PERBANKAN

FINANCIAL LEGAL ASPECTS AND BANKING

A PRACTICAL REVIEW

Dr. Jusuf Anwar, SH., MA
  















 
        
WORKSHOP ON DEVELOPMENT OF NATIONAL LAW VIII Ministry LAW AND HUMAN RIGHTS
NATIONAL AGENCY FOR LEGAL GUIDANCE DENPASAR, 14-18 JULI 2003

 

A.   INTRODUCTION

The difficulty that struck the Indonesian economy, particularly since the 1997 crisis that has continued until this year, may not have happened if, among others, the business community to seriously implement the principles of sound financial management company with, among others, to balance the capital structure such that short-term purposes of actually financed from sources of short-term financing, while the term for penjang financed from long-term financing sources. At the bottom is meant by capital structure is a reflection of the balance between long-term debt and equity capital of a company. Improved capital structure of the business world is a necessity to improve efficiency and strengthen competitiveness in the face of increasingly keen competition, especially in this era of globalization. Remediation efforts can be done either by considering aspects of good corporate governance, which more and more studies and research conducted by various institutions in both the environment national or international. Globalization is characterized by refinement of the world (compression of the world) has changed the map of economic, political, and cultural. The movement of goods and services occurs sooner. Capital from a country switches to another country in a matter of seconds due to the utilization of information technology. Accordingly, the banking activities as a pulse of the nation's economy did not escape the impact of globalization. In performing the function of intermediary, banks become economic actors who played facilitate traffic through the fund transfer services via electronic media. One of the legal issues in banking services is the absence of regulations that provide guidelines for electronic funds transfer activity, such as the legal basis for transfer of funds, funds transfer ownership status, legal protection for the sender and recipients of funds transfers in the event of an error caused by the bank, the position of the owner of the funds in this case the bank liquidated or bankrupt. Problems-problems of the above requires the rules to provide legal certainty for users of banking services. Other legal aspects in the field of finance and banking as well as many coloring problems in economics and law, such deviations BLBI, prudential principles that are faced with a decline in the banking intermediary function, the emergence of the phenomenon of fee-based income in banking practices, and various economic issues other law, all of which need our collective attention. Application of the precautionary principle (prudential banking principles) Improvement in all activities is one way to create a healthy banking system, which in turn will have positive impact on the macro economy. Implementation of this principle should be thorough, not only in regards to the provision of credit, but it began when the bank was established, the determination of management that meet the test of adequacy and feasibility (fit and proper test) that is not ceremonial. Bank Indonesia regulation, which requires the fit and proper test for bank managers still have many weaknesses, such as still allowing administrators who do not pass the test to stay afloat despite having to be responsible personally.
In addition, in providing easy access to clients, then the use of ATM machines, debit cards and credit cards have the potential to harm consumers through accounts burglary, machinery breakdown, and other technical errors that have not been touched by the signs of the law. Bank obligations to provide appropriate machinery and safety must be based on certain standards, which regularly should ditera / recalibrated. So far there has been no uniformity of standards of proper machinery to be operated. The cases show that the losses caused by customers who do not like the machines used are enough to encourage standardization made every technology used.
Without deny the existence of the judiciary, banking practice requires completion of banking cases handled in a professional manner, ensuring economic stability and public confidence and banking. The cases are handled banking rambling, intense publicity and no independent judiciary, would undermine the reputation of the banking system. Therefore, the need for the idea to create an efficient settlement mechanisms, effective and keep the reputation of the banking system.

Another important point is related to the Deposit Insurance Corporation. As where in amanatkan by the Banking Act, the establishment of the Deposit Insurance Corporation shall as soon as possible will be realized following the abolition of government liabilities as a guarantor and an end to the task of IBRA. Legal aspect to note is about the status of the Deposit Insurance Corporation, the acquisition and utilization of the guarantee fund guarantee fund, which must be poured in clear rules. In addition, associated with the end of IBRA's task, the need for temporary agency in charge of completing all obligations IBRA, particularly transactions that are done, and even the possibility of lawsuits, if the management of assets, IBRA had made a mistake or act against the law.

In an attempt to cover the many problems in the national banking and financial practices certainly not an easy thing to be discussed in a brief exposure, then the relationship that this paper will attempt to further discuss the essence of the various issues that have been dianalisir advance through a discussion of some legal aspects of financial sector and banking, which the discussion will be based on several key issues related to the problem of the legal system, implementation of good corporate governance in the national banking and financial system, and also the role of law in accommodating the various phenomena that occur in the field of finance and banking.

B.   DISCUSSION

1.    Dualism Legal System

Indonesian legal system that adheres to the Continental European legal systems are the basis for the law enforcement agencies to use the positive law of the Continental European system is in making any decision. But on the other hand, quite a lot of legislation on the finance and banking sector which is strongly influenced by Anglo-Saxon legal system, or Common Law. The second application of different legal systems in the positive law in Indonesia in the financial sector and banking in many cases has resulted in dis-harmony, which can be seen from the arrangements that are inconsistent with each other of the two legal systems are combined in a same material.

For example, in trading securities without paper (scriptless trading) are commonly used application of technology. It has become a feature of general trading in various developed countries and in several other berkembangan countries, including Indonesia. Scriptless trading practices is only possible if accompanied by a digital signature that is not recognized in positive law system in Indonesia, which will result in the unauthorized trades that void by itself or can be canceled.
Inequality is generally solved by a rule that has a lower level of hierarchy of the Act. This can be done as long as there is not a legal dispute. However the in the event of legal disputes, it will be important for the identification is "the legal system which will be adopted by law enforcement?". The answer, of course, "Indonesian legal system namely the Continental legal system." But this situation is actually a challenge for legal experts in applying the concept of "law as a means of reform" proposed by Prof.. Mochtar Kusumaatmadja, which originated from the concept of "law as a tool of social engineering" of Roscoe Pound. Thus, the law must be created for the benefit of society and not vice versa.
However, the problem of dualism is the legal system, can also be viewed as a positive convergence of two different legal systems. Convergence of these two legal systems is caused mainly by the development of market economy and internationalization. So, as the multiplier effect of convergence in the economic field, then the agencies of law relevant to the economic field also occurs convergence. With the economic field also occurs convergence. Although there is economic convergence that resulted in convergence in the legal field, in reality, not all aspects of procedural law that are not there konvergensi7. This can be caused by differences in cultural and legal traditions in each negara8. With it saw as an inevitable meeting of two different legal systems, then this convergence can be more accommodating and easier regulations conducive to business and economic needs. Also worthy of note other important factors which jyang economic policies undertaken by governments of Asian countries that were key determinants for changes in legal systems between 1960 until today.

2.    Implementation of Good Corporate Governance (GCG)

It is interesting to note the following quote, "Good corporate governance of banks is the sine qua non of a sound banking 9system. For individual banks cans it reduces the cost of capital and enhance shareholder value. The Asia Banking crisis has, in part, been attributed to serious inadequacies in the governances of banks. Governance restructuring will from have to accompany bank restructuring. If the latter is to be sustainable. Good governance bank May not work in isolation. It will of need to be accompanied by good governance in the major constituents of the economic Including the governance of central banks, banking supervisory agencies and in the corporate sector. The post-crisis period Nowhere has created an environment most of the major actors in Asia are now willing to implement Governance Reforms. Not only as a way to Ensure survival, but Also as a competitive weapon.'' For companies, GCG is an asset and requires commitment and investment. Governance culture must be grown, including aspects of decision making in a management. List the benefits of compliance with the GCG long enough, all of which lead to the increase in shareholder value added (Increasing shareholder value).
Concrete examples are huutang private companies in the bailed out with a policy of 'blanket guarantee' merely proves that the main sebahagian cooperative sector which should be a major economic player no longer functioning as a state asset. Private companies are a burden (liabilities) that his action has raised new debt to be borne jointly and severally by the children, grandchildren and our great-grandchildren.

Weak corporate sector has led them farther away from its role as the 'engine of growth' or as a prima donna development. The economy has turned to fiscal economics, economic budget, which means safe throughout the state budget so is its economic performance. On the other hand, we are still lucky to still have the SME (small-medium enterprises) and the informal sector, high power resistance to shocks that arise. Sector is able to absorb labor force and stimulating the market mechanism through demand and supply. The amount of interest paid by government bonds that are still able to turn the wheels of the economy. The city is currently living in the 'flower garden'. 'The role of interest' is very dominant banking sector itself instead of living from picking the 'flower' is that of government bonds and SBI. Acceptance of our banking operations are relatively small compared with other revenues. Receipts of interest are included in the group deodorized. Therefore with all the power we should be able to keep the government did not break a promise (default) in fulfilling its obligation to pay interest. Default simply means 'the beginning of the end' and people will start to look at the second banking crisis.
The main cause of the weakness of the Indonesian macro economic foundation proven in studies conducted by the Asian Development Bank (ADB) in 2000 in some East Asian countries, particularly Indonesia, Korea, Philippines and Thailand, which concluded that: 'That sufferes countries dramatic reversals of fortune During the Asian financial ciris have Identified Weaknesses in corporate governance as one of the major sources of vulnerabilities That led to Their economic meltdown in 1997.''
11Dilain hand, the President of the Asian Development Bank, Chino Mr.Tadao once said that, ".... A dynamic private sector is critical to Achieving propoor, sustainable economic growth ....". In this case the corporate sector is closely related to poverty alleviation efforts, either directly or indirectly. On the same occasion, also similar statement made by many parties who represent countries representing both developed and developing countries, in this case they underline the importance and role of the GCG and the strategic role of the private sector in development.
Corporate sector that is able to contribute positively to economic development is the corporate sector which is a national asset and not those who only become a burden and parasites of society. Koporasi sector groups are groups that adhere to good corporate governance, abide by the rules and regulations that apply. In other words, are those who are able to practice the principles of good corporate governance (GCG) in business.
In this present life GCG should be a commitment, and commitment it requires investment. Formation of several committees such as Audit Committee, Budget Committee, and others, including the appointment of Commissioners and the Independent Directors will require a fee. Similarly, enforcement of transparency, accountability and responsibility requires publication and dissemination are not budget neutral.
The benefits are many proven, that the GCG raise the added value of the company's shareholders. However, changing the culture and work ethic is not too easy, including the difficulty of improving decision making and change management behavior. In many respects, the implementation of the new GCG reached the stage of rhetoric. Reluctance to implement GCG more due to the attitude which considers that GCG as an expense and not as a corporate asset.

Thus begins GCG difficult if people are still skeptical. This can be seen from there are still many who think that GCG was not necessary in the absence of sanctions and incentives. Companies that do not apply the GCG even considered more advanced, because the principle of openness for a while the company considered to be largely negative or mudharatnya.
But on the other hand, many companies are also easy to feel the added value of GCG applications, such as more youth access to international capital markets and the many investors who are willing to pay a higher premium for shares of companies that have implemented good corporate governance. In this connection would need also encouraged the application of a special label for companies that have implemented ISO GCG as provided specifically for GCG. Companies that have implemented GCG will carry the flag bonafides. Another positive effect is being able to recruit the best available labor market at this time, more professionals to be critical in finding a job. This professional group only wanted to join the best companies including didalannya compliance with the practice of business ethics. Working at a company that "jerk" will only bring misfortune. The employees will always carry over when the company brought to obtain a problem. Hence also, paradigme shareholder oriented paradigm has shifted to the stakeholder oriented.

GCG basically covers business ethics, ethics collection is contained in the code of GCG. It takes volunteerism from the corporation in complying with this code. There are no sanctions for those who do not obey it because of its voluntary compliance. Code or comparable guidelines are usually also published by institutions and professional associations that do not have public authority, for example Perbanas. In practice, for such guidelines can be enforced, then this guidance should be issued by the agency / institution that has the authority to regulate. Hence also, many provisions of the guidelines GCG taken over by the legislation in force and people are required to comply (compliance mandatory.) Here can be applied sanctions for the offenders. An example is the provisions of Good Corporate Governance practices in the Limited Liability Company Law, Capital Market Law, Banking Law and its implementation regulations.
In many developing countries, the implementation of GCG is more driven because of the fear of existing sanctions, or fear of the rulers. Applicable regulations provide a variety of civil and criminal sanctions, for the offenders, especially now that the ultimum remedium more prominent than Primum remendium. This is the attitude of compliance with regulatory GCG is driven and not driven on the encouragement of professional and ethical driven.

Another thing that also needs attention is that GCG should be regarded as an intangible asset (intangible assets) that would provide an adequate return results in terms of providing added value to our shareholders. GCG also have an advanced way of life or culture of a company that can be used in decision-making process and to guide management behavior.
The principles of responsibility, accountability, fairness, and transparency which was first introduced by the OECD to be a basic principle which was adopted and adapted by many institutions in formulating guidelines for GCG. In the banking context, if a bank would go public, then the price of its shares in the market should reflect these four basic principles. Effective and efficient market the market is capable of reflecting the price that has to accommodate all the existing information. Reprehensible practices such as insider trading, does not reflect actual prices because of information that can affect the price of only owned by the insiders who trade.
Mc Kinsey last survey in 2002 proves that investors are willing to pay a premium for 'awell-governed company. " For Indonesia, they are willing to pay a premium of 27%. A conclusion can be drawn from these surveys is that the lower level of culture is the GCG in a country that will be given a premium will be higher for companies that implement good corporate governance. In this case, investors will greatly appreciate the management company that dared to do positive things in the corporate governance even though the environment is not supportive. Thus, there is no other choice, for a bank which is an institution of trust business in addition to applying the concept of such GCG.

Similarly, commissioners and directors who have been in the era and the changing nuances of business management in which a power company's high resistance to various crises and high sustainabilitynya, only companies with a nuanced governance GCG. As a leader of last resort, the Central Bank must also issue guidelines for GCG that can be followed by banks. In the voluntary guidelines are to be loaded main things which mandatory compliance obligations. Reward and punishment system should be introduced. Until now, no one any bank that is able to fly the flag as one bonafiditasnya GCG. There is no benchmark for a bank that fully GCG.

The legal framework in a country is as vital for economic development as for political and social development. Creating wealth through the cumulative commitmen of human, technological and capital resources Depends greatly on a set of rules SECURING property rights, governing civil and commercial behavior, and limiting the power of the state .... The legal framework Also effects the lives of the poor and, as Such, has changed from an Important dimension of strategies for Poverty Alleviation. This is the strunggle against discrimination, in the protection of the socially weak, and in the distribution of opportunities in the society, the law cans make an Important contribution to a just and equitable society and thus to prospects for social development and Poverty Alleviation''statement The optimistic from the World Bank are references
useful to discuss the role of law in development. The essence of that statement, among others, underlines that the legal framework in a country is very important for economic development, political and social. The legal framework is laid out well from the start will create a good domino effect on various sectors of national life, and vice versa.
15Dalam framework achieve the various development and construction of the law have to reveal his role. In relation to the basic framework of national development, law manifests itself in two faces, namely on the one hand memperketatkan law itself as an aspect of development, meaning that the law is bound as a factor of development itself that needs to get priority in enforcement efforts and fostering development . On the other hand that the law should be viewed as a means of renewal and community development that will determine the success of national development efforts. Related to the problem of the legal relationship with this development, there are various 16konsep raised by legal experts. In general, they argue that the development is implemented, the law serves not merely "as a tool of social control" or as a tool that serves to maintain stability, but as said by Roscoe Pound, the law also serves as "as a tool of social engineering '17. In connection with this opinion Sumaryati Hartono, the preparation of the 1945 actually went on a futuristic philosophy, among others, put forward by Roscoe Pound, and is now known as the philosophy of law that saw the role of law as a tool of social engineering. This philosophy in Indonesia improved by Mochtar Kusumaatmadja as a philosophy that gives a role to law as a means of development, an approach was already applied by the compilers of the 1945 Constitution.
The law is only holding on to its authority to regulate, govern, forcing, as well as banning and so on, without asking whether the provisions made to run effectively. Therefore, in the "social engineering" is a very important role and feedback (feedback), so that arrangements can always be adapted to the situation arising in the community. If the law is seen as a means of supporting the development of the legal function should have a certain pattern. Mochtar Kusumaatmadja concept seemed to have a very broad scope - more than Roscoe Pound itself as the first person mengkonsepsikan function of law as a tool as he explained: "In the broad meaning which the law was not only the overall principles and rules that regulate life man in society but also include institutions (institutions) and processes (process) which bring into force the rules in reality "
19Dalam legal system, the law of development (development) includes all actions and activities that strengthen the legal infrastructure such as legal institutions, professional organizations, law, legal education institutions as well as everything related to settlement of the special problems of "development". Legal conception of development in harmony with the new orientation of the legal notion put forward by A. Rusted Vilhem who said that the law is the legal machinery in action ie as a unity that includes all the rules both written and unwritten, facilities and infrastructure such as police, judiciary, Courts, Advocates and personal circumstances rather than the individual's own law enforcement even law school as an institution of higher education law.

Thus the paradigm of "law as an answer to the problems that arise 'paradigm should be changed to' law that is able to look to the future '(forward looking) on the possibilities of civil and criminal cases that has never happened before as a result of the opening of the cyber world. Technological development is not only foster economic progress, but also open opportunities for criminals to take advantage of a seamless world and borderless. A common example is relevant to the occurrence of chance such as money laundering crimes and also existence of free foreign exchange regime has been adopted for Indonesia about three decades.
Another example is the application system of 'single entry' to government financial accounting ICW imposed on the one hand, and on the part of others is the need to implement a system of 'double entry' in accordance with International Financial Standards. It is a fact that is very encouraging
that currently there are adjustments to the provision of financial legislation the country, including the enactment of the State Finance Act (2003) which will be followed by the State Treasury Law and State Financial Supervision Act. Both provisions of the last and still in draft form the Act is currently under intensive discussion between the government and parliament are expected to be completed in 2003. this is an example of legal responsiveness to the needs of the economy albeit very late. For additional information, discussion of the concept of the State Finance Act has been tilled by no less than 15 teams since about 30 years ago.

3.    CLOSING

1.    The occurrence of legal dualism should be addressed as a positive thing and can better facilitate the regulation of accommodative and conducive to the needs of business and economics. Another important factor is the economic policies undertaken by governments of Asian countries were key in diterminan for shifts and changes in the legal system in many Asian countries between 1960 until today. However, the combination of the legal system can not be claimed as kovergensi full and total of both continental and Anglo-Saxon system, because other aspects that are formed from procedural many historical, cultural and legal traditions of each country.

2.    Implementation of good corporate governance should be full awareness of or commitment from all parties and walks of life. In the context of finance and banking, this will be the duty of each element of a company engaged in the financial sector and banking, finance and banking associations, IBRA, and also the Central Bank.

3.    Paradigm shift regarding the role of law, and of 'law and society following the economic development' to 'future-oriented laws that can anticipate and accommodate and bridge the legal and economic issues within the national community, but also accommodating and able to integrate with international requirements relevant, become an urgent need for economic development and legal.