Job Creation Bill, Post-Approval

Kompas/Wawan H Prabowo

A number of DPR members from the Democratic Party faction left the plenary meeting room because their aspirations were not accommodated by the leadership of the DPR during the ratification of the Job Creation Bill at the Parliament Complex, Senayan, Jakarta, Monday (5/10/2020).

The public witnessed the clamor of the plenary meeting on Monday (5/10/2020) when the House of Representatives (DPR) passed the Job Creation Bill.

Many people smiled as they observed the enthusiasm of the leaders presiding over the meeting or the heated arguments between the attendees, as well as when some attendees walked out. The media reports on the subsequent reactions also varied. Demos were staged in the following days, for whatever motives and aims. These were to do with the process. Then, what was the response to the actual substance of the bill?

Media reports identified reactions to provisions in the four fields of manpower, the environment, regional administration/autonomy, and education – at the very least, or it is these provisions that have been the most talked about so far. It could be that these all concerned popular issues that were apt to trigger negative emotions, despite unclear or misunderstood facts. Some circles are determined to protest against the bill. However, there are also those who are suggesting requesting a review by the Constitutional Court. Are there not any other areas with impacts that are worth heeding and anticipating?

Also read: Not Clear Yet, When Official Draft of Job Law Would Be published

If digested further in a positive manner, the concern that seems more worthy of exposure regards the preparedness of implementation. Impractical matters and anticipation them have been indicated, not only in the elaboration of rules but notably in their administration. Take, for example, the Investment Center. It is not just about what will happen to the Investment Coordinating Board (BKPM). However, let us take a look from the other side of the institution.

Is it not widely known that a pledge and a promise have been made to run a government that is organizationally slim and efficient? While institutional downsizing was realized only recently (and there are to be follow-ups, reportedly), another new institution is now being formed. This is not to mention the heavy burden on the state budget at present.

Amusing reactions

There has been an even more amusing response. This is so because instead of reacting to the substance of the bill, the reactions have been geared more towards showing activity. University and school students joined the demonstrations and displayed their solidarity with workers. This was amusing because their connection to education or anything else was unclear, even manpower.

Kompas/Wawan H Prabowo

The DPR Plenary Meeting at the Parliament Complex, Senayan, Jakarta, Monday (5/10/2020). One of the agenda items is the approval of the Job Creation Bill.

There is another instance that was also amusing, not in the sense that it was entertaining, but rather more in the context of legal policy. To be specific, it is the policy on intellectual property rights (HKI).

In the job creation omnibus bill the President submitted in early February, as far as the HKI was concerned, the bill contained only one proposed provision in Part Three, Article 110, with just a

single point on revoking Article 20 of Law No.13/2016 on Patents (2016 Patent Law). Article 20 stipulates: “(1) Patent holders shall manufacture products or use the processes in Indonesia; (2) The manufacturing of the product or use of the processes as referred to in Clause 1 shall support technology transfer, investment absorption and/or job creation.”

Also read: Pros and Cons Continue on Omnibus Law

This writer suggested in two previous articles (Kompas, 13/2/2020 and 6/3/2020) that Article 20 of the 2016 Patent Law should not be revoked and that Article 110 of the job creation omnibus bill that the President submitted should be eliminated.

Saved by the DPR

Now, in the bill that was approved at the recent DPR plenary meeting, Article 20 of Patent Law No.13/2016 has not been revoked. But whether this was because of the wisdom of the multiparty coalition the President had built or due to other considerations, the DPR saved the Patent Law from the proposed provision in the President’s bill. Without either revocation or elimination, the DPR amended four articles in the 2016 Patent Law, specifically Article 20. Among the articles that were amended was Article 82, which appears to have needed adjustments to correspond with the changed contents of Article 20.

The DPR amended Article 20 of Law No.13/2016 as follows: “(1) Patents shall be executed in Indonesia. (2) The execution of patents as referred to in Clause 1 shall be: a. Product patents are to be executed to cover the manufacturing, importation or licensure of the patented products; b. Process patents are to be executed to cover the manufacturing, licensure or importation of products produced through the patented processes; or c. Patents for the methods, systems and applications are to be executed to cover the manufacturing, importation or licensure of products produced by the patented methods, systems and applications.”

Also read: Listen to the People

KOMPAS/DAHLIA IRAWATI

Rejection Omnibus Law – Dozens of students from the People Alliance for Democracy hold up posters at a rally at City Hall in Malang city, East Java, on Monday (24/2/2020). The protesters objected to the omnibus bill on job creation, which they claimed would sacrifice the normative rights of the community.

Meanwhile, Article 82 was amended to: “(1) Compulsory licenses shall be licenses for executing the patents that are granted upon request on the basis of a Ministerial Decree with the following conditions: a. Patents are not executed in Indonesia as referred to in Article 20 within a period of 36 (thirty-six) months after they are granted; b. Patents have been executed by patent holders or licensees in a form and by means that harm public interests; or c. Patents that are developed from previously granted patents cannot be executed without using the protected patents of other parties. (2) Applicants for compulsory licenses as referred to in Clause 1 shall be charged a fee.”

Whether the decision to not revoke Article 20 of the 2016 Patent Law and to amend it instead is a win-win or not certainly depends on the perspective. Politically it is a possibility, especially as regards the relationship between the President and the DPR. But in terms of the legal aspects, particularly in view of the HKI policy, it is amusing, as mentioned before.

Also read: The Legal Politics of the Omnibus Job Creation

The obligations required of the holders of patents granted/registered in Indonesia to manufacture their products and utilize the processes in the country (=“shall be executed in Indonesia”, in the newly passed Job Creation Bill), stems from the legal principle of balancing rights and responsibilities. From the drafting of the 1989 Patent Law to its fourth amendment in 2016, the law firmly upheld this principle of balance. Where there are rights, there are responsibilities. Responsibilities are also imposed under the principle of advantage needed for advancing science and technology, including the technology transfers in Indonesia.

International law

From the perspective of international law, mandating the execution of patents is the sovereign right of each individual state. Both the World Intellectual Property Organization (WIPO; a UN agency) and the World Trade Organization (WTO) make no restrictions. The treaties, conventions, agreements or protocols (primarily the Trade-Related Aspects of Intellectual Property Rights, or TRIPS) administered by the two global institutions impose no bans, either. The provisions of the Indonesian Patent Law were designed by seriously considering their compatibility with the relevant international accords on this issue. As an HKI negotiator to the WIPO until 1997 and for TRIPS at the Uruguay Round of WTO negotiations on the General Agreement on Tariffs and Trade (GATT) as well as a participant in drafting the Patent Law through its third amendment in 2001, the writer is well informed about this issue.

Yet, on scrutinizing the methods used to amend Article 20 of the Job Creation Bill that the DPR approved last week, an oddity that seemed to be small at first glance later turned out to conflict with the legal logic behind the formulation of Article 20. How is it possible that execution has been thus defined to include “importation”? Of course, as a verb, “to import” is also a form of execution. But executing import activities is so far in meaning from the obligation to use or apply patents in Indonesia! Although it is covered in phrasing with a very small difference in wording, the basic idea, meaning and final form are quite different!

Also read: President: Please Go to the Constitutional Court

The next test involves the amended beginning of Article 82. If allowing imports is already covered, then what is the significance and aim of Article 82? Actually, in material terms, the licensure as regulated in Article 82 as a compulsory means of balancing policy loses its meaning.

If it can be expressed in a more forthright (not sharp) language, the President may not have been provided with full comprehension of this issue when he proposed the bill. On the other hand, despite its good intentions, the DPR’s attempt to offer a way out has made us all a little lost in the politics of the Patent Law. This is amusing, isn’t it?

Who benefits? Whether it is thanks to a third, fourth or magic hand, it is the patent holders who benefit. It is no secret that there are business giants in the world who are forging persistent paths that breaking down the politics of patents for the sake of their international trade policies. It is public knowledge that the plastic strategy for these businesses is: Compulsory licensing must die! Even if they are present in Indonesia as national entities and are manufacturing drugs, they don’t actually need the amendment. The exception applies only to new drugs or vaccines.

In international trade calculations, they make more profit if the principal companies can control the product’s distribution volume and prices. To this end, the amendment to Article 20 carries a large meaning for such companies.

Also read: House and Government Convinced

But is this what is meant by “business facilities” in the Job Creation Bill? It should be observed, once again, that not all patent holders are entrepreneurs or investors or actively engaged in business. This was the case throughout the drafting of the 1989 Patent Law until 2016, and during the TRIPS negotiations. Whether the proposed revocation of the article – although this ended only with the amusing amendments to Articles 20 and 82 – was due to negative influences, only God knows. Will the President later endorse the bill into law? Only God knows.

From the very beginning it was said that the Job Creation Bill had good intentions and aims. Only, its coverage and formulation are feared to have created problems. Doesn’t the essence of the bill concern facilitating investment and business, as well as licensing? It is worth recalling that the initial idea and formulation of the bill was under way long before the fuss over Covid-19! Even if there is a need now to (again) reinvigorate an economy that has been rendered vulnerable by Covid-19 and this need only grows even bigger later, is it wise to take a policy action that only disrupts social and legal stability, whereas, in fact, this could have been avoided?

Also read: A Variety of Arguments to Smooth Over Job Creation Bill

Kompas

Bambang Kesowo

Experience has also taught how difficult it is to gain trust, and even more so if those in need of that trust are unaware that they are unwilling to understand.

Bambang Kesowo, Observer, intellectual property issues.