Analysis of the New Criminal Code and Regulations in lieu of the Job Creation Law

The ratification of the RKUHP into law at the beginning of the month was preceded by a long journey. Towards the end of the year, on December 30 2022 to be precise, the Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation has officially been issued, which continues to reap pros and cons to this day. How do legal experts assess the impact of the Criminal Code and the Job Creation Perppu on democratic life and sustainable development in Indonesia?

After six decades of post-independence debates and the leadership of seven presidents, the DPR finally approved the Draft Criminal Code to become the Criminal Code Law on December 6, 2022.

The implementation of the new penal code that replaces the rules inherited from the Dutch colonial will go through a transitional period for the next three years and become fully effective in 2025.

Criticism came from the Press Council and a coalition of civil society who considered that the Criminal Code could threaten democracy, freedom of the press, freedom of speech, perpetuate corruption, and have the potential to destroy citizens’ private spheres. An expert panel organized by The Conversation Indonesia revealed how the Criminal Code is prone to harming Indonesian democracy. Two of those that emerged were:

Bivitri Susanti – Constitutional Law Expert, School of Law (STH) Indonesia Jentera: The definition of an act of insulting the government in the Criminal Code is “an act that humiliates or damages the honor, or the image of the government or state institutions, including defaming or slandering”. This definition has multiple interpretations, thus making these articles potentially rubber articles and clearly not in line with democratic values. Through this Criminal Code, the government seems to be trying to limit criticism and control from the public and this rule is made only for the convenience and interests of the authorities.

Raynaldo Sembiring – Executive Director of the Indonesian Center for Environmental Law: The new Criminal Code still leaves behind the provisions on corporate criminal responsibility in Articles 46 and 48. These rules can only ensnare corporate officials, for example field managers, who are often not intellectual actors in an environmental crime.

Based on our analysis, this article means that corporations as business entities cannot be criminally charged. In fact, so far in cases of environmental crimes, especially forest and land fires, the perpetrators are mostly corporations as business entities. Environmental crimes are also often carried out in a planned manner, which is not only known by an “administrator”, but also by corporate officials. All of them act on behalf of the business entity.

Experts on the panel of The Conversation Indonesia view that the existing regulations do not have a fear effect or deterrent effect for perpetrators of corporate crime. On the other hand, the new Criminal Code can actually become a “wind of heaven”. The new Criminal Code also does not provide a concrete solution to the criminalization of people fighting for their living space.

Turning to the issue of maritime affairs and fisheries which is a sector regulated in the Job Creation Bill. Given the importance of this sector for Indonesia, both in terms of economy, environment, energy, tourism, and others, the main principles that should be the foundation are fair, sustainable and environmentally sound efficiency as mandated by Article 33 paragraph (4) of the 1945 Constitution.

However, unfortunately, the essence and function of instruments for protecting and managing the environment are reduced in spirit by the Job Creation Law. This weakening was carried out at a time when the world was promoting investments that were friendly and responsible for the environment and society.

Not a single country in the world perceives environmental protection and management instruments(environmental safeguards) as an investment constraint(investment barriers). If you look at the Ease of Doing Business (EoDB) indicators, none of the indicators link environmental protection as an obstacle to EoDB. The world trend proves that investors from big and emerging countries are now increasingly aware of the needgreen investment.

If Indonesia wants to encourage investment, Indonesia needs to prioritize investment based on sustainable development, as mandated by Article 33 (4) of the 1945 Constitution above. In addition, increasing sustainable investment must also be accompanied by efforts to improve the quality of public services, increase the effectiveness of law enforcement, and eradicate corruption.

IOJI notes three matters related to maritime affairs and fisheries that deserve great attention in the Job Creation Law and its derivatives, as follows:

1. Strengthening blue carbon ecosystem protection (EKB) by categorizing EKB as critical natural capitals (CNC)

The Job Creation Law gives authority to the Government to issue Business Permits even though the activities specified as National Strategic Policies have not yet been included in the Spatial Planning and Zoning Plans. The Spatial Planning Law clearly states that spatial planning aims to carry out spatial management wisely so that sustainability is maintained for the sake of social justice in accordance with the 1945 Constitution.

Utilization activities carried out without referring to the spatial plan have the potential to be incompatible with the carrying capacity and capacity of the environment, thus causing an imbalance in the ecosystem which has an impact on the sustainability of the ecosystem and the lives of the people in the area.

Furthermore, Government Regulation Number 27 of 2021 concerning the Implementation of the Maritime and Fisheries Sector stipulates that the status of the Core Zone in a Conservation Area can be changed for utilization activities in the context of implementing national policies in the form of establishing national strategic projects.

Such arrangements can threaten blue carbon ecosystems when the safeguards fail. In the concept of strong sustainability, several ecosystems that have important functions as CNC cannot be replaced by man-made capital(man-made capital).

The government already considers certain ecosystems as primary forests and peatlands as protected ecosystems that cannot be granted new permits (a moratorium in the REDD+ framework). Now is the time for the government to also apply a form of protection, with the most suitable form and not necessarily the same as primary forest and peatland, for the blue carbon ecosystem by classifying it as CNC.

To fix criticality, the government can use several criteria. Fridolin Brand introduces 6 domains of critical environmental services: (1) socio-cultural; (2) ecological; (3) sustainability; (4) ethical; (5) economy; (6) human survival.

Based on these criteria, the legal and policy framework needs to recognize EKB as a CNC, with the fulfillment of 5 (five) domains of critical ecosystem services. The government can also use Ecologically and Biologically Significant Areas criteria: (1) Uniqueness or rarity, (2) Special importance for life-history stages of species, (3) Importance for threatened, endangered or declining species and/or habitats , (4) Vulnerability, fragility, sensitivity, or slow recovery (5) Biological productivity, (6) Biological diversity, (7) Naturalness.

This acknowledgment must be followed by concrete actions by the government by imposing protection instruments based on a strong legal framework and without exception clauses. This protection is important to ensure intergenerational equity.

1. Regulations regarding Essential Ecosystem Areas, Blue Carbon Reserve Areas, and Other Effective Conservation Measures

The form of protection against CNC can be through several instruments and does not always have to be through the determination of the core zone of a conservation area which is a no-take zone. CNC protection can be through the establishment of Essential Ecosystem Areas (KEE), Blue Reserve Areas, or other Effective Conservation Measures, where utilization in these areas is strictly limited and for the survival needs of local communities.

KEE is an ecosystem of wetlands, corridors, areas of high conservation value, as well as biodiversity parks and landscapes/landscapes that have geological and geomorphological specificities that are outside of nature reserve areas and nature conservation areas.

The aim is to support community living spaces adjacent to conservation areas that have important values for biodiversity conservation. Mangroves can be categorized into essential ecosystem areas. In practice, in several areas the mangrove ecosystem is included in the scope of the essential ecosystem area through a Governor’s Decree, for example in East Java.

The concept of essential ecosystem areas is implied in the KSDA and Ecosystem Law, and has been explicitly stated in Government Regulation Number 28 of 2011 concerning Management of Nature Reserve Areas and Nature Conservation Areas. However, there is no legal framework that clearly regulates the management of essential ecosystem areas at the statutory level.

With the inclusion of the Spatial Planning Law and PWP3K within the scope of the Job Creation Law, this can be used to recognize KEE and the obligation to integrate them into spatial planning and zoning documents. The same is required for Other Effective Conservation Measures (OECM). OECM is a mechanism so that community-led initiatives can be recognized by the government and formalized through the determination of community/customary conservation areas in the RTRW or RZWP3K.

OECM can improve effectiveness, inclusiveness, and just conservation by empowering local and indigenous peoples, governments to work together in conservation efforts. OECM can also contribute to achieving national and international targets for the number of conservation areas.

There are already several forms of community management in Indonesia that have the potential to become OECM, namely Panglima Laut in Aceh, Sasi in Maluku and Papua, Mane’e in North Sulawesi, and community-based mangrove rehabilitation in Sinjai, South Sulawesi. However, there is no regulation that recognizes this concept at the national level. Thus, the Job Creation Law can revise the PWP3K Law and the Spatial Planning Law to provide a legal umbrella for OECM at the national level.

Another protection instrument that can be strengthened through the revision of the Job Creation Law is the Blue Carbon Reserve Area. PP No. 21 of 2021 concerning Spatial Planning for the first time introduces the term Blue Carbon Reserve Areas in Indonesia.

This area is part of the Zoning Plan for Certain National Strategic Areas (RZ KSNT). The authority to determine RZ KSNT rests with the government. However, until now there has been no further explanation of the implications of the designation of the Blue Carbon Reserve Area.

Therefore, the Job Creation Law needs to regulate more clearly and oblige the Government and Regional Governments not to impose exceptions by national strategic policies if certain projects are located in a Blue Carbon Reserve Area.

1. Regulate safeguarding policies so that the granting of permits for foreign-flagged fishing vessels and foreign investment in the fishing sector are not disclosed

The spirit of the Job Creation Law is to increase investment for economic growth. These interests need to be balanced with safeguarding policies. One of them is to keep permits for foreign-flagged fishing vessels and keep foreign investment in the fishing sector closed.

Deputy V, Chief of Presidential Staff Jaleswari Pramodhawardani opening a public dialogue on the criminal code bill in Bandung, West Java on September 7, 2022. (Doc. RI President’s Staff Office)The Job Creation Law maintains the formulation in the Fisheries Law which only requires an agreement between the two countries if the fishing sector is to be opened up to foreign parties. This single requirement is not in accordance with UNCLOS provisions.

If a country wants to open access, based on UNCLOS the requirements are:

1. Other countries’ access to fish stocks in ZEEI can only occur through 2 (two) things, namely traditional fishing rights and a surplus of allowable catch.
2. Based on Article 62 UNCLOS, surplus of allowable catch can only be given to other countries if several conditions are met, namely: (i) Indonesia does not have the capacity to catch all of allowable catch; (ii) access to the surplus is formulated in an agreement; (iii) the surplus is directed first of all to landlocked States and/ or geographically disadvantaged States; (iv) before making an agreement, Indonesia must first consider all relevant factors, including:
3. a) the significance of fish stocks that will be opened for access to the community’s economy and other national interests, and
4. b) how to mitigate the impact of economic dislocation (i.e. loss of jobs as a result of giving access to other parties to exploit resources) in countries whose citizens have long used these fish stocks. Thus, to open access, Indonesia needs to carry out an accurate calculation regarding whether or not there is a surplus allowable catch and the ability of national business actors to utilize this surplus.

Indonesia also needs to do cost-benefit analysis to consider all factors and threats that may arise. This needs to be regulated in the Job Creation Law. One of the benefits of closing foreign investment is that the level of compliance can be more controlled and it has been proven in previous experience that closing foreign investment in the fishing sector actually increases PNBP from the domestic industry.

Prior to 2015, the operation of fishing vessels with foreign associations could become an entry point for the Criminal Act of Trafficking in Persons (TPPO), another form of crime used as a modus operandi.illegal fishing such as falsification of permit documents, high unreported fishing, and causing fish stocks to deplete.