Indonesia’s 2016 Priority National Legislative Program

As covered by the media earlier this year, there are a total of 40 Draft Bills included in the 2016 Priority National Legislative Program (“Program”)[1] of the House of Representatives of Indonesia (“House”). Although the House has performed poorly in reaching last year’s Program, the 2016 List covers Draft Bills that will be discussed and to be, hopefully, enacted this year by the House.

There are a number of Draft Bills that immediately catches attention, including a few of those that are proving regulars for this annual Program. These Draft Bills are:

Draft Bill on Alcoholic Beverage Prohibition

This Draft Bill has been included into the each year’s Program since it was proposed in 2013 by the United Development Party, arguing that alcoholic beverages will ruin the young generation of Indonesians as alcoholic beverages are easily obtained and consumed by underage consumers (under 21 years).

In the version that was circulated in 2013, the Draft Bill effectively without exception will ban all alcoholic beverages, whether that be imported or domestically produced traditional drinks. This includes selling, buying, distributing, consuming or storing alcoholic beverages. Any person found in violation of this ban will face 2 to 10 years of imprisonment and IDR 200 million to IDR 10 billion in fines.

In recent developments, there are circulating issues that the Draft Bill has included additional provisions, including exceptions for customary alcohol beverages and pharmaceutical alcohol for medical purposes. However, the blanket ban for alcohol beverages still stands.

In my personal opinion, this whole Draft Bill can be scrapped if law enforcement are committed to prosecuting those that sell alcoholic beverages to underage consumers, not to mention a quite significant number of investments will shut down as a result of this new policy under this Draft Bill. If the only problem with alcoholic beverages is underage consumers, then give the law enforcement a slap on the wrist rather than implementing a blanket ban, or we might see a rise in demand for “pharmaceutical alcohol” or a lot of black market – untaxed, no excise, no customs duties – alcoholic beverages.

There is still hope, however, for those that enjoy alcohol, whether that be the casual or social drinker or those that like to have a beer when finishing work. In one of the recent economic policies packages introduced by the Jokowi administration, there is a policy to loosen the investment provisions in relation to alcoholic beverages. This is not much to lay hopes on, but it shows the difference of stance between the executive and legislative bodies. Only time will tell whether or not this Draft Bill will be enacted.

Draft Bill regarding Trademarks

Ridiculous discussion aside, the Draft Bill regarding Trademarks is also in the 2016 List, which is the first of Indonesia’s reform of intellectual property rules (there will be reforms to the laws on patent, industrial design, integrated circuit design and trade secret that will soon follow). This Draft Bill is set to replace the currently prevailing Law No. 15 of 2001 regarding Trademark.

As generally known, a trademark is a sign or symbol that can take the form of a picture, name, letters, numbers, and so forth that distinguishes a particular good or service. The Draft Bill expands the said definition, which can be considered as quite traditional, to include new types of trademark elements, such as three-dimensional features, sounds and holograms. Furthermore, the Draft Bill also aims to recognize international trademark registration under the Protocol relating to the Madrid Agreement Concerning the International Registration of Marks.

The Draft Bill will also expand the provisions related to geographical indication. A geographical indication is a name or sign used on a product which corresponds to a specific geographical location from which the product originates from. The use of a geographical indication to a product may imply that the product possesses certain qualities, is made according to traditional methods, or enjoys a certain reputation, due to its geographical origin.

The Draft Bill provides new provisions on geographical indication, covering registration requirements and procedures, lawsuits filed for geographical indication infringements, and geographical indication development and monitoring.

Draft Bill regarding Amendment to Law No. 11 of 2008 regarding Electronic Information and Transactions

This Draft Bill intends to amend certain provisions related to criminal proceedings under Law No. 11 of 2008 regarding Electronic Information and Transaction, including:

  1. Adding Official Interpretation that sending electronic messages that contain insults or defamation will be prosecuted in accordance with the Law No. 8 of 1981 regarding Criminal Procedure (commonly known as the “KUHAP”);
  2. Searches and confiscations by law enforcement no longer require the permission of the local district court;
  3. Adds a number of authorities of Civil Servant Investigators, including locking electronic data or systems related to a criminal case and obtaining information contained in an electronic system; and
  4. Spreading electronic data that violates public decency, with gambling content, or contains insults or defamation, are classified as complaint offenses (the criminal proceedings will be discontinued if the party pressing the charges withdraws the report).

While the changes are minor, many have protested against the revision that allows law enforcement to conduct searches and confiscations without the permission of the local court. This will enable easier access to information contained in an electronic system, which in this digital age is where most data and information are stored, however this revision revokes the only means of control to law enforcement in exercising their authority in which the intrusion of a person’s privacy is clearly at stake.

Draft Bill regarding Second Amendment to Law No. 7 of 1992 regarding Banking

This Draft Bill has been included into the House’s Program every single year since 2012 and has yet to see significant progress.

The current discussions at the House of highlight is the percentage of foreign ownership over banks, between 30 and 40 percent according to latest discussions, and providing access to banking information for the Directorate General of Taxation.

Regarding the former, there is at least a common understanding between all the factions at the House that the Draft Bill must stipulate foreign shareholding limit, unlike the new plantation law (Law No. 39 of 2014 regarding Plantation) that was enacted in 2014 that left this matter to be further regulated under a Government Regulation.

Other amendments include changing the allowed legal form of banks to only be as a limited liability company. The current Banking Law provides that banks may also be in the form of a cooperative or regional company, other than as a limited liability company.

Draft Bill regarding Creative Economy

This Draft Bill is the fruit of efforts undertaken by former president Susilo Bambang Yudhoyono during his term in office when he addressed the importance of creative economy. Despite this good intent, there has been no follow-up to introduce a comprehensive regulatory framework for Indonesia’s creative economy, other than a presidential instruction and the formation of a new ministry for creative economy. Without legal certainty, no matter how much potential, Indonesia’s creative economy will not thrive.

Taking initiative of this executive and parliamentary oversight, Indonesia’s Regional Representatives Council proposed this Draft Bill regarding Creative Economy in 2014, with hopes that it will be enacted before the initiation of the ASEAN Economic Community (“AEC”). As mentioned earlier, due to the House’s poor performance last year, the AEC has commenced at the beginning of this year without Indonesia enacting any form of legislation on creative economy.

The Draft Bill, at the foremost, introduces a definition of creative economy, which is an economic sector that relies on added value of ideas and concepts deriving from creativity, covering cultural heritage (cultural festivals and ceremonies, and traditional art galleries and museums), art, media, and functional creations. Functional creations refer to design, new media (software, games, and creative digital content), and creative services and products.

The Draft Bill also defines creative industry as being part of creative economy. Creative industry, according to the Draft Bill, refers to any industry that combines creation, production, and commercialization of creative products that incorporates the development of customs or cultural elements.

In hopes of ensuring the development and protection of Indonesia’s creative economy, the Draft Bill provides comprehensive provisions on:

  1. Obligating all Regional Governments to establish a so-called Creative House (Rumah Kreatif), which is a place designated for promoting creative skills and management, networking for individuals engaged in the creative economy sector, and providing intellectual property consultations;
  2. Providing income and regional tax incentives;
  3. Encouraging partnerships between individuals and entities that engage in the creative economy sector, such as creative and production cooperations; and
  4. Opening financing opportunities for those engaged in the creative economy sector, as well as promoting investment and export of their products.

 


FOOTNOTES

[1] For the complete Program, see: http://www.dpr.go.id/uu/prolegnas


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