Draft Bill on Water Resources

Water businesses working within Indonesia and the general public were shocked when the Constitutional Court (Mahkamah Konstitusi) delivered decision No. 85/PUU-XI/2013 (“Decision 85/2013”)[1]on 18 February 2015, which struck down Law No. 7 of 2004 on Water Resources(“Law 7/2004”).For a whole decade, Law 7/2004 had served as the basic legal framework, both for businesses which were looking to engage in the water industry and members of the general public who were looking to gain access to supplies of water. As a consequence of the decision, there was initially much concern expressed regarding the uncertainties which had been introduced into this sizeable business sector.
 
The Constitutional Court did not leave the sector unregulated however, and in its decision, the court reinstated the predecessor to Law 7/2004, specifically LawNo. 11 of 1974 on Water (“Law 11/1974”). However, Law 11/1974 was ultimately deemed unsuitable in its designated role of accommodating more recent developments within the industry. In order to overcome this predicament, the government ended up issuing two regulations, namely Government RegulationNo. 122 of 2015 on the Drinking-Water Supply System,[2] and Government RegulationNo. 121 of 2015 on Water-Resource Utilization.[3] It soon became clear though that a more rigorous regulatory framework was urgently needed.
 
And so, in a bid to update the obsolete provisions which were originally set out under the 1974 Law and to provide greater legal certainty within the water industry, the Draft Bill on Water Resources(“Draft Bill”) is currently awaiting deliberation by the House of Representatives. Accordingly, this week’s edition of Indonesian Law Digest (ILD) will analyze and discuss issues relating to the Draft Bill. Our analysis will confine itself to the following topics: