00 (fifty million United States Dollar), meanwhile the Indonesian participants may only buy ownership capital of 20% (twenty percent) against the whole capital of the company within the duration of 20 (twenty) years. This means, that Indonesian participants may only buy twenty percent of total capital in the companies with foreign capital investment of above fifty million United States Dollar.

The regulation on divestment in the Government Regulation Number 17 of 1992 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment has limited the capability of national participants to take over foreign companies, the regulation apparently gives special treatment to the foreign investors, taking into account that this regulation is protecting foreign investors with huge funds, to keep them invest their capital in Indonesia.

The issuance of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment which has replaced the Law Number 17 of 1992 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment is considered as more lenient to the national interest and it does not show selective manner in cutting the foreign investors who invest their capital in Indonesia.

The nationality nature in the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment is showing selective manner in its several articles containing various policies. For instance, its Article 4 Paragraph (2) which briefly explains the requirement for the foreigners to hold the minimum ownership of US$ 50,000,000.00 (fifty million United States Dollar) in the capital investment, within the duration of 20 years, whereas no lesser than 51% (fifty one percent) from the paid-up capital of the company is obliged to be sold or transferred to Indonesian subjects.[12]

Besides, the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment has added some provisions to the foreign companies fully incorporated by capital investment from foreign subjects with the minimum paid-up capital of US$ 2,000,000.00 (two million United States Dollar), within the duration of 20 (twenty) years as of the companies come into production, whereas no lesser than 51% (fifty one percent) from the paid-up capital of the company is obliged to be sold to Indonesian subjects.[13]

The spirit of nationality in the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment led the government to require the foreign investors to just hold their shares within pre-determined amount of time before they are obliged to do divestment. It is different with the Government Regulation Number 20 of 1994 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment. After been running for a year, the spirit of nationality is requiring the foreign investors to divest their shares up to 51% to Indonesian participants within the duration of 20 years, however in fact, this does not change the status of the company. Article 7 Paragraph (2) of the Government Regulation Number 20 of 1994 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment explains that mere transfer of shares does not change the status of the company, this means that the ownership of the company is still fall under the power of the foreign investors who inject their capital in Indonesia.

The inconsistency of requirements in the nominal amount of shares and duration of allotted time for the divestment in the Government Regulation Number 17 of 1992, Number 50 of 1993, and Number 20 of 1994, all concerning Ownership of Shares in the Companies Established by Foreign Capital Investment are describing the dependency of government to the political condition and situation to the incumbent reign at respective time in drafting the regulations, and thus, this raise distrust from the foreign investors in doing their business and inject their capital in Indonesia.

Besides, those Government Regulations are in contrary with the higher hierarchy of law as referred in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment.

“The said company in the article 3, which capital is all deriving from foreign subjects, has the obligation to give opportunity to the domestic capital to effectively participate therein, after certain duration of time and in accordance to the balance determined by the Government.”[14]

The word “which capital is all” in the said phrase is referring to the requirements for the foreign capital investment companies to also divest capital other than the foreign investment made over the joint capital between the foreign and domestic capital as regulated in the Government Regulation Number 17 of 1992, Number 50 of 1993 and Number 20 of 1994, all concerning Ownership of Shares in the Companies Established by Foreign Capital Investment.

Provisions in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment, particularly in the wordings “which capital is all” may be interpreted as the chance for foreign subjects investing their capital in Indonesia to supersede the requirements made by the government, taking into account that there is a principle of law that higher hierarchy of law may supersede other laws below it (Lex Superior Derogat Legi Inferior Principle) and according to the order, the hierarchy of rules and regulations in Indonesia according to the provisions in the Law No. 12 of 2011 is: The 1945 Constitution of the Republic of Indonesia, Resolution of People’s Consultative Assembly, Law/Government Regulation in lieu of Law, Government Regulation, Presidential Regulation, Provincial Regulation and Regency/City Regulation.

The chance for foreign capital investors to supersede several Government Regulations as said, does not applicable for those subjected to more specific provisions in the mineral and coal sector. It is to be noted that the foreign subjects investing in the mineral and coal sectors also have the obligation to divest their shares, and this applied to legal entity, it is required for them to have business entity in the form of legal entity in order to invest their capital in that sector.

The Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment explains that companies in the form of Indonesian legal entity has close connection to the mining companies as referred to in the Article 12 Paragraph (1) of the Law Number 11 of 1967 concerning the Main Principles of Mining. It is explained therein that the power to conduct mining for the purpose of doing business in the field of extractive materials may be given to, among others, private legal entity established according to Indonesian laws and domiciled in Indonesia by proxy.

Mining business as regulated in the Article 3 of the Law Number 11 of 1967 concerning the Main Principles of Mining may be permitted by the Minister through proxy power to mining. This may be given to Cooperatives and also to private legal entities domiciled in Indonesia. Contract of Work made between the Government and foreign Investors are the manifestation of mandate from the proxy power to Mining. The State receives this mandate from its people, to do business on its natural resources, even in case it is managed by foreign subjects, thus there is agreement made by the State to regulate this matter.

The Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor (hereinafter referred to as “Presidential Decision Number 49 of 1981) is regulating the requirements on the partnership agreement between the coal mining companies as the original holder of the Proxy Power to Mining and the private parties as contractor, for the sake of doing mining business for 30 (thirty) years.

Towards the Contract of Work, there are several imposed obligations to the contractor, namely:

1. Contractor is obliged to hand over at least 13.5% (thirteen point five percent) of its coal production to the Coal Mining State Owned- Enterprise in natural form. This submission is the substitute of customs supposed to be paid in exchange of exploration/exploitation.[15]
2. The obligation of Contractor to pay taxes and levies to the Government are as follow: During the first 10 (ten) years as of the company come into production, the Contractor is imposed with company tax with the rate of as much as 35% (thirty five percent) from the taxable profit and starting from the 11^th (eleventh) year onward, the Contractor shall be imposed with fixed company tax of as much as 45% (forty five percent) from the taxable profit, Local Development Customs (IPEDA), regional taxes and other customs that have obtained approval from the Central Government, general administration Customs for certain facilities or services given by the Government, Sales Tax, Duty Stamp Customs over loan agreement, excise on tobacco and liquor.[16]
3. Contractor shall be obliged to submit tax over interest, dividend royalty (PPDR) and income taxes of its employee to the Government, the Contractor is also obliged to pay certain amount of fixed customs according to the total area of its mining.[17]
4. Foreign contractor who invest capital must be in the form of legal entity incorporated based on Indonesian law and domiciled in Indonesia.[18]
5. Contractor is obliged to offer its shares to the Government or Indonesian Citizen, after 4 (four) years since the company come into production, hence at the end of the 10^th (tenth) year after the production has been started, at least 51% (fifty one percent) of its shares has been offered and bought by Indonesian subjects.[19]
6. Contractor is obliged to prioritize the use of domestic production, domestic manpower, and services from Indonesia, as well as to take into account the policies from Indonesian Government in the Regional development within its business.[20]

The obligation for contractor to offer its shares to Indonesian participants, 4 (four) years after it has started the production phase, is an obligation of divestment against its foreign shares in the mineral and coal sector, particularly applied to the contractor holding Contract of Work.

Presidential Decision Number 21 of 1993 concerning the Main provisions of the Partnership Agreement in the Coal Mining Business between Public Company (PERSERO) PT Tambang Batubara Bukit Asam and Contractor Company, (hereinafter referred to as “Presidential Decision Number 21 of 1993”). According to the Presidential Decision Number 21 of 1993, PT Tambang Batubara Bukit Asam as the holder of Proxy Power of Mining was holding an agreement with a contractor to conduct mining business of extractive coal.

In the Presidential Decision Number 21 of 1993, the provisions on the inclusion and development of national interest in the coal mining business is regulated under Article 8 and Article 9. In Article 8 Paragraph (2) it is regulated that contractor is obliged to offer its shares to Indonesian Participants, either the government, business entities, or Indonesian citizens, in accordance with the related provisions in the field of capital investment. This provision has a downside, it does not regulate on the exact percentage and required duration for the transfer/divestment of the shares as Presidential Decision Number 49 of 1981 does, then, in this provision, the contractor obligation is only as far as offering its shares to be divested from its ownership.

Presidential Decision Number 75 of 1996 concerning the Main Principles of Agreement in the Coal Mining Business (hereinafter referred to as the “Presidential Decision Number 75 of 1996”) also has divestment provision in its sub-chapter of inclusion and development of national interest. In its Article 6, it is briefly explained that in order to make capital investment, Private Contractor must incorporate a legal entity based on Indonesian law, and if this Private Contractor is foreign subject, it must ascertain that its capital is not fully deriving from foreign sources, in case otherwise, then it must sell part of its shares to Indonesian citizens and/or legal entity, in accordance with the applicable rules and regulations.

The advantage from Presidential Decision Number 75 of 1996 is in the obligation for private contractor to sell part of its shares, however on the downside, this provision is only applied to fully-owned foreign companies, which shares are all held by either foreign citizens and/or legal entity, it shall not be applicable to foreign companies incorporated with joint funding between domestic and foreign capital, even though the business in the mining sector in Indonesia is dominated by joint venture companies. Other downside in the Presidential Decision Number 75 of 1996 is the absence of provisions regarding the number of shares and duration of time for the divestment.

The inconsistency in the Presidential Decision to determine the object obliged to be divested, the number of shares and the duration of time, is quite similar to what happened in the Government Regulation. This is the outcome from the absence of detailed and firmed provisions particularly towards the divestment, in the Law concerning Foreign Capital Investment and Law concerning Mineral and Coal Mining during the period of 1967. The incumbent reign of government has a broad chance to take over the ownership of foreign capital, however on the other hand, the uncertainty coming from the regulations in the receiving country of the foreign capital is declining the desire from the foreign subjects to invest their capital in Indonesia.

• Analysis on the Divestment Regulation for the Foreign Shares in Indonesian National Law After 2009.

The divestment/sale of shares in the field of capital investment after 2007 is regulated

under the issuance of Law Number 25 of 2007 concerning Capital Investment (hereinafter referred to as “Law No. 25 of 2007”), which unfortunately does not have specific obligations for the divestment/sale of foreign capital ownership in its articles to give more room of chance for the Indonesian participants. Article 7 of the Law Number 25 of 2007 concerning Capital Investment explains that, the Government shall not conduct any nationalization or take-over of the ownership rights on the capital investment, unless mandated by Law. Here, the government is firmly stated its intention to refrain from taking-over ownership capital in a company. Even though there is a mechanism of capital take-over through divestment/sale of shares to investors either from local or foreign sources.

The act mentioned in the previous paragraph is actually ambiguous and not absolute. It means that Government conduct in refraining from taking-over ownership right over capital investment does not applied entirely to all conditions, this act shall need requirement from the provisions of other Law for the Government to do so, a kind of intention or act that shall limit capital investment  either from foreign or domestic sources.

Further, Article 8 of the Law Number 25 of 2007 concerning Capital Investment runs as follow:

“Capital investors may transfer their assets to the desired parties according to the provisions in the rules and regulations.”

Transfer of share ownership in the Article 8 of the Law Number 25 of 2007 is referring to the authority given to the capital investors to freely manage their shares. Capital investors, either local or foreign subjects may transfer their assets on their own accord as long as it does not infringe the rules and regulations. The transfer as referred here, is intended both to give opportunity to national capital to raise and also to allow the foreign investors to come up with business strategies in the effort to seek the best profit in the receiving country of the capital. Merger, acquisition or divestment are all kind of ways to transfer company asset to other parties. Article 8 of Law No. 25 of 2007 does not explain on how the transfer of shares must be made, this, again, signifies the said downside.

Transfer of shares generally may be made by capital investors through divestment of its shares, as one of its business strategies to seek for profit, then, the divestment may also be made by the government to give the opportunity to national capital to raise, by obliging the foreign investor to divest its capital. Article 112 Paragraph (1) of the Law Number 4 of 2009 concerning Mining, mainly states that after 5 (five) years of production, business entities holding Mining Business Licenses (IUP) and Special Mining Business Licenses, which shares are owned by foreign subjects, must divest its shares to the central Government, regional governments, state-owned enterprises, regional-owned enterprises, or national private business entities.

Law Number 4 of 2009 concerning Mining is the Lex Specialis (specific regulation) from the Law Number 25 of 2007 concerning Capital Investment. Therefore, all capital owners in the mineral and coal sector must also comply to the Law Number 4 of 2009 concerning Mining along with its implementing regulations besides to the Law Number 25 of 2007 concerning Capital Investment.

Government Regulation Number 23 of 2010 concerning Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 23 of 2010”), has finally been amended numerous times. Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 24 of 2012”) has been through several amendment in its divestment regulation, particularly regarding the requirement of larger share ownership for Indonesian participants up to 51%.[21]

Such change has amended the content of Article 97 which stipulated that the holder of Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK) in the sense of foreign capital investment, has the obligation to gradually divest their shares 5 (five) years after coming into production, thus in the tenth year there will be no lesser than 51% (fifty percent) of shares under the ownership of the Indonesian participant. Then the next paragraph is explaining the minimum ownership of Indonesian participant must have each year after the end of fifth year of production, whereas Indonesian participant shall have no lesser than 20% (twenty percent) of shares in the sixth year, 30% (thirty percent) in the seventh year, 37% (thirty seven percent) in the eighth year, 44% (forty four percent) in the ninth year, and 51% (fifty one percent) in the tenth year, from the total number of shares.[22]

Then, in such divestment, the foreign shares must be firstly offered to the central Government, regional governments, state-owned enterprises, and regional-owned enterprises, before to the national private business entities, within the determined period of time and if the offering has not met the requirements, then it must be re-offered the next year.[23] The existence of offering in the next year may give broader opportunity to Indonesian participants and to let them prepare all necessary pre-requisites, either with respect to the capital or human resources.

Two years later, the Government Regulation Number 1 of 2014 concerning the Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 1 of 2014”) has been issued. In the second amendment, there is no discussion regarding the divestment policy, thus in order to seek for divestment regulation, one still must have to see the previous regulation namely the Government Regulation Number 24 of 2012 concerning Implementation of Mineral and Coal Mining Business Activities.

Not long after, in 2017, there was an issuance of the Government Regulation Number 1 of 2017 concerning the Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 1 of 2017”). The government seemed to reduce its effort to give better chance to Indonesian participants in the divestment that has been regulated under the Article 97, it was not due to the annulment of regulation on the number of shares and duration of time required for the divestment, instead it was because of absence of opportunity for Indonesian participants to accept the offer the next year, hence, all Indonesian participants are only getting the chance within the same year and not for the next year.

Government Regulation Number 1 of 2017 has been refined further by the Government Regulation Number 8 of 2018 concerning the Fifth Amendment on the Government Regulation Number 23 of 2010 concerning the Implementation of Mineral and Coal Mining Business Activities. This amendment is more specific to the minister authority in determining the selling price for the coal used in the necessity for domestic interest.

Several Government Regulations related to the divestment in the sector of mineral and coal mining, have the downside of inconsistency and continuous change of number of shares and duration of time required for the divestment, within short range of time. This inconsistency shows the image of the political condition in the government, which may affect foreign investors to refrain from divesting their shares in time, and may become one of the factors impeding the divestment of foreign shares in the sector of mineral and coal mining to Indonesian participants.

Besides Government Regulations, divestment is also regulated under Minister Regulation Number 27 of 2013 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 27 of 2013”). In this Minister Regulation, there has been clear regulation on the procedure to divest, transfer the ownership of, stipulation of price for shares, and up to the administrative sanctions imposable to the offenders, Besides, the Minister Regulation Number 27 of 2013 has also been regulating procedures and stipulation of price for the divestment of shares applicable for the holder of Contract of Work and Work Agreement for Coal Mining Business.

Four years later, Indonesian Government is issuing the Minister Regulation Number 9 of 2017 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 9 of 2017”). This Minister Regulation has changed the procedures of share divestment and mechanism of price stipulation in the divestment from the previous regulation, it is considered as more detailed and clearer, however on the downside, it no longer obliged the price stipulation to be made by independent appraisal.

A year later, Minister Regulation Number 9 of 2017 then amended again by the issuance of the Minister Regulation Number 43 of 2018 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 43 of 2018”). Minister Regulation Number 43 of 2018 has additional of Article 4a which stipulated that share Divestment may be made through the issuance of new shares and/or transfer or sale of existing shares, either directly or indirectly. Minister Regulation Number 43 of 2018 is adding the easiness for the capital investors to divest their shares.

The large multitude of implementing regulations on divestment may confuse the investors and put them at loss when they invest their capital in certain receiving country. Regulation on divestment towards the holder of Contract of Work and Work Agreement for Coal Mining Business are stipulated in the provisions of the Contract. Article 169 point b of the Law Number 4 of 2009 concerning Mining explains that provisions stipulated in the articles of Contract of Work and Work Agreement for Coal Mining Business which have been existed before the Law Number 4 of 2009 concerning Mining entered into force, must be adjusted no later than 1 (one) year as of the enactment of the Law Number 4 of 2009 concerning Mining unless on the matter regarding state revenue.

Article 169 point b of the Law Number 4 of 2009 concerning Mining mandated that the provisions in either Contract of Work or Work Agreement for Coal Mining Business must be adjusted no later than one year after the Law Number 4 of 2009 concerning Mining has been issued. The downside of this adjustment as referred in the said article is the absence of detailed requirements on what are the aspects that must be adjusted and with respect to the divestment, there is no explanation on how much is the quantity of shares that must be divested from the foreign capital by the holder of Contract of Work or Work Agreement for Coal Mining Business to the Indonesian participants.

With regards to Contract of Work or Work Agreement for Coal Mining Business, Article 169 point b of the Law Number 4 of 2009 concerning Mining is clearly stating that Contract of Work shall be in force until its expiration. This provision is in contrary to the said mandate of this article.

There are several provisions necessary in the drafting of a contract, one of which is related to Divestment, nonetheless the obligation to adjust contract is in contrary to other responsibility to enact a contract up to its expiration. This shows the weak implementation of adjustment to the contract, one of which is related to the Divestment in the mining law in Indonesia and it also manifest the inconsistency and irresolute attitude from the government against the mineral and coal businessmen in obliging them to divest their shares to the Indonesian participants.

PT Freeport Indonesia and PT Newmont Nusa Tenggara are mining companies which entered Indonesia through Contract of Work. The divestment of the two companies are regulated under contracts made between the Indonesian Government and the Contractor of the mining business, either PT Newmont or PT Freeport. The number of shares obliged to be divested to Indonesian participants are varied, depends on the contract made by the respective mining company in Indonesia. Article 1338 of the Indonesian Civil Code of Conduct has regulated that all agreement made in valid manner shall be applicable as the law for the concluding parties.

Satjipto Raharjo explains on how the law should have been made, first, the style is supposedly firm and simple, second, the terms chosen are supposedly having absolute character instead of relative character, hence it will constrict possibilities for multi-interpretation or hypothetical interpretation, fourth, it is supposedly far from complicated, since it is made for everyone, do not immerse people in logical problems, it only need to merely reachable for common reasoning, fifth, main problems must not be biased with exceptions, limitations or modifications, unless it is utterly necessary, six, better to refrain from using argumentative reasoning, it is very dangerous to give detailed reason on regulated matters, since it opens the door to argumentation,  seventh, all of those matters are supposedly put into thorough consideration, no need to be confused on the thoughts and sense of common justice or how things are naturally going, since a weak, unnecessary, and unfair type of law will cause collapse to the whole system of rules and regulations and undermine the prestige of a state.[24]

With respect to the Article 169 point a and Article 169 point b of the Law Number 4 of 2009 concerning Mining, the government are not supposedly choosing terms with absolute character, the absence of different interpretation or limitation to the main problems elaborated is biased by the existence of other articles, or in other words, all of such contents are supposedly put into thoughts, considered, and reviewed before being enacted, to prevent confusion from the foreign investors who divest their shares in Indonesia.

Then for the mineral and coal mining business in Indonesia after 2009, there is no requirement of contract of work, instead, it has licensing system, divestment in contract of work is complying to the provisions made between Indonesian government with the contractor holding the mineral and coal mining business in Indonesia, which have varying number of offered shares. Common people in Indonesia view that mining businesses are no longer in need of contract of work, it will need licenses instead, thus the people consider that the Indonesian government is uncapable of exercising economical sovereign against the foreign investors who invest their capital in Indonesia.

Mochtar Kusumaatmadja is also explaining that the law is functioned to generate order and justice. Public order may be attained if the law is giving certainty on why it is created.[25] In connection to the business world, order in the field of divestment may be attained if there is certainty on the purpose of the creation of divestment against the foreign capital investment in the mineral and coal mining sector in Indonesia, as stipulated in the rules and regulations.

This function of law to guarantee order and discipline is utterly important, to the extent that some people refers this function as the purpose of law. The purpose meant here, is the preserved and guaranteed condition of order (certainty) and discipline. Without order and discipline, it is impossible to have reasonable life. No person can do business and develop his talent without the existence of both certainty and order.[26]

Conclusion

There has been no rules and regulations specifically regulate divestment of foreign shares in Indonesia yet. Regulations on the divestment are scattered in various applicable rules and regulations either in capital investment or mineral or coal mining. Regulation on divestment of foreign capital in Indonesia has been started since the foreign capital investment entered Indonesia in 1967. In 1967, divestment is only regulated under foreign capital investment and there is no other regulation in the mining sector. It is different with 2009, divestment regulation is clearly elaborated in the Law Number 4 of 2009 concerning Mining as well as its implementing regulations. Divestment regulations after 1967 up to after 2009 in Indonesia are not consistent and may be changing within faster duration of time, some might need lesser than one year, this may put the foreign investors at lost and declining their interest to inject its capital in Indonesia. Aside from inconsistent, divestment regulations in Indonesia are also absence of details against the adjustment referred in the Article 169 point b of the Law Number 4 of 2009 concerning Mining. Divestment regulations for foreign shares in Indonesia, does not only applied to the foreign investors holding the licenses, it is also applicable to the holder of the Contract of Work/Agreement. The total number of shares obliged to be divested by the holder of Contract of Work/Agreement and the different number of divestment of shares in each company shall be regulated in the contract. Divestment regulations for foreign shares in Indonesia exists in the Law and its implementing regulations, however, it is also regulated under the Contract of Work made between the government of Indonesia and mining business Contractor in Indonesia

References

Law Number 4 of 2009 concerning Mining

Law Number 11 of 1967 concerning Main Provisions of Mining

Law Number 1 of 1967 concerning Foreign Capital Investment

Law Number 25 of 2007 concerning Capital Investment

Government Regulation Number 23 Of 2010 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 24 Of 2012 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 1 Of 2014 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 1 Of 2017 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor.

Department of Energy and Mineral Resources of the Republic of Indonesia, Press Release Number 23/HUMAS DESDM/2009, with regards to Arbitration Award concerning Divestment of Shares of PT Newmont Nusa Tenggara.

Erni Yoesry,  “Divestasi PT. Freeport Indonesia”, Jurnal Hukum & Pembangunan 49 No. 1 (2019).

Jeef Madura, Introduction to Business, Fourth Edition, Thomson Higher Education, USA, 2007.

Mochtar Kusumaatmadja dan Arief Sidharta, Pengantar Ilmu Hukum Suatu Pengenalan Pertama Ruang lingkup belakunya Ilmu Hukum, Alumni, Bandung, 2000.

Nanik Trihastuti, Hukum Kontrak Karya Pola Kerjasama Pengusaha Pertambangan Indonesia, Setara Press, Malang, 2013.

Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  2013.

Salim HS dan Erlies Septiana Nurbani, Edisi Revisi Hukum Divestasi di Indonesia Pasca Putusan Mahkamah Konstitusi RI Number 2/SKLN-X/2012, PT Raja Grafindo Persada, Jakarta, 2013.

Satjipto Rahardjo, Ilmu Hukum, PT Citra Aditya Bakti, Semarang, 2000.

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[1] See Article 112 of the Law Number 4 of 2009 concerning Mining

[2] See Explanation in the Law Number 4 of 2009 concerning Mining

[3] Government Regulation Number 23 Of 2010 concerning Implementation of Mineral and Coal Mining Business Activities.

[4] Tempo, Sengketa Churcihll Mining vs Pemerintah, https://bisnis.tempo.co/read/412812/sengketa-churchill-vs-pemerintah-masuk-arbitrase.

[5]Erni Yoesry,  “Divestasi PT. Freeport Indonesia”, Jurnal Hukum & Pembangunan 49 No. 1 (2019): 153-179

[6]Department of Energy and Mineral Resources of the Republic of Indonesia, Press Release Number 23/HUMAS DESDM/2009, with regards to Arbitration Award concerning Divestment of Shares of PT Newmont Nusa Tenggara.

[7]Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  (2013), p. 1

[8]Nanik Trihastuti, Hukum Kontrak Karya Pola Kerjasama Pengusaha Pertambangan Indonesia, Setara Press, Malang, (2013), p. 3.

[9] Salim HS dan Erlies Septiana Nurbani, Edisi Revisi Hukum Divestasi di Indonesia Pasca Putusan Mahkamah Konstitusi RI Number 2/SKLN-X/2012, PT. Raja Grafindo Persada, Jakarta, (2013),  p 120.

[10] “A divestiture is the sale of an existing business by a firm. It is the reverse of investing in new assets”. Terdapat dalam Jeef Madura, Introduction to Business, Fourth Edition, Thomson Higher Education, USA, ( 2007), p. 656

[11] That in that regard, the principle to use self-capability as well as self-eligibility as the ground of development must not raise reticent to utilize potential of capital, technologies, and skills available from abroad, as long as all of them are truly dedicated for the interest of people’s economy without resulting into dependency to external support, this is contained in the Consideration of point e of the Law Number 1 of 1967 concerning Foreign Capital Investment

[12] See Article 4 Paragraph (2) of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

[13] See Article 5 Paragraph (2) of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

[14] Article  27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment

[15] See Article 2 of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[16] See Article 4 Paragraph (1) of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[17] See Article 4 Paragraph (2) and Paragraph (3) of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[18] See Article 12 Paragraph (1)  of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[19] See Article 12 Paragraph (3)  and in connection with Article 12 Paragraph (4) of the Presidential Decision Number 49 Of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[20] See Article 13 of the Presidential Decision Number 49 Of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[21] Article 97 Paragraph (1) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business

[22] See Article 97 Paragraph (2) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities

[23] See Article 97 Paragraph (3)-(8) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities

[24] Satjipto Rahardjo, Ilmu Hukum, PT Citra Aditya Bakti, Semarang, (2000), p. 180

[25]Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  (2013), p. 1

[26] Mochtar Kusumaatmadja dan Arief Sidharta, Pengantar Ilmu Hukum Suatu Pengenalan Pertama Ruang lingkup belakunya Ilmu Hukum, Alumni, Bandung, (2000), p. 50

Dosen Pengajar Dr. Tetti Samosir, S.H., M.H.

Dari

Suwarsit, S.H.

5619221074

Semester Satu (1)

Magister Kenotariatan Universitas Pancasila

DAFTAR ISI

BAB 1 PENDAHULUAN…………………………………………………………………………… 3

BAB II RANGKUMAN BUKU KARYA PROF. MAHMUD MD POLITIK HUKUM DIINDONESIA

1. Arti dan Cakupan Politik Hukum……………………………………………………….. 4
2. Pengaruh Politik Terhadap Hukum …………………………………………………….. 4
3. Pilihan Konsepsi dan Indikator tentang Politik Mengapa Politik Hukum ….4
4. Konfigurasi Politik dan Produk Hukum pada Demokrasi Liberal  ……………5
5. Konfigurasi Politik dan Produk Hukum pada Demokrasi Terpimpin……….. 5
6. Konfigurasi Politik dan Produk Hukum pada Demokrasi Orde Baru ……… 5
7. Diskusi tentang Konfigurasi Politik dan Karakter Produk Hukum…………. 6
8. Demokrasi menuju Pembangunan Hukum Berwatak Responsif …………….. 6.
9. Aktualisasi Temuan Pasca  Reformasi ………………………………………………….6

BAB III PEMBAHASAN(MEMBAHAS ISI DARI BUKU TERSEBUT DENGAN MEMBANDINGKANNYA DARI BUKU/PENDAPAT LAIN YANG BERKAITAN DENGAN SETIAP ISI BUKU)

1. Arti dan Cakupan Politik Hukum………………………………………………………. 7
2. Pengaruh Politik Terhadap Hukum ……………………………………………………. 7
3. Pilihan Konsepsi dan Indikator tentang Politik Mengapa Politik Hukum …7
4. Konfigurasi Politik dan Produk Hukum di Indonesia ……………………………9
5. Sejarah Negara Indonesia dalam Politik Hukum ………………………………. 11

BAB IV PENUTUP (TANGGAPAN ATAU PENDAPAT SAYA TENTANG ISI DARI KARYA PROF. MAHMUD MD POLITIK HUKUM DI INDONESIA) ……….. 15

DAFTAR PUSTAKA ………………………………………………………………………………16

BAB 1

PENDAHULUAN

Sebagai mahasiswa Ilmu hukum khususnya sebagai mahasiswa yang menempuh pendidikan Magister Kenotaritan Universitas Pancasila harus dapat memahami gejolak hukum bahwa hukum tidak selalu memberikan kepastian dan keadilan kepada masyarakat. Mahasiswa harus memahami bahwa produk hukum banyak diwarnai kepentingan-kepentingan politik pemegang kekuasaan yang dominan. Dalam hal ini sebagai seorang mahasiswa harus dapat memahami kebijaksanaan hukum yang akan atau telah dilaksanakan secara nasional oleh Pemerintah. Melalui Dosen Pengajar Ibu Dr. Tetti Samosir SH MH yang telah mewajibkan terhadap muridnya untuk membuat book report Politik Hukum Indonesia karya Prof Moh. Mahfud MD. Terhadap book report tersebut Mahasiswa Magister Kenotaritan Universitas Pancasila dapat memahami terhadap kebijaksanaan Hukum (Ilmu Politik Hukum).

BAB II

RANGKUMAN BUKU KARYA PROF. MAHMUD MD POLITIK HUKUM DI INDONESIA PADA SETIAP BABNYA

1. Arti dan Cakupan Politik Hukum

Politik hukum adalah pilihan tentang hukum-hukum yang akan dicabut atau tidak diberlakukan yang semuanya dimaksudkan untuk mencapai tujuan negara seperti yang tercantum di dalam pembuakaan UUD 1945. Arti lain terhadap Politik Hukum adalah sebagai suatu pernyataan kehendak penguasa negara mengenai hukum yang berlaku di wilayahnya dan mengenai arahperkembangan hukum yang dibangun.[1] Cakupan politik hukum pertama adalah kebijakan negara tentang hukum yang akan diberlakukan atau tidak diberlakukan dalam rangka pencapaian tujuan negara. Kedua latar belakang politik ekonomi, sosial,budaya atas lahirnya produk hukum, Ketiga, penegakan hukum didalam kenyataan lapangan.[2]

• Pengaruh Politik Terhadap Hukum

Hukum tidak selalu dapat menjamin keadilan, kepastian hukum, dan ketertiban dalam masyarakat. Justru hukum yang dibuat kadang tidak sedikit yang bertentangan dengan masyarakat. Hal ini tidaklah lain disebabkan oleh produk hukum yang dibuatnya pengaruh dari kebijakan dan kepentingan politik para penguasa. Artinya hukum tidak hanya dipandang sebagai suatu pasal-pasal yang bersifat imperatif atau keharusan yang bersifat dassolen melainkan harus dipandang sebagai subsistem yang dalam kenyataan (dassein).[3]

• Pilihan Konsepsi dan Indikator tentang Politik Mengapa Politik Hukum

Ilmu hukum diibaratkan sebagai pohonnya kemudian melahirkan cabang-cabang berbagai bidang hukum seperti hukum perdata, hukum pidana, hukum tata negara, hukum administrasi negara dan seagainya. Jika ada pertanyaan hubungan kausalitas anatara hukum dengan politik atau pertanyaan apakah hukum mempengaruhi politik ataukah politik yang mempengaruhi hukum. Maka paling tidak ada tiga jawaban pertama hukum determinan tas politik dalam arti bahwa kegiatan-kegiatan politik diatur oleh dan harus tunduk pada aturan hukum. Kedua, politik determinan atas hukum karena hukum merupakan hasil atau kristalisasi dari kehendak-kehendak politik yang saling berinteraksi. Ketiga, yang sederajat determinasinya seimbang antara yang satu dengan yang lainya karena meskipun hukum merupakan produk keputusan politik, tetapi begitu hukum ada maka semua kegiatan politik harus tunduk pada aturan hukum.[4]

• Konfigurasi Politik dan Produk Hukum pada demokrasi liberal

Konfigurasi politik pada demokrasi leberal dimulai pada akhir pendudukan jepang, yakni pemerintah menjanjikan kemerdekaan bangsa Indonesia yang ditindaklanjuti dengan pembentukan badan pembentuk rancangan UUD 1945 dan badan persiapan kemerdekaan seperti pembentukan panitia undang-undang, pengesahan pembukaan batang tubuh UUD, dan sebagainya).[5] Produk hukum pada masa itu seperti halnya pembentukan UU agraria, UUD 45 bahkan UUDS hingga menjadikan pemerintahan kita Republik Indonesia Serikat pada masa itu.[6]

• Konfigurasi Politik dan Produk Hukum pada Demokrasi Terpimpin

Konfigurasi politik demokrasi terpimpin dimulai sejak dikeluarkanya dekrit presiden 5 Juli 1959. selama kurun waktu 1959-1965 sistem pemerintahan Indonesia dibawah presiden soekarno adalah sistem pemerintahan yang otoriter. Keotoriteranya terlihat dalam kepres yang membubarkan partai-partai sainganya seperti masyumi,PKS bahkan dengan Kepres Presiden menghentikan pelaksanaan tugas DPR yag secara tidak langsung membubarkan DPR dimana pembubaran tersebut bertentangan dengan ketentuan yang terdapat dalam UUD 1945.[7] Karakter produk hukumnya periode pemilu tanpa ada pemilu, keharusan perubahan pada UU Pemda, disektor hukum agraria meneruskan usaha periode sebelumnya.

• Konfigurasi Politik dan Produk Hukum pada Demokrasi Orde Baru

Konfigurasi politik pada orde baru dimulai sejaklengsernya presiden soekarno dan sistem pemerintahan dibawah kendali pemerintahan presiden soeharto. Tragedi pemberontakan G30S PKI pada masa itu Presiden Soekarno tidak dapat mempertanggung jawabkan. MPRS mencabut Presiden Soekarno sekaligus menetapkan Presiden Soeharto sebagai penggantinya. Kelahiran orde baru mendefinisikan tatanan kehidupan negara danbangsa diletakan kembali pada pelaksanaan kemurnian pancasila dan UUD 1945. [8] Musuh utama orde baru adalah PKI dan para pengikutnya, militer menjadi peran utama pemerintah, pemilu yang berfokus menguatkan Golkar merupakan ciri-ciri produk hukumdan pemerintahan padamasaorde baru.

• Diskusi tentang Konfigurasi Politik dan Karakter Produk Hukum

            Pada intinya bab ini megaskan kembali atau menguraikan secara singkat dari konfigurasi politik dan produk hukum pada pemerintahan demokrasi liberal, demokrasi terpimpin, dan demokrasi orde baru. dimana simpulanya adalah secara ringkas dapat dikemukakan studi ini (maksudnya dari bab-bab sebelumnya) berangkat dari asumsi bahwa hukum merupakan produk politik sehingga hukum dipandang sebagai formalisasi yuridis dari kehendak-kehendak politik yang saling beriterkasi dan bersaingan.[9]

• Demokratisasi menuju Pembangunan Hukum Berwatak Responsif

Studi hubungan antara konfigurasi politik dan karakter produkhukum menghasilkan tesis bahwa setiap produk hukum merupakan percerminan dari konfigurasi politik yang melahirkanya. Artinya setiap muatan produk hukum akan sangat ditentukan oleh visi politik kelompok dominan (penguasa). Oleh karena itu setiapupaya melahirkan hukum-hukum yang berkarakter responsif harus dimulai dari upaya demokratisasi dalam kehidupan politik.[10] Pada intinya pada bab ini penulis buku setuju jika pengujian terhadap UUD dilakukan oleh Mahkamah Agung, yang mana diIndonesia hak uji materiil terhadap UU belum diadakan dengan alasan tidakada pengaturanya dalam UUD1945 dan alasan lain yang bersifat teknis.

1. Aktualisasi Temuan Pasca  Reformasi

Temuan hubungan kausalitas politik dan produkhukum pada masa pasca reformasi terlihat pada adanya perubahan UU dan penghapusan Tap MPR.

BAB III PEMBAHASAN

(MEMBAHAS ISI DARI BUKU TERSEBUT DENGAN MEMBANDINGKANNYA DARI BUKU/PENDAPAT LAIN YANG BERKAITAN DENGAN SETIAP ISI BUKU)

A. Arti dan Cakupan Politik Hukum

            Pengertian politik hukum menurut Sunarti Hartono adalah sebuah alat (tool) atau sarana dan langkah yang dapat digunakan oleh pemerintah untuk menciptakan sistem hukum nasional yang dikehendaki dan dengan sistem hukum nasional itu akan diwujudkan cita-cita bangsa Indonesia.[11] Cakupan politik hukum dapat meliputi pelaksanaan ketentuan hukum yang telah ada secara konsisten, proses pembaruan dan pembuatan hukum, yang mengarah pada sikap kritis terhadap hukum yang berdimensi ius contitutum dan menciptakan hukum yang berdimensi ius constituendum, serta pentingnya penegasan fungsi lembaga dan pembinaan para  penegak hukum.

B. Pengaruh Politik Terhadap Hukum

            Faktor-faktor yang akan menentukan politik hukum tidak semata-mata ditentukan oleh apa yang kita cita-citakan atau tergantung pada kehendak pembentuk hukum, praktisi atau para teoritisi belaka, tetapi ikut ditentukan pula oleh kenyataan serta perkembangan hukum di lain-lain negara serta perkembangan hukum internasional. Perbedaan politik hukum suatu negara tertentu dengan negara lain inilah yang kemudian menimbulkan apa yang disebut dengan  politik hukum nasional.[12]

C. Pilihan Konsepsi dan Indikator tentang Politik Mengapa Politik Hukum

            Dilihat dari fungsinya maka hukum yang berkarakter responsif bersifat aspiratif. Artinya, memuat materi-materi yang secara umum sesuai dengan aspirasi atau kehendak masyarakat yang dilayaninya, sehingga produk hukum itu dapat dipandang sebagai kristalisasi dari kehendak masyarakat. Adapun hukum yang berkarakter ortodoks bersifat positivis-instrumentalis. Artinya, memuat materi yang lebih merefleksikan visi sosial dan politik pemegang kekuasaan atau memuat materi yang lebih merupakan alat untuk mewujudkan kehendak dan kepentingan program pemerintah. Jika dilihat dari segi penafsiran, maka produk hukum yang berkarakter responsif biasanya memberi sedikit peluang bagi pemerintah untuk membuat penafsiran sendiri melalui berbagai peraturan pelaksanaan dan peluang yang sempit itu pun hanya berlaku untuk hal-hal yang benar-benar bersifat teknis.[13]

            Adapun produk hukum yang berkarakter ordoks memberi peluang luas kepada pemerintah untuk membuat berbagai interpretasi dengan berbagai peraturan lanjutan yang berdasarkan visi sepihak dari pemerintah dan tidak sekadar masalah teknis. Oleh sebab itu, produk hukum yang berkarakter responsif biasanya memuat hal-hal penting secara cukup rinci, sehingga sulit bagi pemerintah untuk membuat penafsiran sendiri.

Dalam buku Politik Hukum Karya Abdul Latif tidak menjelaskan terhadap konsepsi dan indikator tentang mengapa politik hukum dalam sub babnya namun saya secara eksplisit terhadap konsepsi ini dapat dilihat dan dipahami pada buku tersebut tentang bagaimana Abdul Latif mencoba kebutuhan hukumnya dalam politik yaitu Ius Constitutum dan perubahan kehidupan masyarakat, Ius Constituendum, proses perubahan Ius Constitutum dan perubahan kehidupan masyarakat menjadi Ius Constituendum

            Ius Constitutum merupakan hukum yang berlaku merupakan hukum yang sudah ditetapkan dan berlaku pada suatu tempat tertentu. Ketentuan tersebut dapat juga ketentuan sopan santun, ketentuan moral, ketentuan agama, ketentuan hukum. Seorang petugas hanya melakukan politikhukum bila ia menghadapi kesukaran yang timbul karena ketidak sesuain antara ketentuan hukum, yang telah ditetapkan atau yang harus dilakukan dengan kenyataan kehidupan masyarakat dihadapi.[14] Sedangkan perubahan masyarakat keadaan sesuatu yang berbeda dari keadaan sebelumnya.[15]

            Ius Constitundum adalah hukum yang merupakan hasil analisis Ius Constitutum dan perubahan kehidupan masyarakat, artinya hukum yang seharusnya berlaku.[16] Misalnya Pasal 338 KUHP menyatakan barang siapa dengan sengaja menghilangkan nyawa orang,atas perbuatanya iadihukum penjara selama-lamnya 15 tahun penjara. Kalimat yangmengharuskan atau kalimat yang mewajibanadalah kalimat yang secara eksplisit menggunakan kata harus atau wajib dengan segala bentuk aktif atau pasifnya. Kalimat demikian sebagai suatu ketentuan hukum menetapkan suatu kewajiban bagi yang bersangkutan untuk melakukan perbuatan yang ditentukan.[17]

            Terhadap proses perubahan Ius Constitutum menjadi Ius Constitundum diartikan suatu rangkaian kegiatan yang membentuk suatu kejadian. Rangkaian tersebut terdiri dari menguraikan unsur-unsur ius constitutum, menguraikan unsur-unsur perubahan kehidupan masyarakat, mebandingkan unsur-unsur ius constitum dengan unsur perubahan kehidupan masyarakat hingga menemukan troble dalam menerapkan ius constitundum pada kenyataan hidup.[18]

D. Konfigurasi Politik dan Produk Hukum di Indonesia

Bintan Ragen Saragih mendefinisikan konfigurasi politik hukum sebagai suatu kekuatan-kekuatan politik yang riel dan eksis dalam suatu sistem politik. Konfigurasi ini biasanya muncul dalam wujud partai-partai politik. Jika partai politik ini berperan secara nyata dalam sistem politik yang berlaku dalam pengambilan kebijakan hukum maupun kebijakan lainnya, maka konfigurasi politik itu adalah konfigurasi politik yang demokratis. Sedangkan apabila berlaku sebaliknya maka konfigurasi politik itu adalah konfigurasi politik otoriter. Kekuatan politik juga nampak dalam organisasi-organisasi kepentingan, tokoh berpengaruh dan sebagainya.[19]

Konfigurasi kekuatan dan kepentingan pemerintah sebagai  badan pembuat undang-undang menjadi penting karena proses pembuatan undang-undang modern bukan sekedar perumusan materi hukum secara baku sesuai rambu-rambu yuridis saja, melainkan pembuatan suatu keputusan politik. Intervensi-intervensi dari eksternal maupun internal pemerintah, bahkan kepentingan politik global secara tidak langsung turut mewarnai proses pembentukan undang-undang. Intervensi tersebut terutama dilakukan oleh kelompok yang mempunyai kekuatan dan  kekuasaan baik secara politik, sosial maupun ekonomi.[20]

Konfigurasi politik otoriter adalah susunan sistem politik yang lebih memungkinkan negara berperan sangat aktif serta mengambil seluruh inisiatif dalam pembuatan kebijakan negara. Konfigurasi ini dicirikan oleh dorongan elit kekuasaan untuk memaksakan persatuan, penghapusan oposisi terbuka, dominasi pimpinan negara untuk menentukan kebijakan negara dan dominasi kekuasaan politik oleh elit politik yang kekal. Konfigurasi politik otoriter menghasilkan produk hukum yang berkarakter ortodoks. [21]

Hukum merupakan hasil tarik-menarik pelbagai kekuatan politik yang terealisasi dalam suatu produk hukum. Satjipto Rahardjo menjelaskan bahwa hukum merupakan instrumentasi dari putusan atau keinginan politik sehingga pembentukan peraturan perundang-undangan disarati oleh berbagai kepentingan. Oleh karena itu pembuatan undang-undang menjadi medan pertarungan dan perbenturan berbagai kepentingan badan pembuat undang-undang yang menerminkan suatu konfigurasi kekuatan dan kepentingan yang terdapat dalam masyarakat.[22]

Merujuk pada UUD 1945 yang telah mengalami perubahan sebanyak empat kali, lembaga-lembaga negara yang dapat merumuskan politik hukum nasional adalah (1) Majelis Permusyawaratan Rakyat dan (2) Dewan Perwakilan Rakyat. MPR dapat merumuskan politik hukum dalam bentuk Undang-Undang Dasar. Setelah perubahan ketiga UUD 1945, MPR tidak lagi sebagai lembaga tertinggi negara (supreme body), tetapi hanya merupakan sidang gabungan (joint session) yang mempertemukan Dewan Permusyawaratan Rakyat dengan Dewan Perwakilan Daerah.[23] 

Produk dari kedua lembaga yang bergabung dalam MPR, yang dituangkan ke dalam penetapan atau perubahan UUD tersebut, merupakan politik hukum. Artinya, segala bentuk perubahan dan penetapan yang dilakukan oleh MPR terhadap UUD disebut sebagai politik hukum, karena merupakan salah satu kebijaksanaan dasar dari penyelenggara negara dan dimaksudkan sebagai  instrumen untuk mencapai tujuan negara yang dicita-citakan.[24]

Dengan demikian, pasal-pasal yang terdapat dalam UUD yang merupakan produk dari MPR adalah cetak biru untuk merealisasikan tujuan-tujuan negara. Dewan Perwakilan Rakyat (DPR) dapat merumuskan politik hukum dalam bentuk undang-undang, karena kedudukannya sebagai kekuasaan legislatif.

Konfigurasi politik dan produk hukum di Indonesia lain dapat terlihat ketika Indonesia dilanda krisis monetar pada Tahun  1997.  Hubungan dengan masalah tersebut pemerintah pusat terlalu campur tangan kepada pemerintah daerah hingga menyebabkan pemerintah pusat disaat ekonomi global tidak membaik tidak mampu mempertanggung jawabkan keadaan ekonomi daerah. Masyarakat menuntut adanya perubahan dalam sistem pemerintahan yang sebelumnya sentralisasi dengan desentralisasi. Desentralisasi dapat terlihat dan dirasakan dalam pemerintahan Indoneisiahingga saat ini seperti halnya Pilkada secara lanngsung sebagaimana UU No. 32 Tahun 2004 sebagai produk hukumnya.[25]

Abdul Latif terhadap pada politik hukum agraria istilah agraria hanya digunakan dalam arti sempit, sehingga dalam praktik sehari-hari tanah agraria sering disamakan begitu saja. Hukum perairan dan sumber daya yang komprehensif, pemakaian agraria dalamartian yang sempit telah melahirkan hukumsektoralyang berbenturan dengan hukum tanah atau UUPA itu sendiri. Mengingat cakupan agraria penting harus mempertimbangkan politik hukum bagi aspek-aspek agraria diluar tanah tersebut. Hak menguasai sebagaimana terkandung dalam Pasal 33 UUD 1945  persoalan yang sering muncul adalah bergesernya penggunaan hak menguasai yang berintikan mengatur dalam kerangka populisme menjadi memiliki dalam rangka pragmatisme untuk melaksanakan program pembangunan ekonomi yang berorentasi pada pertumbuhan. Istilah lain pemiskinan petaniterjadi karena pemerintah keluar dari ideologis UUPA, yakni dari populisme menjadi liberal individualisme.[26] Akhirnya politik hukum agraria sebagaimana tertuang dalam Pasal 33 UUD 1945 dan UU No.5 Tahun 1960 secara prinsip tidak perlu dirubah, sebab pada dasarnya yang menjadi masalah adalah implementasinya.[27]

• Sejarah Negara Indonesia dalam Politik Hukum

Dalam sepanjang sejarah Negara Republik Indonesia telah terjadi perubahan-perubahan politik secara bergantian (bedasarkan periode sistem politik) antara politik yang demokratis dan politik otoriter. Sejalan dengan perubahan-perubahan politik itu, karakter produk hukum juga berubah. Terjadinya perubahan itu karena hukum merupakan produk politik, maka karakter produk hukum berubah jika politik yang melahirkannya berubah.

1. Perubahan Berbagai UU. Tampak jelas dan terbukti secara gamblang bahwa ”hukum sebagai produk politik” sangat ditentukan oleh perubahan-perubahan politik. Begitu rezim Orde Baru di bawah kekuasaan Suharto jatuh, maka hukum-hukum juga lansung diubah, terutama hukum-hukum publik yang berkaitan dengan distribusi kekuasaan yakni hukum tata negara. Berikut ini beberapa contohnya:[28]

a. UU tentang Partai Politik dan Gelongan Karya diganti dengan UU tentang Kepartaian. Jika semula rakyat dipaksa untuk hanya menerima dan memilih tiga organisasi sosial politik tanpak boleh mengajukan alternatif, maka sekarang rakyat diperbolehkan membentuk partai politik yang eksistensinya di parlemen bisa dibatasi oleh rakyat melalui pemilu dengan memberlakukan electoral theshold dan/atau parliamentary threshold.

 b. UU tentang Pemilu dibongkar dengan menghapus porsi anggota DPR dan MPR yang diangkat oleh presiden. Penyelenggara pemilu juga dilepaskan dari hubungan struktural dengan pemerintah, dari yang semula diselenggarakan oleh Lembaga Pemilihan Umum (LPU) yang diketuai oleh Menteri Dalam Negeri dialihkan ke Komisi Pemilihan Umum (KPU) yang bersifat mendiri.

 c. UU tentang Susunan dan Kedudukan MPR, DPR, dan DPRD dirombak sejalan dengan perubahan UU tentang Pemilu. Perubahan atas UU ini sampai tahun 2004 berisi pengurangan terhadap jumlah anggota DPR yang diangakat serta pengangkatan anggota MPR secara lebih terbuka, namun sejak pemilu 2004 perubahan atas UU sudah meniadakan pengangkatan sama sekali dan memasukkan Dewan Perwakilan Daerah sebagai lembaga negara yang baru sejalan dengan amandemen atas UUD 1945 yang menentukan bahwa MPR terdiri dari anggota DPR dan anggota Dewan Perwakilan Daerah (DPD).

d. UU tentang Pemerintah Daerah juga diganti, dari yang semula berasas otonomi nyata dan bertanggung jawab menjadi berasas otonomi luas, dari yang secara politik sentralistik menjadi desentralistik.

2. Penghapusan Tap MPR. Pasca reformasi 1998 perubahan hukum bukan hanya mengantarkan perubahan berbagai UU seperti yang dikumukan di atas, melainkan menyentuh juga peraturan perundang-undangan yang lebih tinggi yakni Ketetapan Majelis Pemusyawaratan rakyat (Tap MPR) dan UndangUndang Dasar (UUD) 1945. untuk tingkat Tap MPR yang mula-mula ditiadakan adalah Tap MPR No. II/MPR/1978 tetang Pedoman Penghayatan dan Pengamalan Pancasila (P4) dan Tap MPR No. IV/MPR/1983 tentang Referendum, tetapi akhirnya Tap MPR sendiri dinyatakan dihapus dari peraturan perundang-undangan sejalan dengan perubahan atau amandemen atas UUD 1945. Amandemen UUD 1945 mengubah hubungan antar lembaga negara dari yang vertikalstruktural menjadi horizontal-fungsional sehingga ada lagi lembaga tertinggi negara. MPR yang semula merupaka lembaga tertinggi negara diturunkan derajatnya menjadi lembaga negara biasa yang sejajar dengan lembaga negara dlainnya yaitu DPR, DPD, Presiden, BPK, MA, Mahkamah Konstitusi (MK), dan Komisi Yudisial. Dengan posisi yang tidak lagi sebagai lembaga tertinggi negara, maka peraturan perundang-undangan di dalam tata hukum tidak lagi mengenal Tap MPR sebagai peraturan. Adapun  tap MPR yang sudah terlanjur ada yang jumlahnya mencapai 139 Tap sejak tahun 1960 hingga tahun 2003 tetap berlaku sesuai dengan perintah pasal I Aturan Tambahan UUD 1945 hasil amandemen, MPR mengeluarkan Tap No. I/MPR/2003 merupakan Tap Terakhir yang menutup semua Tap MPR yang bersifat mengatur dalam arti tidak boleh ada lagi setelah itu Tap MPR yang bersifat mengatur.[29]

3. Perubahan Undang-undang Dasar. Penghapusan Tap MPR seperti yang telah disinggung di atas sebagai salah satu bentuk peraturan perundang-undangan merupakan akibat dari perubahan atau amandemen atas UUD 1945. Perubahan UUD 1945 itu sendiri merupakan produk politik hukum di Indonesia pasca reformasi. Pada masa reformasi ada arus pemikiran kuat yang dimotori oleh berbagai kampus dan para pegiat demokrasi bahwa reformasi konstitusi merupakan kaharusan jika ingin melakukan reformasi. Karena krisis multi dimensi yang menimpa Indonesia disebabkan sistem politik yang otoriter sehingga untuk memperbaikinya harus dimulai dari perubahan sistem politik agar menjasi demokratis. Untuk membangan sistem politik yang demokratis haruslah dilakukan amandemen terhadap UUD 1945 karena sistem politik otoriter yang dibangun selalu masuk dari celah-celah yang ada pada UUD 1945 tersebut.  Ada hal lain yang memperkuat alasan dilakukannya amandemen atau perubahan UUD 1945 yakni alasan konstitusi sebagai resultante atau produk kesepakatan politik sebagaimana dikemukankan oleh KC Whese. Sebagai resultante, kontitusi merupakan kesepakatan pembuatannya sesuai dengan keadaan politik, ekonomi, sosial, dan budaya pada saat dibuat.[30]

BAB IV

PENUTUP (TANGGAPAN ATAU PENDAPAT SAYA TENTANG ISI DARI KARYA PROF. MAHMUD MD POLITIK HUKUM DI INDONESIA)

             Dari sisi arti dan cakupan pada buku karya Prof. Mahmud MD politik hukum di indonesia kurang luas namun kelebihan dari buku ini dibanding dengan buku lain. Buku karya Prof Mahmud MD Politik Hukum Indonesia dibandingkan dengan Bukunya Abdul Latif dan Hasbi Ali cara mengantarkan pembaca dan memahami campur tangan politik pada produk hukum lebih mudah dipahami. Maksud saya buku karya Prof Mahmud MD dijelaskan fakta-fakta politik hukum pada perkembangan sejarah dari demokrasi liberal,demoktrasi terpimpin, hingga demokrasi era orde baru. Setelah menggambarkan dalam perjalanan sejarah politik hukum pada pemerintahan indonesia dari pasca merdeka hingga orde baru buku tersebut secara otomatis pembaca akan mudah meresapi dan menggambarkan bahwa benar adanya campur tangan politik dalam produk hukum. Tidak seperti buku Abdul Latief dan Hasbi Ali yang mengantarkan pemahaman kebutuhan politik dengan hukum dengan menjelaskan Ius Constitutum, perubahan masyarakat,Ius Constitundum, dan proses perubahan Ius Contituntum ke Ius Constitundum sehingga menurut pembaca perlu pemahaman yang lebih mendalam atau lebih konsentrasi akan kebutuhan politik pada undang-undang.

            Disisi lain buku karya Prof. Mahmud MD politik hukum di indonesia menjelaskan demokratisasi menuju pembangunan berwatak responsif dimana memberikan pendapat yang tepat terhadap lembaga yang berhak dan berkompenten terhadap uji materiil UUD 1945. Secara keseluruhan pada intinya buku karya Prof. Mahmud MD Politik Hukum di Indonesia bahasa mudah dimengerti, tulisanya runtut (alur ceritanya gamblang), sehingga mudah dipahami dengan cepat.

DAFTAR PUSTAKA

Abdul Latif dan Hasbi Ali, Politik Hukum, Cetakan Kedua, Sinar  Grafika, Jakarta, 2011.

Abdul Latif dan Hasbi Ali, Politik Hukum, Cetakan Keenam, Sinar  Grafika, Jakarta, 2019.

Bintan Ragen saragih, Politik Hukum ,  CV Utomo , Bandung,  2006.

Frenki,  Politik Hukum dan Perannya dalam Pembangunan hukum di Indonesia Pasca Reformasi,  tulisan bebas, Fakultas Syari’ah IAIN Raden Intan, Lampung, tanpa tahun

Moh.Mahfud MD, Politik Hukum di Indonesia, Cetakan ke Tujuh, Raja Grafindo Persada, Jakarta, 2017.

Satjipto Rahardjo, Sosiologi Hukum, Perkembangan, Metode dan Pilihan Masalah, Muhammadiyah University Press, Surakarta, 2002.

Satya arinanto, Kumpulan  Materi Presentasi Hukum  ( dikumpulkan dari berbagai referensi),  Pascasarjana, Fakultas Hukum Universitas Indonesia, Jakarta, 2010.

Sunaryati Hartono, Politik Hukum Menuju Satu Sistem Hukum Nasional, Alumni, Bandung, 1991.

---

[1] Moh.Mahfud MD, Politik Hukum di Indonesia, Cetakan ke Tujuh, Raja Grafindo Persada, Jakarta, 2017, hlm. 2

[2] Ibid., hlm. 2

[3] Ibid., hlm. 8-9

[4] Ibid., hlm. 16

[5] Ibid., hlm. 23

[6] Ibid., hlm. 25

[7] Ibid., hlm. 129

[8] Ibid., hlm. 195

[9] Ibid., hlm. 293

[10] Ibid., hlm. 368

[11] Sunaryati Hartono, Politik Hukum Menuju Satu Sistem Hukum Nasional, Alumni, Bandung, 1991, hlm.1

[12] Ibid.,hlm. 7

[13] Abdul Latif dan Hasbi Ali, Politik Hukum, Cetakan Kedua, Sinar  Grafika, Jakarta, 2011, hlm.31

[14] Abdul Latif dan Hasbi Ali, Politik Hukum, Cetakan Keenam, Sinar  Grafika, Jakarta, 2019, hlm.37

[15] Ibid., hlm., 51

[16] Ibid., hlm., 57

[17] Ibid., hlm., 59

[18] Ibid., hlm., 59

[19] Bintan Ragen saragih, Politik Hukum ,  CV Utomo , Bandung,  2006 , hlm. 33

[20] Satjipto Rahardjo, Sosiologi Hukum, Perkembangan, Metode dan Pilihan Masalah, Muhammadiyah University Press, Surakarta, 2002, hlm. 126

[21] Satya arinanto, Kumpulan  Materi Presentasi Hukum  ( dikumpulkan dari berbagai referensi),  Pascasarjana, Fakultas Hukum Universitas Indonesia, Jakarta, 2010, hlm. 77

[22] Satjipto Rahardjo, Op. Cit., hlm. 126.

[23] Ibid., hlm., 87

[24] Ibid., hlm., 89

[25] Ibid., hlm., 95

[26] Ibid., hlm., 121

[27] Ibid., hlm., 122

[28] Frenki,  Politik Hukum dan Perannya dalam Pembangunan hukum di Indonesia Pasca Reformasi,  tulisan bebas, Fakultas Syari’ah IAIN Raden Intan, Lampung, tanpa tahun, hlm. 6

[29] Ibid.

[30] Ibid.

Abstract

The mandate from the Article 112 of the Law Number 4 of 2009 concerning Mining essentially oblige foreign investor with share ownership of more than 51% to divest his shares to Indonesian Participants. Foreign investors in the mineral and coal mining sector in Indonesia, such as in case of PT Freeport Indonesia Company, PT Newmont Nusa Tenggara and Churchill Mining, are not running their obligation to divest shares in a good manner. Several divestment cases occurred in Indonesia shows that the divestment regulation cannot provide order to the public. On the other hand, despite that the rules on divestment are not specifically regulated, however its provision is scattered in various rules and regulations in the divestment that has close connection with Investment. The initial penetration of foreign direct investment in Indonesia referred back to the juridical basis as of 1967, it is necessary to conduct further analysis on the regulation to understand the fault at law in arranging the divestment regulation in Indonesia currently.

Keyword: Divestment, Foreign, Mining, Regulation, Indonesia

Introduction

Law Number 4 of 2009 concerning Mining is the amendment made to the law in the mining business in Indonesia, it replaces the Law Number 11 of 1967 concerning Main Provisions of Mining which is considered as no longer appropriate to cover the necessity of Indonesia as a nation today.[1] The Law Number 4 of 2009 concerning Mining contains main ideas of handing over the control on the Mineral and coal as non-renewable resources to the state and to give the authority to develop and effectuate them to the central and regional Government along with the business actors. Then, the Government will further give opportunity to the business entities in the form of Indonesian legal entity, cooperatives, individual businesses, or local society to work on the mineral and coal according to the licenses they have obtained, in correspondence with the regional autonomy, given by either the central and/or regional Government based on their respective authority.[2]

The Indonesian government is putting endeavor to be in favor Indonesian participants in giving the said opportunity through the enactment of Article 112 of the Law Number 4 of 2009 concerning Mining, which oblige the foreign investors to divest their shares to Indonesian participants. The precise wordings of the said Article is that “After 5 (five) years of operation, business entities holding Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK), which shares are owned by foreign subject(s), have the obligation to divest its shares either to the central Government, regional governments, state-owned enterprises, regional-owned enterprises, or national private business entities.”

Divestment of shares involve offers of total foreign shares to be sold to Indonesian participants.[3] In the mineral and coal sector, divestment of shares in Indonesia has never been running well, for instance in the case of Churcihll Mining[4], PT Freeport Indonesia,[5] and PT Newmont Nusa Tenggara.[6] Even though here, the law should have functioned as the tool to create order and justice.[7] In connection to the Divestment rules in Indonesia, it is apparent that the function to create order to the society has not yet been achieved.

Mining works are not easy to put into realization, since the activities in this sector need huge investments, high technologies, good managerial skills, as well as long duration of time to produce excellent mining materials.[8] There has been no specific rules regulating the divestment, however, the provisions are scattered into various rules and regulations.[9]

Divestment has close connection with the Investment.[10] Capital investment, or in other word, investment. The entrance of foreign direct investment in Indonesia is inseparable with the juridical ground rules of 1967 emerging after the independence of Indonesia. Regulation on the capital investment and other regulations are possible to come into existence with the balance deriving from several provision rules of divestment. Some provisions for the divestment in the national law of Indonesia is interesting to be taken as research, in order to seek way out from the vacuum of and/or fault at Divestment rules in Indonesia particularly in the mineral and coal sector. This article is using legal analysis approach against the rules and regulations precisely with respect to the Divestment in Indonesia.

1. Analysis on the Divestment of Foreign Shares in the Indonesian National Law After 1967.

Divestment has a close connection with the investment/capital investment made by the foreigners to certain field of business. Along with investment/capital investment there will be decrease of capital/divestment to the business. In order to develop the economy, one of the ways taken by the Indonesian Government is to invest capital either using domestic or foreign sources. The entrance of foreign capital in Indonesia after the independence was dating back to 1967, and it has tight correlation with the divestment regulation.

It is a given that the Indonesian Government has no intention to be dependent to the foreign capital it has received. This intention elaborated in the basis of considerations in the drafting of the Law Number 1 of 1967 concerning the Foreign Capital Investment.[11] Then, the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment briefly explains that companies fully established by foreign capital has the obligation to give participation for domestic capital after certain duration of time. This indirectly means that foreign investor must reduce its number of shares to be owned by Indonesian subjects.

The intention of this regulation in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment as affirmed in its Paragraph (2) is to encourage the foreign investors to divest their shares to enable the domestic investors to participate in their companies.

Divestment as referred in the Article 27 Paragraph (1) and (2) of the Law Number 1 of 1967 concerning the Foreign Capital Investment does not determine the minimum number of shares that must be sold. The absence of this regulation raise interpretation among the foreign investors that they are permitted to sell as least as possible. Besides the number of shares, the Law Number 1 of 1967 concerning the Foreign Capital Investment also has no elaboration on the duration of time for the performance of this obligation, whether at the time they obtain the Mining Business License (IUP) or at the time this license is expired.

The multi-interpretation on the regulation regarding the number of shares obliged to be divested by the foreign investors and the absence of duration of time for the divestment in the rules and regulations, particularly in the Law Number 1 of 1967 concerning the Foreign Capital Investment, will put domestic parties at lost as the receiving country for the capital. However, this does not applicable in absolute manner.

Article 3 Paragraph (2) and (3) of the Government Regulation Number 17 of 1992 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment, explained briefly that the capital for Indonesian participants might be increased to at least 20% (twenty percent) from the whole value of capital in the shares of the company within 10 (ten) years since the company starts its production. Then the capital in the number of shares for the Indonesian participants might be enhanced to be at least 51% (fifty one percent) from the whole value of capital in the shares of the company within the duration of 20 (twenty) years as of the company come into production. Such number of shares and duration applied to foreign capital investment companies with the capital value no lesser than US$ 250,000.00 (two hundred fifty thousand United States Dollar).

Besides the number and duration of the obligation, the foreign investors must at least own a capital of US$ 50,000,000.00 (fifty million United States Dollar), meanwhile the Indonesian participants may only buy ownership capital of 20% (twenty percent) against the whole capital of the company within the duration of 20 (twenty) years. This means, that Indonesian participants may only buy twenty percent of total capital in the companies with foreign capital investment of above fifty million United States Dollar.

The regulation on divestment in the Government Regulation Number 17 of 1992 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment has limited the capability of national participants to take over foreign companies, the regulation apparently gives special treatment to the foreign investors, taking into account that this regulation is protecting foreign investors with huge funds, to keep them invest their capital in Indonesia.

The issuance of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment which has replaced the Law Number 17 of 1992 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment is considered as more lenient to the national interest and it does not show selective manner in cutting the foreign investors who invest their capital in Indonesia.

The nationality nature in the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment is showing selective manner in its several articles containing various policies. For instance, its Article 4 Paragraph (2) which briefly explains the requirement for the foreigners to hold the minimum ownership of US$ 50,000,000.00 (fifty million United States Dollar) in the capital investment, within the duration of 20 years, whereas no lesser than 51% (fifty one percent) from the paid-up capital of the company is obliged to be sold or transferred to Indonesian subjects.[12]

Besides, the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment has added some provisions to the foreign companies fully incorporated by capital investment from foreign subjects with the minimum paid-up capital of US$ 2,000,000.00 (two million United States Dollar), within the duration of 20 (twenty) years as of the companies come into production, whereas no lesser than 51% (fifty one percent) from the paid-up capital of the company is obliged to be sold to Indonesian subjects.[13]

The spirit of nationality in the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment led the government to require the foreign investors to just hold their shares within pre-determined amount of time before they are obliged to do divestment. It is different with the Government Regulation Number 20 of 1994 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment. After been running for a year, the spirit of nationality is requiring the foreign investors to divest their shares up to 51% to Indonesian participants within the duration of 20 years, however in fact, this does not change the status of the company. Article 7 Paragraph (2) of the Government Regulation Number 20 of 1994 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment explains that mere transfer of shares does not change the status of the company, this means that the ownership of the company is still fall under the power of the foreign investors who inject their capital in Indonesia.

The inconsistency of requirements in the nominal amount of shares and duration of allotted time for the divestment in the Government Regulation Number 17 of 1992, Number 50 of 1993, and Number 20 of 1994, all concerning Ownership of Shares in the Companies Established by Foreign Capital Investment are describing the dependency of government to the political condition and situation to the incumbent reign at respective time in drafting the regulations, and thus, this raise distrust from the foreign investors in doing their business and inject their capital in Indonesia.

Besides, those Government Regulations are in contrary with the higher hierarchy of law as referred in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment.

“The said company in the article 3, which capital is all deriving from foreign subjects, has the obligation to give opportunity to the domestic capital to effectively participate therein, after certain duration of time and in accordance to the balance determined by the Government.”[14]

The word “which capital is all” in the said phrase is referring to the requirements for the foreign capital investment companies to also divest capital other than the foreign investment made over the joint capital between the foreign and domestic capital as regulated in the Government Regulation Number 17 of 1992, Number 50 of 1993 and Number 20 of 1994, all concerning Ownership of Shares in the Companies Established by Foreign Capital Investment.

Provisions in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment, particularly in the wordings “which capital is all” may be interpreted as the chance for foreign subjects investing their capital in Indonesia to supersede the requirements made by the government, taking into account that there is a principle of law that higher hierarchy of law may supersede other laws below it (Lex Superior Derogat Legi Inferior Principle) and according to the order, the hierarchy of rules and regulations in Indonesia according to the provisions in the Law No. 12 of 2011 is: The 1945 Constitution of the Republic of Indonesia, Resolution of People’s Consultative Assembly, Law/Government Regulation in lieu of Law, Government Regulation, Presidential Regulation, Provincial Regulation and Regency/City Regulation.

The chance for foreign capital investors to supersede several Government Regulations as said, does not applicable for those subjected to more specific provisions in the mineral and coal sector. It is to be noted that the foreign subjects investing in the mineral and coal sectors also have the obligation to divest their shares, and this applied to legal entity, it is required for them to have business entity in the form of legal entity in order to invest their capital in that sector.

The Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment explains that companies in the form of Indonesian legal entity has close connection to the mining companies as referred to in the Article 12 Paragraph (1) of the Law Number 11 of 1967 concerning the Main Principles of Mining. It is explained therein that the power to conduct mining for the purpose of doing business in the field of extractive materials may be given to, among others, private legal entity established according to Indonesian laws and domiciled in Indonesia by proxy.

Mining business as regulated in the Article 3 of the Law Number 11 of 1967 concerning the Main Principles of Mining may be permitted by the Minister through proxy power to mining. This may be given to Cooperatives and also to private legal entities domiciled in Indonesia. Contract of Work made between the Government and foreign Investors are the manifestation of mandate from the proxy power to Mining. The State receives this mandate from its people, to do business on its natural resources, even in case it is managed by foreign subjects, thus there is agreement made by the State to regulate this matter.

The Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor (hereinafter referred to as “Presidential Decision Number 49 of 1981) is regulating the requirements on the partnership agreement between the coal mining companies as the original holder of the Proxy Power to Mining and the private parties as contractor, for the sake of doing mining business for 30 (thirty) years.

Towards the Contract of Work, there are several imposed obligations to the contractor, namely:

1. Contractor is obliged to hand over at least 13.5% (thirteen point five percent) of its coal production to the Coal Mining State Owned- Enterprise in natural form. This submission is the substitute of customs supposed to be paid in exchange of exploration/exploitation.[15]
2. The obligation of Contractor to pay taxes and levies to the Government are as follow: During the first 10 (ten) years as of the company come into production, the Contractor is imposed with company tax with the rate of as much as 35% (thirty five percent) from the taxable profit and starting from the 11^th (eleventh) year onward, the Contractor shall be imposed with fixed company tax of as much as 45% (forty five percent) from the taxable profit, Local Development Customs (IPEDA), regional taxes and other customs that have obtained approval from the Central Government, general administration Customs for certain facilities or services given by the Government, Sales Tax, Duty Stamp Customs over loan agreement, excise on tobacco and liquor.[16]
3. Contractor shall be obliged to submit tax over interest, dividend royalty (PPDR) and income taxes of its employee to the Government, the Contractor is also obliged to pay certain amount of fixed customs according to the total area of its mining.[17]
4. Foreign contractor who invest capital must be in the form of legal entity incorporated based on Indonesian law and domiciled in Indonesia.[18]
5. Contractor is obliged to offer its shares to the Government or Indonesian Citizen, after 4 (four) years since the company come into production, hence at the end of the 10^th (tenth) year after the production has been started, at least 51% (fifty one percent) of its shares has been offered and bought by Indonesian subjects.[19]
6. Contractor is obliged to prioritize the use of domestic production, domestic manpower, and services from Indonesia, as well as to take into account the policies from Indonesian Government in the Regional development within its business.[20]

The obligation for contractor to offer its shares to Indonesian participants, 4 (four) years after it has started the production phase, is an obligation of divestment against its foreign shares in the mineral and coal sector, particularly applied to the contractor holding Contract of Work.

Presidential Decision Number 21 of 1993 concerning the Main provisions of the Partnership Agreement in the Coal Mining Business between Public Company (PERSERO) PT Tambang Batubara Bukit Asam and Contractor Company, (hereinafter referred to as “Presidential Decision Number 21 of 1993”). According to the Presidential Decision Number 21 of 1993, PT Tambang Batubara Bukit Asam as the holder of Proxy Power of Mining was holding an agreement with a contractor to conduct mining business of extractive coal.

In the Presidential Decision Number 21 of 1993, the provisions on the inclusion and development of national interest in the coal mining business is regulated under Article 8 and Article 9. In Article 8 Paragraph (2) it is regulated that contractor is obliged to offer its shares to Indonesian Participants, either the government, business entities, or Indonesian citizens, in accordance with the related provisions in the field of capital investment. This provision has a downside, it does not regulate on the exact percentage and required duration for the transfer/divestment of the shares as Presidential Decision Number 49 of 1981 does, then, in this provision, the contractor obligation is only as far as offering its shares to be divested from its ownership.

Presidential Decision Number 75 of 1996 concerning the Main Principles of Agreement in the Coal Mining Business (hereinafter referred to as the “Presidential Decision Number 75 of 1996”) also has divestment provision in its sub-chapter of inclusion and development of national interest. In its Article 6, it is briefly explained that in order to make capital investment, Private Contractor must incorporate a legal entity based on Indonesian law, and if this Private Contractor is foreign subject, it must ascertain that its capital is not fully deriving from foreign sources, in case otherwise, then it must sell part of its shares to Indonesian citizens and/or legal entity, in accordance with the applicable rules and regulations.

The advantage from Presidential Decision Number 75 of 1996 is in the obligation for private contractor to sell part of its shares, however on the downside, this provision is only applied to fully-owned foreign companies, which shares are all held by either foreign citizens and/or legal entity, it shall not be applicable to foreign companies incorporated with joint funding between domestic and foreign capital, even though the business in the mining sector in Indonesia is dominated by joint venture companies. Other downside in the Presidential Decision Number 75 of 1996 is the absence of provisions regarding the number of shares and duration of time for the divestment.

The inconsistency in the Presidential Decision to determine the object obliged to be divested, the number of shares and the duration of time, is quite similar to what happened in the Government Regulation. This is the outcome from the absence of detailed and firmed provisions particularly towards the divestment, in the Law concerning Foreign Capital Investment and Law concerning Mineral and Coal Mining during the period of 1967. The incumbent reign of government has a broad chance to take over the ownership of foreign capital, however on the other hand, the uncertainty coming from the regulations in the receiving country of the foreign capital is declining the desire from the foreign subjects to invest their capital in Indonesia.

• Analysis on the Divestment Regulation for the Foreign Shares in Indonesian National Law After 2009.

The divestment/sale of shares in the field of capital investment after 2007 is regulated

under the issuance of Law Number 25 of 2007 concerning Capital Investment (hereinafter referred to as “Law No. 25 of 2007”), which unfortunately does not have specific obligations for the divestment/sale of foreign capital ownership in its articles to give more room of chance for the Indonesian participants. Article 7 of the Law Number 25 of 2007 concerning Capital Investment explains that, the Government shall not conduct any nationalization or take-over of the ownership rights on the capital investment, unless mandated by Law. Here, the government is firmly stated its intention to refrain from taking-over ownership capital in a company. Even though there is a mechanism of capital take-over through divestment/sale of shares to investors either from local or foreign sources.

The act mentioned in the previous paragraph is actually ambiguous and not absolute. It means that Government conduct in refraining from taking-over ownership right over capital investment does not applied entirely to all conditions, this act shall need requirement from the provisions of other Law for the Government to do so, a kind of intention or act that shall limit capital investment  either from foreign or domestic sources.

Further, Article 8 of the Law Number 25 of 2007 concerning Capital Investment runs as follow:

“Capital investors may transfer their assets to the desired parties according to the provisions in the rules and regulations.”

Transfer of share ownership in the Article 8 of the Law Number 25 of 2007 is referring to the authority given to the capital investors to freely manage their shares. Capital investors, either local or foreign subjects may transfer their assets on their own accord as long as it does not infringe the rules and regulations. The transfer as referred here, is intended both to give opportunity to national capital to raise and also to allow the foreign investors to come up with business strategies in the effort to seek the best profit in the receiving country of the capital. Merger, acquisition or divestment are all kind of ways to transfer company asset to other parties. Article 8 of Law No. 25 of 2007 does not explain on how the transfer of shares must be made, this, again, signifies the said downside.

Transfer of shares generally may be made by capital investors through divestment of its shares, as one of its business strategies to seek for profit, then, the divestment may also be made by the government to give the opportunity to national capital to raise, by obliging the foreign investor to divest its capital. Article 112 Paragraph (1) of the Law Number 4 of 2009 concerning Mining, mainly states that after 5 (five) years of production, business entities holding Mining Business Licenses (IUP) and Special Mining Business Licenses, which shares are owned by foreign subjects, must divest its shares to the central Government, regional governments, state-owned enterprises, regional-owned enterprises, or national private business entities.

Law Number 4 of 2009 concerning Mining is the Lex Specialis (specific regulation) from the Law Number 25 of 2007 concerning Capital Investment. Therefore, all capital owners in the mineral and coal sector must also comply to the Law Number 4 of 2009 concerning Mining along with its implementing regulations besides to the Law Number 25 of 2007 concerning Capital Investment.

Government Regulation Number 23 of 2010 concerning Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 23 of 2010”), has finally been amended numerous times. Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 24 of 2012”) has been through several amendment in its divestment regulation, particularly regarding the requirement of larger share ownership for Indonesian participants up to 51%.[21]

Such change has amended the content of Article 97 which stipulated that the holder of Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK) in the sense of foreign capital investment, has the obligation to gradually divest their shares 5 (five) years after coming into production, thus in the tenth year there will be no lesser than 51% (fifty percent) of shares under the ownership of the Indonesian participant. Then the next paragraph is explaining the minimum ownership of Indonesian participant must have each year after the end of fifth year of production, whereas Indonesian participant shall have no lesser than 20% (twenty percent) of shares in the sixth year, 30% (thirty percent) in the seventh year, 37% (thirty seven percent) in the eighth year, 44% (forty four percent) in the ninth year, and 51% (fifty one percent) in the tenth year, from the total number of shares.[22]

Then, in such divestment, the foreign shares must be firstly offered to the central Government, regional governments, state-owned enterprises, and regional-owned enterprises, before to the national private business entities, within the determined period of time and if the offering has not met the requirements, then it must be re-offered the next year.[23] The existence of offering in the next year may give broader opportunity to Indonesian participants and to let them prepare all necessary pre-requisites, either with respect to the capital or human resources.

Two years later, the Government Regulation Number 1 of 2014 concerning the Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 1 of 2014”) has been issued. In the second amendment, there is no discussion regarding the divestment policy, thus in order to seek for divestment regulation, one still must have to see the previous regulation namely the Government Regulation Number 24 of 2012 concerning Implementation of Mineral and Coal Mining Business Activities.

Not long after, in 2017, there was an issuance of the Government Regulation Number 1 of 2017 concerning the Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 1 of 2017”). The government seemed to reduce its effort to give better chance to Indonesian participants in the divestment that has been regulated under the Article 97, it was not due to the annulment of regulation on the number of shares and duration of time required for the divestment, instead it was because of absence of opportunity for Indonesian participants to accept the offer the next year, hence, all Indonesian participants are only getting the chance within the same year and not for the next year.

Government Regulation Number 1 of 2017 has been refined further by the Government Regulation Number 8 of 2018 concerning the Fifth Amendment on the Government Regulation Number 23 of 2010 concerning the Implementation of Mineral and Coal Mining Business Activities. This amendment is more specific to the minister authority in determining the selling price for the coal used in the necessity for domestic interest.

Several Government Regulations related to the divestment in the sector of mineral and coal mining, have the downside of inconsistency and continuous change of number of shares and duration of time required for the divestment, within short range of time. This inconsistency shows the image of the political condition in the government, which may affect foreign investors to refrain from divesting their shares in time, and may become one of the factors impeding the divestment of foreign shares in the sector of mineral and coal mining to Indonesian participants.

Besides Government Regulations, divestment is also regulated under Minister Regulation Number 27 of 2013 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 27 of 2013”). In this Minister Regulation, there has been clear regulation on the procedure to divest, transfer the ownership of, stipulation of price for shares, and up to the administrative sanctions imposable to the offenders, Besides, the Minister Regulation Number 27 of 2013 has also been regulating procedures and stipulation of price for the divestment of shares applicable for the holder of Contract of Work and Work Agreement for Coal Mining Business.

Four years later, Indonesian Government is issuing the Minister Regulation Number 9 of 2017 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 9 of 2017”). This Minister Regulation has changed the procedures of share divestment and mechanism of price stipulation in the divestment from the previous regulation, it is considered as more detailed and clearer, however on the downside, it no longer obliged the price stipulation to be made by independent appraisal.

A year later, Minister Regulation Number 9 of 2017 then amended again by the issuance of the Minister Regulation Number 43 of 2018 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 43 of 2018”). Minister Regulation Number 43 of 2018 has additional of Article 4a which stipulated that share Divestment may be made through the issuance of new shares and/or transfer or sale of existing shares, either directly or indirectly. Minister Regulation Number 43 of 2018 is adding the easiness for the capital investors to divest their shares.

The large multitude of implementing regulations on divestment may confuse the investors and put them at loss when they invest their capital in certain receiving country. Regulation on divestment towards the holder of Contract of Work and Work Agreement for Coal Mining Business are stipulated in the provisions of the Contract. Article 169 point b of the Law Number 4 of 2009 concerning Mining explains that provisions stipulated in the articles of Contract of Work and Work Agreement for Coal Mining Business which have been existed before the Law Number 4 of 2009 concerning Mining entered into force, must be adjusted no later than 1 (one) year as of the enactment of the Law Number 4 of 2009 concerning Mining unless on the matter regarding state revenue.

Article 169 point b of the Law Number 4 of 2009 concerning Mining mandated that the provisions in either Contract of Work or Work Agreement for Coal Mining Business must be adjusted no later than one year after the Law Number 4 of 2009 concerning Mining has been issued. The downside of this adjustment as referred in the said article is the absence of detailed requirements on what are the aspects that must be adjusted and with respect to the divestment, there is no explanation on how much is the quantity of shares that must be divested from the foreign capital by the holder of Contract of Work or Work Agreement for Coal Mining Business to the Indonesian participants.

With regards to Contract of Work or Work Agreement for Coal Mining Business, Article 169 point b of the Law Number 4 of 2009 concerning Mining is clearly stating that Contract of Work shall be in force until its expiration. This provision is in contrary to the said mandate of this article.

There are several provisions necessary in the drafting of a contract, one of which is related to Divestment, nonetheless the obligation to adjust contract is in contrary to other responsibility to enact a contract up to its expiration. This shows the weak implementation of adjustment to the contract, one of which is related to the Divestment in the mining law in Indonesia and it also manifest the inconsistency and irresolute attitude from the government against the mineral and coal businessmen in obliging them to divest their shares to the Indonesian participants.

PT Freeport Indonesia and PT Newmont Nusa Tenggara are mining companies which entered Indonesia through Contract of Work. The divestment of the two companies are regulated under contracts made between the Indonesian Government and the Contractor of the mining business, either PT Newmont or PT Freeport. The number of shares obliged to be divested to Indonesian participants are varied, depends on the contract made by the respective mining company in Indonesia. Article 1338 of the Indonesian Civil Code of Conduct has regulated that all agreement made in valid manner shall be applicable as the law for the concluding parties.

Satjipto Raharjo explains on how the law should have been made, first, the style is supposedly firm and simple, second, the terms chosen are supposedly having absolute character instead of relative character, hence it will constrict possibilities for multi-interpretation or hypothetical interpretation, fourth, it is supposedly far from complicated, since it is made for everyone, do not immerse people in logical problems, it only need to merely reachable for common reasoning, fifth, main problems must not be biased with exceptions, limitations or modifications, unless it is utterly necessary, six, better to refrain from using argumentative reasoning, it is very dangerous to give detailed reason on regulated matters, since it opens the door to argumentation,  seventh, all of those matters are supposedly put into thorough consideration, no need to be confused on the thoughts and sense of common justice or how things are naturally going, since a weak, unnecessary, and unfair type of law will cause collapse to the whole system of rules and regulations and undermine the prestige of a state.[24]

With respect to the Article 169 point a and Article 169 point b of the Law Number 4 of 2009 concerning Mining, the government are not supposedly choosing terms with absolute character, the absence of different interpretation or limitation to the main problems elaborated is biased by the existence of other articles, or in other words, all of such contents are supposedly put into thoughts, considered, and reviewed before being enacted, to prevent confusion from the foreign investors who divest their shares in Indonesia.

Then for the mineral and coal mining business in Indonesia after 2009, there is no requirement of contract of work, instead, it has licensing system, divestment in contract of work is complying to the provisions made between Indonesian government with the contractor holding the mineral and coal mining business in Indonesia, which have varying number of offered shares. Common people in Indonesia view that mining businesses are no longer in need of contract of work, it will need licenses instead, thus the people consider that the Indonesian government is uncapable of exercising economical sovereign against the foreign investors who invest their capital in Indonesia.

Mochtar Kusumaatmadja is also explaining that the law is functioned to generate order and justice. Public order may be attained if the law is giving certainty on why it is created.[25] In connection to the business world, order in the field of divestment may be attained if there is certainty on the purpose of the creation of divestment against the foreign capital investment in the mineral and coal mining sector in Indonesia, as stipulated in the rules and regulations.

This function of law to guarantee order and discipline is utterly important, to the extent that some people refers this function as the purpose of law. The purpose meant here, is the preserved and guaranteed condition of order (certainty) and discipline. Without order and discipline, it is impossible to have reasonable life. No person can do business and develop his talent without the existence of both certainty and order.[26]

Conclusion

There has been no rules and regulations specifically regulate divestment of foreign shares in Indonesia yet. Regulations on the divestment are scattered in various applicable rules and regulations either in capital investment or mineral or coal mining. Regulation on divestment of foreign capital in Indonesia has been started since the foreign capital investment entered Indonesia in 1967. In 1967, divestment is only regulated under foreign capital investment and there is no other regulation in the mining sector. It is different with 2009, divestment regulation is clearly elaborated in the Law Number 4 of 2009 concerning Mining as well as its implementing regulations. Divestment regulations after 1967 up to after 2009 in Indonesia are not consistent and may be changing within faster duration of time, some might need lesser than one year, this may put the foreign investors at lost and declining their interest to inject its capital in Indonesia. Aside from inconsistent, divestment regulations in Indonesia are also absence of details against the adjustment referred in the Article 169 point b of the Law Number 4 of 2009 concerning Mining. Divestment regulations for foreign shares in Indonesia, does not only applied to the foreign investors holding the licenses, it is also applicable to the holder of the Contract of Work/Agreement. The total number of shares obliged to be divested by the holder of Contract of Work/Agreement and the different number of divestment of shares in each company shall be regulated in the contract. Divestment regulations for foreign shares in Indonesia exists in the Law and its implementing regulations, however, it is also regulated under the Contract of Work made between the government of Indonesia and mining business Contractor in Indonesia

References

Law Number 4 of 2009 concerning Mining

Law Number 11 of 1967 concerning Main Provisions of Mining

Law Number 1 of 1967 concerning Foreign Capital Investment

Law Number 25 of 2007 concerning Capital Investment

Government Regulation Number 23 Of 2010 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 24 Of 2012 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 1 Of 2014 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 1 Of 2017 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor.

Department of Energy and Mineral Resources of the Republic of Indonesia, Press Release Number 23/HUMAS DESDM/2009, with regards to Arbitration Award concerning Divestment of Shares of PT Newmont Nusa Tenggara.

Erni Yoesry,  “Divestasi PT. Freeport Indonesia”, Jurnal Hukum & Pembangunan 49 No. 1 (2019).

Jeef Madura, Introduction to Business, Fourth Edition, Thomson Higher Education, USA, 2007.

Mochtar Kusumaatmadja dan Arief Sidharta, Pengantar Ilmu Hukum Suatu Pengenalan Pertama Ruang lingkup belakunya Ilmu Hukum, Alumni, Bandung, 2000.

Nanik Trihastuti, Hukum Kontrak Karya Pola Kerjasama Pengusaha Pertambangan Indonesia, Setara Press, Malang, 2013.

Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  2013.

Salim HS dan Erlies Septiana Nurbani, Edisi Revisi Hukum Divestasi di Indonesia Pasca Putusan Mahkamah Konstitusi RI Number 2/SKLN-X/2012, PT Raja Grafindo Persada, Jakarta, 2013.

Satjipto Rahardjo, Ilmu Hukum, PT Citra Aditya Bakti, Semarang, 2000.

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[1] See Article 112 of the Law Number 4 of 2009 concerning Mining

[2] See Explanation in the Law Number 4 of 2009 concerning Mining

[3] Government Regulation Number 23 Of 2010 concerning Implementation of Mineral and Coal Mining Business Activities.

[4] Tempo, Sengketa Churcihll Mining vs Pemerintah, https://bisnis.tempo.co/read/412812/sengketa-churchill-vs-pemerintah-masuk-arbitrase.

[5]Erni Yoesry,  “Divestasi PT. Freeport Indonesia”, Jurnal Hukum & Pembangunan 49 No. 1 (2019): 153-179

[6]Department of Energy and Mineral Resources of the Republic of Indonesia, Press Release Number 23/HUMAS DESDM/2009, with regards to Arbitration Award concerning Divestment of Shares of PT Newmont Nusa Tenggara.

[7]Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  (2013), p. 1

[8]Nanik Trihastuti, Hukum Kontrak Karya Pola Kerjasama Pengusaha Pertambangan Indonesia, Setara Press, Malang, (2013), p. 3.

[9] Salim HS dan Erlies Septiana Nurbani, Edisi Revisi Hukum Divestasi di Indonesia Pasca Putusan Mahkamah Konstitusi RI Number 2/SKLN-X/2012, PT. Raja Grafindo Persada, Jakarta, (2013),  p 120.

[10] “A divestiture is the sale of an existing business by a firm. It is the reverse of investing in new assets”. Terdapat dalam Jeef Madura, Introduction to Business, Fourth Edition, Thomson Higher Education, USA, ( 2007), p. 656

[11] That in that regard, the principle to use self-capability as well as self-eligibility as the ground of development must not raise reticent to utilize potential of capital, technologies, and skills available from abroad, as long as all of them are truly dedicated for the interest of people’s economy without resulting into dependency to external support, this is contained in the Consideration of point e of the Law Number 1 of 1967 concerning Foreign Capital Investment

[12] See Article 4 Paragraph (2) of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

[13] See Article 5 Paragraph (2) of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

[14] Article  27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment

[15] See Article 2 of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[16] See Article 4 Paragraph (1) of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[17] See Article 4 Paragraph (2) and Paragraph (3) of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[18] See Article 12 Paragraph (1)  of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[19] See Article 12 Paragraph (3)  and in connection with Article 12 Paragraph (4) of the Presidential Decision Number 49 Of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[20] See Article 13 of the Presidential Decision Number 49 Of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[21] Article 97 Paragraph (1) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business

[22] See Article 97 Paragraph (2) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities

[23] See Article 97 Paragraph (3)-(8) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities

[24] Satjipto Rahardjo, Ilmu Hukum, PT Citra Aditya Bakti, Semarang, (2000), p. 180

[25]Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  (2013), p. 1

[26] Mochtar Kusumaatmadja dan Arief Sidharta, Pengantar Ilmu Hukum Suatu Pengenalan Pertama Ruang lingkup belakunya Ilmu Hukum, Alumni, Bandung, (2000), p. 50

Abstract

The mandate from the Article 112 of the Law Number 4 of 2009 concerning Mining essentially oblige foreign investor with share ownership of more than 51% to divest his shares to Indonesian Participants. Foreign investors in the mineral and coal mining sector in Indonesia, such as in case of PT Freeport Indonesia Company, PT Newmont Nusa Tenggara and Churchill Mining, are not running their obligation to divest shares in a good manner. Several divestment cases occurred in Indonesia shows that the divestment regulation cannot provide order to the public. On the other hand, despite that the rules on divestment are not specifically regulated, however its provision is scattered in various rules and regulations in the divestment that has close connection with Investment. The initial penetration of foreign direct investment in Indonesia referred back to the juridical basis as of 1967, it is necessary to conduct further analysis on the regulation to understand the fault at law in arranging the divestment regulation in Indonesia currently.

Keyword: Divestment, Foreign, Mining, Regulation, Indonesia

Introduction

Law Number 4 of 2009 concerning Mining is the amendment made to the law in the mining business in Indonesia, it replaces the Law Number 11 of 1967 concerning Main Provisions of Mining which is considered as no longer appropriate to cover the necessity of Indonesia as a nation today.[1] The Law Number 4 of 2009 concerning Mining contains main ideas of handing over the control on the Mineral and coal as non-renewable resources to the state and to give the authority to develop and effectuate them to the central and regional Government along with the business actors. Then, the Government will further give opportunity to the business entities in the form of Indonesian legal entity, cooperatives, individual businesses, or local society to work on the mineral and coal according to the licenses they have obtained, in correspondence with the regional autonomy, given by either the central and/or regional Government based on their respective authority.[2]

The Indonesian government is putting endeavor to be in favor Indonesian participants in giving the said opportunity through the enactment of Article 112 of the Law Number 4 of 2009 concerning Mining, which oblige the foreign investors to divest their shares to Indonesian participants. The precise wordings of the said Article is that “After 5 (five) years of operation, business entities holding Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK), which shares are owned by foreign subject(s), have the obligation to divest its shares either to the central Government, regional governments, state-owned enterprises, regional-owned enterprises, or national private business entities.”

Divestment of shares involve offers of total foreign shares to be sold to Indonesian participants.[3] In the mineral and coal sector, divestment of shares in Indonesia has never been running well, for instance in the case of Churcihll Mining[4], PT Freeport Indonesia,[5] and PT Newmont Nusa Tenggara.[6] Even though here, the law should have functioned as the tool to create order and justice.[7] In connection to the Divestment rules in Indonesia, it is apparent that the function to create order to the society has not yet been achieved.

Mining works are not easy to put into realization, since the activities in this sector need huge investments, high technologies, good managerial skills, as well as long duration of time to produce excellent mining materials.[8] There has been no specific rules regulating the divestment, however, the provisions are scattered into various rules and regulations.[9]

Divestment has close connection with the Investment.[10] Capital investment, or in other word, investment. The entrance of foreign direct investment in Indonesia is inseparable with the juridical ground rules of 1967 emerging after the independence of Indonesia. Regulation on the capital investment and other regulations are possible to come into existence with the balance deriving from several provision rules of divestment. Some provisions for the divestment in the national law of Indonesia is interesting to be taken as research, in order to seek way out from the vacuum of and/or fault at Divestment rules in Indonesia particularly in the mineral and coal sector. This article is using legal analysis approach against the rules and regulations precisely with respect to the Divestment in Indonesia.

1. Analysis on the Divestment of Foreign Shares in the Indonesian National Law After 1967.

Divestment has a close connection with the investment/capital investment made by the foreigners to certain field of business. Along with investment/capital investment there will be decrease of capital/divestment to the business. In order to develop the economy, one of the ways taken by the Indonesian Government is to invest capital either using domestic or foreign sources. The entrance of foreign capital in Indonesia after the independence was dating back to 1967, and it has tight correlation with the divestment regulation.

It is a given that the Indonesian Government has no intention to be dependent to the foreign capital it has received. This intention elaborated in the basis of considerations in the drafting of the Law Number 1 of 1967 concerning the Foreign Capital Investment.[11] Then, the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment briefly explains that companies fully established by foreign capital has the obligation to give participation for domestic capital after certain duration of time. This indirectly means that foreign investor must reduce its number of shares to be owned by Indonesian subjects.

The intention of this regulation in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment as affirmed in its Paragraph (2) is to encourage the foreign investors to divest their shares to enable the domestic investors to participate in their companies.

Divestment as referred in the Article 27 Paragraph (1) and (2) of the Law Number 1 of 1967 concerning the Foreign Capital Investment does not determine the minimum number of shares that must be sold. The absence of this regulation raise interpretation among the foreign investors that they are permitted to sell as least as possible. Besides the number of shares, the Law Number 1 of 1967 concerning the Foreign Capital Investment also has no elaboration on the duration of time for the performance of this obligation, whether at the time they obtain the Mining Business License (IUP) or at the time this license is expired.

The multi-interpretation on the regulation regarding the number of shares obliged to be divested by the foreign investors and the absence of duration of time for the divestment in the rules and regulations, particularly in the Law Number 1 of 1967 concerning the Foreign Capital Investment, will put domestic parties at lost as the receiving country for the capital. However, this does not applicable in absolute manner.

Article 3 Paragraph (2) and (3) of the Government Regulation Number 17 of 1992 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment, explained briefly that the capital for Indonesian participants might be increased to at least 20% (twenty percent) from the whole value of capital in the shares of the company within 10 (ten) years since the company starts its production. Then the capital in the number of shares for the Indonesian participants might be enhanced to be at least 51% (fifty one percent) from the whole value of capital in the shares of the company within the duration of 20 (twenty) years as of the company come into production. Such number of shares and duration applied to foreign capital investment companies with the capital value no lesser than US$ 250,000.00 (two hundred fifty thousand United States Dollar).

Besides the number and duration of the obligation, the foreign investors must at least own a capital of US$ 50,000,000.00 (fifty million United States Dollar), meanwhile the Indonesian participants may only buy ownership capital of 20% (twenty percent) against the whole capital of the company within the duration of 20 (twenty) years. This means, that Indonesian participants may only buy twenty percent of total capital in the companies with foreign capital investment of above fifty million United States Dollar.

The regulation on divestment in the Government Regulation Number 17 of 1992 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment has limited the capability of national participants to take over foreign companies, the regulation apparently gives special treatment to the foreign investors, taking into account that this regulation is protecting foreign investors with huge funds, to keep them invest their capital in Indonesia.

The issuance of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment which has replaced the Law Number 17 of 1992 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment is considered as more lenient to the national interest and it does not show selective manner in cutting the foreign investors who invest their capital in Indonesia.

The nationality nature in the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment is showing selective manner in its several articles containing various policies. For instance, its Article 4 Paragraph (2) which briefly explains the requirement for the foreigners to hold the minimum ownership of US$ 50,000,000.00 (fifty million United States Dollar) in the capital investment, within the duration of 20 years, whereas no lesser than 51% (fifty one percent) from the paid-up capital of the company is obliged to be sold or transferred to Indonesian subjects.[12]

Besides, the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment has added some provisions to the foreign companies fully incorporated by capital investment from foreign subjects with the minimum paid-up capital of US$ 2,000,000.00 (two million United States Dollar), within the duration of 20 (twenty) years as of the companies come into production, whereas no lesser than 51% (fifty one percent) from the paid-up capital of the company is obliged to be sold to Indonesian subjects.[13]

The spirit of nationality in the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment led the government to require the foreign investors to just hold their shares within pre-determined amount of time before they are obliged to do divestment. It is different with the Government Regulation Number 20 of 1994 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment. After been running for a year, the spirit of nationality is requiring the foreign investors to divest their shares up to 51% to Indonesian participants within the duration of 20 years, however in fact, this does not change the status of the company. Article 7 Paragraph (2) of the Government Regulation Number 20 of 1994 concerning the Ownership of Shares in the Companies Established by Foreign Capital Investment explains that mere transfer of shares does not change the status of the company, this means that the ownership of the company is still fall under the power of the foreign investors who inject their capital in Indonesia.

The inconsistency of requirements in the nominal amount of shares and duration of allotted time for the divestment in the Government Regulation Number 17 of 1992, Number 50 of 1993, and Number 20 of 1994, all concerning Ownership of Shares in the Companies Established by Foreign Capital Investment are describing the dependency of government to the political condition and situation to the incumbent reign at respective time in drafting the regulations, and thus, this raise distrust from the foreign investors in doing their business and inject their capital in Indonesia.

Besides, those Government Regulations are in contrary with the higher hierarchy of law as referred in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment.

“The said company in the article 3, which capital is all deriving from foreign subjects, has the obligation to give opportunity to the domestic capital to effectively participate therein, after certain duration of time and in accordance to the balance determined by the Government.”[14]

The word “which capital is all” in the said phrase is referring to the requirements for the foreign capital investment companies to also divest capital other than the foreign investment made over the joint capital between the foreign and domestic capital as regulated in the Government Regulation Number 17 of 1992, Number 50 of 1993 and Number 20 of 1994, all concerning Ownership of Shares in the Companies Established by Foreign Capital Investment.

Provisions in the Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment, particularly in the wordings “which capital is all” may be interpreted as the chance for foreign subjects investing their capital in Indonesia to supersede the requirements made by the government, taking into account that there is a principle of law that higher hierarchy of law may supersede other laws below it (Lex Superior Derogat Legi Inferior Principle) and according to the order, the hierarchy of rules and regulations in Indonesia according to the provisions in the Law No. 12 of 2011 is: The 1945 Constitution of the Republic of Indonesia, Resolution of People’s Consultative Assembly, Law/Government Regulation in lieu of Law, Government Regulation, Presidential Regulation, Provincial Regulation and Regency/City Regulation.

The chance for foreign capital investors to supersede several Government Regulations as said, does not applicable for those subjected to more specific provisions in the mineral and coal sector. It is to be noted that the foreign subjects investing in the mineral and coal sectors also have the obligation to divest their shares, and this applied to legal entity, it is required for them to have business entity in the form of legal entity in order to invest their capital in that sector.

The Article 27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment explains that companies in the form of Indonesian legal entity has close connection to the mining companies as referred to in the Article 12 Paragraph (1) of the Law Number 11 of 1967 concerning the Main Principles of Mining. It is explained therein that the power to conduct mining for the purpose of doing business in the field of extractive materials may be given to, among others, private legal entity established according to Indonesian laws and domiciled in Indonesia by proxy.

Mining business as regulated in the Article 3 of the Law Number 11 of 1967 concerning the Main Principles of Mining may be permitted by the Minister through proxy power to mining. This may be given to Cooperatives and also to private legal entities domiciled in Indonesia. Contract of Work made between the Government and foreign Investors are the manifestation of mandate from the proxy power to Mining. The State receives this mandate from its people, to do business on its natural resources, even in case it is managed by foreign subjects, thus there is agreement made by the State to regulate this matter.

The Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor (hereinafter referred to as “Presidential Decision Number 49 of 1981) is regulating the requirements on the partnership agreement between the coal mining companies as the original holder of the Proxy Power to Mining and the private parties as contractor, for the sake of doing mining business for 30 (thirty) years.

Towards the Contract of Work, there are several imposed obligations to the contractor, namely:

1. Contractor is obliged to hand over at least 13.5% (thirteen point five percent) of its coal production to the Coal Mining State Owned- Enterprise in natural form. This submission is the substitute of customs supposed to be paid in exchange of exploration/exploitation.[15]
2. The obligation of Contractor to pay taxes and levies to the Government are as follow: During the first 10 (ten) years as of the company come into production, the Contractor is imposed with company tax with the rate of as much as 35% (thirty five percent) from the taxable profit and starting from the 11^th (eleventh) year onward, the Contractor shall be imposed with fixed company tax of as much as 45% (forty five percent) from the taxable profit, Local Development Customs (IPEDA), regional taxes and other customs that have obtained approval from the Central Government, general administration Customs for certain facilities or services given by the Government, Sales Tax, Duty Stamp Customs over loan agreement, excise on tobacco and liquor.[16]
3. Contractor shall be obliged to submit tax over interest, dividend royalty (PPDR) and income taxes of its employee to the Government, the Contractor is also obliged to pay certain amount of fixed customs according to the total area of its mining.[17]
4. Foreign contractor who invest capital must be in the form of legal entity incorporated based on Indonesian law and domiciled in Indonesia.[18]
5. Contractor is obliged to offer its shares to the Government or Indonesian Citizen, after 4 (four) years since the company come into production, hence at the end of the 10^th (tenth) year after the production has been started, at least 51% (fifty one percent) of its shares has been offered and bought by Indonesian subjects.[19]
6. Contractor is obliged to prioritize the use of domestic production, domestic manpower, and services from Indonesia, as well as to take into account the policies from Indonesian Government in the Regional development within its business.[20]

The obligation for contractor to offer its shares to Indonesian participants, 4 (four) years after it has started the production phase, is an obligation of divestment against its foreign shares in the mineral and coal sector, particularly applied to the contractor holding Contract of Work.

Presidential Decision Number 21 of 1993 concerning the Main provisions of the Partnership Agreement in the Coal Mining Business between Public Company (PERSERO) PT Tambang Batubara Bukit Asam and Contractor Company, (hereinafter referred to as “Presidential Decision Number 21 of 1993”). According to the Presidential Decision Number 21 of 1993, PT Tambang Batubara Bukit Asam as the holder of Proxy Power of Mining was holding an agreement with a contractor to conduct mining business of extractive coal.

In the Presidential Decision Number 21 of 1993, the provisions on the inclusion and development of national interest in the coal mining business is regulated under Article 8 and Article 9. In Article 8 Paragraph (2) it is regulated that contractor is obliged to offer its shares to Indonesian Participants, either the government, business entities, or Indonesian citizens, in accordance with the related provisions in the field of capital investment. This provision has a downside, it does not regulate on the exact percentage and required duration for the transfer/divestment of the shares as Presidential Decision Number 49 of 1981 does, then, in this provision, the contractor obligation is only as far as offering its shares to be divested from its ownership.

Presidential Decision Number 75 of 1996 concerning the Main Principles of Agreement in the Coal Mining Business (hereinafter referred to as the “Presidential Decision Number 75 of 1996”) also has divestment provision in its sub-chapter of inclusion and development of national interest. In its Article 6, it is briefly explained that in order to make capital investment, Private Contractor must incorporate a legal entity based on Indonesian law, and if this Private Contractor is foreign subject, it must ascertain that its capital is not fully deriving from foreign sources, in case otherwise, then it must sell part of its shares to Indonesian citizens and/or legal entity, in accordance with the applicable rules and regulations.

The advantage from Presidential Decision Number 75 of 1996 is in the obligation for private contractor to sell part of its shares, however on the downside, this provision is only applied to fully-owned foreign companies, which shares are all held by either foreign citizens and/or legal entity, it shall not be applicable to foreign companies incorporated with joint funding between domestic and foreign capital, even though the business in the mining sector in Indonesia is dominated by joint venture companies. Other downside in the Presidential Decision Number 75 of 1996 is the absence of provisions regarding the number of shares and duration of time for the divestment.

The inconsistency in the Presidential Decision to determine the object obliged to be divested, the number of shares and the duration of time, is quite similar to what happened in the Government Regulation. This is the outcome from the absence of detailed and firmed provisions particularly towards the divestment, in the Law concerning Foreign Capital Investment and Law concerning Mineral and Coal Mining during the period of 1967. The incumbent reign of government has a broad chance to take over the ownership of foreign capital, however on the other hand, the uncertainty coming from the regulations in the receiving country of the foreign capital is declining the desire from the foreign subjects to invest their capital in Indonesia.

• Analysis on the Divestment Regulation for the Foreign Shares in Indonesian National Law After 2009.

The divestment/sale of shares in the field of capital investment after 2007 is regulated

under the issuance of Law Number 25 of 2007 concerning Capital Investment (hereinafter referred to as “Law No. 25 of 2007”), which unfortunately does not have specific obligations for the divestment/sale of foreign capital ownership in its articles to give more room of chance for the Indonesian participants. Article 7 of the Law Number 25 of 2007 concerning Capital Investment explains that, the Government shall not conduct any nationalization or take-over of the ownership rights on the capital investment, unless mandated by Law. Here, the government is firmly stated its intention to refrain from taking-over ownership capital in a company. Even though there is a mechanism of capital take-over through divestment/sale of shares to investors either from local or foreign sources.

The act mentioned in the previous paragraph is actually ambiguous and not absolute. It means that Government conduct in refraining from taking-over ownership right over capital investment does not applied entirely to all conditions, this act shall need requirement from the provisions of other Law for the Government to do so, a kind of intention or act that shall limit capital investment  either from foreign or domestic sources.

Further, Article 8 of the Law Number 25 of 2007 concerning Capital Investment runs as follow:

“Capital investors may transfer their assets to the desired parties according to the provisions in the rules and regulations.”

Transfer of share ownership in the Article 8 of the Law Number 25 of 2007 is referring to the authority given to the capital investors to freely manage their shares. Capital investors, either local or foreign subjects may transfer their assets on their own accord as long as it does not infringe the rules and regulations. The transfer as referred here, is intended both to give opportunity to national capital to raise and also to allow the foreign investors to come up with business strategies in the effort to seek the best profit in the receiving country of the capital. Merger, acquisition or divestment are all kind of ways to transfer company asset to other parties. Article 8 of Law No. 25 of 2007 does not explain on how the transfer of shares must be made, this, again, signifies the said downside.

Transfer of shares generally may be made by capital investors through divestment of its shares, as one of its business strategies to seek for profit, then, the divestment may also be made by the government to give the opportunity to national capital to raise, by obliging the foreign investor to divest its capital. Article 112 Paragraph (1) of the Law Number 4 of 2009 concerning Mining, mainly states that after 5 (five) years of production, business entities holding Mining Business Licenses (IUP) and Special Mining Business Licenses, which shares are owned by foreign subjects, must divest its shares to the central Government, regional governments, state-owned enterprises, regional-owned enterprises, or national private business entities.

Law Number 4 of 2009 concerning Mining is the Lex Specialis (specific regulation) from the Law Number 25 of 2007 concerning Capital Investment. Therefore, all capital owners in the mineral and coal sector must also comply to the Law Number 4 of 2009 concerning Mining along with its implementing regulations besides to the Law Number 25 of 2007 concerning Capital Investment.

Government Regulation Number 23 of 2010 concerning Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 23 of 2010”), has finally been amended numerous times. Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 24 of 2012”) has been through several amendment in its divestment regulation, particularly regarding the requirement of larger share ownership for Indonesian participants up to 51%.[21]

Such change has amended the content of Article 97 which stipulated that the holder of Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK) in the sense of foreign capital investment, has the obligation to gradually divest their shares 5 (five) years after coming into production, thus in the tenth year there will be no lesser than 51% (fifty percent) of shares under the ownership of the Indonesian participant. Then the next paragraph is explaining the minimum ownership of Indonesian participant must have each year after the end of fifth year of production, whereas Indonesian participant shall have no lesser than 20% (twenty percent) of shares in the sixth year, 30% (thirty percent) in the seventh year, 37% (thirty seven percent) in the eighth year, 44% (forty four percent) in the ninth year, and 51% (fifty one percent) in the tenth year, from the total number of shares.[22]

Then, in such divestment, the foreign shares must be firstly offered to the central Government, regional governments, state-owned enterprises, and regional-owned enterprises, before to the national private business entities, within the determined period of time and if the offering has not met the requirements, then it must be re-offered the next year.[23] The existence of offering in the next year may give broader opportunity to Indonesian participants and to let them prepare all necessary pre-requisites, either with respect to the capital or human resources.

Two years later, the Government Regulation Number 1 of 2014 concerning the Implementation of Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 1 of 2014”) has been issued. In the second amendment, there is no discussion regarding the divestment policy, thus in order to seek for divestment regulation, one still must have to see the previous regulation namely the Government Regulation Number 24 of 2012 concerning Implementation of Mineral and Coal Mining Business Activities.

Not long after, in 2017, there was an issuance of the Government Regulation Number 1 of 2017 concerning the Mineral and Coal Mining Business Activities (hereinafter referred to as “PP 1 of 2017”). The government seemed to reduce its effort to give better chance to Indonesian participants in the divestment that has been regulated under the Article 97, it was not due to the annulment of regulation on the number of shares and duration of time required for the divestment, instead it was because of absence of opportunity for Indonesian participants to accept the offer the next year, hence, all Indonesian participants are only getting the chance within the same year and not for the next year.

Government Regulation Number 1 of 2017 has been refined further by the Government Regulation Number 8 of 2018 concerning the Fifth Amendment on the Government Regulation Number 23 of 2010 concerning the Implementation of Mineral and Coal Mining Business Activities. This amendment is more specific to the minister authority in determining the selling price for the coal used in the necessity for domestic interest.

Several Government Regulations related to the divestment in the sector of mineral and coal mining, have the downside of inconsistency and continuous change of number of shares and duration of time required for the divestment, within short range of time. This inconsistency shows the image of the political condition in the government, which may affect foreign investors to refrain from divesting their shares in time, and may become one of the factors impeding the divestment of foreign shares in the sector of mineral and coal mining to Indonesian participants.

Besides Government Regulations, divestment is also regulated under Minister Regulation Number 27 of 2013 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 27 of 2013”). In this Minister Regulation, there has been clear regulation on the procedure to divest, transfer the ownership of, stipulation of price for shares, and up to the administrative sanctions imposable to the offenders, Besides, the Minister Regulation Number 27 of 2013 has also been regulating procedures and stipulation of price for the divestment of shares applicable for the holder of Contract of Work and Work Agreement for Coal Mining Business.

Four years later, Indonesian Government is issuing the Minister Regulation Number 9 of 2017 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 9 of 2017”). This Minister Regulation has changed the procedures of share divestment and mechanism of price stipulation in the divestment from the previous regulation, it is considered as more detailed and clearer, however on the downside, it no longer obliged the price stipulation to be made by independent appraisal.

A year later, Minister Regulation Number 9 of 2017 then amended again by the issuance of the Minister Regulation Number 43 of 2018 concerning Procedure and Stipulation of Price in the Share Divestment for Mineral and coal Mining Business Activities (hereinafter referred to as “Minister Regulation Number 43 of 2018”). Minister Regulation Number 43 of 2018 has additional of Article 4a which stipulated that share Divestment may be made through the issuance of new shares and/or transfer or sale of existing shares, either directly or indirectly. Minister Regulation Number 43 of 2018 is adding the easiness for the capital investors to divest their shares.

The large multitude of implementing regulations on divestment may confuse the investors and put them at loss when they invest their capital in certain receiving country. Regulation on divestment towards the holder of Contract of Work and Work Agreement for Coal Mining Business are stipulated in the provisions of the Contract. Article 169 point b of the Law Number 4 of 2009 concerning Mining explains that provisions stipulated in the articles of Contract of Work and Work Agreement for Coal Mining Business which have been existed before the Law Number 4 of 2009 concerning Mining entered into force, must be adjusted no later than 1 (one) year as of the enactment of the Law Number 4 of 2009 concerning Mining unless on the matter regarding state revenue.

Article 169 point b of the Law Number 4 of 2009 concerning Mining mandated that the provisions in either Contract of Work or Work Agreement for Coal Mining Business must be adjusted no later than one year after the Law Number 4 of 2009 concerning Mining has been issued. The downside of this adjustment as referred in the said article is the absence of detailed requirements on what are the aspects that must be adjusted and with respect to the divestment, there is no explanation on how much is the quantity of shares that must be divested from the foreign capital by the holder of Contract of Work or Work Agreement for Coal Mining Business to the Indonesian participants.

With regards to Contract of Work or Work Agreement for Coal Mining Business, Article 169 point b of the Law Number 4 of 2009 concerning Mining is clearly stating that Contract of Work shall be in force until its expiration. This provision is in contrary to the said mandate of this article.

There are several provisions necessary in the drafting of a contract, one of which is related to Divestment, nonetheless the obligation to adjust contract is in contrary to other responsibility to enact a contract up to its expiration. This shows the weak implementation of adjustment to the contract, one of which is related to the Divestment in the mining law in Indonesia and it also manifest the inconsistency and irresolute attitude from the government against the mineral and coal businessmen in obliging them to divest their shares to the Indonesian participants.

PT Freeport Indonesia and PT Newmont Nusa Tenggara are mining companies which entered Indonesia through Contract of Work. The divestment of the two companies are regulated under contracts made between the Indonesian Government and the Contractor of the mining business, either PT Newmont or PT Freeport. The number of shares obliged to be divested to Indonesian participants are varied, depends on the contract made by the respective mining company in Indonesia. Article 1338 of the Indonesian Civil Code of Conduct has regulated that all agreement made in valid manner shall be applicable as the law for the concluding parties.

Satjipto Raharjo explains on how the law should have been made, first, the style is supposedly firm and simple, second, the terms chosen are supposedly having absolute character instead of relative character, hence it will constrict possibilities for multi-interpretation or hypothetical interpretation, fourth, it is supposedly far from complicated, since it is made for everyone, do not immerse people in logical problems, it only need to merely reachable for common reasoning, fifth, main problems must not be biased with exceptions, limitations or modifications, unless it is utterly necessary, six, better to refrain from using argumentative reasoning, it is very dangerous to give detailed reason on regulated matters, since it opens the door to argumentation,  seventh, all of those matters are supposedly put into thorough consideration, no need to be confused on the thoughts and sense of common justice or how things are naturally going, since a weak, unnecessary, and unfair type of law will cause collapse to the whole system of rules and regulations and undermine the prestige of a state.[24]

With respect to the Article 169 point a and Article 169 point b of the Law Number 4 of 2009 concerning Mining, the government are not supposedly choosing terms with absolute character, the absence of different interpretation or limitation to the main problems elaborated is biased by the existence of other articles, or in other words, all of such contents are supposedly put into thoughts, considered, and reviewed before being enacted, to prevent confusion from the foreign investors who divest their shares in Indonesia.

Then for the mineral and coal mining business in Indonesia after 2009, there is no requirement of contract of work, instead, it has licensing system, divestment in contract of work is complying to the provisions made between Indonesian government with the contractor holding the mineral and coal mining business in Indonesia, which have varying number of offered shares. Common people in Indonesia view that mining businesses are no longer in need of contract of work, it will need licenses instead, thus the people consider that the Indonesian government is uncapable of exercising economical sovereign against the foreign investors who invest their capital in Indonesia.

Mochtar Kusumaatmadja is also explaining that the law is functioned to generate order and justice. Public order may be attained if the law is giving certainty on why it is created.[25] In connection to the business world, order in the field of divestment may be attained if there is certainty on the purpose of the creation of divestment against the foreign capital investment in the mineral and coal mining sector in Indonesia, as stipulated in the rules and regulations.

This function of law to guarantee order and discipline is utterly important, to the extent that some people refers this function as the purpose of law. The purpose meant here, is the preserved and guaranteed condition of order (certainty) and discipline. Without order and discipline, it is impossible to have reasonable life. No person can do business and develop his talent without the existence of both certainty and order.[26]

Conclusion

There has been no rules and regulations specifically regulate divestment of foreign shares in Indonesia yet. Regulations on the divestment are scattered in various applicable rules and regulations either in capital investment or mineral or coal mining. Regulation on divestment of foreign capital in Indonesia has been started since the foreign capital investment entered Indonesia in 1967. In 1967, divestment is only regulated under foreign capital investment and there is no other regulation in the mining sector. It is different with 2009, divestment regulation is clearly elaborated in the Law Number 4 of 2009 concerning Mining as well as its implementing regulations. Divestment regulations after 1967 up to after 2009 in Indonesia are not consistent and may be changing within faster duration of time, some might need lesser than one year, this may put the foreign investors at lost and declining their interest to inject its capital in Indonesia. Aside from inconsistent, divestment regulations in Indonesia are also absence of details against the adjustment referred in the Article 169 point b of the Law Number 4 of 2009 concerning Mining. Divestment regulations for foreign shares in Indonesia, does not only applied to the foreign investors holding the licenses, it is also applicable to the holder of the Contract of Work/Agreement. The total number of shares obliged to be divested by the holder of Contract of Work/Agreement and the different number of divestment of shares in each company shall be regulated in the contract. Divestment regulations for foreign shares in Indonesia exists in the Law and its implementing regulations, however, it is also regulated under the Contract of Work made between the government of Indonesia and mining business Contractor in Indonesia

References

Law Number 4 of 2009 concerning Mining

Law Number 11 of 1967 concerning Main Provisions of Mining

Law Number 1 of 1967 concerning Foreign Capital Investment

Law Number 25 of 2007 concerning Capital Investment

Government Regulation Number 23 Of 2010 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 24 Of 2012 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 1 Of 2014 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 1 Of 2017 concerning Implementation of Mineral and Coal Mining Business Activities.

Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor.

Department of Energy and Mineral Resources of the Republic of Indonesia, Press Release Number 23/HUMAS DESDM/2009, with regards to Arbitration Award concerning Divestment of Shares of PT Newmont Nusa Tenggara.

Erni Yoesry,  “Divestasi PT. Freeport Indonesia”, Jurnal Hukum & Pembangunan 49 No. 1 (2019).

Jeef Madura, Introduction to Business, Fourth Edition, Thomson Higher Education, USA, 2007.

Mochtar Kusumaatmadja dan Arief Sidharta, Pengantar Ilmu Hukum Suatu Pengenalan Pertama Ruang lingkup belakunya Ilmu Hukum, Alumni, Bandung, 2000.

Nanik Trihastuti, Hukum Kontrak Karya Pola Kerjasama Pengusaha Pertambangan Indonesia, Setara Press, Malang, 2013.

Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  2013.

Salim HS dan Erlies Septiana Nurbani, Edisi Revisi Hukum Divestasi di Indonesia Pasca Putusan Mahkamah Konstitusi RI Number 2/SKLN-X/2012, PT Raja Grafindo Persada, Jakarta, 2013.

Satjipto Rahardjo, Ilmu Hukum, PT Citra Aditya Bakti, Semarang, 2000.

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[1] See Article 112 of the Law Number 4 of 2009 concerning Mining

[2] See Explanation in the Law Number 4 of 2009 concerning Mining

[3] Government Regulation Number 23 Of 2010 concerning Implementation of Mineral and Coal Mining Business Activities.

[4] Tempo, Sengketa Churcihll Mining vs Pemerintah, https://bisnis.tempo.co/read/412812/sengketa-churchill-vs-pemerintah-masuk-arbitrase.

[5]Erni Yoesry,  “Divestasi PT. Freeport Indonesia”, Jurnal Hukum & Pembangunan 49 No. 1 (2019): 153-179

[6]Department of Energy and Mineral Resources of the Republic of Indonesia, Press Release Number 23/HUMAS DESDM/2009, with regards to Arbitration Award concerning Divestment of Shares of PT Newmont Nusa Tenggara.

[7]Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  (2013), p. 1

[8]Nanik Trihastuti, Hukum Kontrak Karya Pola Kerjasama Pengusaha Pertambangan Indonesia, Setara Press, Malang, (2013), p. 3.

[9] Salim HS dan Erlies Septiana Nurbani, Edisi Revisi Hukum Divestasi di Indonesia Pasca Putusan Mahkamah Konstitusi RI Number 2/SKLN-X/2012, PT. Raja Grafindo Persada, Jakarta, (2013),  p 120.

[10] “A divestiture is the sale of an existing business by a firm. It is the reverse of investing in new assets”. Terdapat dalam Jeef Madura, Introduction to Business, Fourth Edition, Thomson Higher Education, USA, ( 2007), p. 656

[11] That in that regard, the principle to use self-capability as well as self-eligibility as the ground of development must not raise reticent to utilize potential of capital, technologies, and skills available from abroad, as long as all of them are truly dedicated for the interest of people’s economy without resulting into dependency to external support, this is contained in the Consideration of point e of the Law Number 1 of 1967 concerning Foreign Capital Investment

[12] See Article 4 Paragraph (2) of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

[13] See Article 5 Paragraph (2) of the Government Regulation Number 50 of 1993 concerning Ownership of Shares in the Companies Established by Foreign Capital Investment

[14] Article  27 Paragraph (1) of the Law Number 1 of 1967 concerning Foreign Capital Investment

[15] See Article 2 of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[16] See Article 4 Paragraph (1) of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[17] See Article 4 Paragraph (2) and Paragraph (3) of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[18] See Article 12 Paragraph (1)  of the Presidential Decision Number 49 of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[19] See Article 12 Paragraph (3)  and in connection with Article 12 Paragraph (4) of the Presidential Decision Number 49 Of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[20] See Article 13 of the Presidential Decision Number 49 Of 1981 concerning the main Principles of Partnership Agreement in the Coal Mining Business between Coal Mining State Owner-Enterprise and Private Contractor

[21] Article 97 Paragraph (1) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business

[22] See Article 97 Paragraph (2) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities

[23] See Article 97 Paragraph (3)-(8) of the Government Regulation Number 24 of 2012 concerning the Implementation of Mineral and Coal Mining Business Activities

[24] Satjipto Rahardjo, Ilmu Hukum, PT Citra Aditya Bakti, Semarang, (2000), p. 180

[25]Otje Salman dan Eddy Damian (editor), Konsep-konsep Hukum dalam Pembangunan: Kumpulan Karya Tulis Prof. Dr. Mochtar Kusumaatmadja, SH, LL.M, Alumni, Bandung,  (2013), p. 1

[26] Mochtar Kusumaatmadja dan Arief Sidharta, Pengantar Ilmu Hukum Suatu Pengenalan Pertama Ruang lingkup belakunya Ilmu Hukum, Alumni, Bandung, (2000), p. 50