When Indonesia is booming, and we see other people marrying, starting businesses, apparently doing well,
we assume that a few minor problems can’t derail a basically healthy social and legal
But here is a basic fact:
Despite the enthusiastic representations of lawyers, business advisors, notaries, friends,
and potential partners, it is not possible to obtain 100% security regarding
marriages, business ownership, contracts, land purchases, child / parent relationships,
or anything else depending upon legal status or enforcement under law in Indonesia.
This is true for Indonesian citizens, and even more true for expatriates.
Expatriates come from legal environments with solid principles and solutions. They expect
such solutions in Indonesia, and they look for attorneys and advisors who can give them
clear guarantees. They become easy prey for fraud because they too often insist on viewing Indonesian law through the lens of Western law traditions, and they ignore Indonesian reality.
Complexity and corruption...
A noted Indonesia scholar calls Indonesia’s legal system
“complex and unusual,” which would make law in Indonesia difficult to
navigate even without the problems of corruption. Corruption makes it far worse.
Because of this complexity and corruption, there is, unfortunately, no short-cut,
and the consequences of a mistake can be disastrous.
On the most personal level, when documenting your marriage or the parentage
of your children, for example, there is no legal process which can guarantee that
your family is not drawn into conflict. You may lose the legitimacy of your marriage,
custody and legitimacy of your children, and rights to marital property.
For investors, “corruption as the most severe problem affecting the
business environment in Indonesia” does NOT refer to the possible inconvenience
of paying a bribe for a business license or land document; the downside is far more
severe and could involve complete loss of your business or property.
And these problems don’t only affect us individually. The social causes
for which so many Indonesians and non-Indonesians struggle—democracy,
freedom of the press, protection of the environment, women’s health, children’s
welfare, and more—are all pointless, with hard-won principles easily aborted
precisely when they are most needed, without secure rule of law.
In brief, here is why:
- Written law as found in codes and regulations–what we might call Formal
Law–may not describe real-world application of law. Indonesian laws are
based on multiple and sometimes incompatible heritages, resulting in statutes which
can be vague, incomplete, or contradictory.
- The actual implementation of law–or Applied Law–depends on the
actions of lawyers, judges, police, and other law professionals. Their actions can
be at odds to the laws as written.
- Regardless of written statutes or usual implementations, any particular case–Your
Law–can take its own trajectory. Here is where the famous problem of Indonesian
corruption comes in. The impact of corruption is not simply
an inconvenience as implied by some Indonesian law and business advisories, but
potentially a complete loss of family, security, property, or human rights despite
fully documented guarantees of those rights.
- The resemblance of Indonesian legal Institutions to those of other nations–including
legislatures, law codes, lawyers, courts, police, and prosecutors–can cause
confusion. In some cases, the origin, purpose, or function of these institutions
is entirely different than one might assume from their superficial appearances.
- Corruption reaches its most complete expression in the actions of the Mafia
Hukum, or Law Mafia, the Indonesian term for the blocks of lawyers, judges,
police, and other law professionals who lock up practical access to law in many
As a result, representations of law solutions and investment opportunities by some
law and business advisories are more in the nature of wishful thinking–aspirations
for law, not Indonesian reality. For expatriates
thrilled by their Last Paradise, or investors jumping on board the latest boom, Indonesian
law deserves a more careful look.
Even worse, some promenent advisories and law offices intentionally dispense incorrect advice to clients while setting them up for fraud.
The FAQ noted above—Do I need a Prenuptial Agreement?—is a case in point.