New Regulation on the Settlement of Disharmony between Laws and Regulations through Mediation

Introduction
Scope
Parties and applications
Mediation procedure
Comment

Introduction

On 12 February 2019 the Ministry of Laws and Human Rights (MOLHR) issued Regulation 2/2019 on the Settlement of Disharmony between Laws and Regulations through Mediation.

The regulation took effect on 14 February 2019 and has replaced the previous regulation on the same subject (MOLHR Regulation 32/2017 on the Procedure for the Settlement of Disputes over Laws and Regulations through Non-litigation).

Scope

MOLHR Regulation 2/2019 reinstates the possibility to settle disputes concerning laws and regulations outside the courts through mediation. Under the regulation, disputes regarding the following types of law and regulation, among others, can be resolved through mediation:

• ministerial regulations;
• non-ministerial government institution regulations;(1)
• non-structural institution regulations;(2) and
• regional laws and regulations.

The above regulations can be submitted for mediation if they contradict each other vertically and horizontally and:

• cause disharmony between legal norms;
• cause conflicts of authority between ministries and institutions;
• cause injustice for communities or businesses; or
• disrupt the investment or business climate or national or regional economic activities.

Mediation can commence on receipt of:

• an application from the parties; or
• an order from the MOLHR.

In the latter case, the MOLHR will assign the director general of laws and regulations to conduct mediation without first receiving an application from any party.

Parties and applications

The following parties can apply for mediation:

• individuals or groups of individuals;
• agencies, institutions, ministries, non-ministerial government institutions or regional governments; and
• public or private entities.

The application must be submitted in writing in Indonesian and provide at least the following information:

• the applicant's identity;
• the applicant's date of birth or age;
• the types of law and regulation for which mediation is being applied;
• the grounds for the application; and
• the matters to be resolved (petition).

The application must be submitted to the MOLHR and a copy must be sent to the director general of laws and regulations. The latter will then assign a preliminary assessment team comprising administrative officials from the Directorate for the Litigation of Laws and Regulations. The assessment team will check the completeness of the application. If complete, the application will be registered; otherwise, it will be returned to the applicants to be completed. A copy of the application will then be delivered to the parties within seven days of its registration.

In addition, Regulation 2/2019 defines 'related parties' as those which have a direct interest in any mediation application with regard to either their rights or powers.

Mediation procedure

Mediation must be conducted by way of a public hearing and chaired by the examining panel appointed by the director general of laws and regulations. The examining panel will comprise:

• three MOLHR representatives; and
• two legal scholars.

The mediation procedure includes:

• hearing the testimony of the applicant and any relevant parties;
• hearing expert legal opinions;
• providing clarification to the parties; and
• concluding and delivering the mediation result.

Mediation can be resolved by way of:

• an agreement between the parties to be implemented within 30 calendar days (or otherwise agreed); or
• a recommendation from the MOLHR if:
  • the relevant parties were not present at the hearings;
  • the parties did not reach an agreement; or
  • the mediation was ordered by the MOLHR.

The parties must implement the recommendation within 60 calendar days of its receipt. Otherwise, the recommendation will be submitted to the president within 30 calendar days of the expiry of the implementation time limit. The recommendation will then be considered during the development of the laws or regulations of the relevant minister, non-ministerial institution or non-structural institution or regional laws or regulations.

Comment

The new mediation procedure differs to court proceedings before or judicial review by the Supreme Court or the Constitutional Court, whose rulings are enforceable. MOLHR Regulation 2/2019 provides no clear and detailed provisions on how to enforce the results of mediation, regardless of whether a recommendation is issued by the MOLHR or the parties reach an agreement.

In addition, the submission of the MOLHR's recommendation to the president is unusual, as this should ideally be submitted to the authorities which issued the disputed regulations. Further, MOLHR Reg 2/2019 is silent on how a recommendation should be implemented once received by the president.

Issues may also arise if an MOLHR recommendation is not in the applicant's favour, as Article 16 of Regulation 2/2019 states that mediation cannot be applied for if it concerns issues which have already been resolved through mediation under the MOLHR, unless the parties (ie, the applicant and the relevant institutions) agree to amend their agreement.

For further information on this topic please contact Vincent Ariesta Lie, Towy Aryanosa or Putri Rachelia Azzura at Makarim & Taira S by telephone (+62 21 252 1272) or email (vincent.lie@makarim.com, towy.aryanosa@makarim.com or putri.azzura@makarim.com). The Makarim & Taira S website can be accessed at www.makarim.com.

Endnotes

(1) 'Non-ministerial government institutions' are state institutions establised to implement certain government duties for the president (eg, the State Intelligence Agency and the National Narcotics Agency). The head of a non-ministerial government institution reports directly to the president.

(2) Non-structural institutions are institutions which are formed by law to support certain government functions funded by the state budget, including:

• the Corruption Eradication Commission;
• the Business Competition Supervisory Commission;
• the National Police Commission; and
• the Press Council.