The Sustainable Madani Foundation summarizes several important events related to the economic and political conditions that occurred in the past week (May 3-10, 2021). Here are the excerpts:
1. MK Rejects Lawsuit for Judicial Review of the Corruption Eradication Commission Law
The Constitutional Court (MK) rejected the formal judicial review petition filed by the KPK Law Advocacy Team against Law Number 19 of 2019 concerning the Second Amendment to Law Number 30 of 2002 concerning the Corruption Eradication Commission (KPK). The Constitutional Court argued that the applicants' arguments that the KPK Law was not included in the National Legislation Program (Prolegnas) and that legal smuggling had occurred were legally baseless. The Constitutional Court also concluded that the KPK Law met the principle of clarity of purpose.
Agus Rahardjo and his colleagues presented a number of arguments in their petition demanding that the KPK Law be declared formally flawed, thus unenforceable and null and void. One of their arguments, the KPK Law Advocacy Team, assessed that the KPK Law was procedurally flawed, particularly in the Planning, Drafting, and Discussion sections, which were based on five argumentative structures. The applicant also argued that the KPK was not invited to the discussion on the revision of the KPK Law, but instead only included two government representatives, namely the Minister of Law and Human Rights and the Minister of Empowerment of State Apparatus and Bureaucratic Reform. This argument was also deemed legally baseless. The Constitutional Court argued that the KPK refused to be involved despite being invited.
However, one constitutional judge, Wahiduddin Adams, held a dissenting opinion regarding the petition for a formal judicial review of the KPK Law. He argued that the Constitutional Court should grant the petition for a judicial review of the KPK Law. He argued that the revision of Law Number 19 of 2019 was carried out in a short time and has significantly changed the KPK's posture, structure, architecture, and function fundamentally. Furthermore, the revision was carried out at a specific moment that raises significant questions, but it does not directly render the law unconstitutional. He added that the accumulation of these conditions leads to a lack of guarantees for the KPK Law's constitutionality.
2. News of Dismissal of KPK Employees
News of dismissal spread after 75 employees of the Corruption Eradication Commission (KPK), including Novel Baswedan and a number of high-achieving figures, failed the national insight test as a requirement for changing employee status to State Civil Apparatus (ASN) after the new KPK Law came into effect in 2019. However, KPK Chairman Firli Bahuri in a press conference at the KPK on Wednesday (5/5) emphasized that the test was designed in collaboration with other parties. Firli also stated that if KPK employees who do not meet the requirements to become ASN, they will not be dismissed, but further decisions will be submitted to the Ministry of Administrative and Bureaucratic Reform.
Several anti-corruption activists have also protested the news of the KPK employee's dismissal. One such protest came from Feri Amsari, Director of Pusako at Andalas University. He argued that the test is only regulated by Commission Regulation (Perkom) Number 1 of 2021. The regulation also contains several odd requirements.
Another protest was lodged by former KPK Commissioner Bambang Widjojanto. According to Bambang, the KPK employees who failed the selection process had successfully uncovered numerous corruption cases, including bribery cases involving COVID-19 social assistance and bribery cases involving lobster larvae export permits. Yet, they were eliminated from the national insight test.
Indonesia Corruption Watch (ICW) also protested the alleged dismissal of KPK employees following a national insight test. ICW believes the test is part of a plan to weaken the KPK, a product of the reform era. ICW researcher Kurnia Ramadhana stated that the weakening has been ongoing since Firli Bahuri and his colleagues were elected. This scenario, he said, continued through the revision of the KPK Law, which was passed at the end of the 2014-2019 House of Representatives (DPR) term and enacted in 2019.
3. Belgium's Palm Oil Biofuel Ban in 2022
Indonesian Ambassador to the Kingdom of Belgium, Luxembourg, and the European Union, Andri Hadi, specifically expressed regret over the issuance of the draft Royal Decree on Product Standards for Transport Fuels from Renewable Sources, which includes a ban on the use of palm oil-based biofuels in Belgium. The ban on palm oil biodiesel will take effect in January 2022. Ambassador Andri's regret also stems from the draft regulation being drafted against the backdrop of strong accusations against palm oil as a cause of deforestation and a commodity considered closely linked to human rights violations.
According to Andri, although Indonesia is a major palm oil producer, its deforestation rate has declined significantly over the past few decades. Recognition of Indonesia's success in addressing deforestation is reflected in the global funding it has received through the REDD+ mechanism (USD 104 million from the Green Climate Fund, USD 110 million from the World Bank, and USD 56 million from Norway).
Andri told Tillieux that close cooperation between Indonesia and the EU has contributed to Indonesia's achievements in reducing deforestation. To date, Indonesia is the only EU partner country that can issue FLEGT licenses, allowing Indonesian timber and timber products to enter the EU more easily.
4. Merger of LIPI, BPPT, Batan, and Lapan into BRIN
The National Research and Innovation Agency (BRIN) now oversees four research institutions: the Indonesian Institute of Sciences (LIPI), the Agency for the Assessment and Application of Technology (BPPT), the National Nuclear Energy Agency (Batan), and the National Institute of Aeronautics and Space (Lapan), which have been merged into one. The government has given them a maximum of two years to unify them, as stipulated in Presidential Regulation Number 33 of 2021 concerning BRIN. With this integration, the four research and assessment agencies will become the Implementing Organization for Research, Development, Assessment, and Application (Litbangjirap) (OPL) under BRIN.
BRIN will be directly under the responsibility of the president and will be the only autonomous research institution. Jokowi has appointed Laksana Tri Handoko as Head of BRIN. Meanwhile, the institution also has a Chair of the Steering Committee held by the Chair of the Indonesian Democratic Party of Struggle (PDI-P) Megawati Soekarnoputri. Megawati's appointment as Chair of the Steering Committee is due to Article 7 of the BRIN presidential decree stating that the Chair of the BRIN Steering Committee is an ex officio element of the steering committee of the agency that organizes the development of Pancasila ideology. Educational technology observer Indra Charismiadji highlighted the decision of the BRIN Steering Committee to be appointed ex officio by the BPIP Steering Committee. According to him, there is no direct link between the two.
5. Indonesia Allocates 4.1 Percent of the State Budget to Address the Climate Crisis
At the ADB Annual Meeting - Raising the Bar on Climate Ambition : Road to COP 26 , held on Tuesday (May 4), Finance Minister Sri Mulyani revealed that the government has allocated 4.1 percent of the State Budget (APBN) to address climate change. Based on the 2021 APBN's spending target of Rp2,750 trillion, the funds allocated to address climate change are approximately Rp112.74 trillion.
Sri Mulyani admitted receiving direct instruction from President Jokowi not to prioritize climate change. Therefore, the government continues to allocate funds to address climate change while the economy recovers from the COVID-19 pandemic. She further stated that funding for climate change prevention needs to be expanded to the provincial level. The central government is encouraging local governments to participate by employing local communities to protect forests. She also stated that the government frequently uses various funding instruments to mitigate climate change, including green bonds.
According to Sri Mulyani, COP 26 is crucial for implementing the Paris Agreement's provisions on creating a single global carbon market and establishing a credible carbon price, or providing incentives, including for the private sector. Therefore, to implement the Paris Agreement, Indonesia is currently preparing a carbon market mechanism.
6. 4 European Countries Sign Trade Agreement
Several European countries, including Liechtenstein, Switzerland, Norway, and Iceland, have signed the Indonesia-EFTA CEPA economic cooperation agreement. This signing is believed to be a breath of fresh air for Indonesian trade commodities, particularly palm oil products. Palm oil products have recently become problematic in the European market due to environmental concerns. Deputy Minister of Trade Jerry Sambuaga stated that the signing of the Indonesia-EFTA CEPA represents a very positive opportunity, including in terms of the acceptance of Indonesian palm oil products.
Jerry believes that EFTA's acceptance of Indonesian palm oil products demonstrates that resistance is not actually being expressed by all European countries. Essentially, European Union countries must approach the palm oil issue objectively and proportionately. The demand for vegetable oil is growing worldwide, and not all vegetable oil sources can meet this demand as efficiently as palm oil.
Indonesia itself is currently preparing for the WTO hearings regarding palm oil discrimination by the European Union. The Indonesian government, particularly the Ministry of Trade, is approaching the hearings, codenamed DS 593, with optimism.
