Indonesian Law Reform, or Once More unto the Breach: A Brief Institutional History

Transcription

1 Indonesian Law Reform, or Once More unto the Breach: A Brief Institutional History David K Linnan* Law-reform efforts reach back to the 1950s, but the rule of law is still acknowledged to be weak in Indonesia. Written before the election of President Abdurahman Wahid in late 1999, this article critiques two existing views of law-reform efforts and develops a third interpretation examining problems from the 1980s into the current Reform Period. The three interpretations counsel differing approaches to further legal development with implications for structural reform, as well as Indonesian perceptions of law reform. Reformasi is on everyone's lips in Indonesia, with law prominently featured alongside economic and political reform. Less well recognised is the fact that law reform under the concept of 'legal development' has been an organised Indonesian preoccupation at least since the late 1950s. How and why has law reform been so long in the making in Indonesia, and what does this indicate about its present prospects? Traditional scholarship connects halting Indonesian legal development with continuing problems of patrimonialism and a bureaucratic class held over from the Dutch period. I take a somewhat different view, at least concerning legal development in Indonesia since the early 1970s. This differing view has implications for Indonesian structural reform currently mandated under multilateral conditionality, as well as Indonesian perceptions oflaw reform. in I. Two Mysteries and Three Interpretationsof Indonesian Law Reform There are two enduring legal mysteries for foreigners trying to understand Indonesian legal development: first, why the New Order state, by reputation an autocracy, tried so hard - and yet failed so long in its attempts - to change laws written in a colonial language, now spoken by increasingly small numbers of Indonesians even among lawyers. Second, what explains the continuing chaotic state of an Indonesian world in which people talk incessantly about 'law' in terms of legality, but where the rule of law is lost from sight? Presidential and ministerial decrees proliferate, while legislative actions are few and far between. Answers to these questions are the Rosetta Stone of Indonesian law reform.

2 I distinguish between three competing interpretations to explain the quandary of Indonesi~n law reform. The three are not mutually exclusive. They may possess more or less explanatory power during different modern Indonesian eras. All retain currency during the new post-soeharto Reform Period to the extent that each counsels a different approach to nurturing the rule of law under reformasi. Ultimately, the three different interpretations boil down to: (a) a sociological qua political science approach, asserting that 'elite' preferences have trumped formal governance structures including law; (b) a psychological or cultural approach, asserting that traditional Indonesian (or more properly Javanese) 'feudalistic' attitudes must be changed before the rule oflaw can take hold; and finally (c) an approach stressing basic problems of government organisation under Indonesia's 1945 Constitution (Undang-Undang Dasar, or UUD 1945) linked with bureaucratic competition in a public choice sense, which immobilises reform within government. Henceforth I refer to these three competing explanations respectively as the political economy or 'rentseeker interpretation', the spiritual or 'kebatinan interpretation', and the bureaucratic competition or 'organisational dysfunction interpretation'. A. The Rentseeker Interpretation of Law Reform The rentseeker interpretation represents received foreign scholarly wisdom reaching back to the early New Order/ explaining problems of Indonesian law reform in terms of the integralist state versus a human rights emphasis fought out primarily by lawyers2 over the meaning of the negara hukum under the 1945 Constitution.3 According to this interpretation, New Order Indonesian law reform was stillborn as can be seen in Law 14/1970, fixing the relatively weak position of the judiciary within the Indonesian government, Its explanation for the failure of the rule of law to take hold within Indonesia mixes ideas such as crony capitalism, bureaucratic-armed forces alliances and the self-interest of the Indonesian armed forces or Angkatan Bersenjata Republik Indonesia ('ABRI'),4 This interpretation judges all law-reform efforts from the late Old Order up to the Reform Period as beside the point. Its explanation for the mystery of law reform's continuing failure is that the rule of law could not be allowed to take hold precisely because it would conflict with elite rentseeking activity (and proliferating decrees were as often as not the means of securing economic rents), Fast-forwarding to reformasi, the rentseeker interpretation's proposed remedy for law reform's prior failure is, somewhat paradoxically, a renewed stress on judicial independence and review. The internal inconsistency lies in the implicit assertion that elites made

3 the rule oflaw irrelevant during the New Order, but also that the rule of law can be established post-haste during reformasi in formal elevation of judicial institutions still staffed by New Order placeholders linked with the accelerated passage of various statutes. On the other hand, at least before the financial crisis, proponents of the rent seeker interpretation argued, in a general parallel to Weberian views of European legal development, that the growing Asian (including Indonesian) middle and professional classes' desire for legal protection would overcome traditional elite prerogatives. Current multilateral conditionality under a structural reform agenda, as well as bilateral technical aid aimed at law reform, seems to be premised on this rent seeker interpretation. B. The Kebatinan Interpretation of Law Reform The kebatinan interpretation of law reform has predominated in Indonesian private discussion and public academic discourse for at least a dozen years. The New Order Government formalised an instrumentalist approach to law as part of development (ie, passing laws to channel behaviour under the Repelita, or Five-Year Plans). At the same time, law reformers, including a small but distinct group of lawyers overlapping in part with human rights advocates, have stressed alternative, subjective approaches to law reform. One involves raising the general population's legal consciousness (kesadaran hukum masyarakat) to escape perceived cultural constraints. Another involves improving legal culture (budaya hukum), recasting issues from inside the legal system typically in terms of democracy under law. Yet another calls for the implementation of'international standards' under modernisasi. On the public law side, reformers constituted, in Indonesian terms, a more or less loyal opposition keyed on liberal or human rights-oriented approaches (the traditional view of the Rechtsstaat).5 Meanwhile, the selfsame reformers' government-sanctioned efforts on the economic law side tended to be lost in claims that no law reform could succeed absent generalised cultural changes. On the micro-level, Indonesians continue to discuss law reform among themselves, employing the concept of legal consciousness. This sounds overly subjective to foreign ears, but is considered the opposite of traditional Javanese, or more pejoratively paternalistic and feudalistic, behaviour (undercutting ideas oflegal rights and equality before the law). Since reformasi began, law has also become commonly perceived as opposed to corruption or 'korupsi, kolusi, nepotisme' ('KKN'). International standards claims typically address substantive law, while the legal culture critique aims commonly at the inadequate (legal) performance of the executive, legislative or judicial arms of government (eg, lack of judicial independence and corruption in the courts). Paralleling civilian Rechts-

4 sicherheit, the three critiques are often subsumed in general claims that Indonesia requires legal certainty (kepastian hukum) for social and economic progress. The kebatinan interpretation of law reform is that it failed because the rakyat, or people, were not culturally prepared for the rule of law. The corresponding solution is that, if only ordinary Indonesians could be imbued with understanding of the importance of their legal rights, commonly via education or, in Indonesian terms 'socialisation' of the concept, the rule of law would break through spontaneously as an expression of the people's aspirations. This approach is also evident in certain non-government organisation ('NGO') litigation. Thus, such litigation, seemingly challenging ABRI-police performance in Jakarta during the May 1998 riots, was perceived as odd by foreign legal professionals. Its claims were not based on malfeasance, but rather on 'the failure to maintain that safe environment to which the people aspire'. The kebatinan interpretation of law reform seems to predominate among legal development NGOs as the rationale for their educational function and, to the extent that a common voice is discernible, in much student-inspired reformasi. c. The Organisational Dysfunction Interpretation of Law Reform The organisational dysfunction interpretation distinguishes between public and economic law-reform efforts on a more nuanced basis, registering the difficulty of law reform even in officially sanctioned economic law areas.6 Similarly, this interpretation distinguishes between modernising substantive law and providing for its enforcement via judicial reform or other means. This article asserts that dysfunctional institutions under UUD 1945 and bureaucratic competition primarily accounted for law reform's continuing failure by the late New Order period. The difficulty is that to remedy the problem, institutional change is necessary on the order of that contemplated by Indonesia's unfinished Konstituante (Constituent Assembly) of the 1950s. However, change on that level is not yet seriously contemplated within the Indonesian government, if for no other reason than changing the 1945 Constitution entails resolving ABRI's position under dwifungsi and its participation in civil governance. This, however, is only the public law side of the problem. Beyond the current financial crisis, on the economic law side, the underlying issue in Indonesian eyes has been reconciliation of the economic view expressed in Article 33 UUD This contains the little understood 'family principle', or perekonomian negara disusun sebagai usaha bersama berdasar alas azas kekeluargaan ('the national economy shall be organised as cooperative endeavour based on the family principle'). By opposition, unabashed economic liberalism was visible in deregulation debates during the late New Order, surfacing initially during the economic crisis

5 when the then president, Soeharto, criticised International Monetary Fund ('IMF') proposals as 'unconstitutional' (Vasuki, 1998a: 1).7 The related ekonomi rakyat, or 'people's economy', debate in the 1999 election campaign, was wrongly perceived in foreign commentary solely as an electioneering ploy by Islamic politicians - most notably Cooperatives Minister Adi Sasono.8 Looking back on the New Order, economic law reform enjoyed formal legitimacy as part of development, notwithstanding which its practical success was limited. Such limited success resulted from a combination of bureaucratic conflicts, difficulties in reconciling divergent economic ideals and rent seekers (in that order of importance). Public law reform was even more problematic, however, because it involved basic issues of control over the executive and rule of law concerns, at odds with the New Order's security emphasis.9 How do we explain our initial two mysteries under the organisational dysfunction interpretation of Indonesian law reform? Unlike the Western tradition viewing the rule of law as an organic restraint directly on the sovereign, modern Indonesian law reformers have focused on convincing the populace that such restraints can exist. This is opposed to concepts of 'feudalism' as understood in Indonesian society, and runs against the strain of thought that the Indonesian state lies closer to a people's rather than a liberal democracy.lo Since the New Order, arguments concerning the desired content of Indonesian law have been conducted in terms of Pancasila national ideology on the economic (Pancasila economic democracy) and political sides. Turning to economic law reform as an activity sanctioned by the government from the 1980s onward, the answer to our first mystery is that bureaucratic competition in a public choice sense was the chief impediment to law reform. In practice, the New Order approach to legal rules was instrumentalist and tied to development policies, particularly in the economic law area, so that the legal rules changed every time policy did. Thus, restraints on changing law or the content of particular legal rules have been viewed largely as a matter of political and economic constraints on policy, rather than formal legal constraints. Policy has determined law, rather than vice-versa. Hence, the seeming dissonance between an Indonesian government that talks incessantly about law while the rule of law is weak in Indonesia. This also yields an explanation for the second mystery of government by decree, given that bureaucratic competition impeded statutory legal change controlled by more than one governmental instance. The general pattern has continued almost perversely during the Asian financial crisis, with senior Indonesian economic officials revising 'economic law' under IMF conditionality threat, while apparently resisting real structural reform. At the same time, multilateral officialdom bemoans the Indonesian absence of the rule of law. In the longer term the policy-

6 oriented economists have hamstrung the rule of law themselves - a shortcoming which is becoming apparent only now that structural reform and transparency under the rule oflaw are the prescribed medicine. The second-level economic Pancasila qua Article 33 UUD 1945 debate has basically been ignored by foreigners. This occurs presumably under the influence of the rentseeker interpretation. It represents a dangerous omission to the extent multilateral conditionality assumes that the only problem with its structural reform agenda is crony capitalist resistance. The unsuspecting foreigners may thereby procure precisely that which they are trying to avoid. First, they risk a bona fide nationalist backlash against structural reform, subject to manipulation by rentseekers (probably apparent in the wake of the 1999 elections). Second, they encourage the Indonesian government quickly to embrace formal structural reform under statutory initiatives without bothering to ask whether there are issues beyond 'crony capitalism'. This practically guarantees that Indonesian laws may change but behaviour will not to the extent structural reform is not perceived as being in Indonesian interests beyond procuring the next IMF disbursement. In 'multilateral-speak', the Indonesians are not really being encouraged to 'buy into the program'. A continuing clash of views within Indonesia is now visible following the New Order's end. On the macro-level, traditional law reformers qua lawyers outside government have not changed their approach. Academic law reformers, such as Minister of Justice Muladi, brought into the government during the New Order's waning days, are concerned about the kind of Indonesian government that will emerge from the second half of 1999, and are trying to make hay while the sun shines in the form of statutory changes. The Indonesian legislature (Dewan Perwakilan Rakyat or 'DPR') - the current composition of which makes it a rump New Order institution - is competing with law reformers within the government to originate new statutory drafts with an eye towards the upcoming elections. Under IMF conditionality, the Indonesian government is obliged to carry out structural reforms, including enacting a panoply of laws. This is notwithstanding the fact that it remains unclear whether reformasi will succeed in changing the way Indonesians behave, as opposed to enacting isolated statutes. II. A History of Bureaucratic Organisation, Conflicts and Players in Law Reform Developing the lessons of the organisational dysfunction view requires attention to law reform's institutional character. Making law in the Indonesian system is, above all else, an elite or bureaucratic exercise. Popular attention to formal law-making has been foreign to Indonesia, excepting

7 interludes tied to social eruptions following Independence, during the Konstituante period of the mid-1950s, at the beginning of the New Order and now during the Reform Period. Changing law, particularly economic law, may entail the loss of bureaucratic control with its associated perquisites. This may arise simply from moving responsibilities between ministries or, in the case of deregulation, streamlining or removing them from government. Thus, in a public choice sense, conflict is expected. This is the background to the tortuous government-sanctioned efforts to reform economic law made since the early 1980s. On the public law side, the problem has been less infighting within a Beamtenstaat, or bureaucratic state, than a combination of the autocratic model of government and the unquestioned primacy of internal security concerns (that is, ABRI always had the last word). On the public law side, as proxy, the Ministry of the Interior exercised tight control over political and similar laws, up to, and including, government drafts of the recently enacted political laws as a precondition to Indonesia's June 1999 elections. The problematic issue from an Indonesian perspective, however, has always been the extent to which one could bifurcate the rule of law to make it available for foreign investment, and in the name of development on the economic, but not political, law side. A. Old Order Law Reform Institutional Development The Constitutional baseline for the post-independence validity of colonial law was Article II ofuud 1945's transitional regulations. It provided that colonial institutions and regulations continued pending replacement, but only to the extent they were consistent with the 1945 Constitution.11 Indonesian legal scholars initially pressed for rapid modernisation of economic law to be modelled on 'Western law', while urging restraint in attempts to unify law touching upon personal and religious beliefs (such as family law and inheritance, including related areas like property law). 12 Constitutional or public law reform engaged society as a whole, albeit inconclusively. The 1940s and 1950s saw Indonesia's experiment with parliamentary government, different constitutions and the ultimately unsuccessful Konstituante as a form of a 'second constitutional convention' (viewing the 1945 Preparatory Committee work as the first). On the political side the Indonesian government has, since at least the 1950s, sought to articulate a distinctively Indonesian society via 'law'. Reaching back to the Old Order, one core issue lies in drawing the line between calls for law incorporating specifically 'Indonesian values' and what sophisticated Indonesians recognise would work (political economy in the economic law area, and political realism in a broader public law sphere). The Lembaga Pembinaan Hukum Nasional or National Legal Development Agency ('LPHN', now the 'BPHN') was formed in the crisis

8 atmosphere of 1958 as the first organised 'legal development' institution within the Indonesian government. 13 The LPHN was initially placed under the prime minister, and the enacting regulation's preface recites an intention to replace law in a foreign language (Dutch) tailored to the needs of colonial government and colonists, rather than the colonised (Indonesian) people, with a new national law. Bureaucratic placement under the prime minister was justified by the explanation that substantive ministries were too oriented towards their day-to-day problems and lacked time to address law in terms of systematic planning. However, the LPHN's advisers were the heads of the chief 'lawyers' institutions' within the government (head of the Mahkamah Agung or Supreme Court and Jaksa Agung or Attorney General, as well as the Ministers of Justice and Education, the latter presumably because of his responsibility for legal education). Subsequent Old Order law-reform developments can only be understood as part of the takeoff of Soekarno's Guided Democracyl4 and the opening of the so-called 'revolutionary law' period lasting until 1965 (positing a new national revolutionary spirit including the 'Guided Economy', which did not contemplate the market price mechanism, recalling allusions to Article 33 UUD 1945 issues). The LPHN itself was moved under the Minister of Justice, but was advised by a broader circle including the Provisional People's Consultative Assembly (Majelis Permusyawaratan Rakyat Sementara or 'MPRS') and the People's Representative Council- Cooperation (Dewan Perwakilan Rakyat-Gotong Royong) heads as well as the Minister of Planning.15 Its first task was to implement 1960 MPRS guidelines that national law should be coordinated with state policy and based on an adat law (traditional or customary law) which would not impede the development of a just and prosperous society (echoing Article 33 UUD 1945 and the traditional nationalist primacy of adat law).16 The early 1960s 'revolutionary law' period represented an era of sharp division over law reform, pitting legal professionals against a political leadership articulating ideology rather than positive law. Instead of focusing on discrete enactments to displace colonial law, starting in 1962, Minister of Justice Sahardjo argued that colonial law was negated by judicial decision. Only laws and institutions consistent with the 1945 Constitution continued in force under its transitional provisions. I? The extreme position held that Dutch colonial law codes were no longer 'binding' law at all, while a more moderate position left judges with problems in determining whether specific legal provisions had lost effect. Legal professionals were initially reluctant to accept such an idea of reforming law wholesale without legislation, because such an approach clashed with civil law attitudes and exposed judges, in particular, to considerable pressure in a highly politicised atmosphere.

9 LPHN operated with little effect during Guided Democracy. Through the end of the Old Order, the LPHN was conceived of less as a drafting instance for new laws and more as a mini-council for debating their wisdom. From 1958 to 1965 it ran a modest research and statutory drafting program, mostly outside the public law area,18 as well as organising the first of Indonesia's now quadrennial National Law Seminars (which continue to be the chief public forum for official legal development discussions). The judiciary eventually supported the idea of reforming law through application of the transitional provisions of the UUD However, the dispute's practical effect was marginal except for a lasting perception that the Old Order had attacked the Indonesian basis of the rule oflaw (negara hukum). B. New Order Law-Reform Institutional Development The role oflaw and legal reform changed in unexpected ways at the New Order's beginning, understood as the period 1966 to 1970, introduced initially at a high profile seminar on the negara hukum held in May On the one hand, emergency economic measures initially shifted civilian power within government to economic managers who employed 'law' instrumentally through changeable regulation.2o Constitutional concepts of economic importance, such as Article 33 UUD 1945, were addressed only at the relatively high level of abstraction of 'economic democracy'. 21 By comparison, more general public law issues were addressed at a surprising level of technical detail (in part because of concerns about the Old Order's perceived attack on the rule of law and in part to support New Order integralist views of the state).22 Heightened attention to formal 'legality' in government is evident in Repelita I and the 1968 Second National Law Seminar's theme of the relationship between the rule oflaw (negara hukum) and Pancasila democracy.23 There is also a striking change among legal professionals involved in law reform. After collective resistance to the 'revolutionary law' approach (law reform through judicial decision), they now discuss law reform in terms of sociological jurisprudence (understood as viewing law in a larger social setting).24 At this point, early New Order public law reform hit its stride in the form of Law 14/1970 on Judicial Authority as a shadow battle about the negara hukum's content, fought out over issues of judicial independence and judicial review.25 These issues even now have re-emerged during reformasi in conjunction with the current proposed draft law to amend Law 14/1970's Articles 11 and 39A, plus a proposed contempt power in Article 24A and restrictions on military court jurisdiction under Article 22. However, as history developed, neither this attempt to advance the judicial branch, nor the subsequent Law 5/1986 on Administrative Courts,

10 had any lasting effects in an institutional sense during the New Order. Nonetheless, they established a pattern that still holds - focusing ins~itutional law-reform efforts on lawyers' institutions within the government, with the aim of improving judicial performance as the path to creation of the negara hukurn. The somewhat naive, implicit belief engendered in this theory appears to be the proposal that if one improved the judiciary and courts enough, nothing could hold back the rule of law's triumph. This ignored public law issues growing out of internal security concerns and ABRI's primacy. The number of players, and the direction of law reform changed dramatically in the early 1970s.26 Suddenly, substantial financial assistance became available.27 The most active supporter of legal education reform was the International Legal Center ('ILC'), a Ford Foundationsupported legal development NGO operating worldwide. Mochtar Kusumaatmadja, ILC trustee and Dean of the UNPAD (Universitas Padjadjaran) Law Faculty in Bandung, coordinated its work in Indonesia before becoming Minister of Justice in Among its major activities,29 ILC placed numerous foreign teaching and research fellows on multiyear assignments in key state university law faculties in an attempt to upgrade teaching and research. At the same time, improved legal training had become government policy no later than Repelita II, coinciding with attempts within Indonesian legal education to change traditional pedagogy. In the 1970s even locating applicable government regulations was difficult, much less systematically accessing government legal sources. To alleviate such problems the Pusat Dokurnentasi Hukurn ('PDH') was created at Jakarta's flagship University of Indonesia ('UI') initially with Asia Foundation support, while Indonesian law library collections were documented with ILC support. The American, Australian and Canadian governments financed smaller contributions to legal education and training programs, while direct contacts broken off following 1950s expulsions and nationalisation of Dutch property now resumed between Indonesian and Dutch law faculties. During the 1970s the Dutch also initiated an ultimately unsuccessful Compendium program, aimed at exploring how Dutch and Indonesian law had developed separately since independence. The Lernbaga Bantuan Hukurn ('LBH'), or legal aid society, was founded in 1969 as the first indigenous NGO with a legal focus. The LBH, particularly represented by its charismatic founder Adnan Buyung Nasution, assumed a role as the chief institutional proponent for a liberal or human rights-oriented interpretation of the negara hukurn during the balance of the New Order. The LBH was founded on the three principles: free legal assistance to the poor, 'empowerment' of the people concerning human rights, and monitoring Indonesian law and human rights performance (including legal reform) through its research division. In its first

11 10 years of operation LBH addressed cases on an individual basis, but by the end of the decade had moved to taking a structural approach in bringing cases that challenged social, political and economic conditions. The LBH created the idea of Indonesian 'public interest' litigation, seeking systematic changes to improve the legal system on a broader basis.3d However, such litigation was brought more as a political than legal strategy to publicise problems to the extent that judicial resolution of disputes in Indonesia was and remains only marginally effective. At the governmental level BPHN resources and personnel were significantly expanded following its 1974 incorporation as a Ministry of Justice department (when Mochtar Kusumaatmadja became Minister of Justice).31 BPHN was reconceptualised as a vehicle for drafting laws (a change from LPHN's Old Order character as a conceptual forum). However, as can be seen from the 1974 and 1979 Third and Fourth National Law Seminars and its publications throughout the decade, BPHN's law-reform emphasis changed over time, yet tended towards research. Through the mid-1970s BPHN co-sponsored a variety of programs nationwide in conjunction with various university law faculties, addressing topics at the general level of law and prison reform, legal education and legal documentation. Initially, only limited attention was paid to economic law within the BPHN. This may reflect a broader bureaucratic conflict already visible by the early 1970s. This was whether, from the viewpoint of policy-makers in substantive ministries, 'law' really should involve lawyers beyond being mere scriveners - taking the instrumentalist approach to an extreme. The BPHN-Ministry of Justice focus was on reform of lawyers' institutions in government,32 while economic policy was the province of the economists' institutions (the Coordinating Ministry for the Economy or 'EKUIN', the Government Development Planning Agency or 'BAPPENAS', the Ministry of Finance, the Ministry of Industry, Bank Indonesia, etc). To the extent that the more influential economists' institutions in government could 'make' their own economic law via flexible regulation, they had no need for institutionalised law reform in their substantive areas. By the decade's end, however, BPHN's programs began a slow migration towards specific subject areas, first addressing such matters as labour law and intellectual property. During the early 1980s, BPHN's programs began to address core economic law concerns, such as commercial law and the treatment of multinational enterprises, as well as more general criminal and juvenile law reform. The University of Indonesia and LBH began cooperation in the criminal law area in 1978 as part of a general push, going back to ILC involvement, to introduce clinical legal education via legal aid. Paralleling BPHN's efforts, during the period the Legal Aid Assistance Program was sponsored by the United States Agency for International De-

12 velopment ('VSAID') through the Asia Foundation, providing funding to a consortium consisting of LBH, the VI Institute of Criminology and the PDH. This consortium established a mini-grant system for provision of legal aid by individual lawyers, encouraging the Indonesian government in the longer term to fund legal assistance through its own budget. During the period , it was recast as the Legal Infrastructure Assistance Program (Program Penungjang Praesarana Hukum Indonesia or 'P3HI') with links to the economists' institutions within government. In this form, it provided an early 1980s push in economic law areas parallel to BPHN's efforts in the lawyers' institutions within government. Coincidentally, this established the pattern for foreign technical assistance in legal development that holds to this day. In 1985, the Dutch government started a multi-million dollar program, which was terminated only in the early 1990s in conjunction with Indonesia's broader disputes with the Netherlands over human rights. Conceptually, Dutch efforts built upon P3HI, but were focused specifically on improving legal education and lawyers' institutions within government. Three lawyers' institution projects were involved. One involved cooperation between the Dutch and Indonesian Ministries of Justice, reviewing Indonesian law codification and sectoral legislation, and attempting reforms of the commercial and criminal codes in their entirety.33 The other element, legal education, was focused on key state university law faculties and involved upgrading young Indonesian law teachers through research stays in the Netherlands and numerous short graduate course-seminars taught within Indonesia by teams of Indonesian and Dutch scholars. Its research focus was on reforming substantive Indonesian law, mostly through adapting models of modern Dutch law to Indonesia. Thus civil law traditions continued, but Dutch law was treated as representative of civilian 'international standards', given sensitivities about modelling substantive law reform on the former colonising power's newer laws. The third element, legal information, involved upgrading law libraries in top government legal institutions as well as key state law faculties. The National Legal Development Agency's 1980s attempt at broader law reform is remembered with fondness in the Indonesian academic legal community, but was at best a limited success. Viewed from an Indonesian perspective, the substantive approach to law reform centred on lawyers' institutions did not change from the 1970s. This is borne out by the fact that Dutch-supported law-reform efforts encompassed, in substantive terms, all Indonesian law.34 In the end, however, the revised laws which actually made it through the legislative process remained chiefly concerned with lawyers' institutions in the public law sphere, such as the jurisdiction of courts. Its greatest success was probably the creation of new administrative courts in the tradition of Continental administrative law

13 aimed at controlling executive acts. However, a close examination of the Law 5/1986 on Administrative Court's terms uncovers very different perspectives on the law (Linnan, 1999b: 221, 222-5). It represented, from a government perspective, a watered-down system providing a process for supervising the performance of lower levels of bureaucracy. Law reformers, however, embraced it as the dawn ofthe Rechtsstaat. There are several aspects of the BPHN/Ministry of Justice approach to law reform in the 1980s that help to explain its failure to reach beyond the lawyers' institutions. The first was a tendency, reaching back to its 1970s revival of interest in economic law, to view economic law reform through the prism of the New International Economic Order ('NIEO'). This was an easy leap, to the extent the NIEO invites Article 33 DUD 1945 thinking on a broader scale. This placed it at odds, in substantive terms, with the more liberal deregulasi orientation of economists' institutions in government, as well as their procedural approach of economic 'law' reform via decree. In more general bureaucratic terms, BPHN was perceived as infringing upon other government institutions' competencies in interpreting its law-reform mandate to include renewal of 'their' law. Internally, Mochtar Kusumaatmadja's successors within the Ministry of Justice were less oriented to law reform. They conceived of their role as caretakers of existing institutions rather than as agents of change (undercutting BPHN's own conception of its role). As a result, BPHN was gutted in bureaucratic terms during the late 1980s, retaining an academic research function within the Ministry of Justice. Control of legislative reform was lost to the Directorate General of Law and Legislation (Dirgen Hukum dan Perundang-undangan or 'Kumdang') where it still resides. Economic law reform begins to move into non-lawyers' institutions in the early 1980s with tax law reform, accelerating with financial deregulation.35 Commencing in the late 1980s the US government began a multiyear, multi-million dollar technical assistance program for Indonesian deregulation. It funded much technical advice for regulatory reform centred in the economists' institutions, but chiefly through institution building and with the substance of 'legal reform' of regulations consigned mostly to technical assistance from foreign regulators.36 Meanwhile, at the political level, Indonesians continued to embrace national law incorporating economic democracy as the basis for economic law reform instead of the liberal economic concepts behind deregulation. Economists' institutions recaptured the further direction of economic law reform through a June 1990 study on economic law, sponsored by the World Bank. In 1992, after rejection of further Dutch legal development assistance, replacement funding in the form of the USAID Economic Law and Improved Procurement Systems Project flowed directly into the economic law-reform area, largely on the basis of the 1990 study. The

14 Economic Law and Improved Procurement Systems Project ('ELIPS') represented the practical continuation of Dutch technical assistance in many areas (particularly legal education, research support for drafting new laws and legal documentation), with three significant differences. As a matter of form, and despite the involvement of some Dutch scholars, the ELIPSsupported law-reform efforts were not premised on modernising Indonesian law through Dutch law models (ie, preserving its civil law character). More importantly, however, the emphasis was specifically on economic law reform, and so ELIPS was placed within EKUIN (coordinating ministry for the economists' institutions).37 Vesting control of economic law reform in the economists' institutions materially contributed to the successful completion of key economic law statutory reform efforts, including the 1992 Banking Law, the 1995 Capital Markets Law and the 1995 Company Law, work on which predated ELIPS. However, not all such efforts were successful, as witnessed by the failure to enact competition law with ELIPS support through the late 1990s. This points to more subtle differences involving the underlying Article 33 UUD 1945 debate and opening up the heretofore non-public, law-making process. Beyond bureaucratic politics, ELIPS's approach to economic law reform was premised on transaction cost minimisation and familiar economic analysis concerns. The lawyers' institutions, particularly BPHN, were more aligned with ideas about the Pancasila economy, despite a lack of clarity about precisely what that meant beyond heavy government involvement.38 Thus, a shift in emphasis occurred in the assumptions underlying economic law, between the Dutch-supported effort in the lawyers' institutions and ELIPS in the economists' institutions.39 As ELIPS wound down, it was replaced in the midst of the financial crisis by the USAID successor program, Partnership for Economic Growth ('PEG'), inaugurated in January PEG is best understood as a continuation and expansion of ELIPS within constraints, to the extent that PEG lawyers formerly involved with ELIPS still work with the Ministry of Justice, at the same time as its economists work with BAPPENAS, Bank Indonesia and the Ministry of Trade and Industry, together with the Ministry of Cooperatives (which, in Indonesian terms, are less involved with core economic policy decisions than, for instance, the Ministry of Finance). To the extent distinctions can be drawn among the economists' institutions within the Indonesian government, PEG has moved towards those traditionally less associated with liberal economic policy and hence the economists' version of the Pancasila economy. Closing our historical analysis, a March 1997 World Bank-sponsored study was prepared for BAPPENAS under its law-reform program authority immediately prior to the financial crisis.4othe report assessed that legal development in Indonesia remained marginal. Three things are

15 striking about the study. First, it forms the conceptual basis for a variety of foreign and multilateral legal and technical assistance initiatives under active consideration during the Reform Period (at a minimum, involving the World Bank plus the American, Australian, British, Canadian and Dutch governments). Second, the 1997 study is oriented towards the lawyers' institutions in government, pushing investment in human resources and seeming resurrection of something like the 1980s' visions of BPHN as an independent law-reform agency. Thus, it ignores the history of how Indonesian la\v-reform efforts were marginalised over time to the extent they focused solely on lawyers' institutions and ignored bureaucratic competition. Third, the most current study was prepared by academic law-reform proponents, including Mochtar Kusumaatmadja reaching all the way back to the ILC era of the 1970s. It illustrates that the tight-knit group of law-reform proponents within Indonesia has been fighting a low key, but constant, battle for the better part of 30 years. Indonesian law reform is a hoary matter, rather than a babe in arms, which perspective seems lost on multilaterals currently peddling structural reform and the rule of law in Jakarta. Indonesian law-reform efforts seem to have come full circle, since (except for the dates) current agendas bear a remarkable resemblance to ILC efforts in the early 1970s.41 c. Judicial Reform and Its Alternatives from the Late New Order to the Present Beyond modernising substantive law, Indonesia fac,es a problem with perceived corruption in its courts. Formal enforcement remains problematic for substantive law such as it is, and both Indonesians and foreigners go to great lengths in practice to avoid the courts. Reformers approaching the problem through the lawyers' institutions within government have focused on judicial training and similar strategies since the 1980s. This approach is the current basis for foreign technical assistance following the March 1997 World Bank-sponsored study. Meanwhile, there is a shadow discussion about bypassing courts to achieve crucial enforcement oflaw. Here differences among the three views of law reform surface again. The rentseeker interpretation oflaw reform perceives the judicial system's problems as rooted in intentional subversion of the rule of law since the 1950s, hence any law reform under the current judicial system is doomed to failure. The kebatinan interpretation perceives the judicial system's problems as the joint product of legal culture and individual judges' shortcomings, for which the remedy is heightened awareness and more training of incumbent judges. The organisational dysfunction interpretation asks whether resolving judicial problems is really the key to law reform, since that implies Indonesian law reform can be accomplished solely in the lawyers' institutions within government.

16 Recent criticism of alleged judicial corruption dates to the mid-1990s, but increased exponentially early in the Reform Period. It peaked in Minister of Justice Muladi's surprising July 1998 admission in DPR testimony concerning Perpu No 1/1998 emergency bankruptcy legislation, that neither Indonesians nor foreigners had any confidence in the courts. He went on to argue that creation of its new commercial court therefore amounted to a broader test of the rule oflaw in Indonesia.42 Criticism of the courts is now widespread given perceived problems with the emergency bankruptcy law's implementation, since foreign creditors in particular have been forced into the Indonesian court system to seek payment of debts.43 The background for inchoate discussions of bypassing the courts involves the National Human Rights Commission, Komisi Nasional Hak Asasi Manusia or 'KomnasHAM', created under Kepres No 50/1993 as one of the late New Order's few successful public law innovations. Komisi Nasional Hak Asasi Manusia was created following international human rights pressure and, in Indonesian terms, was to promote and protect human rights to help achieve national development goals. It was intended solely as a fact-finding and mediating body without authority to render legally binding decisions, or otherwise infringe on the discretion of government agencies whose actions were the target of complaints. Staffed with prominent Indonesians considered independent, it did not include sitting judges and quickly eclipsed the Indonesian government in terms of public acceptance. The National Human Rights Commission's high public acceptance was an embarrassment during the mid-1990s, since government officials displayed annoyance sometimes that the public placed more credence in KomnasHAM's pronouncements than their own. The National Human Rights Commission became de facto competition for the courts in so far as it unexpectedly attracted a significant volume of land rights and similar complaints, under which the complainants either attacked eminent domain decisions already delivered (typically by administrative courts) as inadequate, or sought recourse without first going through the courts (reflecting the reluctance of Indonesians themselves to use the courts). However, KomnasHAM's authority did not include the power to force the resolution of legal disputes and so depended on pressure resulting from publicity to effect suggestions in its mediation role. There are ongoing discussions about broadening KomnasHAM's authority to include legally binding settlement of disputes in conjunction with the RUU Hak Asasi Manusia dan Komisi Nasional Hak Asasi Manusia, or Draft Law on Human Rights and the National Human Rights Commission before the DPR at the time of writing. Should that idea become law, KomnasHAM would become a full competitor for Indonesian courts staffed by judges, particularly where its jurisdiction overlaps with

17 that of administrative and other courts. Less obviously, in discussions leading to the creation of the new commercial court under Perpu No 1/ 1998, consideration was apparently given to the placement of bankruptcy jurisdiction in an administrative agency rather than courts. In this light, Minister Muladi's remark about insolvency reform being a test of the rule of law takes on special significance, as does the fact that he is a former member of KomnasHAM and has consequently faced numerous Indonesian petitioners who implicitly chose KomnasHAM over the court system. The law-reform pr~blem with the courts is <;omplex. Judges' compensation is unrealistically low,44 while Indonesian lawyers and law professors indicate that highly qualified law graduates have avoided the judiciary for at least the past 10 years. Thus, along with charges of corruption, there are significant issues concerning the general level of legal skills among the junior judiciary. As yet there is no strategy to address the problem of whether, and how, to distinguish among good and bad judges if real reforms are to be made. This problem is a microcosm of the broader difficulty of how to rene\y the Indonesian bureaucracy under reformasi. This is the background for the inchoate discussion of when and whether it would be appropriate to replace courts with some alternative mechanism for enforcing law. The problem is that in a traditional sense the rule of law includes judicial authority under separation of power concepts. Law reformers focused on traditional lawyers' institutions within government worry that any movement towards alternative mechanisms represents abandonment of the judicial system itself. In the Indonesian context, however, fixing the judiciary's problems implies a longer term effort. This raises three problems under current circumstances. First, after accepting early reformasi period criticism, senior members of the Indonesian judiciary seemingly have gone back on the offensive, to the extent that they once again publicly challenge the idea that judicial corruption exists at all. It obviously renders solutions difficult, if those concerned fail to see a problem. Second, Indonesians themselves perceive a need for approaches that promise results in a relatively short time-frame, given the reformasi expectations, as well as concerns over the financial crisis. Thus, expectations may be disappointed in that the message is that fixing the judiciary's problems may require somewhere between five years and a generation. Third, from the multilateral viewpoint, facing longer term problems with the general legal system may undercut the structural reform agenda, because it requires an admission that laws can change while behaviour may not. Meanwhile, the current approach to judicial problems is more of the same, following the March 1997 World Bank-sponsored study, despite the fact that its approach largely continues judicial improvement strategies pursued without notable success since the mid-1980s.

18 III. Current Conditions and the Mechanics of Law-Making from the Late New Order through to Early 1999 At the end of the New Order, President Soeharto surprisingly appointed a law-reform-oriented Minister of Justice to his short-lived Seventh Development Cabinet. Minister Muladi (a former Human Rights Commission member involved in law-reform efforts since the 1980s as the Dean of Diponegoro University Law Faculty) recalled Mochtar Kusumaatmadja's law-reform orientation and assembled a senior staff of like-minded individuals from outside the traditional ministry system. Then President Soeharto resigned and the newly ensconced cadre for law reform within government was carried over almost by default into the Habibie presidency. What is overlooked from a law-reform perspective is that, in the waning days of the New Order, the priority of law reform was reaffirmed at the highest levels, despite being underway since the early 1980s deregulation. The most cogent explanation is that, consistent with the organisational dysfunction interpretation of law reform and in opposition to the rentseeker interpretation, President Soeharto himself, as a matter of self-interest, recognised problems buried in Indonesia's longer term failure to achieve law reform. Otherwise, he would have chosen a less independent thinker for Justice Minister if only a new face were necessary as a matter of show for conditionality purposes. So what was the difficulty from the perspective of the highestelevels of the Indonesian government? During the 1990s the Program Legislasi Nasional ('PROLEGNAS', or National Legislative Program) tied to the national planning process listed planned legislation over a five-year Repelita period and designated a lead ministry for the preparation of each individual statute.45 PROLEGNAS was prepared within the Ministry of Justice on the basis of information from substantive ministries, but had only a tentative character in setting an aspirational schedule. Ultimate control rested in the substantive ministries as a matter of balkanised ministerial politics. The PROLEGNAS schedule was traditionally remade by substantive ministries changing their own priorities internally, although current revisions result from extensive legislative reforms contemplated as a matter of political reform and under the IMF program. The New Order legislative initiative system is commonly referred to within the Indonesian government in terms of Inpres 15/1970. Statutory reforms of the late New Order were left to the initiative of, and prepared in the first instance by, the lead substantive ministry. They were typically drafted by their law bureaux, other than in the Ministry of Justice. Mter its initial production, the lead ministry's non-public draft would go through numerous redrafts in the forum of an interministerial drafting

19 committee composed of representatives (at the bureau or department head level) from all affected governmental agencies (typically a broad group for economic law). Each draft would be distributed to all agencies with representatives on the interministerial drafting committee, with intra-agency comments consolidated by the agency's committee representative(s). A large all-hands meeting would be held by the interministerial group for discussion of the draft, following which a new draft would be produced. The process repeated itself until consensus (in theory) was eventually reached on the entire law. Such meetings were painfully detailed, since participants would spend an entire day going through sections of the draft law on a line-by-line basis. The key issue was whether, and how, to reach consensus, since a broad group of agency participants on the interministerial committee implied divergent interests. Under general development planning authority during the New Order period, BAPPENAS had responsibility for law reform at the program level.46 It was shared at the level of drafting law with the Secretary of State's Office ('SETNEG'), particularly its Cabinet Secretariat Department. The Secretary of State is very important within the Indonesian government because he or she serves an analogous function to the White House Chief of Staff within the US government, or the Chief Secretary to the Prime Minister within a parliamentary system. The Office of the Secretary of State is the institutional gatekeeper, and the Secretary functions as personal adviser to Indonesia's President. The Cabinet Secretariat Department ('SEKKAB') advises the President on practically all legislation.47 Having the President's ear naturally made SETNEG/SEKKAB a hidden institutional player in law reform during the New Order. This was particularly true where consensus on a proposed law's form and substance could not be reached within the interministerial drafting group, as was often the case in economic law reform. The Secretary of State's Office and its Cabinet Secretariat Department's role as facilitator was to seek a consensus within the interministerial drafting group if possible, but ultimately to advise the President as to the form in which legislation should be presented to the DPR for adoption. A minister whose position did not prevail within the interministerial group could, in theory, take a higher appeal to the President. The President presumably would not be inclined too often to ignore SETNEG/SEKKAB's advice, nor to look kindly on frivolous appeals. Thus, the real lobbying would be of SETNEGI SEKKAB at the interministerial drafting committee level. At the ministry level during the late New Order, SETNEG/SEKKAB was viewed as a bottleneck and hindrance to law-reform initiatives. The Cabinet Secretariat Department's limited personnel implied a prioritising of legislative initiatives from ministries, which meant that many simply died for lack of attention. Additionally, an irreconcilable conflict at the

20 interministerial committee level often led to the legislative initiative dying because SETNEG/SEKKAB would not, or could not, resolve the conflict to the President's satisfaction. The alternative - SETNEG/SEKKAB's advice to the President regarding which of the competing positions to adopt in the draft law sent to the DPR - inevitably produced winners and losers at the interministeriallevel. The losers would argue that this was due to the relative weight of the competing bureaucratic institutions rather than the superiority of their arguments. Regardless of whether SEKKAB should bear responsibility for a decision ultimately consigned to the President, SEKKAB was unpopular to the extent that revisions to its position in the legislative process have been under discussion since shortly before the New Order's end. During the New Order, the DPR typically made relatively minor changes to draft laws presented for its approval by the President. Thus, a losing party in the interministerial drafting committee might also theoretically seek satisfaction by lobbying the DPR party factions for a reversal of the President's position taken on SETNEG/SEKKAB's advice, but with only a very slim chance of success. The DPR factions would themselves develop position papers (pemandangan umum) for discussion in the special committee typically convened for consideration of a proposed law. While the DPR formally retained the right to propose its own draft legislation, DPR rules of conduct required that any such initiative be supported by 20 members from more than one faction. This hurdle was set so high that there was never a legislative initiative from the DPR during the New Order. Understanding this legislative initiative system contributes to comprehending why ministries during the New Order had significant incentives to make law by regulation rather than by statute, apart from technical expertise in the regulated area, questions of law-making style in a civil law system, and the like. It kept their law-making activities out of a tortuous statutory drafting process. The statutory drafting process typically took years within the interministerial committee setting. More importantly, ministries initiating statutory reforms might ultimately disagree with the product presented for adoption to the DPR by the President. The mechanics of law reform are in flux during the reformasi period, but remain important to the extent that structural reform contemplated by the IMF program, and political reform more generally, have become high priorities. Eleven reforms have been given initial priority: 'economic' law reforms including a new bankruptcy law, competition law, consumer protection law, revisions to the 1992 banking law, a new central bank law, and alternative dispute resolution law (arbitration), plus four 'political' laws (new party, election and MPR/DPR laws, plus regulation of demonstrations and free association), as well as an attempt to reform the

21 -~..,.<::/UflTl \ I mechanics of law-making itself inherited from the New Order.48 Howe~ the slate of statutory reforms under active consideration by the D] expanded to an extremely ambitious 22 as of February 1999 (with 17 dr! laws coming from the government and five draft laws coming from ti DPR).49The most significant contemplated additions on the public law sic include decentralisation laws to address regional autonomy and fundi! issues, changes to existing anti-subversion law, a new anti-corruption la, and new laws governing various sectors of the economy increasing1 subject to privatisation (telecommunications, oil and gas, and forestry). I offer here in summary a preliminary report of how law-makin behaviour is changing during the early Reform Period, and, equall, importantly, how many institutions have not substantially changed thei insular law-making behaviour. As a point of departure, at least three factors visibly affect current law-reform efforts. First, both domestic political reform imperatives and structural reform deadlines affecting IMF loan disbursements seemingly preclude following the delay-fraught legislative initiative process of the late New Order. Second, essentially the same 'law-reform' players, both institutional and personal, have been carried over from the late New Order into the Reform Period.5OThird, law reform largely remains a non-public, bureaucratic process, subject to players' awareness that public opinion is a heightened practical concern even while the law-reform process has not yet achieved full democratic legitimacy. Tight New Order control of law reform has substantially disappeared, at least in the economic law area. This is evidenced by the fact that, in different substantive areas, institutions inside and outside government have begun preparing a large number of draft laws of widely varying quality. For example, as of August 1998 there were numerous statutory drafts circulating in Jakarta, both from NGOs and government, as well as active DPR drafting of competition law. In the interim, Competition Law No 5/1999 has been signed, providing for a fair competition committee or Komisi Pengawas Persaingan Usaha as the model essentially followed in all drafts, but incorporating some ideas that did not necessarily originate in government drafting efforts. However, the crucial task of articulating and implementing regulations has not yet been accomplished and it is unclear to what extent regulation drafting will be transparent in Indonesian terms. The problematic aspect of a sudden 'hundred flowers blooming' in highly politicised areas of economic law reform (concerning 'conglomerates') is the triple danger that: (a) available Indonesian expertise can be spread so thinly that no law results;

22 (b) the exercise becomes so politicised that the resulting law makes little sense in economic terms; or (c) a single 'sensible' draft can only be created if others are ignored. The last opens the adopted law to charges that it was 'engineered' by various interests. The readiest example of the general problem under recent economic law is probably Article 51 of Competition Law No 5/1999, apparently exempting state monopolies in contemplation of Article 33 UUD This indirectly raises questions about laws under current DPR consideration that seek to privatise state-owned enterprises and, ultimately, about the economic substance of structural reforms. While it might be tempting to regard potential DPR origination of draft laws as evincing greater 'democracy' in Indonesian law reform, one should remember that DPR members are hangovers from the New Order, have no experience at drafting legislation from a clean slate, and have no staff to help with the task. Thus, any legislation originated in the DPR in the near term will almost invariably be either flawed in a technical sense, or drafted by a third party. In fact, actors wanting to initiate DPR consideration have already undertaken to steer various proposed drafts to DPR members, who then propose them as 'DPR-originated' statutory proposals. At the same time, since many DPR members under Habibie see little chance of staying past the June 1999 election, they may enjoy more personal independence and put more effort into passing new laws as a personal legacy than is expected of their immediate successors. The fairest description of the DPR's role is that it is not in a position effectively to originate laws, however, it is independent enough to criticise governmentoriginated legislation. By energising public criticism it represents the first real check in many years on legislation coming from the executive, at least to the extent the President is sensitive to public opinion.51 Now Indonesian law-making is experiencing the problem of what happens when the (mostly bureaucratic) law-making expertise in the executive branch is divorced from the process, as the Inpres 15/1970 system starts to breakdown. Assuming a DPR-originated bill were presented to the President, short of its rejection and return with comments, there is no apparent procedure for improvements. There are attempts underway to procure some kind of legislative drafting support for the DPR, but it is unclear whether there is any reasonable short-term solution, given limited Indonesian human resources in technical areas such as economic law, not to mention continuity issues (ie, whether most DPR 'law-makers' will be replaced in the upcoming election). From the institutional point of view ministries are showing varying degrees of willingness to opening up their law-drafting processes to comment from elsewhere within the government, though much less to

23 public (typically NGO) input, with the Ministry of Finance (for economic laws) and Ministry of the Interior (for political laws) drawing criticism. The difficulty here is that they are perceived as not having changed their behaviour patterns from the New Order, except for possible abandonment of the 'pretence' of interministerial committee review as under the older SETNEG/SEKKAB system. Thus, creation of draft laws under this approach is not more 'democratic' in style, and indeed may simultaneously become more parochial in terms of individual ministry interests. Multilateral institutions aiming at structural reform via the Ministry of Finance apparently do not realise the problem. The first statutory initiatives of the Reform Period short-circuited institutional law-reform problems by means of emergency legislation. Bankruptcy legislative reform was enacted under a special procedure for emergency legislation that effectively precluded amendment (as Peraturan Pemerintah Pengganti Undang-Undang No 1 Tahun 1998 Tentang Perubahan Atas Undang-Undang Tentang Kepailitan or Perpu No 1/1998). To get DPR approval without substantial debate, however, the Minister of Justice had to promise to resubmit a new bankruptcy law for full DPR consideration within 12 months.52 Thus legislative debate on this piece of economic law reform was delayed rather than circumvented. Perpu No 1/1998 did not even offer a figleaf justification in Indonesian terms addressing Article 33 UUD 1945 concerns, a departure from key economic law reforms of the 1990s (eg, the 1995 Capital Markets and Company Laws). What the multilateral institutions seemingly do not understand as they push structural reform on the basis of liberal economic ideals (arguably 'unconstitutional' in Indonesian eyes) is that they are creating problems on the public law side and storing up troubles in the economic law area. The pot seems close to boiling over in terms of a nationalist backlash to pressures for structural reform, which might be anticipated once the DPR finally does begin to function like a legislature. The second emergency law under DPR consideration was the controversial Peraturan Pemerintah Pengganti Undang-Undang No 2 Tahun 1998 Tentang Kemerdekaan Menyampaikan Pendapat Di Muka Umum (or Perpu No 2/1998 concerning the freedom to express public opinions). This was to be one of the new political laws. It regulated free association and demonstrations in what was commonly perceived within Indonesia as an unacceptable manner, considering the upcoming electoral campaign. Given public criticism, 53 Perpu No 2/1998, a draft law that originated in the Ministry of Defence, was withdrawn and replaced by a more moderate Ministry of Justice draft law, which eventually became Law No 9/ Thus, judging by Perpu Nos 1 and 2/1998, it will hardly be possible to avoid an extended legislative process for any of the critical statutory reforms. In the meantime, law reformers in government are currently

24 pressing for the accelerated enactment of an ambitious legislative slate before the end of 1999, precisely because of doubts about what will be accomplished after the elections. IV. Looking Forward and Looking Back In the short term Indonesian law reform appears triumphant during reformasi, as structural reform measures contemplated by the various IMF letters of intent advance steadily towards enactment. The hidden issues are the extent to which institutional law-reform problems may reemerge following the 1999 elections, whether intervening changes in Indonesian law will be matched by consequent changes in Indonesian behaviour, and how to approach the delicate issue of a wholesale renewal of the Indonesian judiciary and bureaucracy. Foreigners speak as though the 'Indonesian crisis' will be resolved by the June 1999 elections. In fact nothing can change pending presidential selection in late A more realistic timetable for crisis resolution is probably three to five years, given the need for deeper institutional change. To make real progress, Indonesian law reform requires both a strengthening of the rule of law and the implementation of the changes impeded since the 1980s by bureaucratic competition in the sense of the organisational dysfunction interpretation. In other words, nothing changes short of substantial institutional change. Even assuming formal institutional change, however, New Order placeholders within the bureaucracy and judiciary will make for a rocky transition. While the analogy is not exact, the closest comparison may be to the transition problems of formerly socialist states. The old Inpres 15/1970 New Order system of law-making controlled reform initiatives by funnelling them through SETNEG/SEKKAB in the President's name. It depended upon a higher officer within the executive branch mediating between entrenched bureaucratic interests in the name of a powerful President. The legislative branch (DPR) functioned as little more than a debating society for making final adjustments in proposed laws - fine-tuning, in Indonesian terms. However, as evidenced by institutional behaviour under that system, 'law' was chiefly made by regulation in lieu of statute, since competing bureaucratic interests were a constant drag on statutory reform. The SETNEG/SEKKAB system was criticised even during the late New Order, but presumably could only be replaced by another mediating institution within the executive branch. This assumes that, for practical reasons, real law-reform proposals must continue to originate within the executive branch through the medium term. The likeliest candidate would seem to be the Ministry of Justice, however, our review of law reform's institutional history reveals that this approach already failed for reasons of bureaucratic competition in the 1980s.

25 The underlying difficulty is that the Indonesian government as structured under UUD 1945 places ministries effectively beyond control of all political actors, save the President. Serious discussion about substantially changing UUD 1945 seems to be one of the few traditional taboos still respected in current Indonesia, presumably because of ABRI's view that it anchors dwifungsi.55 Thus, bureaucratic balkanisation seems inevitable without decisive presidential action. President Habibie's position (and any immediate successor's likely position under a coalition government) is commonly perceived as not strong enough to permit such decisive action. On the other hand, for reasons already noted, true DPR origination of lawreform proposals will likely remain problematic through the medium term. There is further concern, beyond the scope of this article, which is grounded in the observation that parties within the DPR have hardly adjusted, even during reformasi, to the idea of cooperating as a true legislature. Looking back to the 1980s, however, senior levels of New Order Government seemed to recognise the necessity for law reform, at least on the economic law side, even while most public law reform remained stalled. This anticipated a current sense within the Indonesian government and multilateral institutions that the rule of law also serves economic purposes. For example, the wreckage of the Indonesian banking system, involving widespread and systematic violation of prudential regulation, may demonstrate that articulating 'law' (ie, banking regulations) without a justifiable expectation that it will be followed is not good development policy. The problem is that the corresponding multilateral prescription of structural reform under the rule of law seems lost in the translation, to the extent that 'law reform' under conditionality may be viewed within the Indonesian government as a tactic to achieve short-term funding goals, rather than a strategy of fundamental economic reform. Looking past who governs Indonesia on 1 January 2000, the next step is the issue of whether the rule of law is divisible. Can there be legal reform and the rule of law in one but not the other of the economic and political spheres? The rentseeker interpretation, through its exclusive stress on lawyers' institutions in government, misses the point that economic law reform did make progress, albeit slowly, when control of the reforms moved from lawyers' to economists' institutions in government. Nonetheless, the 'rule of law' was hardly followed, as seen in the widespread violations of prudential banking regulations, for example. Here the political opportunity hidden by the rentseeker interpretation of law reform is that, by failing to recognise that even the late New Order Government perceived the continuing law-reform problem on the economic law side, the economic implications of dwifungsi are lost. The 'middle way' (as originally contemplated by General Nasution in the 1950s) and the New Order's security emphasis may not be realistic options on the economic

26 side because the rule of law is not divisible between the economic and political spheres, and consequently needs to be tightened in both. If this is so then ABRI must choose, as South American militaries once did, between having the final word in a poorer country or a lesser position in a richer one.56 However, even optimistic Indonesian political figures speak in terms of a dwifungsi phase-out lasting five years or more. This does not take into account likely concessions from presidential candidates, given ABRI's potential king-maker status post-june 1999 election by reason of its guaranteed DPRiMPR iseats. Beyond reformasi's amorphous calls for democracy, however, appeals to ABRI's enlightened self-interest may be a necessary precondition to serious discussions about changing UUD Overlaying this is the question of what the law's substance should be in the economic or political spheres. This accounts for disputes about incorporating specifically Indonesian values and current people's economy issues as a continuation of Article 33 UUD 1945 concerns. Problems of law reform really reflect Indonesian difficulties with surmounting deeply divided points of view in the midst of structural dysfunction. All these questions would apply even if ABRI were to abandon dwifungsi tomorrow. Thus there is less than meets the eye in the rentseeker interpretation that the rule of law would triumph if only ABRI withdrew from politics. The operative question is what or whose assumptions underpin the rule of law in both the political and economic spheres? These are issues that have not been intensively discussed since the 1950s Konstituante. This question also illuminates a shortcoming of the kebatinan interpretation of law reform: it seeks to build a consensus for the rule of law but is so sparse on detail that the journey's direction remains unclear. With a view to ongoing law-making, however, structural reform, assuming a liberal economy under multilateral conditionality, poses the question of what Article 33 UUD 1945 means to Indonesians. From an Indonesian perspective the problem is that the answer is unclear. The issue is not whether Article 33 UUD 1945 makes economic sense in the abstract. Indonesia's economic policy-makers finessed this question from 1980s deregulasi through 1990s globalisasi, even while official politics embraced the Pancasila economy. Rather, the issue is whether, during some very hard times, the Indonesian public will jettison core values constitutionally enshrined by their founders. Article 33 UUD 1945's redistributive or nonefficiency overtones have obvious political implications for an election campaign conducted in the midst of what amounts to an economic depression. More than anything else, this contains the incipient nationalist seeds of a reaction against what may be perceived as externally imposed law reform under a structural reform agenda. This dangerous problem is one that multilateral institutions do not seem to understand fully as they act on the rent seeker interpretation of law reform.

27 Notes Associate Professor of Law, University of South Carolina. A version of this paper was originally delivered at the conference 'Back to the Future? Prospects for Reform in Post- Soeharto Indonesia', Centre for Asia-Pacific Initiatives, University of Victoria, Victoria, British Columbia, March Lev, See also Sutherland, 1979, in which she describes the colonial creation of the bureaucratic class Lev sees re-emerging in conflict with negara hukum ideals by the time of the early New Order regime. See Lev, 1999: 227. The negara hukum concept represents a problem unto itself, since its closest parallel in Anglo-American legal usage is the 'rule of law', while the closer legal analogy is the Rechtsstaat of Continental European public law (of which the negara hukum concept is probably best viewed as an Indonesian offshoot, albeit with Hegelian overtones to the extent it incorporates the integralist vision of the state). See, Kunig, To the extent Indonesian expositions of the negara hukum constitute an argument about what the Rechtsstaat concept entails, they are as open-ended and diverse as American law discussions of what 'due process' means or Commonwealth legal discussions of what 'natural justice' includes. I typically use the negara hukum concept without translation in the text, since just rendering it correctly in English represents taking a position on its meaning within a quintessentially Indonesian debate. Now TNI (Tentara Nasional Indonesia), the Indonesian National Army. The 'more or less loyal opposition' refers to the fact that the group generally considered as law reformers contains both LBH (Lembaga Bantuan Hukum or 'Legal Aid Society') and human rights activists prominent during the New Order as shadow political opponents of the Soeharto regime, as well as numerous legal academics, some of whom were prominent in officially sanctioned New Order groupings such as Golkar and Ikatan Cendekiawan Muslim se-indonesia ('Association of Indonesian Intellectuals'). For example, current reformist Justice Minister Muladi, who entered the Seventh Development Cabinet shortly before President Soeharto's resignation, was prominent in law reform during the 1980s as Dean of the Law Faculty at Diponegoro University, Semarang. He became a member of the National Human Rights Commission in the 1990s, and was prominent in Golkar during the entire period. Institutionally speaking, law reformers worked both inside and outside the New Order regime. There is an analogous overlap between the circle of legal academics and the more sophisticated local legal consultants. Legal academics, particularly those specialising in economic law, are often coincidentally part of the relatively small Jakarta community of sophisticated corporate and commercial practitioners where they typically work in parallel as legal consultants to supplement their meagre government salaries. Legal academics qua law professors may be consulted or act as advisers to government bodies considering law reform, while their law firm colleagues, including foreign legal consultants, may be informally consulted by government institutions seeking economic law-reform input. These multiple overlapping groups, which political scientists would analyse as 'elites', are best understood as reflecting the continuing thinness of Indonesian human resources in terms of sophisticated legal practitioners rather than exclusion of otherwise knowledgeable participants. Economic law reform grew out of deregulation, or deregulasi, which became a necessity during the early 1980s following the end ofindonesia's oil boom years. Significantly, still serving Coordinating Minister for Economy, Finance and Industry, Ginandjar Kartasasmita, point man for structural reform under multilateral conditionality, apparently shares this view. See Vasuki, 1998b: 1. The IMF has indirectly recognised the people's economy concept through its contemplation in later letters of intent of subsidised loans for cooperatives, and small-sized and medium-sized enterprises. See Kagda, 1999: 4. However, it is fair to say that such acquiescence reflects short-term pro-employment thinking on the IMF's part, leaving its liberal structural reform agenda intact.

28 9 Immediately following President Soekarno's fall from grace, President Soeharto formally embraced 'law' in the form of the negara hukum, albeit with an integralist slant ultimately inconsistent with aspirationalliberal or human rights-oriented views of the Rechtsstaat. The hidden question is why the New Order Government adopted an integralist view. Resolution of that issue is beyond this paper, however, because its investigation would take us back to an examination of the UUD 1945 itself and Indonesia's failed 'second constitutional convention' in the form of the 1950s Konstituante, which ended with Soekarno's introduction of Guided Democracy. For purposes of understanding law reform on the public law side, however, this paper would de-emphasise traditional interpretations that integralist approaches were a means to ensconce bureaucracy reaching back to colonial times; see Lev, Instead, they represented a continuing response to perceived centrifugal tendencies within Indonesia itself. The historical significance lies in the issue of what motivated the New Order's security approach beyond facile statements that it was necessary 'for development' or that President Soeharto was also Jenderal Soeharto (purnawirawan). The significance lies in the issue of whether the reformasi struggle is simply a replay of Indonesian conflicts still unresolved after attempts in 1945, 1959 and U) See, eg, Pranarka, 1985: The qualifier that laws continued in force 'only to the extent consistent with the Constitution' was established by contemporaneous regulation: Peraturan Pemerintah No 2, 10 Oktober 1945 Tentang Badan-badan dan Peraturan Pemerintah Dulu. 12 Soepomo, This pattern has been pursued into the present, with family law and inheritance principles differentiated by religions representing the one area of current law incorporating substantial formal Islamic law elements. Nonetheless, even here there are some deviations from traditional Islamic law. Compare Lubis, 1997: Keputusan Presiden Republik Indonesia No 107 Tahun 1958 Tentang Pembinaan Hukum Nasional (30 May 1958). 14 Soekarno's abolition of the Konstituante by decree on 5 July 1959 is considered as the end of Indonesia's parliamentary democracy, and in his Independence Day speech of 17 August 1959 articulated MANIPOL (Manifesto Politik RD, which was subsequently adopted by the MPRS as the basis for state policy MPRS Decree No II MPRS (19 November 1960). The rentseeker interpretation of law reform sees Guided Democracy itself as ABRI's sole creation, with the result that post-1958 Old Order law reform is lumped together with New Order law reform as beside the point. 15 Keputusan Presiden RI No 194 Tahun 1961 Tentang Pembentukan Kembali LPHN (6 May 1961) (requiring LPHN planning board members to be creative legal experts from government or the courts with a view of law in harmony with the character of the nation); Keputusan Presiden RI No 376 Tahun 1961 (1 July 1961) (appointed LPBN planning board members include professors from the major state universities, attorneys and civil servants); Keputusan Presiden RI No 282 Tahun 1964 Menggayabarukan LPHN (31 October 1964) (requiring LPHN planning board members to be creative legal experts imbued with the spirit of Pancasila and Manipol with a view of law in harmony with the character of the nation); Keputusan Presiden RI No 184 Tahun 1965 (23 June 1965) (large appointed LPBN planning board includes wide spectrum of party nominees, who are typically lesser known legal and political science academics, UI law professors, military and civil servants); Keputusan MenKeh No JS Tanggal 21 Augustus 1965 Tentang Peraturan Tata Tertib LPBN (LPHN planning board leadership to be drawn from nationalist, religious, communist and functional groups reflecting progressive revolutionary national unity on the basis of Nasakom). The flavour of the LPHN's ideological guidance can be found in the opening speeches of the first quadrennial nationallaw seminar (11-16 March 1963), reproduced in Simorangkir, 1979: 127, 139, MPRS Decree No II 1MPRS (3 December 1960) Appendix A, No See Gautama and Hornick, 1974: 184; Lev, 1965: See Simorangkir, 1979: 5-8, listing draft statues and research areas. 19 Simposium Kebangkitan Semangat '66: Mendjeladjah Tracee Baru diselenggarakan oleh Universitas Indonesia 6 Mei Mei 1966 dengan Kerjasama KAMI dan KASI (1966).

29 20 One prominent example of mixing legal and economic functions in economic regulation was the early New Order program financed by the Ford Foundation in law and foreign investment. Initial training was sponsored by the University of Indonesia's Economics Faculty, followed by offshore training at the Earl Warren Institute of the University of California at Berkeley School of Law, training government staff, primarily Ministry of Finance lawyers, as interpreter-scriveners of economic policy at the regulatory level. 21 See Ketetapan MPRS No XXIII/ MPRS /1966 tentang Pembaharuan Kebidjaksanaan Landasan Ekonomi, Keuangan dun Pembangunan (particularly sections 4-7, noting underlying constitutional provisions in discussing the guided economy and economic democracy in terms familiar trom traditional Article 33 UUD 1945 points of view). The same basic approach to the Pancasila economy is visible in Ketetapan MPR No N / 22 MPR /1973 and Ketetapan MPR No N / MPR /1978. See Ketetapan MPRS RI No XX/ MPRS /1966 Tentang Memorandum DPR-GR Mengenai Sumber Tertib Hukum RI dun Tata Urutan Peraturan Perundangan RI. The memorandum is remarkable to the extent that beyond articulating a formal legal basis for the New Order government (explicating Supersemar) it addresses the form of the state and a hierarchy of legal enactments following Continental public law distinguishing between Staatsrecht and Verwaltungsrecht. It lies at the heart of New Order reinterpretation of UUD 1945 in integralist terms. See Simorangkir, 1979: 181, 187, 195. See Simorangkir, 1979: 189. See also Lev, 1978, which interprets the drastic change in receptiveness among legal professionals in terms of bureaucratic self-interest among the judiciary (seeking judicial independence and review less for the sake of the legal system than for personal aggrandisement). See Lev, 1978: The best overview of the 1970s explosion of technical assistance is provided in the transcript and affiliations of participants in the ILC's 1973 New York seminar led by Mochtar Kusumaatmadja: International Legal Center, 1973a. When law-reform technical assistance trom foreign sources is mentioned subsequently, it is only with an eye towards showing the extent to which Indonesian efforts enjoyed generous material support. There should be no inference, express or implied, that foreign financial assistance has altered Indonesian perspectives in the least. The reason is simple, that the ahli using (foreign expert) presence reflects an aspect ofindonesian government and public life recognisable to anyone with substantial experience in Jakarta. On the one hand, the foreign experts and accompanying program funding usually are paid for by foreign development assistance (and so may provide a substantial part of the budget within an Indonesian undertaking). On the other hand, Indonesians are masters at using foreign experts as stalking horses for ideas and positions they do not wish to assert in person. The most recent, visible example of this is probably economist Steve Hanke, who rose to sudden fame as President Soeharto's 'special adviser' for a currency board. Mochtar Kusumaatmadja counts as one of the New Order's early fathers of legal development by virtue of his heavy involvement in ILC programs followed by service as Minister of Justice when the LPHN became active. Concerning his philosophy of legal development, see Kusumaatmadja, 1970, 1975a, 1975b. His influence can be viewed through the eyes oftwo ILC Indonesia fellows in Katz and Katz, 1976: 335. See International Legal Center, 1973b. Since reformasi began, LBH has expanded its educational and law-reform activities by 'socialising' the concept of new laws through seminars conducted around Indonesia, discussing its own drafts for the various political laws. It also formed an NGO law-reform consortium with the Indonesian Bar Association (lkatan Advokat Indonesia or 'IKADIN'), a bar organisation, and ICEL, an environmental law NGO. See Konsorsium Reformasi Hukum Nasional, To this extent, LBH itself appears to shift functionally from the rentseeker to the kebatinan interpretation of law reform, perhaps in part since it is now only one of many voices pushing law reform. Over the years NGOs have received limited foreign financial support for their law-reform efforts, which amounts were immeasurably

30 smaller than funds directed to Indonesian government agencies. In recent years Australian government scholarships paid for studies in Australia for some LBH staff, while USAID has made direct contributions to legal development NGOs (including LBH) during that same period. Certain LBH staff also wrote dissertations in the Netherlands under the Dutch bridging program ofthe late 1980s. 31 Concerning LPHN organisation during this period of high activity, see Katz and Katz, 1978: Mahkamah Agung (Supreme Court), Jaksa Agung (Prosecutor General) and Departemen Kehakiman (Ministry of Justice). 33 These efforts mostly involved the BPHN, but also extensive judicial training, hence the Mahkamah Agung or Jaksa Agung. 34 This included significant elements of economic law, such as BPHN's initial attempt to revise the commercial code in its entirety. Decision-makers elsewhere in the Indonesian government advised abandonment of this in favour of concentration on a new, second draft company law which subsequently died on the vine much like its 1970s predecessor draft. See below n 49 and following text. 35 Tax law reform was undertaken within the Ministry of Finance with technical assistance from the Harvard Institute of International Development and affiliated lawyers in the early 1980s, so there is a degree of arbitrariness in fixing the exact beginnings of deregulation and law reform within the 'economists' institutions'. Financial deregulation really represented the first time new institutions were articulated on a level that practically 36 required legislative action. Its initial vehicle was the USAID Financial Markets Project, with banking and moneymarket aspects centred within Bank Indonesia, as well as capital markets and privatisation aspects centred within the Ministry of Finance, particularly 'BAPEPAM' (Badan Pengawas Pasar Modal) or the Capital Markets Supervisory Agency. Following completion of the Financial Markets Project in 1995, a small number of its activities were continued with soft loans from the Asian Development Bank. Post-Asian financial crisis, multilateral assistance, particularly from the World Bank, in the reformation and recapitalisation of the Indonesian banking system plus privatisation continue the exercise. 37 BPHN received some ELIPS support for foreign training of its staff (scholarships for LLM study in the USA), but the Dutch support of judicial training, which is now being revived, was initially taken over by the Australian government through cooperation, still continuing, between the Australian Attorney General's Office, the Indonesian Ministry of Justice and the Supreme Court. There were other, smaller law-reform projects in public law, such as a German government project supporting government decentralisation, but these were outside the economic law area. Similarly, there were spun-off private-sponsored purely Indonesian institutions propagating economic law reform, such as the Legal Studies Centre, Pusat Pengajian Hukum ('PPH'). The PPH, affiliated with corporate law practitioners in Jakarta, was initially founded as a quasipublic undertaking for lawyer training with government support (moved into the private sector due to foreign funding source restrictions). PPH limited its efforts to organising seminars, which may have helped in building a consensus in the Indonesian tradition, but only after the non-public governmental work was substantially complete. 38 For example, at one point and with much fanfare, BPHN representatives became proponents seemingly of looking to the German model of Sozialmarktwirtschaft for economic law, presumably because of a higher comfort level with its assumed formal distance from a 'liberal' (ie, non-pancasilaist) economy; see Lampert, To a limited extent BPHN attempted, during the 1980s, to open up the statutory reform process to outside input via its joint seminars with law faculties. ELIPS actively solicited comments on economic laws in draft form from groups such as the sophisticated corporate bar, although the process still remained relatively closed. 40 Diagnostic Assessment of Legal Development in Indonesia: IDF Grant No (1997). 41 Compare International Legal Center, 1973a. 42 'Menkeh: Perpu Kepailitan untuk Rekayasa Masyarakat', Kompas, 17 July 1998, <http: //

31 43 SeeFung and McCarthy, 1999: 3; Fung, 1999: 3. See also Linnan, 1999a: 4 (paper presented to Current Issues and Future Directions for Bankruptcy Reform in Indonesia: 1 International And Comparative Perspectives, Jakarta, April 1999, sponsored by I Tim Pengarah Pengadilan Niaga RI, AusAID, World Bank and IMF). 44 Proposals have recently been made within the government to raise judicial salaries substantially; see Jakarta Post, 1999: 1. However, similar suggestions were rejected in the past on the basis that if salaries were raised for one class of civil servants, they would have to be raised for all. This would not be financially feasible, even disregarding potential political fall-out resulting from sharply raised government salaries in the midst of the economic crisis. 45 Although the PROLEGNAS was not always followed in practice, and the work of the ministry nominally responsible for the draft statute ultimately might be rewritten significantly. 46 Through the Assistant Minister of State (Assisten Menteri Negara or 'ASMENEG'), PPN Bidang Pembangunan Hukum Kemasyarakatan dan Hubungan Kelembagaan, at the Vice-Chairman level. 47 This includes laws (undang-undang), emergency laws (peraturan pemerintah pengganti undang-undang or perpu), government regulations (peraturan pemerintah), presidential decrees (keputusan presiden) and presidential instructions (instruksi presiden). Under Inpres 15/1970 (29 August 1970), the President, through SETNEG, must give approval for the commencement of draft legislation, be notified of its progress, and approve the end result (before its presentation to parliament in the case of a law). See, eg, Attamimi, 1977 (description of SEKKAB official); Hartono, 1979: 6-19 (English discussion of Inpres 15/1970 process). The gatekeeper's control over the legislative process leads to influence on legislative content, to the extent SETNEG speaks on the President's behalf. For example, in the late 1980s SETNEG counselled the Ministry of Justice, BPHN and other ministries involved to abandon attempts to redraft the entire Indonesian commercial and criminal codes stemming from Dutch times in favour of working on discrete, more urgent matters such as company law. See Netherlands Council for Cooperation with Indonesia in Legal Matters, This advice was later formalised under Repelita vrs Chapter 39 VAlA (the portion of Repelita VI dealing with planning and formulating law) calling for law reform to be conducted on the basis of stand-alone laws rather than trying to reform the older civil and commercial codes in one fell swoop. This was referred to as 'partial' and 'open' codification in Indonesian terminology, notwithstanding which the approach was challenged in the DPR committee review ofthe draft 1995 Company Law. 48 See 'Depkeh Siapkan Naskah Perbaikan Inpres No 15 I 1970', Kompas, 8 August 1998, <http: Ilwww.kompas.com/kompas-cetak/9808/08/ NASIONAUdepk15.htm>. As of April 1999, the original emergency bankruptcy reform legislation, or Perpu No V1998, is under revision; see Linnan, forthcoming. The competition law has been enacted as Law No 5/ 1999, the consumer protection law as Law No 8/1999, the banking law as Law No , the party law as Law No 2/1999, the election law as Law No 3/1999, the MPRIDPR law as Law No 4/1999, and the freedom of expression/free association law as Law No The new central bank law was approved by the DPR but has not yet been signed by President Habibie, while the arbitration law is still under DPR consideration. Changing the Inpres 15/1970 system has been delayed, along with any real attempt to address limited DPR law creation capacity, leaving the issue to be addressed by whatever political constellation and president emerge from the 1999 election and presidential selection. 49 See 'SoulPembahasan 22 RUU: Cari Waktu yang Tepat', Kompas, 15 February 1999, <http: Ilwww.kompas.com/kompas-cetak/9902/15/NASI 0 NAL/cari 08.htm>. 50 There are certain notable exceptions, principally in the Ministry of Justice, and more recently in SETNEG/SEKKAB For example, Perpu No 2/1998, discussed subsequently. See'DPR MintaPemerintahSegera Ajukan RUU Kepailitan Baru', Kompas, 22 July 1998, < 'Perpu Kepailitan Masih Mengandung Kelemahan', Kompas, 25 July 1998, < NASIONAUperp15.htm>. The new bankruptcy legislation is already being drafted; see Jakarta Post, 1999: 1.

32 53 'Kapolri Bentuk Juklak Soal Perpu 2/1998', Kompas, 3 August 1998, < kom pas. com/kom pas-cetak/9808/03/n ASI 0 NAUkapo 15.htm>. 54 See, eg, Jakarta Post, This is merely shorthand for ABRI's more complex view of dwifungsi's status under Indonesian law; see Soebijono et ai, 1992: See also the speech by a retired senior ABRI legal officer in Tambunan, 1995: It is not even a case of putting security interests above wealth, to the extent that the rumoured traditional ABRI internal security calculation holds that to avoid unemployment and consequent unrest the Indonesian economy must grow at a specified percentage per annum to provide sufficient jobs for new workforce entrants. The imponderable question from that perspective would be what happens if the Indonesian economy continues to limp along as the rest of Asia begins to emerge from the Asian financial crisis. The question is not far-fetched in that economists interested in Indonesian development commonly pose questions about the 'high cost economy' and Indonesia's perennial growth shortfall of 1 to 2% vis-a.-vis other high-growth Asian economies before the financial crisis. The Asian financial crisis stopped such questions, but what are the security implications if you are in ABRI's shoes, assuming New Order Indonesia's traditional 'growth discount' re-emerges under a lower long-term growth rate post-financial crisis? References Attamimi, Hamid (1977) 'Mekanisme Proces Perundang-undangan' in Lokakarya Penyusunan Program Legislatif 4-S Februaru 1977 di Manado. Fung, Noel (1999) 'Indonesian Supreme Court Rejects Dharmala Appeal: Ruling Considered Harmful to Bankruptcy Reform', Asian Wall Street Journal, 9 February, 3. Fung, Noel and McCarthy, Grainne (1999) 'Departure of Bankruptcy Expert is Blow to Confidence in Indonesia', Asian Wall Street Journal, 26 March, 3. Gautama, Sudargo and Hornick, Robert (1974) An Introduction to Indonesian Law: Unity in Diversity (rev edn). Bandung: Alumni. Hartono CFG, Sunaryati (1979) In Search of New Legal Principles. Bandung: Binacipta. International Legal Center (1973a) 'The Indonesian Legal System: Teaching, Research and Technical Assistance - Record of a Workshop Convened by the International Legal Center, 30 April- 1 May 1973', unpublished transcript. International Legal Center (1973b) 'Law Reform in Post-Sukarno Indonesia', 10 Newsletter November. Jakarta Post (1998) 'Freedom of Expression Bill Submitted', 3 October. Jakarta Post (1999) 'Indonesia Amending Bankruptcy Law', 30 April, 1. Kagda, Shoeb (1999) 'Indonesian People's Economy Gathers Steam: IMF Move Will Pave Way for Cheap Loans to Co-ops and SMEs', Business Times (Singapore) 13 February, 4. Katz, June and Katz, Ronald (1976) 'Law Reform in Post-Sukarno Indonesia', 10 International Lawyer 335. Katz, June and Katz, Ronald (1978) 'Indonesia's National Law Development Center: A Potential Model for Developing Countries', 12 International Lawyer 443. Konsorsium Reformasi Hukum Nasional (1998) Menegakkan Kedaulatan Rakyat: Tiga Dasar Partisipasi Politik. Kunig, Philip (1986) Das Rechtsstaatsprinzip. Tuebingen: Mohr. Kusumaatmadja, Mochtar (1970) Fungsi & perkembangan hukum dalam pembangunan nasional. Unpublished. Kusumaatmadja, Mochtar (1975a) Pembaharuan pendidikan hukum dan pembinaan professi. Unpublished. Kusumaatmadja, Mochtar (1975b) Pembinaan hukum dalam rangka pembangunan nasional. Unpublished.