SOE Ministry: SOE Law must be revised

"The regulation of State-Owned Enterprises (BUMNs) do need to be revised and steered in line with the mandate of the 1945 Constitution, as an effort to create prosperity for the entire Indonesian society," said Deputy for Mining, Strategic Industry, and Media sector, Ministry of State-Owned Enterprises, Fajar Harry Sampurno in Jakarta, Wednesday.

Fajar made this statement in response to the assertion that state-owned companies have not been given the appropriate constitutional portion as a business entity that is, for the most part, utilized to benefit the entire Indonesian people.

However, according to Fajar, BUMNs still can not be steered fully to control all of Indonesia's natural resources because not all commodities are considered to fall into the category of public necessities.

"There should not be such an obligation, since it would become a monopoly. So do not generalize the BUMNs that do indeed manage public necessities and those that should be able to compete," he said.

Fajar explained that BUMNs that have the right to monopolize are those that manage public necessities, such as PT PLN, Bulog, PDAM, and the oil and gas sector. Meanwhile for minerals, he asserted that these commodities are free to be managed by anyone.

"This is because the mineral and coal sector do not directly impact the livelihoods of many people, only a few," he said.

Previously, constitutional law expert Irmanputra Sidin assessed that state-owned business entities have not received the appropriate constitutional portion as a state business entity.

"Law Number 19 of 2003 concerning BUMNs directly emphasizes that BUMNs are one of the actors in economic activity based on economic democracy; this is not quite right," Irman said in the DPR/MPR RI Building in Jakarta, Tuesday (15/3).

According to him, the law has inadvertently degraded BUMNs that are in fact business entities in the name of the people's sovereignty and the representation of the state, thus situating them on the same footing as both domestic and foreign private companies.

"Economic democracy is a subtle form of compromise and the state's powerlessness vis-a-vis free market forces," he said.

Irman added that the constitution mandates that the earth, water, and the wealth contained therein must be fully controlled by the state, for the greatest possible prosperity of the people. This is in fact the genesis of the BUMNs, which were established to enable the state to prosper its people.

"We must recognize that BUMNs were not born of economic democracy, nor are they subject to the desires of the free market. That is what has led BUMNs to become indistinguishable from private business entities serving private interests. How can it be possible that the state-owned business entity must compete for objects of business operations with the private sector? It is clear that this object falls under the category of production branches of state power," he said.