The 150th Anniversary of the
Indonesian Civil Code
In April 1999 Leiden University and the Indonesian Department of Justice organized a conference commemorating the 150th anniversary of the introduction of the Civil Code in Indonesia. The Leiden conference was supported by the International Institutefor Asian Studies, as well as by other funding agents, including the Department of Justice of the Netherlands, the International Monetary Fund, the Law School of Leiden University, the Centre for Asian and African Studies of Leiden University, and the international law firm Loeff Claeys Verbeke.
By SEBASTIAN POMPE
The Leiden conference was organized back-to-back with another conference under the aegis of Melbourne University, supported principally by AUSAID, with organizers from each conference joining in and participating as speakers or moderators in the other. The reason for organizing conferences this way is that they addressed topics that were closely related. The Leiden conference principally concentrated on technical civil law topics relevant to bankruptcy law and procedures, whereas the Australian conference focused on political and institutional aspects of the bankruptcy law and commercial courts. There were some differences. Leiden followed a legal-technical approach and was principally carried by Dutch and Indonesian speakers jointly for each selected topic. The Australian conference, by way of contrast, was more political, and most speakers came from abroad. But both conferences addressed the same legal and institutional development in Indonesia, being the commercial court and the bankruptcy law programme, therefore a word about this would not go amiss here.
The background:
commercial court and bankruptcy law reform
Of the many important new developments in Indonesian legal and administrative development under Reformasi, the establishment of the commercial court has been one of the most ambitious and interesting.
Technically, the court had a limited function, being part of the private debt restructuring programme agreed by Indonesia and the IMF. Its jurisdiction, at least at first, was limited to the narrow field of bankruptcy law (though this would be broadened later). For a proper understanding of this technical role of the court, it should be added here that the bankruptcy law and the court were not meant to bring defaulting Indonesian companies to bankruptcy en masse, as was widely believed in the early months and in fact erroneously argued by some (foreign) commentators. Decidedly that would have been a most inefficient way of recuperating investments, and in any case generally conflicted with long term investment plans of many foreign capital investors. Instead, the court was part of a broader debt restructuring package, initiated long before the court even came into existence, and directed towards facilitating private debt restructuring for Indonesian companies. The massive refusal of Indonesian companies even to discuss debt restructuring with creditors on the grounds that this was a national emergency (force majeure) rather than individual problem harmed economic recovery in two ways. First, assets tied up in companies could not be freed for other purposes, and second, most importantly, vital new foreign investment would not be forthcoming unless the status of existing investments had been determined. In the debt restructuring programme, the bankruptcy law and commercial court therefore were clearly meant to be instruments of last resort.
Beyond the legal technicalities of the law, it is important to recognize in the commercial court an institutional and political revolution in a broader strategic sense. The programme was emphatically directed towards creating a strong, independent, and professional court, before which governance generally could be called to account: not just corporate governance, but political governance as well. The commercial court without doubt represented the most serious attempt since the fatal decline of the courts in the 1950s to improve the professional standards, effectiveness, and credibility of the Indonesian judiciary radically as a whole. For that purpose, the court was carved out of the jungle that is the Indonesian law machine, both legally and physically. With its own procedural law, physically was also an altogether new court, with its own distinct offices, judges and court staff, and office facilities. Every effort was directed to make this a court a niche in the morass of the Indonesian judiciary: properly equipped and remunerated, free from external interference, and observing the highest professional standards. A separate appeals channel was put in place, with a distinct chamber of the Supreme Court handling such appeals. It is for this reason that, notwithstanding its limited role within the legal edifice as a whole, the initiative enjoyed strong support in progressive Indonesian circles, just as much as it was aggressively opposed by entrenched interests which it challenged.
Looking at the actual performance of the court, talking here as an insider, it is fair to say that the commercial court and certainly the Supreme Court have failed to live up to expectations. In fact, the Indonesian judiciary as a whole seems to have been 'absen dari Reformasi', much as fifty years earlier it was politically absent from the Revolution an act of fence-sitting for which it subsequently was served many a political debt to pay. The new commercial court by and large simply slipped back into the old habits soon after it was established, coaxed along by entrenched interests and with a gentle bit of armtwisting here and there by the judicial hierarchy. Sometimes the process of decline was even rather perversely supported by some foreign commentators, evidently lacking in an understanding either of what the programme meant to achieve or of their own role and responsibilities.
The conference
It is in this context of rise and decline if one likes, that the conference was organized. And even though the conference had been planned some time ago, the topic nevertheless turned out to be wonderfully timely. Dealing as it did with the Civil Code, and commemorating the historic event of its introduction into Indonesia, for better or worse, 150 years ago, the topics covered during the conference addressed matters that all were directly relevant to the commercial court and bankruptcy law reform. This was done at the express request of the Indonesian side, which had been extensively consulted on the matter in the run-up to the conference. As a result the conference made an important contribution towards both legal studies and legal practice.
This was a gathering of Dutch and Indonesian legal professions, nearly all of the latter being represented in force: academics, judges, lawyers, notaries, and representatives from the public prosecution and board of bankruptcy trustees. The conference was hosted by the Institute for Legal Development (BPHN) of the Department of Justice, whose Director, Prof. N.A.S. Natabaya, and wonderful staff had organized everything with traditional Indonesian hospitality, great food, and attention for detail. Also highly supportive was Cyber Consult, which arranged such facilities as a prompt translation of the papers in the Indonesian and the English, as the need arose, thus facilitating discussion between speakers. More than 150 persons attended, as the conference was opened in great ceremony by the Minister of Justice, Professor Muladi, in the presence of the Dutch Ambassador, Baron van Heemstra, and the Dutch Director General for Courts, Professor C.L.M. Cleiren. The Embassy had been extremely helpful in the preparation of the conference, as in fact during an Embassy reception celebrating the conference, the cultural section (Mrs G. Wolters and Mrs M. Winter) had arranged for an information kit on Dutch law and related matters to be provided to all senior legal officers in Indonesia, including a catalogue of international courses in the Netherlands in the field of law, a provisional bibliography of Dutch law in translation edited by the Meijers Institute of Leiden Law School, an issue of the (Leiden edited) Indonesian Law and Administration Review, and last but not least, the three Indonesian
Dutch legal dictionaries (on contract, commercial, and property law) which had just come off the press under the auspices of the Centre for International Legal Co-operation in Leiden.
As regards the substance of the conference, and inevitably so when professions meet, they talk trade. It would bore readers of a journal with a wider audience such as this to deal with the technicalities of that trade in too much detail. Suffice to state here that the conference addressed the following major topics: (1) general legislative and jurisprudential principles and the interrelation between the commercial law and the civil law (and code) describing the way in which the civil code serves as a basis for commercial law; (2) the Civil Code security rights by which debts are secured (and are key elements in bankruptcy procedures) and finally (3) the issue of force majeure in the Civil Code (i.e. the question to what extent parties can escape contractual obligations claiming ulterior reasons).
It may be pointed out here that these are all issues which are key elements in the economic reform which is undertaken in Indonesia in this period of reform. Whilst observers generally tend to focus on the politics, it is important to bear in mind that the politics of change is embodied in legislative instruments, the success or failure of which is largely determined by such 'technical issues' as the nature of securitization, mortgage, fiduciary transfers etc. In recent months we have witnessed numerous events in Indonesia in which the use, or abuse, of such technical instruments has been the determining factor in economic recovery or relapse, or political reform. Precisely by focusing on legal technique, this conference was directed towards making a serious contribution to economic and institutional reform in Indonesia.
The results of the conference, consisting of almost 30 papers, will be edited and published in a book. Publication in both English and Indonesian is our aim. A great deal of work remains to be done to complete this, requiring the commitment of most speakers. Also, a translation of the contract law book of the Indonesian Civil Code is in preparation right now. If all this succeeds, then a major contribution will have been made towards the development of civil and commercial law in Indonesia. *
Sebastiaan Pompe
Van Vollenhoven Instituut
Rapenburg 33, 2311 BC Leiden
Tel.: +31-71-527 7260
Fax: +31-71-527 7670
E-mail: jfvviam@ruljur.leidenuniv.nl