Bill on Societal Organizations (RUU Ormas) and Freedom of Association in Indonesia

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Document Information:


Eryanto Nugroho

Pusat Studi Hukum dan Kebijakan Indonesia (PSHK)
Indonesian Centre for Law and Policy Studies

This paper was written for the research fellowship program conducted by the
International Center for Not -for -profit Law (ICNL) and European Center for Not –
for Profit Law (ECNL) in B udapest, Hungary, November 2011.

The research fellowship was made possible with the support of the Swedish
International Development Cooperation Agency.
08
Fall
June
12
Bill on Societal Organization s (RUU Ormas) and Freedom
of Association in Indonesia

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Bill on Societal Organization s (RUU O rmas ) and the Freedom of Association in
Indonesia

Table of Contents

Abstract ………………………….. ………………………….. ………………………….. ………………………….. …………….. 3
A. Background ………………………….. ………………………….. ………………………….. ………………………….. …. 5
B. Legal Framework for CSO in Indonesia ………………………….. ………………………….. …………… 9
C. Law No.8 Year 1985 on Societal Organization ………………………….. ………………………….. 14
1. Legal History ………………………….. ………………………….. ………………………….. …………………….. 14
a. Discussion on Definition and Scope in 1985 ………………………….. ………………………. 15
b. Discussion on Single Basic Principle ( Asas Tunggal ) of Pancasila in 1985 .. 15
c. Discussion on Suspension and Dissolution in 1985 ………………………….. …………… 16
2. Problematic Provisions of Law No.8 Year 1985 ………………………….. ……………………. 17
a. Articles with the Intent to Control in Law No.8 Year 1985 ………………………….. . 17
b. Articles on Suspension and Dissolution in Law No.8 Year 1985 …………………. 17
3. Recent Developments ………………………….. ………………………….. ………………………….. ………. 19
D. Bill on Societal Organizations 2011 ………………………….. ………………………….. ……………….. 21
1. Brief Overview of the Bill on Societal Organization 2011 ………………………….. ……. 21
2. Problem Identification of the Bill on Societal Organization 2011 …………………….. 24
E. Strategic Recommendation s ………………………….. ………………………….. ………………………….. … 26

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Abstract

In the Indonesian National Legislation Pro gram for 2010 -2014, there are at least five
bills that are closely related to the legal environment for civil society in Indonesia.
Those bills include (1) Bill on the revision of the Law on Societal Organization s
(RUU tentang Perubahan atas UU No.8/1985 tentang Organisasi Kemasyarakatan ),
(2) Bill on Association s (RUU tentang Perkumpulan ), (3) Bill on the second revision
of the Law on Foundation s (RUU tentang Perubahan Kedua atas UU No.16/2001
tentang Yayasan ), (4) Bill on NGO s (RUU tentang Lembaga Swadaya Masyarakat ),
and (5) Bill on Prote ction of Human Rights Defenders ( RUU tentang Perlindungan
terhadap Pembela HAM).

The Parliament has p laced the Bill on Societal Organization s on its priority list for
2011 . The draft bill is based on the existing draconian law, the Law on Societal
Organization s N o.8 of 1985.

The discourse around societal organization s in Indonesia seems always politic ized .
On August 30 , 2010, the Parliament conducted a join t meeting with the government to
respond to a series of violent activities related to societal organization s. The meeting
was attended by Parliament ary leaders; the Coordinating Minister of Politic s, Law,
and Human Rights ; the Minister of Interior; the Head of Police ; the Attorney General,
and the Head of Intelligence Body. One result of the meeting wa s a commitment to
push forward with revision s to the Law on Societal Organizations ( RUU tentang
Perubahan atas UU No.8/1985 tentang Organisasi Kemasyarakatan ). The
commitment was further demonstrated when the Bill on the revision of the Law on
Societal Organizations was put on the Parliament ’s Priority Legislation for year s 2011
and 2012.

Since February 2011 , discussions about societal organizations have related to violent
actions against members of Ahmadiyah, a minority Muslim sect in Pandeglang (West
Java) and also against Christian churches in Temanggung (Central Java). Responding
to the situation, President Susilo Bambang Yudhoyono gave instruction to dissolve
the groups engaged in violence and caus ing unrest in society. Although the
President’s instruction has never been implemented, this instruction creates a
problematic situation. According to the Law No. 8 of 1985 on Societal Organization s,
the go vernment c an dissolve a societal organization without seeking a court order .
The possibility that government may act to dissolve organizations directly poses a
substantial threat to t he freedom of association in Indonesia.

Freedom of association is guara nteed by the 1945 Constitution. Since 1998,
Indonesia has been undergoing a democratic transition process after 32 years of
Soeharto’s “New Order” authoritarian government . From 1998 –2004, the pro -reform
groups still h eld enough bargaining power to creat e progressive changes . During this
time , Indonesia adopted legislation , including Law No. 24 of 2003 on the
Constitutional Court, Law No. 22 of 2004 on the Judi cial Commission, Law No. 39 of
1999 on Human Rights, Law No. 26 of 2000 on the Human Rights Court, and Law
No. 23 of 2003 on the General Election for President and Vice President. And i n
2005, Indonesia ratified the International Covenant on Civil and Political Rights
(ICCPR) , which protect s fundamental freedoms , including the freedom of associat ion.

4

Nonetheless, more efforts a re needed to preserve and improve the legal environment
in protecting the freedom of association.

This paper will describe the legal framework related to the societal organization, the
context of the revision process, and how it will affect the freedom of association in
Indonesia.

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Bill on Societal Organization s and the Freedom of Association in Indon esia

A. Background

There are various terms used to refer to a civil society organization ( CSO ) in
Indonesia. Under Soeharto’s New Order regime, Indonesian CSO s used the name
“Lembaga Swadaya Masyarakat (LSM)” which means “self -reliant community
development institution”. 1 The term “non -governmental organization” or “NGO” was
not generally used, as it could be interpreted by the regime to mean “anti -government
organization”. 2 At that time , CSO s were given no room by the regime to express
arguments opposing the government or to challenge government policy. Extra -legal
measures, such as kidnappings and tortures, were also used by the regime, targeting
those who actively challenged the government. 3

The term “LSM ” is st ill commonly used today in pract ice. A s alternatives, some
organizations now prefer to use “Organ isasi Non -Pemerintah (Ornop)”, which is a
direct translation of NGO, or “ Organisasi Masyarakat Sipil (OMS)” which is a
translat ion of Civil Society Organization. 4

From 1999 to 2002, after the fall of the New Order regime in 1998, Indonesia
underwent four rounds of constitutional amendments in order to ensure better
protect ion for civil liberties and the political rights of citizens. As a result , there is
now clear protection fo r the freedom of association (article 28) and freedom of
expression (article 28E). 5 Indonesia also ratified the International Covenant on Civil
and Political Rights (ICCPR) through Law No. 12 of 2005 regarding the Ratification
of the International Covenant on Civil and Political Rights (ICCPR) on October 28,
2005. Taken together, these are significant improvement s in the legal framework for
CSO s, since previously, in the New Order regime, the legal framework wa s not
conducive for CSO s to conduct public pol icy advocacy. 6

Through certain laws and regulations, the government has recognized the importance
and contributions of civil society. For example, s ince 2008, the Income Tax Law has
made available tax deductions for donations in support of disaster reha bilitation,
research and development, social infrastructure construction costs ,7 education, and
sports .8
1 Rustam Ibrahim, “Civil Society Mapping in ASEAN Countries: Indonesia”, Concept Paper prepared
for Friedrich -Ebert -Stiftung (FES), 2011 . 2 Ibid. 3Bivitri Susanti, “NGO Law Monitor: Indonesia ,”
https://www.icnl.org/knowledge/ngolawmonitor/indonesia.htm . 4 There is a perspective that the terms “Lembaga Swadaya Masyarakat (LSM)” shows the hegemony of
the state towards the civil society element. The terms “Organisasi Non Pemerintah (ORNOP) ” was
seen as a counter -discourse which is used intentionally as an effort to deconstruct the hegemonic
discourse. See M.M.Billah, “Perkembangan Ornop di Indonesia” (Seminar proceeding of SMERU,
August 15 th, 2000), p.4 . 5 Article 28: The liberties of assoc iation and assembly, the freedom of thought expressed verbally or in
writing and similar rights, are to be determined by law.
Article 28E section (3): Each person has the right to freely associate, assemble, and express his
opinions. 6At that time, there we re not many CSO active in conducting public policy advocacy. 7 The phrase “social infrastructure construction cost ” is a translation of “Biaya Pembangunan
Infrastruktur Sosial .” It is defined in Article 1 (e) of Government Regulation No.93/2010 as costs that

6

After the 1998 change of regime , the number of CSO s in Indonesia ha s increas ed
considerably . Precise data relating to the number of CSO s in the New Order regime
is not available .9 A s urvey conducted by the Local Assessment Team facilitated by
PPATK (Indonesian Financial Transaction Reports and Analysis Centre) and the
Charity Commission for England and Wales in 2010 shows that there are more than
20,000 registered CSO s in Indonesia. 10

Table – 1
Numbers of CSO and Relevant Ministry in Indonesia 11

No Type Numbers of
Organization
Registered to
Ministry
Role of the
Ministry
1 Foundation 21 ,301 Ministry of Law and
Human Rights
Registration
2 Incorporated
association
268 Ministry of Law and
Human Rights
Registration
3 International
organization
130 Ministry of Foreign
Affairs
Registration and
supervision
4 Societal
Organization
16 ,098 Ministry of Home
Affairs
Registration and
supervision
5 Religion -based
organization
2,425 Ministry of Religion
Affairs
Registration and
supervision
6 Consumer
protection
organization 12
183 Ministry of Trade Registration and
Supervision
7 Organization
conducting social
activities
31 ,474 Ministry of Social
Affairs
Registration,
licensing,
capacity building
8 Labor union

11 ,786 Ministry of
Manpower and
Transmigration
Registration,
licensing ,
capacity building
9 Organizations
working on
Disaster
Management
62 National Body for
Disaster Management
(BNPB)
Registration

In the Indonesian National Legislation Pro gram (2010 -2014 ), there are at least five
bills that are closely related to the legal environment for civil society in Indonesia.

are used to build non -profit public infrastructure ( e.g., religious building s, health clinic s, art and culture
building s, etc .). 8 See Income Tax Law year 2008, further regulated by Government Regulation No.9 3 Year 2010 . 9 CSO s in Indonesia are increasing in quantity and improving in quality. The number of CSO s has
increased from 3,255 in 1985, to 8,720 in 1990, and 13,400 in 2000. See interview with Dr. Kastorius
Sinaga, quoted from Info Bisnis Magazine , Edition. 96/Year VI/September 2001, p. 20. 10 See Local Assessment Team (2010), “ Domestic Review on NPO Sector in Indonesia .” This report is
prepared for the Domestic Review on NPO Sector in Indonesia facilitated by PPATK (Indonesian
Financial Transaction Reports and Analysis Centre) and the Charity Commission for England and
Wales . 11 Each ministry manage s its own database, so that there is a great possibilit y that the data relating to
CSO s is overlapping across ministries. 12 Lembaga Perlindungan Kon sumen Swadaya Masyarakat (LPKSM).

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Those bills include (1) Bill on the revision of the Law on Societal Organization s
(RUU tentang Perubahan atas UU No.8/1985 tentang Organisasi
Kemasyarakatan )13; (2) Bill on Association s (RUU tentang Perkumpulan )14; (3) Bill
on the second revision of the Law on Foundation s (RUU tentang Perubahan Kedua
atas UU No.16/2001 tenta ng Yayasan )15; (4) Bill on NGO s (RUU tentang Lembaga
Swadaya Masyarakat )16; and (5) Bill on Protection of Human Rights Defenders ( RUU
tentang Perlindungan terhadap Pembela H AM )17. The Parliament has p laced the Bill
on the revision of the Law on Societal Organization s on its priority list for 2011. 18
The draft bill is intended to revis e the existing draconian law, the Law on Societal
Organization s No. 8 (1985 ).

Law No. 8 (1985) was enacted to control and re strict CSO s in Indonesia. One of the
main concepts of the law is the “single pot” concept (Konsep Wadah Tunggal ),19
which seeks to compel organizat ion s that share similarit ies based on activity,
profession, function, and religion to be organized as a single organization. 20 In
addition , Law No. 8 (1985 ) give s the government authority to suspend and dissolve a
societal organization without due process of law. The existence of such a draconian
law creates fundamental problems for government -CSO relations .

On August 30 , 2010, the Parliament conducted a join t meeting with the government to
respond to a series of violent activities relat ing to societal organization s. The meeting
was attended by Parliament ary leadership; the Coordinating Minister of Politic s, Law,
and Human Rights ; the Minister of Interior ; the Head of Police ; the Attorney General,
and the Head of Intelligence. One key result of the meeting wa s the commitment to
push the revision of the Law on Societal Organizations ( RUU tentang Perubahan atas
UU No.8/1985 tentang Organisasi Kemasyarakatan ). The commitment was further
demonstrated when the Bill on the revision of the Law on Societal Organizations
(Revision Bill) was p laced on the Parliament ’s Priority Legislation for the year s 2011
and 2012.

In February 201 1, the discourse about the Law and the Revision Bill focused on the
violent actions taken against members of Ahmadiyah, a minority Muslim sect, in
Pandeglang (West Java) and also against Christian churches in Temanggung (Central
Java). Responding to the si tuation, President Susilo Bambang Yudhoyono gave
instruction to dissolve groups engaged in violence and caus ing unrest in society.
Although never implemented, the President’s instruction c reates a problematic
situation , since the instruction is based on Law No. 8 (1985 ) on Societal
Organization s, which was introduced by the New Order Regime to stifle civil society .
13 Listed number 193 in the National Legislation Program year 2009 -2014. In the last draft provided by
the parliament in the public hearing in June 8 , 2011, the titled was changed to RUU Organisasi
Masyarakat (Bill on Society Organization). It is not a draft revision as planned in the National
Legislation Program , but rather a new law which will revoke the existing law. 14 Listed number 228 in the National Legislation Program year 2010 -2014. 15 Listed number 244 in the National Legislation Program year 2010 -2014. 16 Listed number 128 in the National Legislation Program year 2010 -2014. 17 Listed number 156 in the National Legislation Program year 2010 -2014. 18 On October 3, 2011, the Parliament established a Special Committee (Panitia Khusus) for the Bill on
Soc ietal Organizations and the plans were originally to finalize the bill by May 2012. 19 See Article 8 Law No.8 Year 1985 on Societal Organization and the elucidation. 20 In the elucidation of Article 8, the law gave examples of Komite Nasional Pemuda Indonesi a (KNPI)
for youth organization, and Himpunan Kerukunan Tani Indonesia (HKTI) for peasants’ organization.

8

More recently, the government has relied on Law No. 8 (1985) on Societal
Organization s in condemning Greenpeace Indonesia . Government offici als,
parliament ary members, and some interest groups , like the Islamic Defenders Front
(FPI) and the Betawi Brotherhood Forum (FBR) , have accused Greenpeace of being
an illegal entity because it is not registered as a societal organization , as required by
Law No. 8 (19 85).

In defense, Greenpeace Indonesia clarified that it is registered as an a ssociation with
legal entity status , regulated by the Dutch Colonial State Gazette, Staatsblad 1870/64 ,
under the authority of the Ministry of Law and H uman Rights (MLHR) . Greenpeace
was registered with the MLHR and declared a legal entity by the M inistry in 200 9.21
Greenpeace claimed tha t the government accusations are political in nature and
triggered by the fact that Greenpeace launched a global campaign against Asia Pulp
and Paper in June 2011 by exposing evidence of forest destruction .22

This paper will describe the legal framework relat ing to societal organization s, the
context of the revision process, and how it will affect the freedom of association in
Indonesia. This paper will use the term “ societal organization” as a translation of
“Organisasi Kemasyarakatan” or “Ormas”. Some sources translate “Ormas ” as
“Community Organization”. In various writing s “Ormas” is translated as “ mass
organization ,” which is an incorrect translation.
21 Ministry of Law and Human Rights Decision, Number. AHU – 128.AH.01.06 year 2009 . 22 Greenpeace website .

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B. Legal Framework for CSO s in Indonesia

Article 28 and Article 28E section 3 of the Indonesian Constitution guarantee the
freedom of association :

Article 28: The liberties of association and assembly, the freedom of thought
expressed verbally or in writing , and similar rights are to be determined by
law .

Article 28E Section 3: Each person has the right to freely associate, assemble,
and express his opinions .

While there are a range of laws and regulation s governing CSO s,23 this paper will
focus on the framework legislation relating to associations and foundations, two key
organizational forms for CSOs in Indonesia, as important context for understanding
the place of the societal organization. Th is paper will not focus on other types of
legal entit ies, such as labor union s,24 cooperatives ,25 or political parties. 26

Foundations are regulated by Law No. 16 of 2001, as amended by Law No. 28 of
2004. Associations are still regulated under Staatsblad 1870 -64 (Dutch Colonial
State Gazette) on Associations with Legal Person Status ( Rechtpersoonlijkheid van
Vereenigingen ).27

The f oundation in Indonesia is defined as a non -membership legal entity. It is
established by designating the assets of the founders to fulfill a specific objective in
the social, religious, or humanitarian fields. 28 The f oundation attain s legal entity
status after the deed of establishment is submitted to and approved by the Ministry of
Law and Human Right s. The application is made through a public notary, where the
public notary is obligated to submit the application to the M inistry with in 10 days
from the time the deed of establishment is signed .29 The m inimum amount of assets
at the time of the establishment is 10 million IDR (fo r foundation s with Indonesian
citizen s as founders) or 100 million IDR (for foundation s founded by foreign person s
or foreign person s together with Indonesian citizen s).30

The Ministry must respond to the application (approve or reject) with in 30 days from
the time the complete application is received. In case of rejection, the Ministry must
inform the applicant in writing o f the ground s for rejection . In case input from a
relevant government institution is needed, the review process could be extended up to
23 For detailed legal framework with list of r elevant laws, see Bivitri Susanti, “NGO Law Monitor:
Indonesia ,” https://www.icnl.org/knowledge/ngolawmonitor/indonesia.htm . 24 Regulated under Law No.21 Year 2000 on Labor Union. 25 Reg ulated under Law No.25 Year 1992 on Cooperative. 26 Regulated under Law No.2 Year 2011 on revision of Law No.2 Year 2008 on Political Parties. 27 The Indonesian legal system is rooted in the Dutch colonial era. Since independence was gained in
1945, many of the outdated Dutch laws have been replaced. However, some Dutch laws remain in
place. 28 See Article 1 Law on Foundation s. 29 The honorarium of the public notary is regulated under Article law 34 Government Regulation No.
63 of 2008 on the Implementation of Law on Foundations, and Article 36 Law No.30 Year 2004 on
Notary. In practice , the honorarium amounts to approximately 3–5 million IDR. 30 See Article 6 Government Regulation No. 63 of 2008 on the Implementation of Law on Foundations .

10
a maximum of 37 days from the time of the application. 31 A f oundation officially
becomes a legal entity once the Ministry approves the request. It is the Ministry’s
obligation to publish the approved deed of establishment in the Supplement to the
State Gazette with in 14 days from the date of approval.

It is not easy to understa nd the timeline of the establishment process provided in the
Law on Foundation s, but the following tables attempt to outline the process more
clearly:

A. Registration of a Foundation , w here input from another institution is
NOT needed :

Steps Day s Legal Basis
Deed of Establishment,
prepared by Public Notary
1 Art icle 9
Public Notary must submit
the written petition to the
Ministry
No later than 10 days
from the signing of the
Deed of Establishment
Art icle 11(3)
Deadline for
approval/rejection by the
Ministry
Within 30 days of
receiving written
petition
Article 12 (2)

B. Registration of a Fou ndation , w here input from relevant government
institution IS needed :
31 See Article 11 and Article 12 Law on Foundation s. In case consideration from other relevant
institution s is needed, the Ministry must send the request to the r elevant institution with in 7 days from
the time the complete application documents is received. The relevant institution must respond to the
request within 14 days after such request from the Ministry is received . The Ministry must respond
(approval or rej ection) to the applicant with in 14 days after consideration from the relevant institution
is received . I n case the relevant institution do es not respond, the Ministry is obligated to respond to the
applicant with in 30 days from the time the request for co nsideration is sent to the relevant institution.
Steps Day Legal Basis
Deed of Establishment,
prepared by Public Notary
1 Art icle 9
Public Notary must submit
the written petition to the
Ministry
No later than 10 days
from the signing of the
Deed of Establishment
Article 11 (3)
Minister seeks input from
relevant government
institution
No later than 7 days after
the petition submitted by
the Notary
Art icle 11(4)
The relevant government
institution must provide
input
No later than 14 days after
receiving request from the
Minister
Art icle 11(5)
Approval from the
Minister, giving the legal
entity status to the
Foundation

No later than 14 days
from the time the response
of the government
institution is received by
the Minister .

In case there is no
respon se from the
Art icle 12 (3),
12(4)

11

A f oundation is not allowed to conduct economic activities directly . A f oundation can
only engage in economic activities to support the attainment of its objectives by
establishing a separate business enterprise (provided that the activities are in
accordance with the f oundation’s statutory purposes) ,32 or by participating as a
shareholder in an other business enterprise (provided that the shareholdin g does not
exceed 25 percent of the total value of the foundation’s assets). 33

The law requires three governing organs in a foundation , namely the governing board
(Pembina ), supervisory board ( Pengawas ), and executive board ( Pengurus ).34 A
foundation is not allowed to distribute the business profit from any business enterprise
that the foundation establishes or in which the Foundation is a shareholder, to these
governing bodies . Members of t he three organs of a foundation also may not serve a s
board member s, managers, or supervisors in any business enterprise that the
foundation establishes or in which it invests.

Regarding financial transparency and accountability, a f oundation must publish an
abridged version of its annual report on an anno uncement board in its office.
Foundations receiv ing donations (from the state, foreign parties, or other third parties)
in the amount of 500 million Indonesian Rupiah (IDR) or more, or that possess assets
(other than endowed assets ) of over 20 billion IDR, must be audited by a public
accountant and have an abridged version of their financial report published in an
Indonesian -language daily newspaper. 35

The dissolution of a foundation may occur for three reasons: (1) the time period of its
existence, as defined in its governing statute, has expired; (2) the p urposes of the
foundation ha ve been achieved or not achieved ; or ( 3) a f inal and binding court
decision is issued dissolving the foundation , on the grounds of violating public order,
not being able to pay its debt after being declared bankrupt by the court, or lacking
sufficient assets to pay the debt after the bankruptcy declaration is revoked. 36

While the l aw and regulations governing foundation s in Indone sia are comprehensive
and up to date , the same is not the case for associations. As mentioned previously,
associations are still regulated under Staatsblad 1870 -64 , which was enacted in 1870.
It consist s only of 11 articles 37 addressing the legal entity status of the incorporated
association, dissolution, the treatment of remaining assets after liquidation, and
limitation s for ordinary associations.
32 The business activities defined here ha ve a broad scope, including the fields of human rights, arts,
sports, consumer protection, education, environment, health, and science. See Elucidation of Article 8
Law on Foundation s. 33 See Article 3 and Article 7 Law on Foundation s. 34 See Article 2 Law on Foundation s. 35 See Article 52 Law on Foundation s. 36 See Article 62 Law on Foundation s. 37 Compare with Law on Foundation s, which consist s of 73 Articles.
government institution, no
later than 30 days from
the time the request is
sent.

12
Unlike the f oundation, the a ssociation is a membership -based organization. There are
two types of associati ons in Indonesia, the i ncorporated association ( with legal entity
status) and the ordinary association (without legal entity status) . Legal entity status is
granted by the Directeur van Justitie (now the Ministry of Law and Human Right s),
following approva l of the statutory purposes. 38 Rejection of an application by the
Ministry may only occur on the basis of the public interest and must be accompanied
with reasons. 39 It is not clearly stated in the Staatsblad whether or not the reasons
provided should be in written form.

Associations may be dissolved voluntarily or involuntarily. Voluntary dissolution is
based on the agreement of its members , the expiration of its existence as defined in its
governing statute, or accomplishment of its purposes. Involuntary d issolution may
result when the Government 40 revokes the association’s legal entity status for
violation of public order. The District Attorney may file a case in civil court to revoke
the legal entity status of an association when it violates its approved s tatutory
purposes. 41 The liquidation process is then conducted by the State Receiver ( Balai
Harta Peninggalan ), a nd the remaining assets after liquidation can be distributed to
the association’s members or to others who ha ve the rights, proportionally based on
their contribution. 42

Regarding ordinary associations, the Staatsblad 1870 -64 states that such associations
cannot conduct activities as a legal entity (legal person). Any actions under taken by
an ordinary association will be considered as the action of the individual member of
the association. 43 Further governance of ordinary association s is regulated internally
through their bylaws, and through other general civil law provisions, especially
Article 16 53 and Article 16 54 Indonesian Civil Code. 44

The fa ct that association s are still regulated under a colonial -era law has a practical
impact on civil society in Indonesia . As revealed in Table -1 above , there are 21 ,301
foundations and only 268 incorporated associations. This unusual imbalance results,
at l east in part, from the lack of knowledge and information about the Staatsblad
1870 -64, including among the public notar ies in various regions in Indonesia.

38 See Article 1 and Article 2 , Staatsblad 1870 -64. Statutory purposes contains the objectives, basic
values, working environment, and other provisions of the associations. 39 See Article 3 , Staatsblad 1870 -64. 40 The Staatsblad 1870 -64 describe as Governor G eneral (“Gubernur Jenderal”). See Article 5 ,
Staatsblad 1870 -64 . 41 See Article 6 , Staatsblad 1870 -64. 42 See Article 7 , Staatsblad 1870 -64. 43 See Article 8 , Staatsblad 1870 -64. 44 See Article 9 , Staatsblad 1870 -64. Article 1653 and Article 1654 of the Indone sian Civil Code relates
to Legal Entities:
– Article 1653: In addition to an actual partnership, the law shall also acknowledge
associations of individuals as legal entities, whether they are established by public authority
or acknowledged as such, or whethe r they are permitted as lawful, or whether they are
established with a specific objective, provided that they do not violate the law or proper
order.
– Article 1654: All established legal entities shall be, even as private individuals, authorized to
perform civil acts, without prejudice to the public ordinances, in which such authority may be
amended, restricted or rendered subject to certain formalities.

13
In the early 19 90s , a draft law was prepared by the Ministry of Law and Human
Right s (the Ministry of Justice at that time) , en titled “Bill on Foundation s and
Association s.” In 2001, h owever , due to the influence of the IMF Letter of Intent, the
draft law on Foundation s was separated and enacted as Law No. 16 (2001) on
Foundation s.45 The new Law target ed ex -President Soeharto’s foundations, which
were suspected as vehicles for corruption. The impact of the Law, h owever , was far
broader, since there are thousands of foundations in Indonesia.

In addition to the f oundation and association, Indonesian law includes the “societal
organization ” (Organisasi Kemasyarakatan or Ormas ). The societal organization ,
introduced by the Law No. 8 (1985 ) for political reasons, is not a legal entity form ,
but rather a status for CSO s that are registered with the Ministry o f Home Affairs.
Organizations registered will receive a registration acknowledgement known as
“Surat Keterangan Terdaftar (SKT)” or “Letter of Registration” issued by the
Ministry of Home Affairs, Directorate General of National Unity and Politics
(Direktorat Jenderal Kesatuan Bangsa dan Politik ). This paper will consider this
status more deeply in the next chapter.
45 Letter Of Intent dated January 20 th 2000 20, Memorandum of Economic and Financial Policies
Medium -Term Strategy and Policies for 1999/2000 and 2000. Chapter IV, Structural Reform, Article
32. See www.imf.org . It stated that “… The Ministry of Law and Legislation will form a working
group to make policy recommenda tions and to draft legislation on foundations to be submitted to
Parliament by end -April 2000. The legislation will require foundations to file public statement of
activities, including audited accounts .”

14
C. Law No. 8 (1985 ) on Societal Organizatio ns

Law No. 8 (1985 ) on Societal Organization s was conceived and enacted during
Soeharto’s N ew Order regime. The original Bill on Societal Organization s was
included in a legislative package called “Package of Bill s on Politics” ( Paket Undang –
Undang Politik ), together with four other bills , including the Bill on General
Election s; the Bill on People’s Consultative Assembly, House of Representative s, and
Regional House of Representative s; the Bill on Political Parties ; and the Bill on
Referendum.

Discussion in Parliament began on June 23 , 1984, and continued until May 25 , 1985.
The Bill on Soc ietal Organization s was envisioned not to enabl e CSO s, but to restrict
them . Behind the Bill lay strong political motivations, namely, to promote political
stability.
1. Legislative History of 1985 Law

The need to d evelop the Bill on Societal Organizations was articulated in the Decree
of People’s Consultative Assembly No.II/MPR/1983 on State Policy Guidelines ( TAP
MPR No.II/MPR/1983 Tentang Garis -garis Besar Haluan Negara ), Chapter IV on
Politic, letter g and letter h.

In additio n, the importance of political stability was also emphasized by President
Soeharto in his State Address on August 16 , 1983:

… Efforts to improve and structure the societal organization should be put in
the framework of guaranteeing the sustainability of P ancasila, national
stability, and national development, as implementation of Pancasila. All of
this influencing the spirit and direction as shown by State Policy
Guideline … 46

In the first meeting of the Special Committee for the Bill on Societal Organizati on s
(April 22, 1985), the Chairman of the Committee, Mr. Suhardiman from Fraksi Karya
Pembangunan 47, remind ed the Committee about the importance of this law. The
Chairman urged the Committee to ward “not acting as politician, but more as
statesman .” Furtherm ore, the Chairman also made reference to the statement of
Commander of Armed Forces ( Panglima Angkatan Bersenjata ) on April 17 , 1985 that
there were efforts by people to disturb the d eliberation on this Bill.

In the early discussions on the Bill, the Chairman identified six main problems,
including the title of the law, supervision, suspension and dissolution, the relation
between religions and Pancasila 48, elucidation of Article 1 regarding the definition of
“societal organization ,” and elucidation of Article 2 regarding the basic principle s of
societal organization s. Each of these topics was intensely debated.
46 See State Address, free translation . 47 The ruling party . 48 Pancasila is Indonesian state fundamental norm created in 1945, which consist of five (“ panca ”)
principles ( “sila” ), as follows: (1) belief in the one and only God; (2) just and civilized humanity; (3)
the unity of Indonesia; (4) democracy lead b y wisdom in the unanimity arising out of deliberations
amongst representatives; and (5) social justice for all people of Indonesia.

15
a. Discussion on Definition and Scope of Societal Organization

In the early draft of the Bill on Societal Organization s being discussed in t he
Parliament in 1985, the Bill exclud ed other type s of organization s or association s
regulated under separate laws. The draft Bill , in the Elucidation of Article 1 , stated :

“… organization or association regulated under separated laws is not
included in the definition of Societal Organization in this law .”49

This position, h owever , was not a ccepted following discussion in the Special
Committee. In stead, the Elucidation of Article 1 was revised to state that any
organization or association, which is establ ish ed voluntarily by Indonesian citizen s, is
included in the definition of a societal organization. The law only excludes
organizations established by the Government , such as the Boy Scout s (Praja Muda
Karana or Pramuka ), Civil Servant Organization ( Korps Pegawai Republik Indonesia
or Korpri ), and organizations working in economic activities ( cooperatives, limited
liability corporation etc ).

This broad definition of societal organization will later become problematic in
the implementation of the law. The definition of societal organization embraces
all types of organization s, whether with or without legal entity status, including
foundations and associations. For those with legal entity status, registration as a
societal organization serves little or no p urpose. It seems to amount to a kind of
special status , though it is accompanied by no benefit s. Indeed, the concept of
social organization makes sense only as a tool of state control.
b. Discussion on Single Basic Principle ( Asas Tunggal ) of Pancasila

Pancasila is the Indonesian state fundamental norm created in 1945, which consist s of
five (“ panca ”) principles ( “sila” ), as follows: (1) belief in the one and only God, (2)
just and civilized humanity, (3) the unity of Indonesia, (4) democracy led by wisdom
in the unanimity arising out of deliberations amongst representatives, and ( 5)
social justice for all people of Indonesia. 50

The relationship between religion and Pancasila is controversial and sensitive. The
source of concern relates to the requirement that societal organizations must uphold
the single basic principle, which is Pancasila . This requirement wa s clearly
contained in Article 2(1) of the 1985 draft bill , which state d: “Societal organization s
uphold the one and only basic principle, Pancasila .” I mplementation of th is
requirement (known as Asas Tunggal , the single basic principle) may be problematic
for faith -based organizations.

Regarding this issue , President Soeharto gave his explanation in his State Address in
1983 as follows:

“… regarding the field of religion and belief in God, we still strongly hold to
the Pancasila, Indonesian Constitution 1945, Manual on Understanding and
49 Elucidation of Article 1 from the early draft bill submitted by the government to the parliament in
1985. 50 See https://www.indonesianembassy.org.uk/aboutIndonesia/indonesia_facts.html .

16
Implementing Pancasi la (Pedoman Penghayatan dan Pengamalan Pancasila),
and State Policy Guideline (Garis -Garis Besar Haluan Negara) year 1983.
Pancasila is not religion. Pancasila also will not and could not replace
religion. We will not make Pancasila as religion. It is also impossible to make
religion as Pancasila …”

This idea of Asas Tunggal was rejected mostly by Islamic based organizations, since
most of the se organization s considered the religion of Islam as the basic principle of
the organization. In Parliament, the Is lamic political faction 51 Fraksi Persatuan
Pembangunan defended the interest s of these Islamic organizations during
discussion s on the Bill .52

Following the enactment of the Law, this provision prove d problematic and was used
as a repressive measure against some CSO s. For example, o n December 10 , 1987, the
Ministry of Home Affairs dissolv ed the Indonesian Islamic Student ( Pelajar Islam
Indonesia or PII), the biggest student organization in Indonesia , which had been
established in 1947 ,53 and the Marhaenis Yo uth Movement ( Gerakan Pemuda
Marhaenis or GPM). 54 The Ministry of Home Affairs argue d that both organizations
were dissolved because they failed to comply with Law No. 8 (1985 ) on Societal
Organization s.55 PII h eld Islam, and GPM held Marhaenism ,56 as the ba sic principle
of the respective organization s.
c. Discussion on Suspension and Dissolution

The dissolution of PII, GPM, and other organization s after the enactment of the Law
was somehow predictable. During the discussion in the Special Committee, Fraksi
Persatuan Pembangunan (F -PP) had challen ged the provision allowing the
government to dissolve an organization without due process of law. F -PP argued that
Indonesia is a rule -of-law state where such measures (suspension and dissolution)
should be b ased on a court decisio n. This argument, however, was not accepted.
Fraksi Partai Demokrasi Indonesia (F -PDI) indicated that it would support
suspension and dissolution being conducted by the government, provided that
government dissolution is followed by consideration of the Supreme Court. Fraksi
Angkatan Bersenjata (F-ABRI ), the military faction in the Parliament, argue d that this
Law on Societal Organizat ion s is considered as Lex Specialis an d therefore can
authorize the government to dissolve an organization without going to court. The end
result of these discussions, as reflected in the Law on Societal Organization s, was that
51 To give a brief background, in the 1980s (up until reform in 1998) there were four factions (political
grouping called “Fraksi”) in the Parliament: Fraksi Persatuan Pembangunan (F -PP or Faction of United
Development), Fraksi Partai Demokrasi Indonesia (F -PDI or Faction of the Indonesian Democracy
Party), Fraksi Karya Pembangunan (F -KP or Faction of Functiona l Development), and Fraksi
Angkatan Bersenjata (F -ABRI or Faction of the Armed Forces). 52 Masukin hasil pansus, masukan FPP ke pasal 2 . 53 mempunyai 1.080 cabang di 26 provinsi dan 4,5 juta anggota, see
https://majalah.tempointeraktif.com/id/arsip/1987/08/01/NAS/mbm.19870801.NAS29687.id.html . 54 Pelajar Islam Indonesia was dissolved by Decree of Ministry of Home Affairs No.120/1987. Gerakan
Pemuda Marhaenis was dissolved by Decree of Ministry of Home Affairs No.121/1987.
See https://ip52 -214.cbn.net.id/id/arsip/1988/03/19/KL/mbm.19880319.KL26644.id.html ;
https://majalah.tempointeraktif.com/id/arsip/1988/02/06/NAS/mbm.19880206. NAS26288.id.html . 55 The d eadline for such compliance was on June 17 , 1987. It is the deadline given by Law No.8 Year
1985. 56 Marhaenism is the populist ideology of Indonesia first President, Soekarno .

17
the government can dissolve organizations directly (without court involvement) , but
for national level organization s, con sideration of the Supreme Court is also needed.
2. Problematic Provisions of Law No. 8 (1985 )

The Law on Societal Organizations was finally enacted on June 17 , 1985 . All
organizations were given two years within which to comply with th e new Law. As of
June 17 , 1987, the government (based on Article 15 of Law) had authority to dissolve
organizations that were not complying with the Law. Th us, the government was able
to move to dissolve PII and GPM , as indicated above .

Th is section will highlight two key problems with the Law: (1) the controlling focus
of the Law and (2) the abritrary mechanism for suspension and dissolution.
a. Provisions with the Intent to Control

The intent to control CSOs is reflected in Article 1, Article 2, and Article 8 of Law on
Societal Organization s.

Article 1 defines “societal organization ” in broad terms, which includ e all
organization s, except for the Boy Scout s (Praja Muda Karana or Pramuka ), Civil
Servant Organization ( Korps Pegawai Republik Indonesia or Korpri ), and
organizations working in economic activities ( cooperatives, limited liability
corporation etc ). In practice, the Ministry of Home Affairs also includes foundation s
within the definition of societal organizations. This is reflected in the Directory of
Societal Organization s,57 published annually by the Ministry of Home Affairs. This
inclusive regulatory approach creates confusion and inconsistency among laws. The
foundation is clearly defined by the Law on Foundation s as a non -members hip
organization, while the societal organization is defined as a membership -based
organization. 58

Article 2 requires that the single basic principle ( Asas Tunggal ) of Pancasila be
upheld by societal organizations. The government (based on Article 15 of the Law )
can dissolve organizations that violate this requirement.

Article 8 impos es the single -pot concept ( Konsep Wadah Tunggal ). This concept
seeks to ensure that organizations that share similarit ies based on activity, professio n,
function, or religion be organized as one organization. 59 Th e single organization
concept was intended as a means of clustering related organizations and ultimately as
a way to control CSO s in Indonesia.
b. Provisions on Suspension and Dissolution

The Law provides nine grounds for suspending or dissolving a societal organization ,
including the following :
57 See Directory of Societal Organization s, https://www.depdagri.go.id/basis -data/2011/01/17/direktori –
organisasi -kemasyarakatan . 58 See Chapter IV of Law No.8 on Societal Organization, on Membership and Administrat ion . Also see
Chapter III on Func tions, Rights, and Obligations. 59 In the elucidation of Article 8, the law gave examples of Komite Nasional Pemuda Indonesia (KNPI)
for youth organization, and Himpunan Kerukunan Tani Indonesia (HKTI) for peasants’ organiza tion.

18

1. The s ocietal organization does not uphold Pancasila as the one and only basic
principle of the organization. 60
2. The s ocietal organization’s mission stat ement is not in the framework of
achieving the national objectives as stated in the preamble of the 1945
Indonesian Constitution. 61
3. The s ocietal organization fail s to put the basic prin ciple of Pancasila and its
mission statement in its bylaws. 62
4. The s ocietal organization fail s to have bylaw s, does not implement the
Pancasila and 1945 Indonesian Constitution, and does not preserve the unity
of the nation. 63
5. The s ocietal organization distu rbs the public order. 64
6. The s ocietal organization receives foreign support without approval from the
Government. 65
7. The s ocietal organization gives support to a foreign party that can harm the
interest of the nation. 66
8. The s ocietal organization is considered to be promoting the ideology of
Communism, Marxism -Leninism, or an other ideology that is against
Pancasila and the 1945 Indonesian Constitution. 67
9. The s ocie tal organization does not comply with the Law No. 8 (1985 ) on
Societal Organization s after two years of its enforcement (June 17 th 1987). 68

The suspension and dissoluti on of societal organization s is further regulated by
Government Regulation No. 18 of 1986 on the Implementation of Law No. 8 of 1985
regarding Societal Organizations . Before suspending a s ocietal organization, the
government must send a written warning at least twice within 10 days to the
administrator, local administrator, or central administrator of the organization. If
there is no response from the organization within one month, the g overnment must
summon the adm inistrator. If the administrator does not appear , or if the societal
organization continu es its illegal activities, the government can suspend the
organization , after receiving consideration and advice from the Supreme Court (for
national level organizati on s) or other relevant institution appointed by the Ministry of
Home Affairs (for organizations at the provincial or city level). The organization and
the public will be informed of the suspension . The government may consider
revoking the suspension if t he organization ceases its illegal activities, admit s its
wrongdoing, or replace s its administrator. If the organization continu es its illegal
activity, the government c an dissolve it .

As mentioned above, t he government c an also dissolve organizations, which fail to
comply with the Law after June 18 , 1987. In this case , the government will first give
a written warning, and if after three months the organization do es not comply, the
Government c an dissolve it , after receivin g consideration and advice from the
60 Article 2 and Article 15 , Law No.8 Year 1985 on Societal Organization s. 61 Article 3 and Article 15 , Law No.8 Year 1985 on Societal Organization s. 62 Article 4 and Article 15 , Law No.8 Year 1985 on Societal Organization s. 63 Article 7 and Article 15 , Law No.8 Year 1985 on Societal Organization s. 64 Article 13 (a), Law No.8 Year 1985 on Societal Organization s. 65 Article 13 (b), Law No.8 Year 1985 on Societal Organization s. 66 Article 13 (c), Law No.8 Year 1985 on Societal Organization s. 67 Article 16 , Law No .8 Year 1985 on Societal Organization s. 68 Article 18 and Article 15 , Law No.8 Year 1985 on Societal Organization s.

19
Supreme Court (for national level organization s) or other competent institution s (for
organizations at the provincial or city level). The organization and the public will be
informed of the dissolution .

None of th ese procedural mechanism s was applied in the dissolution of PII or GPM in
1987. Neither organization even received the decree of the M inistry regarding the
dissolution. Feisal Tamin, Head of Public Relation s of the Ministry, explained that
there was no need to inform th ese two organizations , since their existence w as no
longer acknowledged by the government. 69

Societal organization s dissolved for promoting the ideology of Communism,
Marxism -Leninism, or other ideology that is against Pancasila and the 1945
Indonesian Constitution, are declared to be a “banned organization” ( organisasi
terlarang ). A written decision will be communicated to the organization and
announce d to the public.
3. Recent Developments

On April 4 , 1986, the Government issued Government Regulation No. 18 of 1986 on
the Implementation of Law No. 8 of 1985 regarding Societal Organizations .
Further more , the Ministry of Home Affairs also promulgated Ministry of Home
Affairs Regulation No. 5 of 1986 on the Scope and Notification Procedure to t he
Government and the Sign and Logo of the Societal Organizations (October 1, 1986 )
and Instruction from the Minister of Home Affairs No. 8 of 1990 on Non –
Governm ental Organization Supervision ( March 19, 1990 ).

After the fall of Soeharto’s regime, this se t of laws and regulatory measures was
practically not e nforced . However , the existence of these laws and regulations served
to threaten the freedom of CSO s in Indonesia.

In 2006 -2007, the Ministry of Home Affairs started to prepare a draft bill to revise the
1985 Law. The Ministry stated that it had changed its perspective and also admitted
that the 1985 Law on Societal Organization s is no longer suitable for a democratic
era. The Ministry of Home Affairs was succe ssful in p lacing the bill on the National
Legislation Program for 2008. The bill, h owever , was never discussed by the
Parliament.

Subsequently, the Ministry started to discuss further implementing regulation s for the
Law. 70 The Ministry of Home Affairs (MoHA) then issued Ministry of Home Affairs
Regulation No. 38 of 2008 on the Obtainment and Granting Societal Organization
Donation s From and To Foreign Entities ( August 15, 2008 ) and Ministry of Home
Affairs Regulation No. 15 of 2009 on Guidelines on Cooperation between the
Ministry of Home Affairs and Foreign Non -Governmental Orga nizations ( March 4,
2009 ).

MoHA Regulation No. 38 (2008 ) provides a detailed reporting procedure for societal
organization s in obtaining and disbursing donations from and to foreign parties.
69 See https://ip52 -214.cbn.net.id/id/arsip/1988/0 3/19/KL/mbm.19880319.KL26644.id.html . 70 This is somehow inconsistent with the statement admitting that the law is no longer suitable for
democratic era.

20
Societal orga nization s must secure approval from the government to receiv e grants
from a foreign party or provide grants to a foreign party .71 Societal organization s
receiving foreign support without government approval are subject to suspension or
dissolution. 72
MoHA R egulation No. 15 (2009 ) outlines the procedure of cooperation between the
MoHA and the foreign NGO. Among other requirements, the foreign NGO must be
registered in its home country, have a representative office in Indonesia, and secure
approval from the Government of Indonesia.

Mo re recently, a s a response to a series of violent action s carried out by societal
organization s,73 a joint meeting was held in Parliament on August 30, 2010 and attended
by leaders of the House of Representative s; the Attorney General ; the Head of
Intelligence Agency; the Chief of Police ; the Minister of Politic s, Law, and Security ; the
Minister of Home Affairs ; the Minister of Religious Affairs ; and the Minister of Law and
Human Rights. At the meeting it was agreed to review the Law on Societal
Organization s. Consequently, the Bill on Societal Organization s was included among the
2011 national legislati ve priorit ies.

71 To be eligible to provide grants to or receive grants from a foreign party, societal organizations must
be registered with MoHA, another government body, or local government. (Articles 7 and 33(1)) A
social organization that receives a grant from a forei gn party, or provides a grant to a foreign party, is
obligated to report the project plan to the Minister of Home Affairs. (Articles 10, 18, 35) 72 Article 13 (b), Law No. 8 (1985 ) on Societal Organization s. 73 One of them was a street brawl involving members of the Forum Betawi Rempug (Betawi
Brotherhood Forum) over the weekend in early August 2010. After the incident, the police brought
together the leaders of the societal organization s involved, Pemuda Pancasila, Forum Betawi Rempug,
Kembang Latar, and Fork abi , to reconcile their differences.

21
D. Bill on Societal Organization s 2011

In analyzing the new Bill on Societal Organization s, this paper will refer to the
published draft Bill provided by the Parliament (dated May 30, 2011) in the series of
public hearing s conducted in June 2011. On October 3, 2011, the Parliament
established a Special Committee ( Panitia Khusus ) for the B ill on Societal
Organizations. The Special Committee was planning to finalize the Bill by May
2012 , but did not manage to do so .

On May 30 , 2012, the Special Committee conducted a meeting with the Government.
It was agreed to establish a Working Committee to further discuss the Bill. The Chief
of the Special Committee, Mr. Abdul Maliq Harmain, mentioned the date of July 12 ,
2012, as the n ew time frame for discussion of the Bill in the Plenary Session.
1. Brief Overview

The draft Bill consists of 19 chapters , with a total of 54 Articles. The structure of the
draft Bill is as follows:

a. Chapter I: General Provision (Article 1) ;
b. Chapter II: Principle, Identification, Characteristic s (Article 2 – Article 4) ;
c. Chapter III: Objectives, Function, and Scope (Article 5 – Article 7) ;
d. Chapter IV: Establishment of Societal Organization s (Article 8 – Article 14) ;
e. Chapter V: Registration (Article 15 – Ar ticle 18) ;
f. Chapter VI: Right s and Obligation s (Article 19 – Article 20) ;
g. Chapter VII: Organization, Domicile, and Board of Executive (Article 21 –
27) ;
h. Chapter VIII: Membership (Article 28 – Article 29) ;
i. Chapter IX: Decision of Organization (Article 30) ;
j. Chapter X: Article s of Association / Bylaw s of Societal Organization (Article
31 – Article 32) ;
k. Chapter XI: Finance (Article 33 – Article 34) ;
l. Chapter XII: Business Enterprise of Societal Organization s (Article 35) ;
m. Chapter XIII: Empowerment of Societal Org anization s (Article 36 – Article
38) ;
n. Chapter XIV: Foreign Social Organization s (Article 39 – Article 40) ;
o. Chapter XV: Supervision (Article 41 – Article 43) ;
p. Chapter XVI: Dispute Settlement of Organization (Article 44 – Article 45) ;
q. Chapter XVII: Prohibiti on (Article 46) ;
r. Chapter XVIII: Sanction s (Article 47 – Article 50) ; and
s. Chapter XIX: Concluding Provision s (Article 51 – Article 54) .

The draft Bill define s “s ocietal organization ” as an organization that is voluntarily
established by Indonesian citizen s, on the basis of common objectives, interest s and
activit ies , to participate in development in order to achieve the objectives of the state .
The draft Bill also regulate s the foreign societal organization , which is define d as a
nonprofit organization that is established by foreigner s as a foreign legal entity and
that conduct s activity in Indonesia .74
74 See Article 1 draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011

22

One or more Indonesian citizen s may establish a societal organization. 75 A s ocietal
organization may take the form of an organization with legal entity status ( e.g., a
foundation or association), or an organization without legal entity status ( e.g., an
ordinary association). 76 Organizations seeking legal entity status (as an association or
foundation) may undergo registration as a societal organization si multaneously .77

Ordinary associations ( unincorporated association s) must inform the government or
local government of their existence in writing .78 The government then will issue an
acknowledgement of receipt letter (surat tanda terima pemberitahuan kebera daan
organisasi ).79 In addition, ordinary association s seeking registration must also
register with the government. The government then will issue a Letter of Registered
Organization ( Surat Keterangan Terdaftar ).80 The Ministry of Home Affairs ,
Governor, or Mayor will issue this letter for organizations working at the national
level, provincial level, and regency/city level , respectively .81

A foreign societal organization, in order to operate in Indonesia, must originate from a
country with diplomatic rela tions with Indonesia; must be established as a legal entity
in its country of origin; must have an operational license from the Ministry of Foreign
Affairs; must submit such license to the Ministry of Home Affairs; and must, in
implementing its activity, c ooperate or involve an Indonesian societal organization or
organizations .82

The permissible s cope of activity for societal organization s includes, among other s,
the following fields : religion and belief, law, social activities , economy , health,
education, human resource s, strengthen ing Pancasila democracy, women ’s
empowerment, environment and natural resources, youth, sports, profession s,
hobb ies , and art s and culture. 83 In order to fulfill the needs of the organization, a
societal organization with legal en tity status may establish business enterprises. 84
75 See Article 8 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 76 See Article 9 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 77 See Article 15 of draft Bill provided by the Parliament (dated May 30 , 2011) in the series of public
hearings conducted in June 2011 . 78 See Article 14(1) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of
public hearings conducted in June 2011 . 79 See Article 14(2) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of
public hearings conducted in June 2011 . 80 Article 16 (1) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011. The issuance of such letter is already implemented by Ministry of
Home Affairs based on Law No.8 Year 1985 on Societal Organization. “Surat Keterangan Terdaftar
(SKT)” or “Letter of Registered Organization” with the existing law is issued by Ministry of Home
Affairs, Directorate General of National Unity and Politics (Direktorat Jenderal Kesatuan Bangsa dan
Politik) 81 Article 16 (3) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 82 See Articl e 39 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 83 See Article 7 (2) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 84 See Article 35 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 .

23

Notably, t he draft Bill does not mandate the Single Principle ( Asas Tunggal ) of
Pancasila . The draft Bill only state s that the principle (s) of a s ocietal organization
must not conflict with Pancasila and the 1945 Constitution . A s ocietal organization
may therefore adopt an other specific identi ty which reflects it s intention and
aspiration and does not conflict with Pancasila or the Constitution .85

The draft Bill also adopts a less rigid approach toward the Single -Pot Concept
(Konsep Wadah Tunggal ), which is emphasized in the existing Law No. 8 (1985 ) on
Societal Organization s. Specifically , the current draft Bill states that to optimize its
role and function, a s ocietal organization may integrate itself into an umbrella
organization .86

The draft Bill requires that a s ocietal organization make its activity and financial
report accessible to the public. 87 The public is entitled to give support or make
objection s/complaints regarding the existence or activity of a s ocietal organization.
Public support may come in the form of a reward, program, donation, or operational
support. The objection s/complaints shall be submitted to the government or local
government, depend ing on the territor ial scope of the societal organization. The
government then will promote settlement through the mechanism of mediation and
conciliation. 88

Permissible source s of financ ing for societal organization s include membership fee s,
public donation s, grant s/donation s from a foreigner or foreign institution , business
income, and other donation/business that is legal under the law. A societal
organization receiving a g rant or donation from a foreign party must inform and seek
approval from the government. 89

Th e underlying legal entity status (for societal organization s established by
organizations with legal entity status) or the Letter of Registered Organization (for
ordinary association s) may be revoked by issuing institutions, if the societal
organization is using a name, symbol or sign, which is similar to the flag or the
State’s symbol of the Republic of Indonesia , the Government ’s symbol, the s tate
symbol of other countries or international institution s, the symbol of a separatis t
movement or banned organization , the symbol of an other societal organization, or the
symbol of political parties .90

85 See Article 2 and Article 3 of draft Bill provided by the Parliament (dated May 30, 2011) in the
series of publi c hearings conducted in June 2011 . 86 See Article 13 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 87 See Article 42 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 88 See Article 43 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 89 See Article 34 (2) draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 90 See Article 46(1) and Article 47(2) of draft Bill provided by the Parliament (dated May 30, 2011) in
the series of public hearings conducted in June 2011 .

24
The g overnment may suspend a s ocietal organization temporarily ( for a maximum of
90 days) 91 after a written warning, where the societal organization is conduct ing
activity that conflict s with the Constitution and prevailing laws and regulation s;
endanger s the unity and safety of the State ; spread s hostility among ethnic groups,
religion s, races , etc.; undermines the unity of the State ; disturb s public order ; engag es
in violent action ; or damag es public facilities. 92

Within 30 days after the temporary suspension is issued, the government or local
government m ay submit a petition for permanent suspension to the District Court (for
provincial/city level organiz ation s) or the Supreme Court (for national level
organization s). The District or Supreme Court must issue a decision no later than 30
days from the date of the petition. In case the temporarily suspended organization
commits another violation, the Distric t/Supreme Court may dissolve the
organization. 93

The g overnment may also suspend the activity of a societal organization, after issuing
three warning s (occurring within a maximum period of 60 days), where the
organization receive s from or provide s to a foreign party any kind of support which is
against the law ; conduct s fundraising for the interest of a political party or campaign
for a political position ; or receive s support (money, goods, or services) from any kind
of party without a clear identi ty. 94

Finally, t he Court may dissolve a s ocietal organization that follow s, develop s, and
promote s Communism or Marxism -Leninism. The board of the executive of such an
organization , if convicted, can be sentenced to 15 -20 years in prison .95
2. Problem Identification

The primary problem with the Bill does not spring from the specific provisions and
details of the Bill, but from the concept of the Bill itself. As described previously, the
societal organization was originally conceived for political reas ons during Soeharto’s
regime in order to control CSO s in Indonesia. Three issues deserve highlighting.

First, t he concept of “societal organization ” amounts to a special status for
organizations that brings no benefits. The laws in many countries provide for a
special status for CSOs – a public benefit or charitable status, for example – but with
this status come fiscal privileges , usually in the for m of tax exemptions. The Bill on
Societal Organizations envisions no privileges or benefits. Instead, the Bill seems to
rest on the original premise of control.
91 The District Court or Supreme Court will make the decision for permanent suspension. See Article
48 (3) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public hearings
conducted in June 2011 . 92 See Article 46 (2) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of
public hearings conducted in June 2011 . 93 See Article 48 of draft Bill provided by the Parliament (dated May 30, 2011) in the series of public
hearings conducted in June 2011 . 94 See Article 49 (1) of draft Bill provided by the Parliament (dated May 30, 2011) in the series of
public hearings conducted in June 2011 . 95 See Article 107 (c, d, e ) of Law Number 27 of 1999 on Amendment of Criminal Code in relation with
Crime Against State Security .

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Second, t he B ill , if enacted, would create a kind of s econd -tier registration system.
The Bill envisions that a s ocietal organization may take the form of an organization
with legal entity status, such as a f oundation or association . Although the foundation
and a ssociation may undergo registration as a societal organization simultaneously in
the process of seeking the underlying legal entity status, the meaning of having the
status of a societal o rganization is unclear.

The Special Committee in the Parliament currently has the opportunity to improve the
legal framework. The immediate priority should be on the Bill on Association s,
which has a valid legal basis and is already listed in the National Legislation Program
2010 -2014, number 228. With an enabling Law on Foundation s (for non -membership
organization s) and Law on Association s (for membership organization s), there would
be no need to regulate the civic sector through the Bill on Societal Organizations. A
broadly sweeping and highly politicized legal status, as represented by the s ocietal
organiza tion , is clearly n ot suitable for a democratic country like Indonesia.

Third, t he Bill on Societal Organizations envisions the continuing authority of the
Ministry of Home Affairs (MoHA) , and the Directorate General of National Unity
and Politics ( Direktorat Jenderal Kesatuan Bangsa dan Politik ) in particular. The
approach of the MoHA, and especially the Directorate General of National Unity and
Politics, is always grounded in the perspective of politic s and security. Such a
regulatory approach is not likely to lead t o a he althy and strong civic sector in
Indonesia . By contrast, in many civil law countries, it is the Ministry of Justice or the
court system that is made responsible for the registration and supervision of CSOs.

Indonesia needs a more enabling legal fr amework to strengthen the CSO sector.
Instead of vesting regulatory authority with the MoHA, i t w ould be better to assign
the Ministry of Law and Human Right s to handle the registration of foundations and
associations. Relevant sectoral m inistries , such as the Ministry of Social Affairs,
Ministry of Education, or Ministry of Religious Affairs can use their regulatory roles
to further support and facilitate the activities of f oundations and a ssociation s.

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E. Strategic Recommendations

This section provide s two phases of strategic recommendation s: short -term and long –
term recommendations.

1. Short -term R ecommendations (June – July or end of 2012)

The Special Committee for the Bill on Societal Organization s in the Parliament
originally schedule d the discussion of the Bill to run from January 26 until May 22 ,
2012 , but did not manage to complete the discussion during that time frame .

On May 30 , 2012, the Special Committee conducted a meeting with the Government.
It was agreed to establish a Worki ng Committee to further discuss the Bill. The Chief
of the Special Committee, Mr. Abdul Maliq Harmain, mentioned the date of July 12 ,
2012, as the new time frame for the discussion of the Bill in the Plenary Session.
There is a substantial possibility, h ow ever, that the targeted schedule will again not be
met .

The short -term recommendation s are based on that schedule, seeking to make input
into the parliamentary process.

1.1 . Recommendation s for CSO s

There is a need to raise awareness of th e Bill and its implications throughout the CSO
sector in Indonesia. One of the lesson s learned in conducting advocacy work for the
Foundation Law in 2000 is that most CSO s are narrowly focused on their core issue s
(issue s related directly to their own mission ) and often tend to ignore issues related to
the underlying legal framework (legal entity status , taxation etc).

The l ack of understanding regarding the Bill on Societal Organization s and the legal
framework for CSO s in Indonesia weaken s the public pressure against the Bill. Some
CSO s and members of the public support the Bill because they believe it will solve
the problems caused by organizations promoting hatred and violence. In fact , the
Criminal Code of Indonesia is more than sufficient to support law enforcement and to
respond to violent activities. The Indonesian Criminal Code ( Kitab Undang -Undang
Hukum Pidana – KUHP) already covers violent offences conducted by a principal
criminal actor, or one who aids, abets, or commands a crime, or who publicly
promote s hatred against a group of people. The real problem is th e lack of political
will of law enforcement agencies, including the p olice, to enforce the law against such
individuals .

A constructive res ponse to the Bill would be for CSO s to participate in and contribute
to the ongoing process in the Parliament , by sharing their views on the Bill and
supporting a more enabling legal framework for CSO s. CSOs could also request a
hearing with each politica l faction to discuss the Bill . In order to provide constructive
input, however, CSO s need enhanced capacity and access to effective advocacy
materials, credible references, comparative international studies , etc.

The recommendation is to (1) raise awareness among CSOs of the Bill on Societal
Organizations and its implications throughout the CSO sector in Indonesia; and (2)

27
empower CSOs to participate in the Parliamentary process, through access to
effective advocac y materials, comparative expertise, etc.

1.2. Recommendation for the Special Committee in the Parliament

The Special Committee needs to understand the leg islative history of the Bill on
Societal Organization s and understand that civil society is an impo rtant sector in a
democratic country. Ideally , the Special Committee should not proceed with the Bill.
However, it may not be realistic to expect the Committee to withdraw the Bill, since
the Bill is already being discussed (special committee established, budget already
allocated , etc). One potential solution is for the Special Committee to shift its focus
from the Bill on Societal Organizations to the Bill on Association s. As mentioned
previously, the Bill on Association is already listed number 228 in the National
Legislation Program 2010 -2014. The challenge of this strategy is that for the Bill o n
Association s, the relevant ministry is the Ministry of Law and Human Rights, not the
Ministry of Home Affairs. It would be politically difficult for the Special Committee
to shift the focus from one Bill to another , because it would mean a shift in liaising
with a different ministry.

The recommendation is for the Special Committee to (1) study the legislative history
of the Bill on Socie tal Organizations and the importance of civil society to Indonesia ;
and/or (2) withdraw the Bill on Societal Organizations from consideration and shift
its focus to the Bill on Associations.

1.3. Recommendation for the Ministry of Law and Human Rights

Since 1994, the Ministry of Law and Human Rights has been discussing the Bill on
Association s. As explained previously , the draft Bill sprang from a unified draft law
en titled “Bill on Foundation and Ass ociation .” In 2001, because of the influ ence of
the IMF, a separate bill on foundation s was prepared and enacted as the Law on
Foundation s.

The enactment of a new Law on Associations is a crucial step toward strengthening
the legal framework for associations. To achieve this, the Ministry of Law and
Human Rights must be more active in promoting the Bill on Association s. The
Ministry of Law must coordinate with the Ministry of Home Affairs to establish a
conducive legal framework for CSO s in Indonesia. The challenge is that, in practice,
so -called “sect or-ego” may prevent a ministry from “disturb ing ” an other ministry’s
program. The discussion of the Bill on Association s will surely overlap with the
discussion of the Bill on Societal Organization since both Bills relate to membership –
based organization s.

The recommendation is for the Ministry of Law to promote the Bill on Association s to
the public, to other ministries, and to the Parliament.

2. Long -term Recommendations (2012 – 2014)

2.1 Recommendation for CSO s

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Government argument s supporting increased regulation of CSO s in Indonesia relate
to accountability and transparency, especially related to foreign funding. CSO s need
to improve their ability to demonstrate their accountability and transparency. More
generally, CSOs need to be more pro -active in managing governmental and public
perceptions, rather than responding to government -led initiatives.

CSOs need greater awareness of their rights and opportunities under the legal
framework. For example, CSO s should be more aware of taxation iss ue s and the
availability of tax incentives . Tax deduction s for donations to support disaster
rehabilitation, research and development, improved infrastructure, education facility,
and sports are available and have been since 2008 .

CSO s need to be more involved in the law making process. As mentioned earlier, the
Indonesian National Legislation Program for 2010 -2014 includes at least five bills
that are closely related to the legal environment for civil society in Indonesia. 96 CSO s
need to be prepared to engage in research, advocacy, parliamentary lobby ing , and
public campaign ing related to the discussion process of the se bill s.

2.2. Recommendation for the Government and Parliament

The Government and Parliament need to adopt a more enab ling approach toward
CSO s in Indonesia. The approach should be to facilitate and improve the quality of
the legal environment , not to limit and repress civil society . CSO s are crucial and
play a n important role in a democratic country.

It is important fo r Indonesia to improve the legal framework. The general framework
should be based on the Foundation Law (for non -membership organization s) and the
Association Law (for membership based organization s). The Law on Societal
Organization s should be revoked, not revised.

Data from t he Ministry of Law and Human Rights reveals the existence of 21 ,301
registered f oundations and 268 incorporated associations. This data reflects a serious
problem in the field. There are undoubtedly more than 21 ,301 foundation s and 268
incorporated association s in Indonesia ; this reveals n ot only a problem of registration
or an incomplete database, but also a problem of the effective ness of law. It also
clearly reflects an imbalance in the number of foundatio ns and associations.

The Ministry of Law and Human Rights has established 12 “Law Center s” in some
provinces (Banda Aceh, Ternate, Yogyakarta, Banten, Pekanbaru, Medan, West Java,
Central Java, East Java, Padang, Nusa Tenggar a Timur, and Jambi). These law
centers could be a good vehicle to connect various CSO s in the regions to the
Ministry of Law in Jakarta. The Ministry of Law coul d run a program facilitating
CSO s in the regions to help them comply with the laws governing foundation s and
association s.
96 To repeat, t hose bills are (1) the Bill on the revision of the Law on Societal Organization s (RUU
tentang Perubahan atas UU No.8/1985 tentang Organisasi Kemasyarakatan ); (2) the Bill on
Association s (RUU tentang Perkumpulan ); (3) the Bill on the second revision of the Law on
Foundation s (RUU tentang Perubahan Kedua atas UU No.16/2001 tentang Yayasan ); (4) the Bill on
NGO s (RUU tentang Lembaga Swadaya Masyarakat ); and (5) the Bill on Protection of Human Rights
Defenders ( RUU tentang Perlindunga n terhadap Pembela HAM).

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The Ministry of Law and Human Rights also need s to build proper database for
CSO s. The Ministry of Law should have an acc essible and reliable database for data
related to the foundations and associations established in Indonesia.

Furthermore, the Governm ent and Parliament should engage in more strategic
partnership with CSO s. This sh ould include open communication and establish
improved relations with the CSO sector.

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