Indonesian Law Advisory Home

Law in Indonesia

 

Remember the tale of the six blind men who went to see the elephant? One felt a tusk and found a spear, another felt the tail and found a rope, another felt the side and found a wall. When all six discussed it later, they disagreed on the whole. No one was actually wrong, but somehow the parts did not add up to an entire elephant.

Indonesian law is a lot like that.

From some recent media articles discussing investments and security under law:

Indonesia's Economic Boom Continues

Indonesia is now one of Asia Pacific’s most vibrant democracies that has maintained political stability and emerged as a confident middle-income country. Indonesia Outlook - The World Bank, December 2012

Indonesia is now an increasingly competitive and secure place in which to invest... A sense of renewal and security has returned to the country. Okusi Associates, Opportunities

Demand for Bali properties has Increased dramatically in recent years. Primarily driven by Indonesians and Foreigners... Bali Property Investments appeared to be secure. Decide now.... [We give] you the right advice to efficiently negotiate your land acquisition and government regulations to make your property investment all the more secure. Please let us show you the exciting opportunities in Bali Island. BaliProperty.com


Indonesia Rated Among World's Most Corrupt Countries

Corruption continues to undermine the economy, distribution of resources, and the public administration in Indonesia. All available data and country reports indicate that corruption remains widespread...[We] consider corruption as the most severe problem affecting the business environment in Indonesia. Causes of Corruption in Indonesia - Transparency International, August 2012

“I no longer know what to say about corruption and government bureaucracy. [It] is indeed endemic, deeply entrenched in the entire judicial process in Indonesia. The problem is not about the substance but more about the law enforcers and the legal culture." Strategic Review, 2012

The law mafia is targeting hotels in Bali, plotting to bankrupt hotels which are still healthy, including Aston Resort and Spa, Tanjung Benoa, Kuta to a loss of billions of dollars. Detik.com, July 2012


Indonesia law often seems to depend on point of view. This is law by anecdote, not wrong, but not complete and not useful.

 

An Overview...

Attempting to understand Indonesian law in general or in application to particular issues requires a broader context. As we shall see, even such fundamental issues as the procedures and legality of marriage can stir up strong disagreement among lawyers, notaries, courts, and the public.

So to avoid presenting a single person’s opinion as fact, this website pulls together a wide variety of original materials, including

  • Written laws and regulations,
  • Written jurisprudence,
  • Academic papers,
  • Newspaper articles and editorials,
  • Internet articles from researchers, lawyers, notaries, and Indonesian and expatriate clients,
  • Actual legal documents,
  • Personal experiences from a variety of sources.

Here is an easy start form a Wiki article Law of Indonesia:

Problems with the system

There are still many problems with the legal system in Indonesia. Many laws and regulations conflict with each other, and because the legal system (including the courts) sometimes does not operate effectively, it can be difficult to resolve these conflicts. Further, the rule of law in Indonesia is often undermined by rife corruption among the nation's judiciary and law enforcers.

 

Understanding the issues brought up in these three short sentences requires some background.

 

Practical guidelines...

If you are visiting this website because your are looking to marry or invest in Indonesia, 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.

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 system.

But it is not that simple, and looking only at examples with the good fortune not to have experienced legal problems tell us nothing about how the system might perform when we need it.

Expatriates come from legal environments with solid principles and solutions. They expect similar solutions in Indonesia, and they look for attorneys and advisors who can give them clear guarantees. But they misunderstand Indonesian law if they insist on viewing it through the lens of Western law traditions.

 

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.

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 jurisdictions.

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.

 

Why Indonesian Law Advisory?

EDCover

 

This website was born after more than 10 years of direct practical experience in a series of cases detailed at www.uluwatu.com.

As a result of the Uluwatu cases, I wrote the book Eleven Demons - Secrets of Deincarnation in Bali.

From a review in TEMPO—Indonesia's leading news magazine:

Don't even think about signing any contract or agreement, entering into any kind of business partnership, starting any legal action, or above all proposing to a Balinese woman without first reading Eleven Demons from cover to cover. Disguised behind a story of how love can go horribly wrong, this book is both a compulsively good read and an essential manual on how to live, love, and conduct business as a foreigner in Bali... (TEMPO English, No. 01/13, August 28, 2012)

The Uluwatu cases still continue in Bali, Jakarta, and California. We hope with Indonesian Law Advisory to help others who may find themselves facing similar problems.