Workers Win: Constitutional Court Affirms State Control over Electricity

On Friday (11/29/2024), the Constitutional Court (MK) decided to grant part of the lawsuit against Law Number 6 of 2023 concerning the Stipulation of Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation (Job Creation Law). In the hearing of decision Number 39/PUU-XXI/2023, the Chief Justice of the Constitutional Court, Suhartoyo, stated that a number of articles in the appendix to the law were contrary to the 1945 Constitution (UUD) and did not have binding legal force.

The Constitutional Court stated that Article 7 Paragraph (1) in Article 42 number 5 of the Attachment to the Job Creation Law is contrary to the 1945 Constitution. The article is considered not to have binding legal force unless it is interpreted that “The National Electricity General Plan (RUKN) is prepared based on national energy policy and is determined by the Central Government after receiving consideration from the Indonesian House of Representatives.”

This decision emphasizes the importance of DPR involvement in the process of determining the RUKN, because electricity is a basic need that concerns the livelihoods of many people. Previously, the Job Creation Law eliminated the obligation to consult with the DPR in determining the RUKN, which drew protests from various parties, including labour unions in the energy sector because the DPR as a representative of the people, must be actively involved from the planning stage because electricity is included in the branches of production that are important for the state and control the livelihoods of many people.

In addition, the Constitutional Court also revoked the word “can” in the norm of Article 10 Paragraph (2) in Article 42 number 6 of the Attachment to the Job Creation Law. The word was declared to be contrary to the 1945 Constitution and has no binding legal force. This decision emphasizes that efforts to provide electricity for the public interest must be carried out in an integrated manner, and not just optionally.

This judicial review application was filed by Gekanas where there were 11 Workers Union applications including PSI affiliated union in the electricity sector such as SP PLN, PP-IP, and SP PJB and 111 personal applications. They considered a number of articles in the Job Creation Law to be detrimental to their constitutionality. One point of criticism is the potential for the imposition of electricity tariffs that are the same as the business concept, thus eliminating the principle of state control as mandated by Article 33 of the 1945 Constitution. This has the potential to make electricity, as a basic need, difficult for the community to reach.

In addition, the difference in electricity rates between regions is also a concern. The applicants emphasized that the provision has the potential to cause injustice and threaten the principle of public service which should be a priority in the provision of electricity.

The Gekanas Lawyer, Mohammad Fandrian, said that in its decision, the Constitutional Court emphasized several important things.

First, the involvement of the DPR in the Determination of the RUKN: The Court considered that the determination of the RUKN must involve the DPR. This is based on the fact that electricity is a public need that must be regulated democratically and transparently, by involving people’s representatives.

In addition, electricity supply efforts must be integrated: The word “can” in Article 10 Paragraph (2) is declared unconstitutional, so that electricity supply efforts for the public interest must be carried out in an integrated manner, without any loopholes for optional interpretation.

“The Constitutional Court emphasized that the provision of electricity must still refer to the principle of state control. This refers to previous decisions, namely Constitutional Court Decision Number 012 of 2003 and Constitutional Court Decision Number 111 of 2015, which stated that basic infrastructure such as the electricity network should not be completely handed over to market mechanisms,” Fandrian emphasized.

PP-IP General Chairman, Dwi Hantoro Sutomo also gave a similar view. He emphasized that electricity is one of the important production branches for the country and controls the livelihood of many people, so it must be controlled by the state.

“This is in accordance with the mandate of Article 33 of the 1945 Constitution, where branches of production that are important to the state must be managed for the greatest prosperity of the people,” said Dwi Hantoro Sutomo. “And based on experience, the Workers Union in the electricity sector has become the vanguard that has filed a Judicial Review many times on the Electricity Law which is not in line with the spirit of the 1945 NRI Constitution Article 33 Paragraphs (2) and (3).

Commenting from New York, Sean Sweeney of Trade Unions for Energy Democracy (TUED) stated “The Court decision is a victory for workers everywhere. Defending and expanding public energy is crucial to a just energy transition,” he said. Sweeney appeared before the Court in January 2024, offering international evidence on the side of the petitioners.

The Constitutional Court’s decision strengthens the state’s position in managing the electricity sector, which is a strategic element for public welfare. By restoring the DPR’s role in determining the RUKN, this decision provides assurance that national energy policy is not only determined by the government, but also involves legislative oversight.

This ruling also provides legal certainty for business actors in the energy sector, while guaranteeing public protection against the potential for detrimental electricity liberalization. In other words, the Constitutional Court emphasized that electricity must remain a state tool to realize social justice.

This Constitutional Court ruling is an important step in ensuring that the provision of electricity in Indonesia remains based on the principle of state control, as mandated by Article 33 of the 1945 Constitution. By revoking articles that are considered detrimental, the Constitutional Court provides new hope for the community and workers in the energy sector to obtain fairer and more sustainable policies. That electricity is not just a commodity, but also an instrument of welfare that must be managed for the public interest.

Giving a statement in front of the Constitutional Court Building with Gekanas, SP PLN General Chairman Muhammad Abrar Ali expressed his appreciation for the Constitutional Court’s decision. However, his party will also evaluate several applications that were not accepted, including further reviewing the issue of network rental which is also regulated in the Renewable Energy Law.

“In-depth studies need to be conducted to close loopholes that have the potential to cause losses. As stated in the previous decision, the practice of unbundling is not justified,” he said.

“We must ensure that electricity issues remain under state control and fully belong to the state,” Abrar stressed.

On this occasion, Gekanas also hopes that the entire community can carefully examine this decision. This is important so that we all understand its impact on the future of the electricity sector and workers’ rights in Indonesia.

“We invite all parties, both applicants, legal counsel, and the wider community, to continue to fight for justice and ensure that the implementation of this decision runs well.”