Introduction
In running its business activity, State-Owned Enterprises (“SOEs”) do not escape from various disputes, including dispute between SOEs/SOEs Subsidiaries/ SOEs Affiliated Companies (“Dispute”) alone.1 Through Minister of State-Owned Enterprises Regulation Number PER-2/MBU/03/2023 concerning The Governance and Significant Corporate Activity Guidelines of State-Owned Enterprises (“Permen 2/2023”), the government had opened an alternative Dispute settlement through mediation at the Ministry of State-Owned Enterprises.2 Article 7 paragraph (1) letter b of Permen 2/2023 regulates that the Minister of State-Owned Enterprises can act as a mediator based on the application of the directors of SOEs/SOEs Subsidiaries/SOEs Affiliated Companies to resolve the Dispute.3 In April 2024, the Minister of SOEs issued a Circular Letter Number SE-1/MBU/DHK/04/2024 concerning Completion of Legal Issues/Disputes between SOEs/SOEs Subsidiaries/SOEs Affiliated Companies (“SE 1/2024”) which regulates the detailed mechanisms of Dispute mediation at the Ministry of State-Owned Enterprises.4

Discussion
Before discussing SE 1/2024 in more depth, we need to understand the basis and principles of mediation. Mediation is carried out to achieve peace between the disputing parties.5 Article 1851 of the Indonesian Civil Code (“ICC”) defines peace as:6

“…an agreement that states that by handing over, promising or withholding an item, both parties end a case…”

The peace reached between the parties must then be stated in the form of a written agreement.7 Because its form is an agreement, the peace agreement must also meet the conditions for the validity of an agreement as stipulated in Article 1320 of the ICC.8 The peace that is achieved has the power of a “judge’s decision at the final stage”.9

Peace efforts were initially made by the disputing parties themselves.10 However, sometimes peace cannot be achieved if only attempted by the disputing parties.11 In such cases, to achieve peace the parties can be assisted by a mediator, and this process is called mediation.12 Mediation is one of the procedures/methods for alternative dispute resolution in addition to consultation, negotiation, conciliation, or expert assessment, as regulated in Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution (“Arbitration Law”).13 Mediation in court is then regulated in more detail in Supreme Court Regulation Number 1 of 2016 concerning Mediation Procedure in Court (“PERMA 1/2016”).14 The Arbitration Law and PERMA 1/2016 regulate mediation between any disputing parties, in the sense that they do not limit who or the form of the party that will conduct mediation.15 Meanwhile, SE 1/2024 limits which parties can conduct mediation at the Ministry of SOEs and regulates in detail the procedures.16 More details regarding SE 1/2024 will be discussed below.

Board of Directors of SOEs/SOEs Subsidiaries/SOEs Affiliated Companies that are in dispute first need to submit an application of law problem settlement to the Minister of State-Owned Enterprises who will act as a mediator.17 However, the Minister of SOEs doesn’t need to act as a mediator personally, because the authority can be mandated or delegated to the Deputy Legal and Legislative Affairs Division of the Ministry of State-Owned Enterprises.18 There are three conditions of submitting law problem settlement application.19 First, the parties involved in the Dispute must be a SOEs/SOEs Subsidiary/SOEs Affiliated Company.20 If one of the party is a private company, then they can not submit an application of mediation at the Ministry of State-Owned Enterprises.21 Second, the parties must have tried to resolve the Dispute by consensus before submitting an application.22 Third, the submission of application must be based on a mediation agreement between the parties, and the submission must be done by one of or the parties.23

Before submitting an application of law problem settlement to the Minister of State-Owned Enterprises, directors of the disputing parties​ need to prepare the required documents.24 Required documents are namely: Mediation Application Letter to the Minister of State-Owned Enterprises cq. Deputy of Legal and Regulation25, Dispute Completion Agreements26, Statement of the Parties27, Correspondence of the Parties28, other supporting documents29, and Proposal of law problem settlement30. The proposal that will be attached in the submission must contains identification of the parties, problem description, scope of the dispute, the reason of dispute settlement submission, the dispute impact, views of the settlement, willingness to settle the dispute through the Ministry of State-Owned Enterprises, and a follow up action plan.31 Explanation of each point of the proposal will be described in the next paragraph.

In the proposal, identification of the parties contains name of the disputing parties​ that are SOEs/SOEs Subsidiaries/ SOEs Affiliated Companies.32 Furthermore, the parties need to describe the problem, problem chronology, and things that have been done related with the problem.33 After the problem description, the proposal must include a scope of the dispute that wanted to be settled, including the type of agreement or transactions involved.34 The parties​ need to explain the reason why they chose dispute settlement through the Ministry of State-Owned Enterprises and also explaining the internal settlement effort that had been done and its result.35 Impact of the dispute that occurred to the sustainability or business operational of SOEs/SOEs Subsidiaries/SOEs Affiliated Companies must also be deeply analyzed and included in the proposal.36 The views of the settlement part contains views or proposals from the parties about the best method to settle the dispute, including through​ agreement to do addendum of contract, agreement to point other party, or other method.37 Board of directors of the parties must also state a commitment and readiness to carry out the agreement reached​ in the mediation.38 The last part of the proposal contains a follow up action plan of the parties after the dispute settlement, including prevention steps so that a similar dispute won’t occur in the future.39 The complete proposal must be signed by the directors of the parties.40

If the mediation application is submitted by a SOEs Subsidiary/SOEs Affiliated Company, then the Main SOEs must also get involve in the law problem settlement process.41 The goal of the mediation process is to reach an agreement through a discussion between the parties and the Ministry of State-Owned Enterprises related to the settlement of the problem that occur.42 If it needed and with a consideration of problem complexity, the discussion may involve other/external parties who can give a recommendation.43 The other/external parties who can be involved are the SOEs Governance Monitoring Team (Tim Kawal), SOEs Deputy Minister Team, The Secretary of the Minister of SOEs element, Deputy of Law and Regulation (HKPUU) element, Deputy of Finance and Risk Management (KMR) element, Deputy of Human Resources Management (MSDM) element, Financial Audit Agency (BPK), Prosecutor’s Office, Commission of Corruption Eradication (KPK), Financial and Development Supervisory Agency (BPKP), Police, Auditor, and Law Enforcer.44

Agreement that has been reached​ as a result of the discussion between the parties and the Ministry of SOEs then stated in the minutes of the meeting signed by the parties.45 The agreement that has been signed is final and binding and must be implemented with good faith by the parties.46 If required, the agreement can be notarized and/or made into a peace deed by the court.47 In order to be able to obtain a peace deed from the court, the peace agreement as a result of the mediation at the Ministry of SOEs must fulfil the provisions of Article 27 paragraph (2) of the PERMA 1/2016.48 Article 27 paragraph (2) of PERMA 1/2016 states that the peace agreement should not contain conflicting provisions​ with the law, public order, and/or decency, should not harm a third party, and should be able to be implemented.49

This problem settlement process does not stop after reaching a peace agreement, there is still a monitoring and evaluation process every three months or in accordance with the agreement.50 For the purpose of monitoring and evaluation, the parties must submit a written report about the implementation of the agreement by the parties to the Ministry of State-Owned Enterprises, forwarded to the Deputy of Law and Regulation.51

Closing
SE 1/2024 has regulated in a detailed way about the requirements, submission, process and stages of the Dispute mediation at the Ministry of SOEs. This Dispute settlement mechanism has also covers monitoring and evaluation process after reaching a peace agreement.52 Throughout 2023, there were 21 Reports on Completion of Dispute Settlement Mediation between SOEs/SOEs Subsidiaries that were operated and coordinated by the Deputy of Law and Regulation of the Ministry of SOEs.53 Then throughout 2024, resolving​ the law problem between SOEs/SOEs Subsidiaries/SOEs Affiliated Companies had also been a focus of the Ministry of SOEs.54 In 2025 we are expecting that the Dispute settlement will also still be a priority and the mediation mechanism at the Ministry of SOEs can run effectively.

Yosefin Mulyaningtyas

Reference

  • Indonesian Civil Code.
  • Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution.
  • Minister of State-Owned Enterprises Circular Letter Number SE-1/MBU/DHK/04/2024 concerning Completion of Legal Issues/Disputes between SOEs/SOEs Subsidiaries/SOEs Affiliated Companies.
  • Minister of State-Owned Enterprises Regulation Number PER-2/MBU/03/2023 concerning The Governance and Significant Corporate Activity Guidelines of State-Owned Enterprises.
  • Supreme Court Regulation Number 1 of 2016 concerning Mediation Procedure in Court.
  • Deputy of Legal and Regulation of the Ministry of SOEs. LKIP 2023 Deputi Bidang Hukum dan Perundang-Undangan. (February 2024) <https://www.bumn.go.id/storage/kontenlaporan/files/files_1728276612.pdf> accessed January 15th 2025.
  • Ministry of State-Owned Enterprises. Rencana Kerja Anggaran Satker Rencana Kinerja Satuan Kerja Tahun Anggaran 2024. (January 2024) <https://www.bumn.go.id/storage/kontenlaporan/files/files_1724135668.pdf> accessed January 15th 2025.
  • Kejati Jatim. JPN lakukan mediasi antar sesama BUMN. (kejati-jatim.go.id, March 22nd 2021) <https://kejati-jatim.go.id/jaksa-pengacara-negara-kejati-jatim-melakukan-mediasi-sesama-bumn-antara-pt-perkebunan-nusantara-x-ptpn-x-dengan-pt-barata-indonesia/> accessed January 15th 2025.
  • Warta Pemeriksa BPK. BPK Berupaya Menyelesaikan Sengketa Antar-BUMN. (wartapemeriksa.bpk.go.id, March 4th 2021) <https://wartapemeriksa.bpk.go.id/?p=24250> accessed January 15th 2025.

Sources

  1. See Kejati Jatim, JPN lakukan mediasi antar sesama BUMN, (kejati-jatim.go.id, March 22nd 2021) <https://kejati-jatim.go.id/jaksa-pengacara-negara-kejati-jatim-melakukan-mediasi-sesama-bumn-antara-pt-perkebunan-nusantara-x-ptpn-x-dengan-pt-barata-indonesia/> accessed January 15th 2025. See also Warta Pemeriksa BPK, BPK Berupaya Menyelesaikan Sengketa Antar-BUMN, (wartapemeriksa.bpk.go.id, March 4th 2021) <https://wartapemeriksa.bpk.go.id/?p=24250> accessed January 15th 2025.
  2. Article 7 of the Minister of State-Owned Enterprises Regulation Number PER-2/MBU/03/2023 concerning The Governance and Significant Corporate Activity Guidelines of State-Owned Enterprises (Permen 2/2023).
  3. Article 7 paragraph (1) letter b of Permen 2/2023.
  4. Minister of SOEs Circular Letter Number SE-1/MBU/DHK/04/2024 concerning Completion Legal Issues/Disputes between SOEs/SOEs Subsidiaries/SOEs Affiliated Companies (SE 1/2024).
  5. See Article 6 of Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution (Arbitration Law). Mediation is carried out so that disputes between the parties can be resolved.
  6. Article 1851 of the Indonesian Civil Code (ICC).
  7. Ibid.
  8. See Article 1320 of ICC.
  9. Article 1858 of ICC.
  10. Article 6 paragraph (1) and (2) of Arbitration Law.
  11. Vide Article 6 paragraph (3) of Arbitration Law.
  12. Ibid.
  13. Article 1 number 10 of Arbitration Law.
  14. Supreme Court Regulation Number 1 of 2016 concerning Mediation Procedure in Court (PERMA 1/2016).
  15. See Arbitration Law and PERMA 1/2016.
  16. See SE 1/2024.
  17. Number 1 of SE 1/2024.
  18. Number 2 of SE 1/2024.
  19. Number 3 of SE 1/2024.
  20. Number 3 letter a of SE 1/2024.
  21. Vide Number 3 letter a of SE 1/2024.
  22. Number 3 letter b of SE 1/2024.
  23. Number 3 letter c of SE 1/2024.
  24. Number 4 of SE 1/2024.
  25. Number 4 letter a of SE 1/2024.
  26. Number 4 letter b of SE 1/2024.
  27. Number 4 letter c of SE 1/2024.
  28. Number 4 letter d of SE 1/2024.
  29. Number 4 letter e of SE 1/2024.
  30. Number 6 of SE 1/2024.
  31. Ibid.
  32. Number 6 letter a of SE 1/2024.
  33. Number 6 letter b of SE 1/2024.
  34. Number 6 letter c of SE 1/2024.
  35. Number 6 letter d of SE 1/2024.
  36. Number 6 letter e of SE 1/2024.
  37. Number 6 letter f of SE 1/2024.
  38. Number 6 letter g of SE 1/2024.
  39. Number 6 letter h of SE 1/2024.
  40. Number 6 of SE 1/2024.
  41. Number 5 of SE 1/2024.
  42. Number 7 of SE 1/2024.
  43. Number 8 of SE 1/2024.
  44. Ibid.
  45. Number 9 of SE 1/2024.
  46. Ibid.
  47. Ibid.
  48. Article 36 paragraph (3) of PERMA 1/2016.
  49. Article 27 paragraph (2) of PERMA 1/2016.
  50. Number 10 of SE 1/2024.
  51. Ibid.
  52. Vide Number 10 SE 1/2024.
  53. Deputy of Legal and Regulation of the Ministry of SOEs, LKIP 2023 Deputi Bidang Hukum dan Perundang-Undangan, (February 2024) <https://www.bumn.go.id/storage/kontenlaporan/files/files_1728276612.pdf> accessed January 15th 2025.
  54. Ministry of State-Owned Enterprises, Rencana Kerja Anggaran Satker Rencana Kinerja Satuan Kerja Tahun Anggaran 2024, (January 2024) <https://www.bumn.go.id/storage/kontenlaporan/files/files_1724135668.pdf> accessed January 15th 2025.