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Monday, December 5, 2022

Perspectives on legal interpretation

Updated: 09:48’ - 27/05/2008

Professor John Gillespie
Director of Asia-Pacific Business Regulation Group
Monash University

Melbourne, Australia



Every legal system needs a mechanism that interprets legal sources. Statutory law functions like a one-way conversation where states instruct citizens on how to behave. Since there is little opportunity in these conversations for citizens to learn what type of behavior the state had in mind, the words and phases in legislative provisions rarely convey a clear and unambiguous meaning in all situations. Different legal systems have developed different ways to overcome this problem, but they share four common concerns:

- What is the purpose of legal interpretation?

- What state institutions should interpret legal sources?

- Should interpreting bodies examine policy questions underlying law?

- What social groups should have a right to request legal interpretation?

This article will examine at close range how the newly formed Indonesian Constitutional Court deals with these concerns. A theme running through the article is that legal interpretation is not merely a set of technical rules for determining the meaning of statutes; rather it gives legal systems substance, operational logics and orientation.

Before considering the Indonesia case it is necessary to start at the beginning and ask why legal systems need legal interpretation techniques.

Purposes of legal interpretation

Statutes are written texts that attempt to summarize and abbreviate everyday relationships. For example, in drafting legislation lawmakers must condense vast amounts of information about optimal trading conditions or personal relationships into general normative rules and procedures that apply to everyone. This difficult task is generally achieved by applying predetermined criteria that prioritize certain types of commercial and social practices1. Like maps, laws are cultural texts that represent the boundaries and aspirations of lawmakers, both spatial and social2.

The purpose of legal (or statutory) interpretation is the opposite of law-making. Rather than condensing ‘thick’ social information into ‘thin’ statutory provisions, it aims to give statutory norms meaning in specific contexts. It is seldom possible to enumerate in statutory provisions all the conditions to which they apply. Statutes do not really fix the meaning of law; they merely offer a starting point for understanding what the legislators had in mind.

The problem of clarity is not entirely solved by providing more information that justifies, explains and places the statute in a larger context. There are three inherent problems with defining the meaning of statutes: 

- Words are imperfect symbols to communicate intent. They are ambiguous and change in meaning over time.

- Unexpected social and economic change is inevitable, and new technologies and cultures can make the application of statutes difficult.

- Statutes themselves may contain uncertainties caused by open-ended drafting and conflicts between laws and implementing sub-laws.

For these reasons laws cannot be mechanically applied to fit social circumstance; they require some degree of subjective choice to deal with issues that are not expressly covered by the law. Legal interpretation is needed to guide these subjective decisions and prevent the legal system from fragmenting into a series of personalized legal meanings determined by particular state officials and citizens. As we shall see, legal theory and political conditions combine to determine how different legal systems standardize the meaning of statutes. 

Indonesia’s Constitutional Court

A critical examination of the steps leading up to the formation of, and recent decisions by, the Constitutional Court in Indonesia sheds light on some key issues faced by developing countries in establishing legal interpretation systems. Until recently only the legislature in Indonesia was entitled to interpret the Constitution and superior laws. Since it rarely performed this function, in practice the executive branch of government determined the meaning and application of statutes. In the short period since its formation in 2003, the Constitutional Court has already developed important doctrinal principles that stabilize legal meanings in important economic and social spheres. 

Relevance to Vietnam?

Despite obvious cultural, historical and political differences, Indonesia shares some similarities with Vietnam. Both legal systems were originally based on imported civil law models, first the French and then the Soviet system in Vietnam and Dutch colonial legality in Indonesia. Both countries have a unitary state hierarchy that descends from central-level institutions, such as the supreme legislature, Supreme Court, president and government ministries, to provincial- and district-level state organs. Lawmakers in both countries are attempting to harmonize the domestic legal system with global rules and principles without losing touch with underlying political, economic and social conditions.

The role law plays in ordering the state and social relationships is also undergoing rapid change. In Indonesia the notion of negara hukum (state law), which for decades permitted the substitution of state policy for law, was replaced in 2002 by the fourth amendment to the 1945 Constitution. The amendment introduced a type of ‘rule of law’ based on constitutionalism3. Legal reforms in Vietnam have not been as decisive, nevertheless the Nha nuoc phap quyen doctrine introduced into the 1992 Constitution has significantly altered the perception and implementation of socialist legality (phap che xa hoi chu nghia).

Establishing the Court 

In 2001 the Majelis Permusyawaratan Rakyat (MPR or People’s Consultative Assembly), Indonesia’s highest legislature, amended the 1945 Constitution to establish a constitutional court4. The Court was eventually formed in 2003. However the first debates about forming the Court began in 1945 when Muhammad Yamin, a member of the original constitutional drafting committee, proposed a court that could strike-down unconstitutional legislation. His suggestion failed to attract support from other members of the committee. As we shall see, Professor Raden Soepomo, an especially influential committee member who prepared the first draft of the Constitution, strongly opposed judicial interpretation of legislation. The proposal for a Constitutional Court resurfaced in 1958, and then again in 1970. It did not re-emerge until the reformasi period following the fall of President Soeharto in 1998.

Galvanised by a desire for reform, the normally divided parties and groups in the MPR formed a consensus about the need to prevent legislative and executive authorities from violating constitutional norms and principles5. In a rare show of unity, they decided that only an independent body such as a court or tribunal would be sufficiently detached from everyday politics to force the powerful executive to exercise its power within constitutional boundaries. Under the Soeharto regime the MPR ‘rubber stamped’ legislation for the executive-the body that exercised the real power.

Constitutional theory

Legislative Supremacy and Integralism

In addition to politics, constitutional theory also played a major role in shaping the Constitutional Court. Since Indonesia’s formation in 1945, two concepts of the state have struggled for supremacy. For much of Indonesia’s history the concept of people’s sovereignty based on legislative supremacy has prevailed6. The notion that the elected legislature represents the true aspirations of the people became entrenched constitutional doctrine. Ironically, as European countries over the last half-century, such as the Netherlands and France, progressively move away from legislative supremacy and gave independent bodies powers to review statutes, Indonesia remained faithful to this nineteenth-century doctrine. They rejected any form of the separation of powers between state bodies, especially the interpretation of statutes by courts.

Professor Raden Soepomo is credited with importing an extreme version of legislative sovereignty from Dutch and German jurisprudence into Indonesia. During his studies at the University of Leiden in the 1930s, Soepomo was influenced by the semi-mystical German notion of Volksrecht (the people’s law)7. According to Volksrecht, law reflects the racial and ethnic essence of particular societies. He used these highly nationalistic ideas to develop a home-grown constitutional theory - the adat school of law - that saw Indonesian village traditions as the only appropriate source of law because they expressed the true spirit of the people. He reimagined the legal system based on a traditional village community - a theory of state and law that became known as integralism.

With Soepomo’s support, integralism developed into a nationalist legal order that was encaptualated in the five Pancasila principles found in the preamble of the Constitution.8It promoted a vague concept of the public good known as the ‘family principle’ (asas kekeluargaan), which permitted the president and other senior officials to justify state policy according to essentialist visions of village-life. Integralism also incorporated ideas derived from the authoritarian, centralized governments promoted by German and Japanese nationalistic ideology of the 1940s9. In such systems the legislature and courts only played minor roles. The president and executive governed society. Judicial interpretation, or any legal checks on state power, was discouraged. Consistent with this thinking, Law No. 14 of 1970 prohibited Indonesian courts from not only reviewing the constitutionality of legislation, but also from interpreting the law.

Integralism transformed legislative sovereignty into an authoritarian concept where the highest authority was not the law, but rather the public good determined by the president. The purpose of the state was not simply to regulate society through laws, but also to encompass it by becoming involved in all aspects of social life. A tension developed within the legal system between the official pronouncements that Indonesia was a rechtsstaat - a legally limited state - and integralism that placed public policy above law.

Integralism dominated legal thought until the fall of the Soeharto regime in 1998. During this period the executive exercised broad discretionary powers to substitute political policy for legal rights and principles enshrined in the Constitution and legislation10. They routinely issued subordinate laws that variously reinterpreted, contradicted or ignored superior legislation. A deeply entrenched tradition developed during the Soeharto period whereby the legislature passed open-ended laws and the executive filled in the regulatory detail with subordinate rules. Courts largely ignored the constitutional hierarchy of laws and followed  prescriptive subordinate laws issued by government agencies to superior legislation passed by the MPR11. Where state policy was silent, they applied a modified version of Dutch colonial legal doctrines. Home grown legal doctrines were slow to develop because the meaning of legislation was determined by the constantly changing policy pronouncements issued by the executive12.   

Constitutional supremacy

The other main constitutional theory in Indonesia advocated constitutional supremacy. Early supporters such as Muhammad Yamin argued during the drafting of the 1945 Constitution for a Supreme Court (Mahkamah Agung) with powers to review the constitutionality of legislation, together with clearly separated legislative, executive and judicial functions13. Drawing his ideas from the United States, he proposed a constitutional state that differed sharply from the Integralism model. He argued that legislatures in developing countries lacked the skills and incentives to check executive power and the doctrine of legislative sovereignty would excite abuse of power by the executive. He also provided case studies showing that legislative delegates in most developing countries came from either the executive or military (the organizations with governance skills). Given this background, delegates seldom opposed executive action. Moreover, unlike legislatures in civil law countries such as France or Germany, he argued that delegates in many developing countries lack legal training and are not equipped for the technical task of legislative interpretation. Without an independent body to review the constitutionality of legislation, Yamin thought that constitutions would become mere statements of party policy without legal authority.

Yamin’s assessment proved correct in the case of Indonesia. The GOKAR party, which drew its support from the president and executive, controlled the MPR during the entire Soeharto presidency (1965-1998). It never questioned government policy.

The main idea of constitutional supremacy, or constitutionalism as it is often called, is that the state’s power is separated into three independent branches (trias politika or separation of powers). Different state institutions are given powers to check and balance each other to prevent the accumulation of power in any one state organ. But most importantly, courts are given powers to ensure that legislation and bureaucratic regulation comply with the constitution.

During the post-Soeharto reformasi period, MPR delegates turned to constitutionalism as a way of reinstating the rechtsstaat (legally limited state). There were various models to consider because more than three-quarters of the world’s states have now adopted some form of judicial interpretation of legislation14. The US model has a strong central court (Supreme Court) with broad powers to review other state agencies. But it is based on a common law system that the Indonesians decided was incompatible with their civilian system. France was seen a possible model, because it is a civil law country that has shifted from legislative supremacy to allowing statutory interpretation by independent bodies15. For similar reasons the Japanese system was also considered.

For most of the twentieth century Japanese courts applied legislative supremacy and primarily left legal interpretation to the executive. But over the last fifteen years in particular, courts have become more active in interpreting legislation16. The long period of economic stagnation in Japan during the 1990s was blamed on the excessive planning powers exercised by the state executive17. As a response, political leaders decided to shift some discretionary power from the executive to the courts. Courts were equipped with increased jurisdictional, but more importantly, discretionary powers to interpret legislation and review executive decision-making. Greater supervision of the executive could not have occurred without giving courts powers to determine and fix statutory meanings. These standardized statutory interpretations now assist in controlling the discretionary powers of the executive.

MPR delegates in Indonesia supported constitutionalism and the establishment of a constitutional court as a means of placing the law above political and administrative power18. Constitutionalism promotes constitutional rules and conventions that stand outside the state and cannot be easily changed by the legislature and executive. After decades of abuses by the executive under the Soeharto regime, MPR delegates were strongly attracted to the idea that an independent body could use the guarantee of rights in Constitution to protect citizens against legislative and administrative abuses. They concluded that constitutional rights are meaningless without an independent body with powers to review the constitutionality of statutes and executive action.

Powers of the Court

Article 24C of the 1945 Constitution gave the Constitutional Court (Mahkamah Konstitusi) final and binding powers to determine the constitutionality of superior-level legislation. This is the first court in Indonesia’s history with these powers19. While the Constitutional Court has power to verify whether laws comply with the Constitution, the Supreme Court (Mahkamah Agung) decides whether regulations passed by the executive comply with superior legislation. As we shall presently see, this division of review powers has caused substantial problems in Indonesia.

Indonesia follows the civil law legislative tradition. The DPR (House of Representatives) passes undang-undang or ‘basic laws’ that are essentially broadly textured statements of principle. It is left to executive agencies, especially ministries, to insert prescriptive detail into subordinate legislation.

In addition to powers of review and interpretation, the Constitution Court can:

- Resolve disputes arising from elections.

- Impeach the President and/or Vice President for abusing their powers20.

- Settle disputes regarding the authority of state institutions.

- Dissolve political parties21.

Reviewing legislation

The President of the Constitutional Court, Dr Jimly Asshiddiqie, set an ambitious agenda for the Court:

We jointly reinforce our determination, not only by words, but also real action that law and justice may be upheld, starting by upholding the constitution as the highest law. The law and constitution should be able to determine and provide direction for the dynamics of political, social and economic life of our nation22.

In the first four years of operation, the Constitutional Court has shown that it is both competent and independent from government policy. Controversially, the Court in 2003 invalidated a statute that would have permitted prosecution of those accused of involvement in the 2002 Bali bombings. Lawyers acting for suspects argued that the Constitutional prohibition against  the retrospective application of law, prevented police from applying Law No. 16 on Anti-Terrorism 2003 to their clients23. Chapter XA of the Constitution gave citizens powers to challenge unconstitutional laws and executive action. The Court decided that Law No. 16 on Anti-Terrorism 2003, which was introduced to prosecute extreme Islamist groups connected with the Bali bombing, was unconstitutional because it gave police retrospective powers24.

This article will discuss a series of cases that show how a newly created court can very rapidly develop constitutional principles that clarify and stabilize the meaning of legislative provisions. The cases concern whether the government acted constitutionally in attempting to privatize key industries. Such concerns resonate in many developing countries, where global pressure to deregulate and privatize the economy are felt.

Those opposed to the Indonesian government’s privatization program relied on two constitutional provisions. The preamble to the Constitution instructs the government ‘to protect all Indonesians and their native land, to further public welfare and the intellectual life of the people’. Article 33 of the Constitution - a provision that survived both the Soeharto government and more recent post-Soeharto economic reforms - is more explicit. It provides:

(a) The economy shall be organized as a cooperative effort, founded upon the basis of family spirit;

(b) Such kinds of production that are important to the state, and which affect the lives of most people, shall be controlled by the state; and

(c) Land and water and the natural riches therein shall be controlled by the state and shall be exploited for the greatest welfare of the people.

Constitutional lawyers drafted article 33 at a time when Indonesian leaders were attracted to socialist economic models and the communitarian sentiments of integralism25. It was originally inserted into the Constitution to promote the wellbeing of the community above individual property rights26. For decades article 33 was interpreted to mean that the government should control key economic sectors. In a developing country with a large proportion of the population living in poverty it was thought that unrestrained private economic development might exploit the economically weak.

In the last years of the Soeharto government, and especially when the IMF imposed conditions for supporting Indonesia after the East Asian Financial Crises (1998), the government seemed to turn away from article 33 and in favor of neo-liberal economic policies that recommended privatizing state companies and opening key economic sectors to private competition. That the new economic policies generated considerable internal opposition is unsurprising. According to the IMF, neo-liberal reforms were needed to prevent rent-seeking by state officials and a return to the ‘crony-capitalism’ that flourished under Soeharto. These practices were blamed for exacerbating the financial crisis and the IMF insisted on the privatization of key industries as a condition for advancing loans to support Indonesia after the East Asian Financial Crisis in 199727. However, the IMF and the Indonesian government ignored deeply entrenched support for an economy based on the ‘family spirit’ - a Constitutional doctrine that aimed to protect the poor28.

In 2002 a group of concerned citizens and NGOs petitioned the Constitutional Court to decide whether neo-liberal privatization policies were compatible with the Constitutional preamble and article 33. They asked the court to imply from the preamble a general constitutional principle that legislation should ‘protect all Indonesians and their native land’ and decide to what extent article 33 prevented privatization of government assets29. (to be continued)






1 Max Boisot, 1995 Information Space: A Framework for Learning in Organizations, Institutions and Culture, London: Routledge.

2 See Clifford Geertz 1983, Local Knowledge New York: Basic Books 234.

3 For a general overview of legal reforms see Tim Lindsey and Mas Achmad Santosa, 2008 ‘The Trajectory of Law Reform in Indonesia: A Short Overview of Legal Systems and Change in Indonesia Tim Lindsey ed., Indonesia: Law and Society, Sydney: Federation Press, 2-22. 

4 The MPR is the supreme legislative body with powers to amend the constitution. The Dewan Perkakilan Rakyat (DPR) is the lower legislative body that meets more frequently than the MPR. See Benny Harman 2007 ‘The Role of the Constitutional Court in Indonesian Legal Reform’ in Reforming Laws and Institutions in Indonesia: An Assessment IDE-JETRO 2007<>.accessed 18 January 2008.

5 See Koichi Kawamura 2003, ‘Politics of the 1945 Constitution:

Democratization and Its Impact on Political Institutions in Indonesia’ IDE Research Paper No. 3, Institute of Developing Economies (IDE-JETRO)

September <> accessed 18 January 2008.

6 See Peter Burns, 1999 Concepts of Law in Indonesia: The Leiden Legacy Jakarat: Pradnya Paramita.

7 See David Bourchier 1999 ‘Postivism and Romanticism in Indonesian Legal Thought’ in Timothy Lindsey ed., Indonesia: Law and Society, Sydney: Federation Press 186-196.’

8 The five principles of Pancasila are:

l belief in the one supreme God;  

l just and civilised humanity; 

l the unity of Indonesia; 

l democracy guided by the wisdom of conferral and consensus (musyawarah and mufakat); and 

l social justice.

9 See David Reeve, 1990 ‘The Corporasit State: the Case of Golkar’ in Arief Budiman State and Civil Society in Indoensia, Monash Papers on Southeast Asia, No. 22 Centre fo Souteast AsianStudies, Monash Univerity, Melbourne, 157-170.

10 See Daniel Lev, 1992 Between State and Society, Working Papter No. 2 Law Department, SOAS, University of London, November.

11 Daniel Lev, 1999 ‘Comments on the Course of Law Reform in Modern Indonesia’ in Tim Lindsey Indonesia: The Commercial Court and Law Reform in Indonesia Sydney: Federation Press.

12 See Sebastian Pompe, 2005 The Indonesian Supreme Court: A Study of Institutional Collapse Ithaca, NY: Cornell University, South Asia Program.

13 Daniel Lev 1978 ‘Judical Authority and the Struggle for An Indonesian Rechsstaat’ 13 Law and Society Review 37.

14 See Donald Horowitz 2006 ‘Constitutional Courts: A Primer for Decision Makers’ 17 Journal of Democracy (4) 125-137.

15 Laurent Pech, 2004 ‘Rule of Law in France’, in Randall Perrenboom ed., Asian Discourses of Rule of Law, Routledge, London, 89–98.

16 See John Haley and Veronica Taylor ‘ Rule of Law in Japan’ in Randall Perrenboom ed., Asian Discourses of Rule of Law, London Routledge 453-467.

17 See John Ohnesorge, 2007 ‘Politics, Ideology and Legal System Reform in Northeast Asia’ in Christoph Antons and Volkmar Gessner eds., Globalisation and Resistance: Law Reform in Asia since the Crisis, Oxford: Hart Publishing.

18 See Andrew Ellis 2007 ‘Indonesia’s Constitution Change Reviewed’ in Ross McLeod and Andrew MacIntryre eds., Indonesia: Democracy and the Promise of Good Governance, Singapore, Institute of Southeast Asian Studies, 24-37. 

19 Constitutional Court Law No 24 of 2003. See generally Tim Lindsey 2008 ‘Constitutional Reform in Indonesia: Muddling Towards Democracy’ in Tim Lindsey ed., Indonesia: Law and Society, Sydney: Federation Press, 23-47.

20 The Constitutional Court was given powers to ensure that the procedural irregularities in the dismissal of President Abdurrahman Wahid by the MPR in 2001 did not reoccur.

21 Law No. 31 of 2002 on Political Parties.

22 Jimly Asshiddiqie, preface on the 1st Anniversary of the Constitutional Court, in BKM No. 6 September 2004, 15.

23 The Bill of Rights was inserted into the Constitution by amendments made in 2000.

24 See Simon Butt and David Hansell 2004 ‘The Masykur Abdul Kadir Case: Indonesian Constitutional Court Decision No 013/PUU-I/2003’ 6 Australian Journal of Asian Law 177-196.

25 See David Linnan 1999 ‘Indonesian Law Reform, or Once More unto the Breach: A Brief Institutional History’ 1 Australian Journal of Asian Law (1) 1, 4-5.

26See Todung Mulya Lubis, 1999 ‘The Rechsstaat and Human Rights’ in Timothy Lindsey ed., Indonesia: Law and Society Sydney: The Federation Press 171-176.

27 See Ross McLeod, 2000 ‘Soeharto’s Indonesia: A Better Class of Corruption’ 7 Agenda: A Journal of Policy Analysis and Reform, (2) 99-112.

28 See Linnan above 5-6.

29 See Constitutional Court Decision No 5/2003 reviewing Law No 32/2002 on Broadcasting (the Broadcasting Law case).


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