Reading and observing the development of the current problem of declining investment, which has led to the formation of an omnibus bill, it seems as if we are returning the problems of 25 years ago.
At that time president Soeharto issued Government Regulation (PP) No. 20/1994 concerning Share Ownership in Companies Established in the Framework of Foreign Investment, which was established and enacted on May 19, 1994. As a government regulation it was appropriate if its formation had been carried out to implement a law that delegated authority, according to the provisions Article 5 Paragraph (2) of the 1945 Constitution, which states: "The President shall issue government regulations to implement the law as appropriately as possible."
However, PP No. 20/1994 not only violated a tradition, namely that a PP is only an implementing regulation of the law that orders it, because PP No. 20/1994 was issued to implement several laws at once, namely the Atomic Energy Law, the Press Law, the Foreign Investment Law, the Domestic Investment Law, the Electricity Law, the Telecommunications Law, the Railway Law, the Aviation Law and the Shipping Law.
PP No. 20/1994 also changed the content of some of the laws about what should be closed to foreign capital, namely ports, production, transmission and distribution of electricity to the public, telecommunications, shipping, aviation, drinking water, public railway services, atomic power plants and mass media, which could thereafter be owned by up to 95 percent of foreign capital. Thus, PP No. 20/1994 not only contradicted a number of these laws, but also contradicted Article 33 of the 1945 Constitution.
However, should it be simplified by establishing regulations that are not in line with the legal system and which do not necessarily bring benefits?
The situation at that time might be the same as now, namely that investment in Indonesia would not develop, which might be caused by the many regulations regarding licensing and the several institutions that also handle it. However, should it be simplified by establishing regulations that are not in line with the legal system and which do not necessarily bring benefits?
The formation of statutory regulations in each country highly depends on the system that is adopted by the respective country, which is theoretically distinguished between civil law (as on Continental Europe) and common law (according to the Anglo-Saxon system). The formation of statutory regulations in each country is also bound by the applicable legal system. For Indonesia, the formation of statutory regulations cannot be separated from an attachment to the highest sources of law, Pancasila and the 1945 Constitution, as strengthened by the formulation of Article 1 Paragraph (3) of the 1945 Constitution that states "the State of Indonesia is a state of law".
Since MPR (Peoples Consultative Assembly) Decree No. XX/MPRS/1966, MPR Decree No. III/MPR/2000, Law No. 10/2004 and Law No. 12/2011 concerning the Formation of Statutory Regulations, the legal system in Indonesia has been established in a hierarchical series, from Pancasila and the 1945
Constitution to the statutory regulations at the regional level. Besides that, in Indonesia there is only one existing law, namely regulations issued by the President with the approval of the House of Representatives (DPR) before the amendment of the 1945 Constitution – or those issued by the DPR with the agreement of the President (after the amendment of the 1945 Constitution).
Therefore, the formation of statutory regulations in Indonesia must be based on these principles so that legal reform in the formation of the statutory regulations must be done carefully and wisely, so as not to cause turmoil that could even create legal uncertainty in its implementation.
If the word “omnibus” (from the Latin) means for all/for everything, of course the term “omnibus law” means the law for all/everything. In a way, there are differences of opinion about the definition of “omnibus law” in some legal dictionaries or expert opinions. Some interpret it as a bill that contains more than one or several articles that are made into one law (Audrey OBrien, Lili Rasyidi et al). There are also those who interpret it as a single document that includes a combination of various subjects on the basis of several criteria (Gunter 2012- Muladi/Kompas). From some of the definitions, I interpret the omnibus law as a new law that contains or regulates various kinds of substances and various subjects for the simplification of steps in several existing laws.
Can the omnibus law be compared to the umbrella law?
Can the omnibus law be compared to the umbrella law? The umbrella law (raam wet, basiswet, moederwet) is often interpreted as a law that is a "parent" of other laws so that its position is higher than its "children" laws. This umbrella law delegates various further arrangements by delegating to other laws.
Is the formation of an omnibus law the same as the formation of a law by means of codification? The term codification is the preparation and stipulation of legal regulations in the book of the laws systematically concerning a broader field of law, such as the field of civil law, the field of commercial law, the field of criminal law. Therefore, by codifying the formation of a general election law that consists of the presidential and vice president election law, the election of members of the DPR, DPD (Regional Representatives Council) and DPRD (Regional Legislative Councils), and the regional elections, it would regulate the institutions that would implement the same general election and the process of implementing the general election, which is not much different, and has the same motto, namely to be direct, general, free, confidential, honest and fair.
The forms of omnibus laws
There are some experts who exemplify the application of omnibus laws, such as the establishment of MPR Decree No. I/MPR/2000 on the Review of Material and Legal Statuses of MPRS Stipulations and MPR decrees from 1960 to 2002, which group 139 MPR decrees into six articles, each regulating: ( 1) MPRS/MPR decrees that are revoked/not valid; (2) MPRS/MPR decrees that are declared still valid with various provisions; (3) MPR decrees that remained in force until the 2004 election; (4) MPRS/MPR decrees that remain in effect until the formation of the law; (5) MPR decrees that remained in effect until a new order was established by the MPR after the 2004 general election; and (6) MPRS/MPR decrees that do not need to be taken care of because they have been revoked or are beschikking.
In my opinion, as together with MPR members I participated in the formation of MPR Decree No. I/MPR/2003, the MPR decree is different from the omnibus law that is being drafted for several reasons. First, the MPR decree is an order of an additional rule of Article I of the amendments to the 1945 Constitution. Although the materials contained in the MPRS/MPR decree are very diverse, the addresses regulated (adressat) in the MPRS/MPR decrees deal only with the MPR and the President (plus the DPR).
Moreover, the grouping in each article stipulates the existence of each MPRS/MPR Decree in full and there is no change.
Moreover, the grouping in each article stipulates the existence of each MPRS/MPR Decree in full and there is no change. With the formulation of the articles in MPR Decree No. I/MPR/2003, the MPRS/MPR decree regulated therein would no longer be useful in due time in accordance with the conditions specified in the articles.
There are a number of experts who exemplify the application of the omnibus law in Law No. 23/2014 concerning Local Governments, where the closing provisions of Article 409 stipulate: (1) Law No. 5/1962 concerning Regional Enterprises; (2) Law No. 32/2004 concerning Regional Governments and so on; (3) Article 157, Article 158 Paragraphs 2-9, and Article 159 of Law No. 28/2009 concerning Regional Taxes and Levies; and (4) Article 1 figure 4, Articles 314-412, Articles 418-421 of Law No.17/2014 concerning MD3 (MPR, DPR, DPRD and DPD), are revoked and declared invalid. With the formulation of Article 409 of Law No. 23/2014, It can be seen that its formulation was similar to the omnibus law method, but can the provisions stipulated in Law No. 23/2014 override or change the provisions of other laws?
Difficult to implement
Should we form regulations that are difficult to implement? In fact, with regard to the formation of laws in Indonesia at present, the material content is no longer an issue because Article 10e of Law No. 12/2011 concerning the formation of statutory regulations stipulates that the material content that must be regulated by the law contains, among other things: "Meeting the legal needs in society." Thus, if we want to interpret it as it is, everything that we want to regulate can be formulated with the law as long as it is formed by the DPR with an agreement with the President.
The problem is, can the formation of the law contradict the prevailing legal system in our country as written in the preliminary paragraph above?
The problem is, can the formation of the law contradict the prevailing legal system in our country as written in the preliminary paragraph above? Can a law remove, replace, change or revoke the provisions in several other laws or regulations and reformulate it in the new law? In accordance with the prevailing tradition and Law No. 12/2011, each statutory regulation must be formed based on the principles of the establishment of appropriate statutory regulations (beginselen van behoorlijke regelgeving) and also based on philosophical, juridical, and sociological bases, which are certainly different for every statutory regulation.
Technically, its formation, perhaps the formation of the omnibus law that is made to simplify some of the laws, can be easily done by organizing them into groups, assemblies, or clusters and writing down what needs to be changed (including additions, subtractions, replacements, eliminations) or revocation. However, in the formulation of the definition in the general provisions it will be a problem that is not easy to solve because changing the definition in the general provisions of a law will affect all articles in the amended (original) law.
Besides that, how does the existence of several laws of which some of the articles are revoked (moved) and placed in the omnibus law because besides regulating different content material each law also regulates different subjects (adressat) and the subjects point to the President (if delegating to the PP or Presidential Decree), relate to the ministers whose functions and authorities are different, or even the regional heads, and other institutions.
Also, how is the formulation of the final provisions of an omnibus law, which must stipulate everything to be changed (including additions, subtractions, replacements and eliminations) or the revocation of several laws that are still valid. Another problem is if the articles of the omnibus law are in dispute with the original law through a judicial review by the Constitutional Court because of legal uncertainty caused by contradictions with the articles of the 1945 Constitution.
The most difficult problem to avoid is caused by the formation of an omnibus law done to simplify various overlapping, conflicting and unharmonious laws and regulations that cause our licensing, taxation and investment problems to develop not as expected. In the first draft of an academic paper for the employment creation bill of 2019, proposed by the Office of the Coordinating Economic Minister, it was stated that "obstacles to invest in Indonesia or difficulties in doing business in Indonesia are caused by the many regulations in the field of licensing whose substance is not harmonious, or overlap, or even contradict one another. Such a regulation creates a long and problematical licensing system that results in an investment climate in Indonesia that is complicated, ineffective, inefficient and does not provide legal certainty. In the end it will cause a decline of foreign investors\' interest to do business in Indonesia".
From an economic point of view, we can dream of how Indonesia can develop investments that can realize the welfare of the people, but what must also be considered is how it can be implemented if the regulation creates legal uncertainty or even contradicts the 1945 Constitution.
From the formulation it has been clear where the direction of the formation of the omnibus law lies, but one of the things that must be studied wisely is what the best arrangement is so that it is not in conflict with the current legal system and the existence of Article 33 of the 1945 Constitution as a pillar of the Indonesian economy. From an economic point of view, we can dream of how Indonesia can develop investments that can realize the welfare of the people, but what must also be considered is how it can be implemented if the regulation creates legal uncertainty or even contradicts the 1945 Constitution.
Is it possible to establish an omnibus law by immediately solving the existing problems? In reality, differences in the formulation of two statutory regulations (for example the word "or" and the word "and") in their implementation are difficult to resolve and sometimes have to be tested, both by the Supreme Court and the Constitutional Court.
Therefore, we need to review the things that underlie the formation of the omnibus law based on the traditions and legislative system in force in Indonesia so that there will not be turmoil in the future. This is because the present various valid laws (which will be included in the omnibus law) regulate various addressat (subjects) from the center to the regions that are usually affected by sectoral egos, as well as by various different authorities.
Maria Farida Indrati, Legislative lecturer at the School of Law, University of Indonesia, since 1982