Here is a very concise article about the role of the Government. A must read for those who would like to understand policies differences between the "big" and "small" government. I can understand why most people will be in favor of the "big" government" during the term of crisis. We love saviors aren't we? For most of us, those smart looking officials seem to have all what it takes to save the country (and ahem, I'm not referring to the officials of my country).

Well, you better think again. I agree that the government must have a role in the development of a country, or else why we need to have a government in the first place? But we must also acknowledge the limitations of the government. They are, after all, made from the people and they definitely could not know and understand everything, including the entire risks and benefits of their policies. A good government should know when to stop making policies to avoid over regulation which could turn into a mess in the long term, or even in the short term.

By the way, hat off to Mr. David Brooks for his intelligent and easy to understand analogy.

In the first part of my article, we have discussed the basic concepts of Hans Kelsen's Pure Theory of Law. In this second part, we will discuss the concept of Norms, and the relationship between efficacy and validity of the law.

Norms, the Hierarchy of Norms, and the Basic Norm 

A discussion on Kelsen's theory of law wouldn't be complete without discussing the Norms. As I've said previously, according to Kelsen, the law can be viewed as a specific social technique and as a norm. What is a norm? Kelsen describes norm as a rule expressing the fact that somebody ought to act in a certain way, without implying that "anybody" really wants the person to act that way. Further, Kelsen also defines norm as an impersonal and anonymous command (this is made by Kelsen to counter argue John Austin's definition of law, i.e. law as a command from a sovereign). 

From his definition, we can conclude three important concepts: (i) a norm is a rule that provide certain "guidelines" to its intended subject whereas such intended subject is ought to follow such "guidelines", (ii) a norm is neutral, it is not representing the will and interest of certain people or entity, and the most important thing is (iii) the validity of the norm is not related to the entity which stipulate such norm (that's why it is considered as an impersonal and anonymous command) but on the validity of the norm which gives authority to such entity. 

Following Kelsen's way of thinking, the validity of a norm (let us call it as Norm No. 1) shall be determined by the validity of the norm having the authority to create/establish Norm No. 1 (let us call this second norm as Norm No. 2) in accordance with the procedures stipulated by Norm No. 2. Logically, Norm No. 2 should have a higher level than Norm No. 1 and both should exist in the same order/system. If not, how can Norm No. 2 create and determine that Norm No. 1 is valid? Thus we've seen the birth of the Hierarchy of Norms. Pretty simple, eh? The process shall be repeated until we reach the highest level of the Hierarchy of Norms, where we will find the Basic Norm. What are the characteristics of the Basic Norm? 

Let me give you an example: Why we stick with the 1945 Constitution and consider it as the basis of all laws stipulated in Indonesia? It is not a sacred document created by God, in fact it is a document made by a bunch of people that we call as the Indonesian founding fathers, which was later amended by the Indonesian parliament. It was once replaced by another constitutions and then we returned to use it using a decree of a president which is obviously has a lower status than the constitution. Yet, we're still using the 1945 Constitution and we still believe that all regulations in Indonesia should not contravene the 1945 Constitution and that all regulations in Indonesia obtain their validity since the 1945 Constitution allows the stipulation of laws and regulations. Yes, 1945 Constitution can be considered as a Basic Norm, but is it valid because it corresponds with justice or the interest of all Indonesian people? Not necessarily. It was not even drafted by the entire Indonesian people, rather it was made by a committee whose most members were appointed by Japanese government. It is without doubt that some Indonesian people might have different views with the idea of such committee and the content of the 1945 Constitution. Even the drafters of the 1945 Constitution and its amendments could have different views among themselves when they draft the 1945 Constitution. 

So why? Why we still use the 1945 Constitution? The answer lies in Kelsen's theory, the 1945 Constitution is valid and becomes the source of all Indonesian laws because we assume that the 1945 Constitution is valid. That is the only logical explanation, the principle of legitimacy. That's why Kelsen acknowledged in his "General Theory of Law and State" that the Basic Norm of a legal order can be replaced by a revolution which include the so-called coup d'etat. 

Validity and Efficacy of the Law 

Before we move on, let me explain first the meaning of efficacy. Efficacy of the law means the effectiveness of such law with respect to its effect to the society, i.e. the degree to which the law is being actually complied by the society. It is common for us to see laws which are so ineffective that the existence of those laws mean nothing to the society, and other type of laws which are very effective and have a high rate of compliance. The main question is, can we consider a law that is not efficacious as a valid law? In Kelsen's opinion, consistent with his theory, the efficacy of the total legal order is a condition for the validity of the relevant Norms, but not the reason for their validity, because the validity of a Norm depends on whether it is created in a constitutional way or not (please refer to above discussion on the Hierarchy of Norms). Therefore, the degree of compliance of law does not affect the validity of such law. In other words, it is possible for us to have a valid law which has a low degree of compliance or no compliance at law. 

One example that I could think of would be the regulation that obliges companies that have trade business licenses (SIUP) to submit periodical reports to the Department of Trade. Based on my experience, the percentage of non-compliance for this particular obligation reaches 99.9999%. Pretty amazing! 

There is more to it. Kelsen also acknowledged that a law/norm wouldn't be valid anymore if the total legal system has lost its efficacy. Theoretically, this is correct. Suppose the current Indonesian legal system loses its efficacy, say because of a revolution, where the 1945 Constitution is entirely dismissed and replaced, and the government has been toppled up. Unless there is a new constitution having a transitional provision which says that the remaining laws remain to be valid, we would lose the legal basis to consider that such remaining laws are still valid. However, since the possibility of having such worst case scenario is very rare, we could stick to the basic principle of the Pure Theory of Law, i.e. the efficacy of the law does not affect the validity of such law. I believe that this is a very important concept having significant practical implications, and we shall further discuss such implementation in the last part of my post, where we shall also discuss the implementation of other parts of Kelsen's Pure Theory of Law.

Natural disasters are without a doubt a powerful force in this world. They destroy many lives and cause great losses not only to a particular area but also a nation as a whole. However, the fact that most people do not learn from the various occurrence of these disasters truly enrages me. Well, saying that people haven't learned anything might be exaggerating, they did learned something, but not in the right thing as we shall see further below. In Indonesia, whenever a disaster occurs, what would be the first thing to expect by us to see? Yes, statements that the disaster came because of God's wrath. The fact that some of the biggest disasters occurred in areas inhabited mostly by moslems also supports the claim that the disasters are actually a form of punishment from God because Indonesian moslems have not lived in accordance with God's laws or the Shari'a (maybe these people forget that moslems are indeed the majority of Indonesian citizens and therefore they are also the majority in the most parts of Indonesian territories). With respect to the recent West Sumatra's earthquake, some people even connect the occurrence time of such earthquake (and the subsequent earthquakes) with some verses in the Koran which coincidentally talk about God's punishment for the sin of men. To what extent can people make this kind of scary correlation? This is not funny anymore, this is dangerous. I have three simple arguments why there shouldn't be any relationship between the wrath of God and natural disasters:

• If the disasters came because of men's sins, then using such logic, non moslem countries such as the United States of America and Israel must have been wiped off from the map a long, long time ago as most of them are unbelievers and their policies have hurted many moslems. But, apparently, they are not and in fact they are two of the most powerful countries in the Earth.
• If the disasters came as a warning for Indonesian's moslem wrongdoings, then we are in a danger of having a very cruel and childish god (note that I'm not using the capital "G") who love to crush its beings for simple reasons. I simply don't buy this crazy idea.
• No one could ever know what is in God's mind, so why even bother to make any relationship between God's wrath and natural disaster? Aren't we having a bad prejudice to our God?

Further, have you ever imagined that this fatalistic kind of thought is not efficient at all? By thinking that natural disaster is a part of God's punishment, people will believe that disasters cannot be avoided by any means whatsoever, it will then create pessimistic people who would surrender themselves to the oblivion without doing anything much. There would be no incentives to make better technologies to prevent disasters, minimize the damages, and save lives if people are thinking that they are facing with God's wrath and its inevitable destruction. For these pessimistic guys, all efforts would be useless. My God, is this the path that we will take? Will we let some irresponsible people use religion to scare the society? Religion should provide comfort to the people, to help them believe on the future, not to let them down and feel sorry about themselves. I guess this is the right time for us to really consider the fact that we live in a country which has a huge risk for earthquakes. Natural scientists have warned us and it is quite easy to find the data on this matter. Why don't we learn? I see history is repeating itself. We experience disasters, then we try to help the victims and discuss the ways to prevent these disasters to happen or at least minimize the damages, but after some times, we eventually forget them and you know what, before we can make a decent preparation, disasters have knocked ours door again. Absurd, simply absurd. If I'm the Government, apart from conducting any necessary real actions to help the victims, I would quickly release a statement saying that there is no relationship between natural disaster and God's wrath. I will not go to the mosque to pray and ask God why these disasters occur in my term and not others. What I will say are: the victims shall be taken care of, preventing actions shall be considered and conducted, and the reconstruction shall be done by paying attention to the potential risks of disasters in Indonesia. We need to ensure that the victims are still sane and that they can move on with their lives! My deepest sympathy to the victims and I hope that they can move on with their life. Disasters might crush our assets and some of our beloved ones. But as long we still alive, we will show that humans' determination will crush any limitation.

American law firms never cease to amuse me. After working together with other firms in producing a 40 pages comment to an SEC regulation, now Davis Polk & Wardwell LLP, a very respectable US law firm provides an impressive 279 pages of financial crisis manual. You can read the manual here and its quick summary here. In general, it discusses the current regulatory issues related to the US financial crisis and the effect of such regulations to US financial institutions. I haven't read the manual, but the table of contents shows a very promising product.

Nevertheless, the most interesting part of this manual is not about the content or the quality of such manual as I am quite sure that the manual has been prepared in a professional manner, but the fact that 21 partners and counsels of Davis Polk are the ones that have prepared this manual. Given the latest news on how US law firms are trying to survive in the crisis, I have no doubt now that the crisis has really affected such law firms.

While it is true that from time to time law firms publish certain materials for the purpose of marketing and promotion, in normal circumstances, it is hard to believe that a law firm can produce a manual that is very huge and comprehensive, how in the world that they can find a spare time to write the manual? I'm afraid this time I might need to assume that such opportunity exists because of the crisis, i.e. less work, less billable hours, more promotional time.

Well, I hope that I'm wrong though. Maybe in the United States, it is usual for law firms to issue this kind of manual. After all, they have many resources for doing that.

Okay, I know that this blog is made for common readers, but I guess that writing a subject on legal theory and legal philosophy once in a while wouldn't do much harm. Besides, I cannot resist the temptation of writing this post. While Hans Kelsen is known as a prominent jurist and a worldwide respected legal scholar, he could also hold the first rank of the most misunderstood legal scholars of all time. There are so many critics to his legal theory (known as the "General Theory of Law" and the "Pure Theory of Law") that in some cases, his name and theory are recorded in law text books only for the sake of being criticized. Of course, this doesn't mean that his theory is less regarded than other legal theories since debating and criticizing are very usual in a well educated community. However, I feel that those critics are not the result of a correct understanding of Kelsen's theory. Instead, such critics were made on a false ground, a misunderstanding of Kelsen's real intention when he first declared his theory of law to the public. 

Personally, after reading Kelsen's book, "The General Theory of Law and State," it is very hard for me to understand the basis of the critics and attacks made toward his theory. In my opinion, Kelsen provides a solid basis for lawyers in understanding the law and its basic characteristics, i.e. law as a norm and as a specific technique for social organization. We'll take a look on these issues further (some will be discussed in Part 2). But, for the appetizer, let us discuss first some basic concepts of the General Theory of Law and the Pure Theory of Law. 

In my opinion, nothing can better describe Kelsen's theory of law than Kelsen's own words. Therefore, to ensure that my description of this theory could reflect Kelsen's original thought in the highest manner, I will stay as close as possible with the description made by Kelsen in "The General Theory of Law and State." Expect a little bit of copy and paste here. But don't worry, my personal comments will be made separately below.  

According to Kelsen, the General Theory of Law is a general theory of positive law and positive law is always the law of a defined community (such as the law of Indonesia, the law of the United States, etc). Kelsen claims that his general theory is made as a result of a comparative analysis of the different positive legal orders, furnishing the fundamental concepts by which the positive law of a definite legal community can be described. Further, the subject matters of a general theory of law is the legal norms, their elements, their interrelation, the legal order as a whole, its structure, the relationship between different legal orders and finally the unity of the law in the plurality of positive legal orders. 

This kind of theory must derive its concepts exclusively from the contents of positive legal norms and therefore must not be influenced by the motives or intentions of regulators or the interests of the individuals to which they are the subject of such law, unless these motives and interests are manifested in the material produced by the lawmaking process. In other words, the general theory of law is directed at a structural analysis of positive law rather than a psychological or economic explanation of its conditions, or a moral or political evaluation of its ends. 

Next, what is the Pure Theory of Law? According to Kelsen, the Pure Theory of Law means that such theory is being kept free from all the elements foreign to the specific method of a science whose only purpose is the cognition of law. Further, Kelsen argues that a science has to describe its object as it actually is, not to prescribe how it should be or should not be from the point of view of some specific value judgments. The latter is a problem of politics, and as such, concerns the art of government, an activity directed at values, not an object of science, which is directed at reality. The Pure Theory of Law considers its subject (law) not as a more or less imperfect copy of a transcendental idea. It does not try to comprehend the law as an offspring of justice. It sees the law not as the manifestation of a super human authority, but a specific social technique based on human experiences. Consequently, it seeks the basic of law, i.e. the reason of its validity, not in a meta-juristic principle, but in a juristic hypothesis, i.e. a Basic Norm, to be established by a logical analysis of actual juristic thinking. 

Referring to Kelsen's thought above, I can conclude that a general theory of law focuses only on the structure and content of the law. It analyzes the law as it is and it is neutral, i.e. it does not question and judge the values or ideas contained within a law which is not the concern of a general theory of law. I find this as enlightening, though I understand that some people may find this idea as distasteful, i.e. how can someone claims that a theory of law should be separated from value judgment, the idea of justice, the idea of good? Wouldn't this provide a theoretical support for a despotic ruler to establish laws in accordance with his own wish and interest, without any accountability and any check and balance mechanism? 

To tell you the truth, the answers are quite easy. First, a theory of law which depends on value judgment to analyze the law's validity will not work simply because it is impossible to determine a value than can be universally accepted by each and every men. As an example, who can perfectly define the term "Justice"? Even the great John Rawls with his magnum opus "A Theory of Justice," a book that has been prepared by him for more than 20 years, can't provide the perfected idea of justice to which every scholars would agree. The question of justice has been asked even by Socrates and Plato more than 2,400 years ago, and yet we have not resolved such question until today. 

There is also a greater reason why Kelsen made such separation. As noted above, Kelsen defines law as a specific social technique made by men, and that definition, in my opinion, becomes the core of the structure of Kelsen's theory. To cut it short, Kelsen's theory is methodological (which is in accordance with Kelsen's ambition to establish a scientific theory of law). As such, Kelsen's theory deals with the method of establishing and operating the law, not the background of why such law was made on the first place. 

As a logical consequence of this theory, the existence and validity of the law are no longer attached to morality, justice, religion, history, etc. Rather, a law would be deemed valid if it is created in accordance with the mechanism set out within a legal order/system (Kelsen believes that a law should be established in a coherent legal order/system, i.e. a positive legal order) and derived from a systematic hierarchy of norms, i.e. a law/norm's validity is determined by the validity of the law/norm having a higher level than such norm (this goes on until we reach the hypothetical Basic Norm (Grundnorm) which will be discussed further below). 

It is also worth to note that while Kelsen makes such separation in his theory, it doesn't mean that he doesn't care about the value judgment of law. He understand that whether you like it or not, every law in this world must be based on certain value and thus such law can be good or bad, just or unjust. We can't deny that fact. However, Kelsen views this value judgment issues as not an issue of legal theory, but more a philosophical question or political science issue and should be answered by philosophers and political scientists. I would add that economists and sociologists would also be helpful in answering these value judgment questions. For clarification purpose, while I do make a differentiation between the General Theory of Law and the Pure Theory of Law, they are actually inseparable, i.e. Kelsen's theory of law is a general legal theory purified from any non legal elements. This concludes Part 1 from my planned 3 Parts of Post. In the second part, we will discuss the concept of Norms and the relationship between the efficacy and validity of the law.

All right, it has been a while since my last post. I guess I can blame my excessive office workload (made a whopping 64 billable hours last week or more than 12 billable hours a business day) and the Id Mubarak holidays for this blogging non-productive period, eh?

In today's post, we will discuss a very interesting issue that has been debated for centuries without ever being finally resolved, even until today. Yes, we are talking about the validity of the claim that there is an eternally just law in this world that can be applied in whatever situation and condition, an everlasting law that will prevail over any other laws.

Now, is this claim valid, i.e. do we, humans, have this kind of law? Sorry to say, but my quick reply would be no. In my opinion, there is no such thing as an eternally just law, because those that are being called just as of now could turn into unjust the next minute. As long as we don't have a single, complete, and universally acceptable definition of the term "justice," we should say goodbye to the concept of an eternally just law.

However, I am not surprised if many people would disagree with my opinion. We could easily spotted these guys when we are dealing with those who believe in the existence of a perfect God's law that holds supremacy over all kind of man-made laws. Usually, such people also believe that the implementation of the God's law would solve any problem in the society because such law is made by the wisdom and grace of the God that surpass humans' limited capabilities.

There are many variations of laws that could fall under the category of God-made laws, however it is safe to assume that all religious laws could be considered as God laws (of course in this case, the deity to which we call it God will depend on the respective religions). Among these religious laws, I have no doubt that the Islamic law holds the foremost position due to: (i) its huge coverage (almost all aspects of life, private and public, are being governed by the Islamic laws), (ii) its well-established legal system (though the Islamic legal system does not have a single and united codification of laws which is applicable in each part of this world, it has established a generally acceptable legal sources and methods of legal reasoning), and the most important thing (iii) its wide use in various parts of the world (with modifications here and there).

Islamic law is indeed interesting. The fact that there are so many ways in implementing this law and the controversies that surround such implementation amuses me. How could this happen? Similar with other types of religious laws, the implementation of Islamic law often falls under the same trap of too much regulating the citizen's private life. Something that I believe is no longer acceptable in this modern world. In addition, as most devoted believers take as granted that the entire body of the Islamic law is derived from God itself, whether through the Koran or through the Sunnah (words, acts, and silent approvals from the Prophet), the Islamic law faces the chronic problem of inflexibility as these people claim that the provisions of the Islamic law cannot be changed in any condition whatsoever (subject to any waiver that is specifically provided under the Islamic law (rukshah)).

I could agree with the unchanging part if we're talking about the Ibadah aspect of Islamic law, i.e. any acts made as an implementation of the relationship between men and God, such as prayer, (shalat), fasting, and hajj. You can't change the basic rules that there are 5 obligatory shalat times in one day, or that mandatory fasting should be conducted in the Ramadan months. But, it is difficult for me to comprehend if we are also saying that any rules of Islamic law related to the Muamalah aspect, i.e. any private acts of men or any acts made between men, including trading, business, marriage, inheritance, etc, should also be fixed for eternity. The implementation of this kind of law should be made in accordance with the situation and condition of the respective era.

For me, rather than trying to made up the benefit or secret wisdom of this Muamalah related laws, it would be better to deeply analyze whether such laws are still viable for use. That would be more effective. You would be surprised to see how many books and articles were made to support the rule that daughters can only receive half of the sons' share in receiving inheritance, or why women is better staying at home and don't work. And that is not including the various ridiculous reasons contained within those books and articles. To add the problem, those who are trying to make a proper review of these rules will be most likely deemed as unfaithful, unbelievers whose faith in God should be questioned.

This brings us to the issue of the Aceh's Qanun. It is truly unfortunate that the Aceh's Qanun, as a part of Islamic law implementation in Indonesia, cannot outshine its counterparts by creating new development that can show some good quality of creativity. Instead, it stays with the mainstream and therefore brings unnecessary problems.

The Aceh's Qanun is basically a new regulation issued by the Regional Government of Aceh which deals with the penalization of certain acts that are being considered as a crime under the Islamic laws (the one which is specifically adopted by the Regional Government of Aceh since there is no single codification of Islamic laws in this world. See above). For ease of reference, let us call this new regulation as Qanun.

As stated above, the stipulation of this Qanun is very unfortunate and it really saddens me. Here we are in the 21st century, and yet, we are still clinging to the past, again and again trying to bring personal life choices into the public room. As you will see further below, except for rape, sexual harassment, and gambling, this Qanun mainly deals with humans' private actions. The Qanun makers also show a liking to the use of Arabic terms as all of the criminalized actions are named in Arabic (which is quite odd since the Qanun is intended for Indonesians).

These are the criminalized actions in the Qanun: (i) drinking alcoholic beverages, (ii) gambling, (iii) male and female being in a closed/hidden room without any marriage relationship and they are not prohibited from marrying each other (khalwat) (please note that these people don't have to do anything to be punished. Simply being together in a closed room would be sufficient to punish them); (iv) male and female making out (including holding hands together, kissing and hugging) without having a marriage relationship (ikhtilath); (v) male and female having sex outside of a marriage relationship (adultery/zina); (vi) performing male-to-male sex, a.k.a gay sex (liwath); (vii) performing female-to-female sex, a.k.a lesbian sex (musahaqah), (viii) harassing sexually, (ix) raping, and (x) accusing other people of performing adultery without having the minimum 4 witnesses as a valid evidence (qadzaf).

The sanctions for these criminal actions include among others caning, prison, fines in the form of gold and stoning/death penalty for a married person that conduct adultery. Now, I wouldn't discuss why this Qanun can exist under the Indonesian legal system. If you're interested with that subject, I suggest that you should see this nice post here. Instead, I would like to focus on the backgrounds used by the Aceh Regional Government to issue this Qanun including all of its provisions.

In the elucidation of the Qanun, the Qanun makers claim that the Qanun was made as a response to the need of the Aceh's people to implement the Islamic law in their society since Islamic law has been considered as an inseparable part of the Aceh's culture. Further, they also claim that the Qanun was established on four basic principles which include: (i) the rules shall be derived from the Koran and the Sunnah; (ii) the interpretation of such rules shall be made in accordance with the local needs of Aceh people and in the context of Indonesian legal system; (iii) the implementation of such rules shall be made by taking into consideration the future progress and the needs of the 21st century's Indonesian people who are still in the process of development (which cover modern issues such as protection of human rights, gender equality, and technology development); and (iv) the implementation of such rules shall also be guided by the Islamic legal principles of using the best opinions from various schools (mazhab) and finding and developing better provisions.

Comparing to the reality of this Qanun, I must admit that the above principles sound very bombastic, if not misleading (especially for the third principle). I don't see any aspect, even the slightest one, that can be used to say that this Qanun has been made in accordance with the above principles. Well, maybe the Qanun corresponds with the first principle, but surely the makers are not paying any attention to the other three principles.

And to complete the irony, the Qanun makers were also hoping in the Qanun's elucidation that the implementation of this Qanun (in accordance with the above principles) can reflect a law that could bring justice and prosperity to the entire society (rahmatan lil alamin). Nice try and keep dreaming sirs.

Come on, how can we say that a law that permits a married person to be killed by stoning due to adultery can be considered as a law that brings prosperity? I can agree if the state would like to punish this kind of person (and by the way, we do have this kind of provision in our Penal Code), but killing the person? That's outrageous.

What make it worse is the fact that the Qanun does not provide any clear mechanism for evidencing the adultery, whereas in the classic Islamic law, an adultery case can only be validly proofed if there are 4 witness who clearly see such act, i.e. a penis is being inserted into a vagina. In fact, it is so hard to implement this rule, that the only known case where a person is being stoned for conducting adultery is a case where a pregnant woman came to the prophet and acknowledged that she has conducted an adultery. The prophet himself has ordered this woman to go home since there is no clear evidence that she has indeed conducted an adultery (even though she is pregnant). But the woman insisted and after more than 2 years of begging to be stoned, she actually got what she wanted, which only happen after she gave birth and taken care her child for some time.

Why do we still insist of using this rule? On a bigger scale, why do we even consider to use the rules that were established a long time ago and might not be relevant anymore in this era. Maybe, it would be effective in the past to control the society by fear. It is not a secret that 1,400 years ago the arab people were living in a barbaric era. Of course they would need to have a law that can impose fear to them and make them obey such law. But now?

I would even dare to say that this law is inefficient! Why bother to find people who are being together in a closed room or are making out somewhere and then punish them? Are we trying to deplete our resources to finance these useless acts? Or assuming that an adultery case is validly evidenced, should we stone the convicted to death? Who will bear responsibility for the family left behind? The state by using the money of the tax payer??? This is utterly ridiculous and the Qanun simply doesn't meet the test of a law that can bring global prosperity to the society, well, unless the Qanun makers believe that the prosperity will come since God will bless Aceh and Indonesia for implementing the Qanun. Again, keep dreaming sirs. The real fact is clear, this Qanun brings unnecessary costs and fear to the society.

I believe that this is the right time for us to bring an end to the claim of an eternally just law. In this modern era, a law or a policy should be made in accordance with the people needs and should be implemented in the most effective and efficient way. A good law shall prevail without much hesitation, but a bad law can only prevail by using force which would be costly. For Islamic law, it would be useful if we start to review the current rules and determine whether such rules would still be applicable. We need to remember that since Koran or Sunnah cannot be changed forever, the law contained within should be flexible and it is our task to make a better interpretation. When man-made laws are wrong, we can always amend them, but we can't amend the content of the Koran and/or Sunnah. The content will always be the same but the implementation should depend on the actual condition. Only by making it flexible that we can ensure the survivability of the Islamic law, or else, I fear that in the future, the Islamic law shall only be regarded as a part of the forgotten history.

I have grown tired with the absurdity of some of the laws that have been passed recently by the Indonesian House of Representatives ("DPR"), particularly the laws on film and electricity (thanks to Mova for the link on Electricity Law). I won't make a review on the new Film Law as Rob Baiton has made an excellent summary and review on such law in his post here. So, I'll go with the new Electricity Law instead.

The Current Nature of Indonesian Electricity Business

Now, before we go forward with the review, we need to understand the nature of electricity business in Indonesia. First of all, in Indonesia, and probably in the majority parts of the world, electricity has been considered as a public utility, which means that it is also a political commodity. I'll discuss further below on the implication of electricity status as a political commodity.

As you might be aware, there is only one electricity provider in Indonesia, PT PLN (Persero) ("PLN"), an Indonesian state owned company, that has been deemed by the Government to provide public service obligation in the electricity sector. As a public service company, PLN has the first priority to establish electricity business in Indonesia and may receive Government supports in order to run its business, including to receive subsidies to replace any costs of PLN for performing such public task.

Under the old Electricity Law (Law No. 15/1985) and its implementing regulations, the electricity business is actually opened to private enterprises, and to certain extent these companies can also directly sell and distribute their electricity to end consumers. However in practice, most private enterprises sell their electricity to PLN and then PLN shall sell and distribute such electricity power to the people. Arguably, this is not efficient for business purposes, but as will be discussed further, I tend to believe that this is the best option in Indonesia, at least until we have a better solution.

Issues on Electricity Price

Historically, the electricity price is always determined by the Government, which makes sense when we considering the nature of electricity as a political commodity. Since politicians need to maintain their votes, most of them would try to make the electricity price as low as possible by all necessary means, even if such means are not economically viable. What is the easiest option for the Government then? Subsidizing the electricity price. It causes a considerable amount of pressures to our Stated Budget, but hey, who cares as long as the people is happy, right?

Who is the main victim of this policy? PLN. For years PLN has been operating in loss, not because they are not efficient but because they cannot sell their electricity in accordance with the market price or at least a price that can cover their basic costs. Though I understand that now some type of industries must purchase electricity from PLN on a market based price, the majority of ordinary citizen like us pay the subsidized price of electricity.

The other victims of this policy are of course private enterprises. As long as there is a subsidy, market price wouldn't work, and thus there are not many incentives for private enterprises to enter into this business. Even worse, there is also a price control for selling electricity to the end consumers. So, the least thing that they could do is to sell electricity to PLN and hoping for a better price which is of course still higher than the subsidized price.

Review on the New Electricity Law: The Government Misunderstanding of The Market