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MK shoots down challenge to OJK's authority
Good news: Financial Services Authority (OJK) deputy chairman Rahmat Waluyanto (center) sits next to OJK audit committee head Ilya Avianti (second left) and OJK commissioner for banking supervision Nelson Tampubolon (left) during the reading of a verdict on a judicial review of the OJK Law at the Constitutional Court building in Central Jakarta on Tuesday
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Good news: Financial Services Authority (OJK) deputy chairman Rahmat Waluyanto (center) sits next to OJK audit committee head Ilya Avianti (second left) and OJK commissioner for banking supervision Nelson Tampubolon (left) during the reading of a verdict on a judicial review of the OJK Law at the Constitutional Court building in Central Jakarta on Tuesday. The court dismissed a petition filed by the National Economic Sovereignty Defense Team (TPKEB) to contest OJK Law number 21/ 2011. (JP/Jerry Adiguna) (OJK) deputy chairman Rahmat Waluyanto (center) sits next to OJK audit committee head Ilya Avianti (second left) and OJK commissioner for banking supervision Nelson Tampubolon (left) during the reading of a verdict on a judicial review of the OJK Law at the Constitutional Court building in Central Jakarta on Tuesday. The court dismissed a petition filed by the National Economic Sovereignty Defense Team (TPKEB) to contest OJK Law number 21)
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span class="inline inline-center">Good news: Financial Services Authority (OJK) deputy chairman Rahmat Waluyanto (center) sits next to OJK audit committee head Ilya Avianti (second left) and OJK commissioner for banking supervision Nelson Tampubolon (left) during the reading of a verdict on a judicial review of the OJK Law at the Constitutional Court building in Central Jakarta on Tuesday. The court dismissed a petition filed by the National Economic Sovereignty Defense Team (TPKEB) to contest OJK Law number 21/ 2011. (JP/Jerry Adiguna)
The Constitutional Court (MK) rejected on Tuesday a judicial review filed by a group challenging the legal basis for the establishment of the Financial Services Authority (OJK).
The court, presided over by chief justice Arief Hidayat, ruled that Law No. 21/2011 on the OJK did not violate the 1945 Constitution.
'The court rejects the request filed by the plaintiffs,' Arief said in a ruling at the MK building in Jakarta on Tuesday.
According to Arief, the OJK's establishment was rooted in principles of independence, with the institution able to supervise objectively, free from conflicts of interest with the financial industry.
Justice Anwar Usman added that while the 1945 Constitution did not stipulate the establishment of a financial regulatory body, the OJK had been formed legitimately by the OJK Law approved by the authorities.
The court rejected other elements of the review, including challenges to the regulator's ability to charge banks a fee for its services.
The regulator took over supervision of banks from Bank Indonesia (BI) last year under a 2011 law on financial institutions.
The court's ruling came after the plaintiffs bringing the case, including Salamuddin Daeng, a researcher at NGO Indonesia for Global Justice, and lawyers Ahmad Suryono and Ahmad Irwandi Lubis, requested a judicial review, arguing the OJK's authority was 'excessive'. The plaintiffs were demanding either the dissolution of the OJK, the return of banking supervision to BI or for OJK fees to be diverted to the state budget.
Separately, OJK deputy chairman Rahmat Waluyanto welcomed the ruling and expressed the authority's commitment to improving its supervision of banks and financial institutions, adding that 'the OJK will coordinate and communicate better with the government as well as BI and the Deposit Insurance Agency [LPS]'.
The OJK, Rahmat said, would be ready to provide and receive insights, with the government and the House of Representatives beginning discussions amendments to several laws, including the BI Law.
Meanwhile, BI Governor Agus Martowardojo said the OJK law had been tenaciously guided through a tough and protracted process until its approval in 2011, as the government was committed to bringing about better supervision of banks and other financial institutions.
'The OJK Law stipulates that the OJK focus is on microprudential supervision, which includes banks and financial institutions, while macroprudential supervision remains under BI's remit. Given that it was mandated by the BI Law, we see no problem at all with the OJK Law,' Agus said.
The MK's verdict is final, and cannot be contested or appealed.
' Satria Sambijantoro contributed to the story
