Airlangga Hartarto Encourages The Establishment Of The LPI, An Investment Management Institution That Requires Capital And Large Assets

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Setkab)

JAKARTA - The draft Omnibus Law on Job Creation was passed into law at the plenary session this afternoon. The government hopes that the presence of this global sweeping regulation can facilitate investment in entering Indonesia.

Coordinating Minister for Economic Affairs, Airlangga Hartarto said, in the Omnibus Law, the DPR and the government agreed to form an investment management institution (LPI).

"The government is expected to be able to invite investment from friendly countries, international institutions, and corporations," he said in a plenary session at the DPR Building, Parliament Complex, Monday, October 5.

Even though there is an investment management agency, Airlangga emphasized that the agency would not move freely. This institution will be supervised by State-Owned Enterprises (BUMN) Minister Erick Thohir and Finance Minister Sri Mulyani Indrawati.

"Of course, the presence of this institution is monitored in accordance with existing laws," he said.

As is known, not all factions agree to the ratification of the Work Creation Bill in the midst of the COVID-19 pandemic. Of the 9 factions, two of them rejected the PKS and Democrats.

Chairman of the PKS Faction, Jazuli Juwaini, said there were several reasons behind his refusal to participate in the discussion and ratification of the broomstick regulation. One reason for this is the formation of an investment institution.

Jazuli stated that the formation of the LPI has the potential to conflict with the constitution and the rule of law because the substance of its supervision closes the room for financial supervision and audit by the Supreme Audit Agency (BPK) and provides immunity for management and policy-making officials as stated in articles 153 and 154.

"This provision also contradicts the principle of equality before the law as mandated in the constitution. Provisions for granting immunity to state administrators and the lack of control and supervision mechanisms in the state institutional system are very dangerous," he said.

According to Jazuli, if it is accepted, it will set a bad precedent in state practice. This is unacceptable if the authority and control over the allocation of such large economic resources through the LPI turns out that the policies cannot be accounted for to the Indonesian people.

"We certainly do not forget the statement as well as the warning from Lord Acton (John Emerich Edward Dalberg-Acton), a British Legal and Political Officer, 'power tends to be corrupt, absolute power corrupt absolutely'," he explained.

Previously, Member of the LPI Formulator and President Director of PT Bahana Indonesian Business Development (BPUI) Robertus Bilitea explained that if the LPI draft was approved for inclusion in the Job Creation Law, this institution would need capital and assets.

The source of capital and assets in question will come from two ministries, namely the Ministry of BUMN and the Ministry of Finance. Robertus said that the amount of capital and assets for the management of this endowment fund, aka sovereign wealth fund (SWF), is quite large.

For that, in its daily implementation the LPI will be run by the board of directors. However, it is at the same time being guarded by a supervisory board which includes BUMN Minister Erick Thohir and Finance Minister Sri Mulyani.