State Capital Act 2023

The 2023 State Capital Act (Indonesian: Undang-Undang Ibu Kota Negara/UU IKN 2023) is an omnibus bill to amend the previous Law on State Capital, a piece of law to relocate capital of Indonesia from Jakarta to Nusantara at East Kalimantan as new capital of Indonesia. Introduced on 21 August 2023,[1] the omnibus bill was passed into law on 3 October 2023.[2] The law intended to amend and expand the power given to the Nusantara Capital City Authority (OIKN).[3]

UU Ibu Kota Negara (UU IKN)
People's Representative Council
  • Rancangan Undang-undang Perubahan atas Undang-undang (UU) Nomor 3 Tahun 2022 tentang Ibu Kota Negara
Territorial extentNusantara
Passed byPeople's Representative Council
Passed3 October 2023
Legislative history
Bill titleRUU Perubahan atas Undang-undang (UU) Nomor 3 Tahun 2022 tentang Ibu Kota Negara (Bill on Amendment to Law No. 3/2022 Re: State Capital)
Introduced21 August 2023 (2023-08-21)
Amends
Law on State Capital
Status: Current legislation

The bill was approved with almost all fractions in People's Representative Council (DPR). In unusual move, Democratic Party one of two opposing parties opposing Joko Widodo administration also supporting the law. Only Prosperous Justice Party rejected the law passage.[4]

Changes and Amendments

There are 9 changes to the Law on State Capital introduced by the bill:[3]

  • Specialized Authorities
  • Agrarian Affairs Autonomy
  • Financial Management
  • Position Filling
  • Update on Areal Delineation, resulted in changes on Nusantara's area
  • Housing Affairs Autonomy
  • Spatial Management
  • Relationship and Partnership between OIKN and DPR
  • Assurance for Sustainable Development.

Notable Changes

Some notable changes are:[2]

Expansion of the Nusantara Capital City Authority' powers

The new bill expanded the power of the Authority to include investment licensing, easing businesses, providing special facilities to funders of Nusantara facilitators, its developers and its satellite areas.[2]

Agrarian affairs autonomy

The new bill granted special agrarian affairs to the Authority to manage land use and spatial management within Nusantara.[2]

Position filling autonomy

The new bill granted autonomy to the Authority to fill the Deputies and/or other high positions within the Authority with non-state apparatus experts. Thus, making the Authority having "mini cabinet"-like structure similar to the Presidential Cabinet.

Financing autonomy

The Authority granted power to issue bonds and securities to provide funding for Nusantara development. It also granted power to the Authority to make foreign loans with permission of the Ministry of Finance.[2]

Extremely long cultivation rights and building use rights to the Investors

The law granted 190-years cultivation rights to anyone who invest in Nusantara. The 190-years cultivation rights not given at once but given by 2 cycles with each cycle has 95 years long. The law also granted 160-years building use rights to anyone who invest in Nusantara, given by 2 cycles with each cycle has 80 years long.[2]

Status of Nusantara Capital City Authority assets

The Authority assets' status is much like treated in manner similar as state-owned enterprises rather than state-owned government institutions. As result, it may purchasable, exchanged, granted, or being included in equity capital for funding Nusantara development.[2]

People Representation within Nusantara

By the law, future Nusantara people representation is solely exercised by members of Commission II of the DPR. There will be no representatives for Nusantara region in local or regional level.[5]

"Sweeper" Article 42

Article 42 of the law noted as "omni-sweeper article", because its sweeping power in cancelling of any effects of regulations and laws that may limit or obstruct the capital relocation.[6] Many legal experts condemned the article because its perceived unconstitutionality and accused the Joko Widodo administration as pro-Investor.[7][8]

Criticism

Only Prosperous Justice Party condemned the passage of the law in parliament.[9]

Indonesian Legal Aid Foundation condemned the passage of the law, especially because the sweeper Article 42, condemning the passage as unconstitutional.[8]

References
  1. Media, Kompas Cyber (22 August 2023). "Revisi UU IKN Diajukan, Luas Wilayahnya Bakal Berubah Halaman all". KOMPAS.com (in Indonesian). Retrieved 5 October 2023.
  2. Indonesia, C. N. N. "Poin-poin Perubahan UU IKN yang Disahkan DPR Hari Ini". nasional (in Indonesian). Retrieved 5 October 2023.
  3. Media, Kompas Cyber (21 August 2023). "9 Poin Revisi Undang-undang IKN, Berikut Daftarnya". KOMPAS.com (in Indonesian). Retrieved 5 October 2023.
  4. "Ditolak PKS dan Diberi Catatan Demokrat, Revisi UU IKN Disahkan DPR". Republika Online (in Indonesian). 3 October 2023. Retrieved 5 October 2023.
  5. "Wakil Rakyat IKN Diputuskan dari DPR". kaltimpost.id. Retrieved 5 October 2023.
  6. Media, Kompas Cyber (3 October 2023). "Pasal 42 UU IKN Baru: Peraturan yang Bertentangan dengan Pembangunan IKN Dinyatakan Tak Berlaku". KOMPAS.com (in Indonesian). Retrieved 5 October 2023.
  7. Yaputra, Hendrik (4 October 2023). "Keberadaan Pasal Sapu Jagat di UU IKN". Tempo. Retrieved 5 October 2023.
  8. Indonesia, C. N. N. "YLBHI Kritik Keras 'Pasal Sapu Jagat' di UU IKN". nasional (in Indonesian). Retrieved 5 October 2023.
  9. Indonesia, C. N. N. "Delapan Catatan Jadi Dasar PKS Tolak Pengesahan RUU IKN". nasional (in Indonesian). Retrieved 5 October 2023.
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