Wanted: Legal Certainty, Clear Regulations, and Consistent Court Decisions

 
Abdul Razak Asri, Andin Aditya Rahman
 
Indonesia has been long known as a country with a complex legal system, with a lack of certainty, and inconsistent court decisions. While normally such circumstance lead to an unwillingness of investors to undertake business in such an environment, despite these negatives Indonesia still maintains its status as one of the emerging markets with significant potential.
 
Even though Indonesia is lucky enough to still attract investors despite its shortcomings, efforts to eradicate these difficulties must still be prioritized by the next administration. This was confirmed by Frans Hendra Winarta, a member of the National Law Commission (KHN).
 
Mr. Winarta emphasized that proper legal infrastructures and supports are needed to maintain a positive business climate, such as clear and unambiguous regulations and consistency between court decisions.
 
“Legal support is legal certainty and enforcement, which derives from court or arbitration decisions,” stated Frans at the KHN office in Jakarta last Tuesday.
 
According to Mr. Winarta, court decisions must be consistent and predictable, or in other words, comparable cases should result in relatively similar decisions. He asserts that discrepancy in court decisions for similar cases must be avoided to uphold legal certainty.
 
In light of the importance of this issue, the Indonesian Government and judiciary system must make haste in creating better legal certainty, particularly as the ASEAN Economic Community (AEC) draws ever closer.
 
As noted by Sulaiman Sujono, a KHN researcher, legal certainty is necessary to protect national interests when the AEC becomes operational in 2016. Legal certainty, he continued, is also important in maintaining a supportive business climate.
 
“What must be observed is that weak law enforcement is a fundamental deterrent to investment in Indonesia,” added Mr. Sujono.
 
Mr. Sujono further elaborated that the AEC will provide Indonesia with many opportunities, such as greater economic access to other markets, the free flow of trade between ASEAN member states, and increased investment potential and integration of the ASEAN region. He also warned, however, that challenges are inevitable, most of which revolve around improving competitiveness.
 
(For an elaboration on the AEC, see: ILD No. 355)
 
(hot/kc)