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Govt hands tied as regional laws discourage business
According to a recent study, one third of 1,109 regional regulations issued by six administrations in Bekasi, Bogor, Depok, Jakarta, Sidoarjo and Kulonprogo contradict central government rulings.
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A worker inspects water pipes at a PVC factory in Bekasi, West Java. Many local government regulations contradict central government regulations, creating uncertainty for businesses. (JP/Dhoni Setiawan)
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any local business regulations contradict national laws and create legal uncertainty, but there is still no clear way to resolve the problem, partly due to a Constitutional Court ruling from two years ago.
Jakarta-based think tank Regional Autonomy Watch (KPPOD) recently completed a study of 1,109 regional business regulations issued by six administrations and found that one-third of them (347 regulations) contradicted equivalent central government rulings.
"Such contradictions confuse business players. Which regulations should they follow? The ones they encounter every day on the field or those on the national level? By hierarchical right, they should follow those on the national level,” said KPPOD executive director Robert Na Endi Jaweng at a briefing in Jakarta on Wednesday.
The regulations studied were those issued by the Bekasi, Bogor, Depok, Jakarta, Sidoarjo and Kulonprogo administrations between 2010 and 2015. KPPOD chose the former four areas, which collectively form Greater Jakarta, because they were easily accessible and the latter two areas because they were rising industrial areas.
Robert said KPPOD, an affiliate of the Indonesian Employers Association (Apindo), used to bring problematic regional regulations to Home Affairs Ministry director-general for regional autonomy Akmal Malik, who would review them and revoke those he deemed contradictory.
However, the central government no longer has the authority to revoke contradictory regulations since the Constitutional Court decided in 2017 to transfer the authority to the Supreme Court. Thus, only privately-funded civil lawsuits can change such laws.
"If we were to send problematic laws to the director-general now, he would just keep it for further study and monitoring," said Robert.
