Strengthening the State-Owned Enterprises (SOE) as an Implementation Instrument of Article 33 of the 1945 Constitution in the Perspective of Foreign Investment

Bayuaji, Rihantoro and Mulyo W, Rahmadi (2018) Strengthening the State-Owned Enterprises (SOE) as an Implementation Instrument of Article 33 of the 1945 Constitution in the Perspective of Foreign Investment. Journal of Law, Policy and Globalization, 77: 8. pp. 54-64. ISSN 2224-3240

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Abstract

Associated with one of the objectives of the law, which is to provide benefits to many people, so with the enactment of Law No. 1 of 1967 concerning Foreign Investment, it also provides great benefits for the host country in providing employment opportunities for the community, doubling the power in the local economy, providing residue in both equipment and technology transfer, providing a way or marketing path that can be traced by local entrepreneurs for exported products while still contributing instant foreign exchange and taxes to the country, more resistant to fluctuations in interest and foreign exchange, and providing protection regional politics and security because if the investors come from strong countries, security assistance will also be provided. Liberalization in the investment sector, especially foreign investment, basically existed long before the enactment of the Law No. 25 of 2007 concerning Investment, it also appeared implicitly in several laws and regulations in Indonesia. The laws include Law No. 5 of 1999 concerning Prohibition of Monopolistic Practices and Unfair Business Competition, Law No. 22 of 2001 concerning Oil and Natural Gas, Law No. 7 of 2004 concerning Water Resources, and Law No. 30 of 2009 concerning Electricity. The many liberal laws and regulations described above indicate that the right to control by the state concerning the livelihoods of the people as amended by the 1945 Constitution is "castrated" by laws that are not in harmony with it. In fact, Law No. 25 of 2007 concerning Investment was issued in the framework of implementing the mandate of Article 33 of the 1945 Constitution (“UUD 1945”).

Thus, the opening of foreign investment in production sectors that dominate the livelihoods of many people is certainly contrary to the concept of the right to control by the state as stipulated in Article 33 of the 1945 Constitution. In this case, the management of production sectors that control the livelihoods of many people should be the role of SOE (state-owned entrerprise). This is because the concept of the right to control by the state that was born from Article 33 of the 1945 Constitution concerns several things, there are:

The economy shall be organized as a common endeavour based upon the principles of the family system;
Sectors of production which are important for the country and affect the life of the people shall be under the powers of the State;
The land, the waters and the natural resources within shall be under the powers of the State and shall be used to the greatest benefit of the people; and
The organisation of the national economy shall be conducted on the basis of economic democracy upholding the principles of togetherness, efficiency with justice, continuity, environmental perspective, self-sufficiency, and keeping a balance in the progress and unity of the national economy.

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