By: Eko B. Supriyanto, Chairman of Infobank Institute
Jakarta – There is no limit to power. In fact, some say that the power of the House of Representatives (DPR) has now exceeded that of the New Order era. In the hands of the DPR, anything can be done. Most recently, the “libido” of the DPR can remove in the middle of the road state officials who have passed the fit & proper test, have been inaugurated by the president, have been sworn in by the Supreme Court and have even taken office.
The matter of “mistakes” of state officials is a matter of hindsight, in the world of politics it can be searched. No one realizes that this power hangover will destroy trust in independent institutions, especially in the financial sector such as Bank Indonesia (BI), the Financial Services Authority (OJK) and the Deposit Insurance Corporation (LPS).
In fact, this mid-course removal is in contrast to the spirit of the Financial Sector Development and Strengthening Act (P2SK). In the financial and banking sectors, the impact of the House of Representatives’ greed has created uncertainty. Finally, strategic posts that are independent are “lackluster” in the “armpits” of party politics.
Honestly, the uncertainty of the financial system starts here. The institution of the Financial System Stability Committee (KKSK) is disrupted and really dangerous when the global world is not okay. Independent institutions, such as BI, OJK and LPS should be kept away from the intervention of political parties presented in the DPR.
Imagine. If BI is made not independent like the New Order era – where bank supervision at that time depended on New Order orders. As a result, the banks were destroyed, and the Bank Indonesia Liquidity Assistance (BLBI) was disbursed. In fact, at one time BI printed money as the government pleased.
The election of the Governor of BI, OJK Commissioner and LPS is a correction of the past destruction. The BLBI case is partly because BI was not independent in bank supervision at that time. If bank supervision is now transferred to OJK and made not independent, then this is the beginning of the destruction of the Indonesian financial sector. This is because the principle of interference in the supervision and management of banks is the beginning of the loosening of the principle of prudential banking.
The Plenary Meeting of the House of Representatives of the Republic of Indonesia, on February 4, 2025, has ratified the revision of the House of Representatives Regulation Number 1 of 2020 concerning the Rules of Procedure of the House of Representatives of the Republic of Indonesia. In short, the DPR now has the authority to conduct periodic evaluations of state officials who have previously passed the fit and proper test process in the DPR.
More clearly, this “hasty” revision gives the DPR the space to review the performance of state officials they have appointed in plenary meetings. If the evaluation finds that performance does not meet expectations, the DPR can recommend dismissal (Article 228A). They can be removed midway.
Who are the state officials that can be removed midway by the DPR? These officials include the Commissioners, Supervisory Board of the Corruption Eradication Commission (KPK), Judges of the Constitutional Court (MK) and Supreme Court (MA), Chief of Police and Commander of the Armed Forces. Also, the Governor of BI and his deputies and of course the Chairman of OJK, Commissioner of LPS. In fact, the Supreme Audit Agency (BPK). All institutions that have been subjected to fit & proper tests, including the OJK, LPS and BI supervisory bodies. All can be corrected by the DPR. According to Infobank’s records, there are more than 300 state officials who have been selected by the DPR.
Exceeding the New Order Era
A number of legal experts have condemned the DPR’s “libido”. Some have called the revision of the House of Representatives’ rules of procedure, which authorizes the removal of elected state officials, a misguided move. The reason is that if the DPR enters the rooms of state officials, this means that there has been an intervention. It could be that the DPR has misunderstood its duties and functions to conduct fit & proper tests.
It also means that the DPR has become a superbody, or superior institution. In fact, when comparing the New Order era. It is clear that this change can be removed in the middle of the road beyond what happened in the New Order era. Moreover, the rules of the DPR are internal to the DPR, and do not intervene against state officials, even though the DPR conducts the fit & proper test.
It is not as if the DPR conducts the fit & proper test, so it is the DPR that produces elected state officials. Because, in the next process there is still the President. Well, if the President does not give a decision, the results of the fit & proper test conducted by the DPR are meaningless.
That means, the DPR cannot act as if it is above the state officials being fit & proper tested. The constitutional relationship is a functional relationship. So, the DPR should see the fit & proper test of state officials as part of carrying out the law. And, not based on the arrogance of the DPR’s position higher than the state officials they test.
According to the Infobank Institute’s internal discussion, the midway dismissal of state officials whose fit & proper test was conducted by the DPR was not only misguided. But, it has also gone too far. To make matters worse, these supposedly independent institutions are being politicized. This will have an impact on the independence of state institutions.
In fact, for BI, OJK, and LPS, the mechanisms and procedures for dismissing officials are regulated in the P2SK Law. So, the DPR should comply with the P2SK Law that was born by the DPR. There is no article that states that they can be removed in the middle of the road, except for death, permanent disability, serious legal cases. The mechanism does not come from the DPR. Meanwhile, the DPR, in a check & balance mechanism, has the right of inquiry, the right of interpellation and the right to express an opinion. It should use these mechanisms.
Vulnerable to Political Intervention
If the House of Representatives’ rules of procedure are applied to other parties, then the trias politica order of the legislature, executive and judiciary seems to be a mirage. Indonesia no longer recognizes the rule of law, but political supremacy. We can feel that political supremacy has caused many “concussions” to the state order mandated in the 1945 Constitution.
According to Infobank Institute’s records, this mid-course removal has adverse impacts, especially for the banking and financial sector. One, it disrupts the independence of BI, OJK and LPS. This raises the danger of political intervention in decision-making. Danger. In fact, they should be independent and professional in making decisions.
Two, financial system instability. Well, the removal of officials in the middle of a term can create uncertainty and instability in the financial system. Investors and financial markets may doubt the credibility of these institutions, potentially triggering economic turmoil.
Three, public trust is undermined. The removal of officials who have been sworn in and are performing their duties may reduce public trust in financial institutions. The public and businesses may question the integrity and professionalism of BI, OJK, and LPS.
Four, the risk of political interest intervention is greater. Thus, financial institutions are vulnerable to the intervention of short-term political interests, especially ahead of elections. This can lead to non-optimal policies, such as massive credit expansion for electoral interests. Or, BI is asked to print money ahead of elections.
Five, disruption of inter-agency coordination. It is realized that a change in leadership in the middle of the road can disrupt inter-agency coordination within the Financial System Stability Committee (KSSK). This can affect the effectiveness of crisis management and the maintenance of financial system stability.
These are the hallmarks of a failed state when politicization occurs in all directions, especially to independent institutions such as BI, OJK and LPS. The mid-course removal is not only misguided, but also out of line, and dangerous for Indonesia’s fragile financial system. As powerful as the New Order was, it would not engage in these “dirty” practices. It must be stopped.
