OJK (Finance Service Authority) has so far been against Swissindo’s Mission. This can be seen from the following links:
However hard and cruel the accusation has been, Swissindo has never ever reversed or withdrawn its move not even an inch. And the intimidation that What Swissindo has been doing will be sued has never realized. The Swissindo Office is still there in Cirebon and no one has come to arrest M1.
The following text is taken from a review made by a researcher of Indonesia for Global Justice, He is one of the petitioners of Judicial Review of Act No. 21 of 2011 Concerning Finance Service Authority and translated officially into English by Yan just for sharing.
Since Finance Service Authority (OJK) officially commenced its activity in January 1st, 2014, criticism of the existence of this institution has been heard. The harsh protest was made by the parties having objection to the service fee charged to the financing institutions (banks, non-banks as well as capital markets. The charged fee is considered to be too burdening.
The Managing Director of PT Bank Negara Indonesia (Persero) Tbk, Mr. Gatot M. Suwondo complained about the supervising fee charged by OJK. He explained that such fee charged by OJK will certainly be added to the company’s expenses or perhaps it will be borne by the customers.
Chaos in financial sector as a consequence of the existence of OJK has been predicted since the beginning. The result of a research of Indonesia for Global Justice (Sugeng Bahagio, 2012) related to the birth of Act/Law of OJK concluded that OJK still has substantive shortcoming. The Articles regarding its objectives and work result are not clearly and solidly formulated, especially in relation to its role in maintaining financial stability from the viewpoint of micro-prudential aspect.
The research also concluded that OJK could only become a regulator that supports financial market making instead of its authority function that influences financial market behavior (market shaping). Amidst financial market liberalization and increasing modus of crime in financial sector, OJK’s policy direction in the market making may endanger stability in national financial sector.
In addition, Articles concerning financing through fee charged to financial services using self regulating organization model may potentially cause public mandate in OJK to lose. Hence, OJK can become a “Grabbing hand’ instead of a helping hand.
The birth process of OJK was largely supported by various International financial institutions. In a book of White Coup D'état entitled "Reformasi dan Pelembagaan Kepentingan Asing dalam Ekonomi Indonesia" / Reformation and Institutionalization of Foreign Interest in Indonesia's Economy (Salamuddin Daeng, Syamsul Hadi, PhD, Indonesia Berdikari, 2012)it is mentioned that OJK is a project of LoI IMF of 1998 - 2003, which shall be established to meet and strengthen financial market.
Project for the success of OJK was then continued through Development Policy Loan (DPL), World Bank, and Technical Assistance Project (TA), Asian Development Bank (ADB) through Development of Financial Services Supervisory Institution project, Asian Currency Crisis Support Facility (ACCSF), Financial Governance and Social Security Reform (FGSSR) and so forth. Hence, OJK's existence was suspected to ease off foreign capital domination in the country.
OJK was born of Law Derivative of Act No.23 of 1999 concerning Bank of Indonesia (BI). In Article 34 section (1), the Task of supervising Bank shall be carried out by an independent finance supervisory institution and was formed by the law; the formation of the said supervisory institution as referred to in section (1) shall be carried out not later than December 31st, 2002.
The presence of OJK as an independent finance institution was not regulated in 1945 Constitution. 1945 Constitution, Article 23 D states that "The State can only have one Central Bank, whose formation, domicile, authority, responsibility and Independence shall be regulated by virtue of the Law". As we are all aware that function of Central Bank is to supervise financial both bank or non-bank institutions. Therefore, function of BI as Central Bank shall be inviolable.
Although, OJK was born of the mandate of the Law of BI, it has an independent position the same as BI does. OJK has taken over BI's task of supervising banking, non-banking institutions as well as capital market, while BI has authority only in terms of monetary matters. If we look at the position, task and function of OJK in financial sector, then we can say that OJK's position from a viewpoint of authority is wider than BI's.
Huge authority owned by OJK makes it as if it were a State within a State. This institution has the right to make regulations, gives sanctions, and determine its own budget. The said authority has the potential to make OJK itself as a new finance syndicate digging up people's fund for the interest of enlarging its own authority.
Parasite of Financial Sector:
There are at least three principles, on which submission of Judicial Review of criticism is based related to Act No.21 of 2011 concerning Finance Service Authority (OJK). Firstly, from a viewpoint of the substance of OJK existence as the instrument of financial market only. Secondly, if viewed from a viewpoint of contradiction of OJK Law against 1945 Constitution. Thirdly, the loss suffered by public community as a result of OJK’s existence.
Viewed from substance viewpoint, OJK was born on neoliberal philosophy that is to remove the role and involvement of the State in economic sector. OJK has eliminated State's control over financial sector. The State has been replaced by an independent, autonomous institution, which is operated to liberalize financial market.OJK has become the extension of hands of global financial institution within the framework of opening widely financial market to foreign control.
Constitutionally, the presence of OJK as an independent financial super-body institution is not regulated in the constitution. Under 1945 Constitution, independence of BI is regulated as central bank. While, OJK as an institution having equal position and even it has larger authority than BI does, its presence violates constitution.
Separation of monetary duty (held by BI) from banking supervisory duty held by OJK will result in the financial system not being integrated, which will impact on financial stability. Meanwhile, source of fund for OJK is derived from the service fee charged to the banking sectors, which will in the end be borne by the people.
OJK imposes levy to all banking, and non-bank institutions as referred to under Governmental Ordinance No.11 of 2014 concerning Levy charged by Finance Service Authority (OJK). Such levy will be used to pay OJK’s officials and employees
Instead of giving the benefit, its existence has become a parasitic body in the economy as well as potentially having adverse impact on customers of financial sector through systematic and massive extortion to national economy and people's fund.
Written in Bahasa Indonesia by a researcher of Indonesia for Global Justice, He is one of the petitioners of Judicial Review of Act No. 21 of 2011 Concerning Finance Service Authority and translated officially into English by Yan just for sharing.
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