The political environment that is less supportive

Oct 13, 2025 by leolavanderia.com.br 14 views

Regulation of the Principle of Transparency in Legal Rules Regarding the Privatization of State-Owned Enterprises (BUMN)

Introduction

Economic globalization has led to a shift from the public economic system to the market economic system, with the latter being based on two main assumptions: competition as a driving force for individual creativity and cost efficiency through entrepreneurship, and the dominance of the state and the existence of the public sector as a trigger for economic inefficiency. This shift requires structural adjustment, and the concept of privatization, which shifts the dominance of the state in business activities to a greater private role, has increasingly been applied. Indonesia began to apply the concept of privatization of State-Owned Enterprises (BUMN) in 1988 with the issuance of Presidential Instruction No. 5 of 1988 concerning Guidelines for Restructuring and Management of State-Owned Enterprises. At present, BUMN privatization has a strong legal basis regulated in Law No. 19 of 2003 concerning BUMN.

The Importance of Transparency in BUMN Privatization

Transparency is a crucial principle in the privatization of State-Owned Enterprises (BUMN) in Indonesia. The lack of transparency in the privatization process has led to controversy and resistance from the public. The main problem of this controversy lies in the process of privatization of BUMN which is considered not transparent enough. The lack of legal support related to privatization in implementing the principle of transparency into the root of the problem. Normative research conducted on statutory regulations since 1988 shows that the application of the principle of transparency has not been sufficiently regulated in legal rules related to BUMN privatization in Indonesia.

Challenges in Regulating Transparency in BUMN Privatization

The legal unclear in regulating transparency obligations in BUMN privatization triggers various problems, such as:

Public Resistance: Society questioned clarity and justice in the privatization process.
BUMN Internal Resistance: Employees and SOE Management Feeling not involved in the process of privatization and worry about their future.
The political environment that is less supportive: Privatization policies are sometimes influenced by certain political interests, which obscure the main objectives of privatization.
Weak investor confidence: Investors are hesitant to invest due to lack of transparency and doubts about the integrity of the privatization process.
Controversy about the deviation of privatization objectives: Suspicion occurs that BUMN privatization is not always carried out for the benefit of the state, but for the benefit of certain individuals or groups.

The Right Solution: Application of Comprehensive Transparency Principles

The presence of the Privatization Law is the right step to apply the principle of transparency in BUMN privatization. This law is expected to direct privatization through _initial public offering (IPO) while still opening opportunities for private placement by setting strict conditions and more open mechanisms. Transparency in this Act must include the entire privatization process, starting from the privatization decision making stage, determining privatization methods, preparation for privatization, implementation, and use of privatization results. The application of the principle of transparency in this law also needs to be in institutional arrangements. This law must be the basis for the formation of a more independent privatization committee, so that the vulnerability of the committee to certain interest interventions can be avoided.

Conclusion

The success of BUMN privatization not only lies in economic efficiency and benefits, but also in the application of good governance principles, one of which is transparency. By strengthening legal arrangements and applying the principle of comprehensive transparency, BUMN privatization can be done fairly and profitably for all parties.

Recommendations

Strengthening legal arrangements: The government should strengthen legal arrangements related to BUMN privatization, including the application of the principle of transparency.
Formation of a more independent privatization committee: The government should form a more independent privatization committee to avoid the vulnerability of the committee to certain interest interventions.
Transparency in the privatization process: The government should ensure transparency in the privatization process, including the entire privatization process, starting from the privatization decision making stage, determining privatization methods, preparation for privatization, implementation, and use of privatization results.
Public participation: The government should ensure public participation in the privatization process, including the provision of information and opportunities for public input.

By implementing these recommendations, the government can ensure that BUMN privatization is done fairly and profitably for all parties, and that the principle of transparency is applied comprehensively in the privatization process.
Frequently Asked Questions (FAQs) on Regulation of the Principle of Transparency in Legal Rules Regarding the Privatization of State-Owned Enterprises (BUMN)

Q1: What is the main problem of controversy in BUMN privatization in Indonesia?

A1: The main problem of controversy lies in the process of privatization of BUMN which is considered not transparent enough. The lack of legal support related to privatization in implementing the principle of transparency into the root of the problem.

Q2: What are the challenges in regulating transparency in BUMN privatization?

A2: The legal unclear in regulating transparency obligations in BUMN privatization triggers various problems, such as:

Public Resistance: Society questioned clarity and justice in the privatization process.
BUMN Internal Resistance: Employees and SOE Management Feeling not involved in the process of privatization and worry about their future.
The political environment that is less supportive: Privatization policies are sometimes influenced by certain political interests, which obscure the main objectives of privatization.
Weak investor confidence: Investors are hesitant to invest due to lack of transparency and doubts about the integrity of the privatization process.
Controversy about the deviation of privatization objectives: Suspicion occurs that BUMN privatization is not always carried out for the benefit of the state, but for the benefit of certain individuals or groups.

Q3: What is the right solution to apply the principle of transparency in BUMN privatization?

A3: The presence of the Privatization Law is the right step to apply the principle of transparency in BUMN privatization. This law is expected to direct privatization through _initial public offering (IPO) while still opening opportunities for private placement by setting strict conditions and more open mechanisms.

Q4: What are the benefits of applying the principle of transparency in BUMN privatization?

A4: The benefits of applying the principle of transparency in BUMN privatization include:

Ensuring fairness and justice in the privatization process
Increasing public trust and confidence in the privatization process
Encouraging public participation and input in the privatization process
Improving the efficiency and effectiveness of the privatization process
Reducing the risk of controversy and resistance in the privatization process

Q5: How can the government ensure transparency in the privatization process?

A5: The government can ensure transparency in the privatization process by:

Providing clear and accurate information about the privatization process
Ensuring public participation and input in the privatization process
Establishing a more independent privatization committee to oversee the privatization process
Implementing strict conditions and more open mechanisms for privatization
Ensuring that the privatization process is fair and just for all parties involved

Q6: What is the role of the privatization committee in ensuring transparency in the privatization process?

A6: The privatization committee plays a crucial role in ensuring transparency in the privatization process by:

Overseeing the privatization process to ensure that it is fair and just for all parties involved
Providing clear and accurate information about the privatization process
Ensuring public participation and input in the privatization process
Implementing strict conditions and more open mechanisms for privatization
Ensuring that the privatization process is transparent and accountable to the public

Q7: How can the government ensure that the privatization process is fair and just for all parties involved?

A7: The government can ensure that the privatization process is fair and just for all parties involved by:

Providing clear and accurate information about the privatization process
Ensuring public participation and input in the privatization process
Establishing a more independent privatization committee to oversee the privatization process
Implementing strict conditions and more open mechanisms for privatization
Ensuring that the privatization process is transparent and accountable to the public

Q8: What are the consequences of not applying the principle of transparency in BUMN privatization?

A8: The consequences of not applying the principle of transparency in BUMN privatization include:

Loss of public trust and confidence in the privatization process
Increased resistance and controversy in the privatization process
Reduced efficiency and effectiveness of the privatization process
Increased risk of corruption and abuse of power in the privatization process
Negative impact on the economy and society as a whole.