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Legal Consequences Dispute Settlement Body
Decision 477-478 Concerning Protection and
Empowerment of The Farmers
Sihnomo Abu Hilmy
Faculty of Law, University of Diponegoro, Indonesia
email correspondence: nomo07alfatih@gmail.com
ABSTRACT
Agriculture has an important role in providing food for the community. The Increasing of
open world trade, especially in food products, causes prices of domestic food products to
be affected by the situation and conditions of international food prices. To protect farmers,
the Law Number 19 of 2013 concerning Protection and Empowerment of Farmers has
been enacted. In the implementation of the law, especially Article 30 Paragraph (1),
received many complaints from Indonesian trading partners, such as the United States
and New Zealand who stated that these rules were inconsistent with the GATT
provisions. The research method in writing this journal is a normative juridical approach
method. In summary, the conclusions from the results of the first discussion, the
protection of farmers in addressing world trade is regulated in Article 30 Paragraph (1) of
the article aimed at protecting farmers as food producers from loss of price risk due to
uncontrolled import of agricultural commodities. Second, Responding to the DS 477-478
WTO ruling it is necessary to revise Article 30 Paragraph (1) because it is contrary to the
principle of quantitative restrictive prohibition. Changes to the article should still be used
as an instrument to protect farmers as food producers by harmonizing the provisions
contained in the WTO.
Keywords: DSB; WTO; Protection; Empowerment; Farmers
Date of Submission: May 16, 2019
Date of Publication: April 02, 2020
DOI: http://dx.doi.org/10.33096/sjijl.v3i1.32
INTRODUCTION
Indonesia is an agrarian-style developing country which the agricultural sector
has a very strategic role in the national economy through its contribution to Gross
Domestic Product (GDP), foreign exchange earnings, provision of food and industrial raw
materials, poverty alleviation, provision of employment and increase in people's income,
and preservation through environmentally friendly farming practices. In the form of
indirect contribution, the agricultural sector also provides a multiplier effect, namely the
interrelationship between input output between industries, consumption, and investment
which is also quite large.
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However, Indonesia's economic structure is still focused on the agricultural and
industrial sectors that process natural products. In the agricultural sector there are three
main components which include land, commodities and farmers. The three components
are interrelated, so the regulation of each component will have an impact on the
regulation of other components and the subjects of development in the agricultural sector
that are at the forefront are farmers. Its existence has consequences for efforts to
increase the production of agricultural commodities that are important for the survival of
society, industry, and the country, so that the regulation of farmers will protect all
important components in the agricultural sector.
An increasingly open world trade system, especially in food products, has caused
domestic prices for food products to be affected by the situation and conditions of
international food prices. These conditions and various problems in the availability and
distribution system, caused the prices of food products, especially strategic foods such as
rice, soybeans, beef, chili and shallots to fluctuate. Most of the trade in food products is
still distorted, not much touched by the commitment to trade liberalization. Market
distortion does not only occur in the domestic market, but also in the international market.
By taking into account the high distortions of the domestic and international markets,
several government policies on food products including food import policies are based on
the idea of providing healthy competition for national food products.
The efforts in protecting and empowering Indonesian farmers are enacted by Law
Number 19 of 2013 concerning the Protection and Empowerment of Farmers as a basis
for implementing the protection and empowerment of farmers, with the aim of realizing
the sovereignty and independence of farmers in order to improve the level of welfare,
quality, and a better life; protect farmers from price risk; increase the ability and capacity
of productive, advanced, modern, value-added, competitive, has a market share and is
sustainable.
Farmers as agents of agricultural development need to be given protection and
empowerment to support the fulfillment of food needs which are the basic rights of
everyone in order to realize food sovereignty, food independence, and food security in a
sustainable manner. Various efforts have been made to protect farmers, planters, and
small scale business farmers, one of which is through the regulation of agricultural
commodity imports in accordance with the harvest season and / or domestic consumption
needs.
In the implementation, the Law on Farmer Protection and Empowerment Article
30 Paragraph (1) receives many complaints from Indonesian trading partners, such as
United States and New Zealand who stated that the regulation is inconsistent with the
provisions of the GATT. In this regard, the United States and New Zealand filed a lawsuit
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to the Appelatte Body regarding the provisions of Article 30 of the Farmers Protection and
Empowerment Act, considering that these provisions are to hinder international trade in
agricultural commodities in Case Number WT / DS477 / AB / R and WT / DS478 / AB / R.
The Appelatte Body took the panel decision No. WT / DS477 / AB / R and WT /
DS478 / AB / R dated 22 November 2017 stating that Indonesia must make adjustments
to 18 measures which, among others, recommend changes to the substance of Article 30
Paragraph (1) of the Law Farmers' Protection and Empowerment which is considered to
be in conflict with the provisions of the GATT 1994 specifically related to the
Requirements where the import of horticultural products, animals and animal products
depends on Indonesia's determination of the adequacy of domestic supply and fulfillment
of domestic demand (Measure 18). Based on the background outlined above, the
problems that will be described by the author are as follows: How is the farmer protection
regulation in Indonesia according to Law Number 19 of 2013 concerning Farmer
Protection and Empowerment in an increasingly open world trade system? How is the
government should react towards The WTO decision DS477-478 against Law number 19
of 2013 concerning the protection and Empowerment of Farmers?
RESEARCH METHODE
This research uses a normative approach as research methode, which tries to
see the validity of the law based on aspects of its formation in a formal juridical manner.
1
This legal research will utilize the legal literature as a primary legal material to try to
remain consistent in making legal scientific work as an outcome of this method. The
limitations of this kind of written study are expected to be able to add legal references so
that solutions to legal problems in the future can be formed in a holistic study.
DISCUSSION
A. The Farmers Protection Regulation under Law No. 19 of 2013 on the Protection
and Empowerment of The Farmers in an Openly World Trade System
The agricultural development is directed to improve the welfare of farmers as
the main actors in agricultural development. To realize such goal, farmers have the
right and freedom to determine the choice of commodity and farming. In addition, the
Government, regional government, community and private sector must strive to
increase the capacity of farmers to become independent and sovereign farmers.
The protection and empowerment of farmers is part of the efforts to protect
the entire Indonesian nation, promote public welfare, and educate the nation's life
1
Soemitro, Rony Hanintjo. (1983). Metodologi Penelitian Hukum. Ghalia Indonesia: Jakarta. p.11
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which supports the achievement of national development goals. One problem that is
still faced by Indonesia today is the high number of poor farmers who need support
from the government. The BPS survey in 2016 stated that of the total 27.76 million
poor people in Indonesia, 62.24% or 17.28 million people were in rural areas while
the remaining 37.76% or 10.49 million poor people were in urban areas.
An increasingly open world trade system, particularly in food products, has
caused domestic prices for food products to be affected by the situation and
conditions of international food prices. These conditions and various problems in the
availability and distribution system, caused the prices of food products, especially
strategic foods such as rice, soybeans, beef, chili and shallots to fluctuate. Most of
the trade in food products is still distorted, not much touched by the commitment to
trade liberalization. Market distortion does not only occur in the domestic market, but
also in the international market. By taking into account the high distortions of the
domestic and international markets, several government policies on food products
including food import policies are based on the idea of providing healthy competition
for national food products.
In other words, the foundation of import policy becomes the government's duty
to correct market failures so that national food products can also compete fairly.
Indonesia as an agricultural country produces a variety of strategic food products,
even for certain products it has a surplus. In order for food production to be
sustainable, and community food needs to be met, the government must protect the
community and farmers from price fluctuations,
2
such as prices falling during the
main harvest, and prices soaring when outside harvest time.
In order to provide support for the independence and sovereignty of farmers,
especially through ensuring the stability of agricultural commodity prices, it is
necessary to develop a policy that can accommodate national interests in providing
protection to farmers to achieve food security, increase income, and welfare of
farmers, meet the interests of consumers and create stability national economy.
Meanwhile, the level of welfare of small farmers in developing countries is
increasingly marginalized due to the high level of volatility in the price of global
agricultural products as a result of market openness.
Import is the last option made by the government as an effort to meet national
food needs. The import mechanism is carried out by issuing import policies
regulated by the Government through the Ministry of Trade and / or other relevant
technical ministries. Some policies are issued in the form of laws and regulations
2
Wangga, M. S. E., Kardono, R. B. A., & Wirawan, A. (2019). Penegakan Hukum Korupsi Politik. Kanun: Jurnal
Ilmu Hukum, 21(1), 39-60. pp, 43
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aimed at achieving food security, increasing farmers' income and welfare,
community interests and creating national economic stability.
One form of protection for farmers for the sustainability of farming is regulated
in Article 30 Paragraph (1) of the Law on Farmer Protection and Empowerment.
"Everyone is prohibited from importing Agricultural Commodities when the
availability of domestic Agricultural Commodities is sufficient to meet
Government consumption needs and / or food reserves."
The substance of this article is that there are norms that are prosecuted by
article 101 containing criminal penalties for those who violate them
"Every person who imports Agricultural Commodities when the availability of
Agricultural Commodities in the country is sufficient to meet the needs of
consumption and / or Government food reserves as referred to in Article 30
paragraph (1) shall be sentenced to a maximum of 2 (two) years imprisonment
and a maximum fine of Rp 2,000,000 .000.00 (two billion rupiah)."
The purpose of the formulation and regulation of this article is to protect farmers
as food producers from price risk losses due to uncontrolled imports of agricultural
commodities. This article is expected to become an instrument of controlling imports
of agricultural commodities to protect and provide opportunities for farmers to enjoy
the harvest from the massive foreign competition.
B. The Government actions that must be taken in relation to the WTO
decision DS 477-478 against Law number 19 of 2013 concerning the
protection and Empowerment of Farmers.Sejarah Perundingan Komoditas
Pertanian di WTO
In 1947 negotiations on the formulation of the General Agreement on
Tariffs and Trade (GATT) were held in Geneva which stipulated a reduction in
45,000 types of tariffs with a value of US $ 10 billion. The negotiations were
attended by 23 countries who wanted a more just and comprehensive form of
international trade system to build a world economy that was devastated by
world war.
GATT is a general agreement on tariffs and trade as an instrument of
international trade law formed through agreements or negotiations which are
usually termed as: round. The purpose of the formation of GATT as explained by
Huala Adolf which refers to the Preamble of GATT is:
a. To achieve stable international trade and avoid national trade policies
and practices that are detrimental to other countries.
b. To increase the volume of world trade by creating attractive and
profitable trade for the economic development of all countries.
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c. Improve human living standards.
d. Increase employment.
e. Develop a multilateral trade system, not one side of a particular country,
which will implement an open trade policy that is beneficial for countries.
f. Increasing the use of world resources and increasing products and
buying and selling goods.
3
After the negotiations in Geneva there were several rounds of
negotiations held in various countries with the addition of several countries
which resulted in several new tariff and non-tariff agreements. In 1988 in
Montreal, Canada, a drip-level meeting known as the Mid-Term Ministerial
Meeting was held to review some of the points that had been achieved in the
previous negotiations. At the trial progress was made in 11 fields except
agriculture. In this period, Indonesia began to play an active role in the Uruguay
Round.
In April 1989 there were negotiations aimed at resuming the discussion
of agricultural issues that were deadlocked in the previous negotiations.
Negotiations continued in Brusssel in 1990 but no agreement was reached
because the United States and the European Union as the main countries
refused to ratify their fields of agriculture.
The Directorate General of GATT was always the chair of the Trade
Negotiations Committee (TNC) at the level of high-level officials in December
1991 having submitted the Draft Final Act (DFA) as the final result of the
Uruguay Round. On January 1992, TNC convened to accommodate the reaction
of participating countries and determine the next steps in the negotiations.
Participating countries expressed difficulties in implementing DFA in various
fields including the obligation to eliminate agricultural subsidies and protection
systems for several types of commodities. In the negotiations that took place in
Geneva, discussions were held including; tariffs and non-tariffs, trade in
services, intellectual property rights (copyright), textile commodities, and
agriculture. During this period it was agreed to establish a framework for the
World Trade Organization (WTO) which was a continuation of GATT. On
December 14, 1993, Indonesia had stated its commitment to gradually opening
market access to the telecommunications , industry, sea transportation, tourism
and financial services sectors.
On April 15, 1994 in Marrakech an agreement was reached on the
outcome of negotiations from the Uruguay Round as a package signed by the
3
Adolf, Huala (2005). Hukum Perdagangan Internasional, Raja Grafindo Persada:Jakarta. pp. 21-22
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participating countries which later gave birth to the WTO. While in the same
year, Indonesia completed the ratification procedure with the DPR in October
1994. So that Indonesia is ready to enforce the treaty obligations in accordance
with the provisions of the agreement, among others, protection of intellectual
property rights, trade in services, tourism, telecommunications and several other
sectors.
In accordance with the results of the agreement from the Uruguay
Round, then on January 1, 1995 in Geneva, Switzerland, the WTO was officially
established with a membership of 146 countries including Indonesia. Based on
the results of the Uruguay Round agreement, there are several things that are
new issues, including; trade in services, intellectual property rights, and trade-
related investment measures (TRIMs). Some things that concern Indonesia as a
logical consequence of its participation in the WTO include; tariff issues, market
access, textile commodities, agricultural products, regulation and dispute
resolution, intellectual property rights, services and investment.
One of the agreements that must be obeyed and implemented by
Indonesia is the Agreement on Agriculture (AoA) which is part of the WTO
expansion on issues outside traditional trade. By placing agricultural agreements
in the WTO, the WTO naturally now has a primary role as a controller and
determinant of the agricultural sector in its member countries.
4
With this AoA, the WTO requires its members to: (1) open their
domestic markets for entry of agricultural commodities from outside, and vice
versa (referred to as market access); (2) reducing support and subsidies to
farmers (referred to as domestic support); and (3) reducing support and
subsidies for farmers to export (referred to as competition competition). These
three problems are taken care of by AoA.
5
1. Indonesia's involvement in the WTO
Indonesia as part of the international community declares itself to carry
out world order based on independence, eternal peace and social justice in
accordance with the fourth paragraph of the Preamble of the 1945 Constitution.
Indonesia became a member of the WTO through the ratification of the WTO
Formation Agreement through Law Number 7 of 1994 concerning Ratification of
the Agreement on Establishing the World Trade Organization. This has the
4
Setiawan Bonnie. (2013). WTO dan perdagangan abad 21, Resist Book:Yogyakarta., p. 27
5
WWF,”Agriculture In The Uruguay Round: Implications For Sustainable Development In Developing
Countries”, didalam Third World resurgence No. 100/101 dec. 98/jan.99, The WTO, Agriculture and Food
Security, pp. 34-35
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consequence that Indonesia must comply with the WTO forum agreement in
order to form an orderly and fair free trade.
The ratification of an agreement has both external and internal legal
consequences for the country that did it. The consequence of external law is that
through these actions means the country concerned has accepted all obligations
imposed. While the consequences of internal law is an obligation for the country
concerned to change its national law to comply with the provisions of the
relevant international agreement. So by ratifying the agreement, the rules in
Indonesia must adjust to the WTO rules.
International treaties are one of the references for countries or other
international law subjects to solve various problems that occur in international
relations in addition to international customs, general legal principles, and
jurisprudence. International treaties are agreements that are held between
members of the community of nations and aim to make certain laws come into
force. International agreements are based on the principle of Pacta sunt
servanda which is paired with the principle of good faith
6
. This international
agreement raises obligations for the parties in it.
7
The form of action that states a country is bound by international treaties,
namely:
a. Signatured
The consent of the State to be bound by the agreement is stated by the
representative's signature if:
8
1) The agreement states that the signature will have the effect of
binding the agreement.
2) If not specified, the country involved in the negotiation agrees that
the signature must have the effect of binding on the state in
international treaties.
3) The signature effect arises from the full power of its representative.
b. exchange of instruments constituting a treaty
The agreement of a country to be bound by an agreement is based on the
instrument being exchanged if the instrument stipulates that the exchange
will have the effect of binding international agreements or if the countries
agree that the exchange of instruments is stated as a condition of binding
international agreements.
6
Purwanto, Harry. (2009). Keberadaan Asas Pacta sunt servanda Dalam Perjanjian Internasional,
Mimbar Hukum, Jurnal berkala FH UGM, Volume 21. p.162
7
Starke, J.G. (2004). Pengantar Hukum Internasional, Sinar Grafika:Jakarta. p.117.
8
Article 12 Vienna Convention on the Law of Treaties 1969
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Exchange of Instruments is defined as the exchange of documents of
agreements or diplomatic notes signed by ambassadors or diplomats, and
also by the head of state or head of government. The existence of an
exchange of this treaty document can be in addition to another international
agreement. Countries do this if their existence is agreed or stated to be
done as a form of agreement that can be valid. Usually done in a bilateral
agreement.
c. Ratification, acceptance or approval
Approval to be bound by an agreement that is disclosed by ratification,
acceptance or approval. Approval from the state to be bound by the
agreement stated with ratification if:
9
1) The agreement itself determines this.
2) The negotiating country agrees that the agreement must be ratified.
3) Representatives from the State have signed an agreement on the
subject of ratification.
4) The intention of the State to sign an agreement subject to ratification
arises from the full power of its representatives or is disclosed during
negotiations.
The Approval from a State to be bound by an agreement is stated by
acceptance or approval under conditions similar to those applicable to
ratification. The "entry into force" of an international agreements is started
after all countries involved in the process of making agreements and have
entered into international agreements in the form of signing by the
representatives of the designated countries, then if determined by the
agreement itself when the clause The last thing that must be fulfilled before
the agreement is declared effective is the process of submitting the
ratification to the agency / institution appointed to receive the results of the
ratification. If all the conditions required have been fulfilled then since then
the international agreement is declared valid.
Ratification is the ratification of an international treaty by the country
that signed the agreement, in accordance with the provisions of the laws of
the country concerned.
10
The Government of Indonesia has committed itself
to international agreements in the following ways:
11
1) Signing;
9
Article 14 Vienna Convention of the Law of Treaties 1969.
10
Shamelenbach, Kirsten, DÖrr, Oliver. (2012). Vienna Convention on the Law Treaties: A Commentary,
(Jerman:Springer).
11
UU Nomor 24 Tahun 2000 tentang Perjanjian Internasional (Lembaran Negara Republik Indonesia
Tahun 2000 Nomor 185, Tambahan Lembaran Negara Republik Indonesia Nomor 4012).
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2) Ratification;
3) Exchange of diplomatic agreement / memorandum documents;
4) Other ways as agreed by the parties in international treaties, for
example simplified procedure, which is the automatic attachment to
international treaties if in a certain period does not submit written
notification to refuse its attachment to an international agreement.
Indonesia's participation in the WTO must also comply with internationally
applicable principles, namely:
a. Pacta sunt servanda Principle
This principle becomes the basis of International Law because it is
contained in Article 26 of the 1969 Vienna Convention on the Laws of
Treaties which states that "every treaty in force is binding upon parties to it
and must be performed by them in good faith".
Basically this principle relates to contracts or agreements made
between individuals, which implies that: Agreement is the law for the
parties who made it. Indicating that breaking the obligations in the
agreement is an act of violating a promise or default
12
.
Hans Kelsen even concludes that international treaties are also law
creating fact, as is international custom. Law creating fact means that an
agreement gives rise to rights and obligations, or in other words the
agreement has binding power. The existence of the binding power of the
agreement is caused by a customary international law that is incarnated in
the formula of pacta sunt servanda. Thus as a basis for binding both
customary international law and conventional international law
(international law based on treaties) is placed on the basic norm
(grundnorm) in the form of pacta sunt servanda.
13
In the opinion of Aziz T. Saliba, the principle of Pacta sunt servanda
is the sacralization of a contract (sanctity of contracts). The focal point of
treaty law is freedom of contract or what is known as the principle of
autonomy, which means that by observing the proper legal boundaries
people can enter into any agreement as they wish, and if they have
decided to make an agreement, they are bound by the agreement.
14
Law Number 24 of 2000 concerning International Treaties Article 4
paragraph (1) states that the Government of the Republic of Indonesia
12
Purwanto, Harry, Loc.Cit. p.166
13
Hans Kelsen terjemahan Muttaqien, Raisul (2006). Teori Umum tentang Hukum dan Negara.
Nuansa & Nusamedia:Bandung., p. 520.
14
Ibid, p. 162.
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makes international agreements with one or more countries, international
organizations, or other international legal subjects based on agreements;
and the parties are obliged to implement the agreement in good faith.
Thus, the existence of the principle of pacta sunt servanda has long
been known in the community, including the international community and
then supported by the opinion of several leading experts has become the
basis for strengthening the existence of the principle. Today this principle
has become part of positive law, both at the Indonesian national level and
at the international level.
The acceptance, existence and use of the pacta sunt servanda
principle is the beginning of an agreement including an international treaty.
This means that the existence and acceptance of the principle of pacta sunt
servanda is used as a basis for the operation or entry into force of
international agreements. Because by adhering to the principle of pacta
sunt servanda, the parties to an international agreement have promised to
respect or carry out what has been agreed or promised. Without the ability
to carry out what has been promised, the agreement will not be able to
operate or apply as it should.
b. The Principle of rebus sic stantibus In Convention of Wina 1969
This principle was first used by religious courts which at that time
adhered to the separation of church affairs from government affairs. Then in
XIII, this principle was widely accepted. The opinions of the experts also
helped to develop and enforce this principle. Macchiaveli at that time stated
"everything depends on circumstances that happen to be valid at a time
faced by state authorities". This illustrates the meaning contained in the
principle of rebus sic stantibus.
Alberico Gentili states that "the most important of the principles of the
treaty law is the argument that the agreement (peace) always contains the
principle of being concluded, namely that the treaty is only binding as long
as the conditions do not change”
15
. It also appears that what Alberico refers
to as 'knotted' here is the rebus sic stantibus principle.
Provisions on rebus sic stantibus were formulated in Article 27 of the
1969 Vienna Convention, viz: “A party may not invoke the provisions of its
internal law as justification for its failure to perform a treaty. This rule is
without prejudice to article 46.”
15
Ibid. p.176
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Article 46 of the 1969 Vienna Convention states that:
“A State may not invoke the fact that its consent to be bound by a treaty
has been expressed in violation of a provision of its internal law regarding
competence to conclude treaties as invalidating its consent unless that
violation was manifest and concerned a rule of its internal law of
fundamental importance.”
Indonesia itself has also adopted this principle, for example in Law
Number 24 of 2000 concerning International Treaties. This can be seen from
the formulation of Article 18 letter viz: "International agreements end if there
are fundamental changes that affect the implementation of the agreement."
With the formulation of an article like this, it is clear that Indonesia adheres
to the principle of boiled sic stantibus in terminating international
agreements.
From the formulation above, it is clear that the principle of boiled sic
stantibus referred to in the 1969 Vienna Convention is a provision that the
parties to the treaty cannot make their national law a justification for not
making provisions in international treaties, even if there is state authority to
close an international agreement because deeply violated his important
national law. In Article 46 paragraph (2) of the 1969 Vienna Convention it is
determined that this authority arises only if the violation of the national law of
the country concerned by an international treaty that binds it can be seen
objectively related to normal practice and good faith.
2. Trading Dispute DS 477-478
The United States (USA) and New Zealand conducted consultations
related to the Indonesian government policy on importation of horticultural
products, animals and animal products. Then the USA and New Zealand sued
the import policy implemented by the Indonesian government and assessed
Indonesia:
16
a. applying quantitative restrictions or restrictions on the import of horticultural
products, animals and animal products;
b. implement restrictive, non-transparent, non-automatic import licensing,
without clear and burdensome justification;
c. less favorable treatment of imported products compared to similar domestic
products; and
16
Erwidodo, (2017) Menyikapi Keputusan Panel DSB-WTO Untuk Kasus Kebijakan Impor Produk
Hortikultura, Hewan, dan Produk Hewan (PSEKP:Kementerian Pertanian) p.124.
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d. apply discriminatory and unreasonable pre-shipment inspection
requirements; Indonesia is considered not to make sufficient explanation of
the import permit policy information.
The WTO panel of judges decided that the 18 policies (measures)
implemented by the Government of Indonesia were deemed inconsistent with
the WTO rules in force for one of the Regulations in Indonesia that were
declared inconsistent with the WTO rules. Article 30 Paragraph (1) of Law
Number 19 of 2013 concerning Farmer Protection and Empowerment. The
results of the WTO Dispute Settlement Body (DSB) lawsuit in the USA and
New Zealand trade disputes DS-477 / DS-478 are listed in 18 measures:
a. Import licencing regime for horticultural products (measure 1 – 9)
b. Import licencing regime for animals and animal products (measure 10 –
17)
c. Sufficiency requirement (measure 18): sufficiency of domestic
production to fulfill domestic demand.
The Indonesian government seeks an appeal process, but in the
Appelatte Body (AB) Judge circulates its decision to accept and strengthen the
Panel Judge's decision, namely to decide that the Indonesian government's
import policy is not consistent with the prevailing WTO rules. This AB decision
for DS 477 / DS 478, which was accepted and adopted at the DSB Regular
Session on November 22, 2017, is final and binding on all parties to the
dispute.
17
The Government of Indonesia is given a Reasonable Period Time
(RPT) in accordance with Article 21.4 Dispute Settlement Understanding
(DSU).
18
which is generally 15 months unless the parties agree otherwise.
19
The RPT is a grass period given by WTO member countries. If Indonesia
continues to implement policies that are not in accordance with the WTO to
make adjustments within this period, Indonesia will face the consequences of
retaliation. In the case of Number WT / DS477 / AB / R and WT / DS478 / AB /
R, Indonesia is given time to settle no later than June 22, 2019.
If Indonesia does not implement the overall harmonization of laws and
regulations in accordance with the Appellate Body recommendations from
WTO Number WT / DS477 / AB / R and WT / DS478 / AB / R on November 12,
2017, then 20 days after the RPT phase II (12) time limit has expired July 2019
17
Erwidodo (2017), Ibid. p. 129.
18
Sistem penyelesaian sengketa WTO oleh Direktorat Perdagangan Perindustrian, Investasi, dan HKI,
Direktorat Jenderal Multilateral Kementerian Luar Negeri, p. 61.
19
Ibid. p. 62.
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Indonesia, the United States and New Zealand have not agreed on
compensation, so the United States requested permission from DSB to impose
trade sanctions on Indonesia, namely demands for compensation payments of
USD 350 million / year, because they were deemed to have failed to make
adjustments. This is technically called "suspending concessions or other
obligations under the cover-ing agreement" (Article 2.2 DSU).
20
3. Indonesian Government Actions
The state efforts to provide legal protection to farmers from the large
number of imported agricultural products from abroad through Article 30
Paragraph (1) of Law Number 19 of 2013 concerning Protection and
Empowerment of Farmers with the formulation of article:
"Everyone is prohibited from importing Agricultural Commodities when the
availability of domestic Agricultural Commodities is sufficient to meet the
Government's consumption needs and / or food reserves.”
The substance of the article contains a policy of self sufficiency, that is,
imports can be carried out on condition that domestic production does not meet
national needs. Restrictions or prohibitions on imports are inconsistent with
Indonesia's commitment to the WTO to eliminate all forms of quantitative
restrictions.
This is contrary to the Principle of Prohibition of Restrictions /
Quantitative Restrictions when the GATT was made, so the most important
non-tariff barriers at the time were non-tariff barriers through quantitative
barriers or quotas so there was a lot of attention on this issue. Quotas or
restrictions on a number of goods are certain physical quantities that may be
imported or exported during a predetermined period of time, usually determined
based on the amount but sometimes based on the value of the item. The basic
provisions of the GATT are the prohibition of quantitative restrictions on export
imports in any form, for example the imposition of import or export quotas,
restrictions on the use of import or export licenses, supervision of payment of
imported or export products. Generally prohibited in Article IX GATT.
21
Decisions of the Appelatte Body WT / DS477 / AB / R and WT / DS478 /
AB / R signed by the Presiding Member (Mr. Ujal Singh Bhatia), Member (Mr.
Thomas Graham), Member (Mr. Ricardo Ramirez-Hernandez), recommends:
20
Ibid, p. 64.
21
Taryana Sunandar, (2016) Penulisan Karya Ilmiah tentang Perkembangan Hukum Perdagangan
Internasional dari GATT 1947 sampai Terbentuknya WTO, p. 18.
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70 |
“6.9. The Appellate Body recommends that the DSB request Indonesia to
bring its measures, found in this Report, and in the Panel Report as modified
by this Report, to be inconsistent with the GATT 1994, into conformity with its
obligations under that Agreement.”
To realize an active foreign policy based on the 1945 Constitution of the
Republic of Indonesia carried out by participating in international relations,
among others by being actively involved in international agreements. The
government needs to follow up by submitting an amendment to Article 30
Paragraph (1) of Law Number 19 Year 2013 concerning the Protection and
Empowerment of Farmers by harmonizing with the provisions of international
agreements. This is a consequence of Indonesia as part of the international
community which is binding itself on the WTO through the ratification of several
international trade agreements, especially in agriculture.
Changes to the substance of the article should still be used as an
instrument to provide legal protection to farmers as the main producers of food
in the country by harmonizing the provisions contained in the WTO. As is the
case with trade remedies for WTO members in the form of safeguards
(Safeguards).
In general, the definition of trade remedies refers to government actions
or policies to minimize the negative impact of imports on the domestic industry.
This trade remedy is needed considering that imports, whether conducted
unfairly (unfair trade) or honestly (fair trade) are not infrequently detrimental to
the domestic industry. Dishonest imports that harm domestic industries are
imports of foreign products at dumping prices, ie prices below normal prices,
and imports of subsidized foreign products. Whereas imports that are carried
out honestly but which can harm domestic industries are imports that have
surged rapidly and unnaturally.
22
The provisions of the WTO also gives freedom to its member to
harmonize the law regarding remedial provisions in any form as long as it is in
accordance with the rules in article X GATT 1994. These conditions are as
follows: First, legal harmonization can be done through legislation, regulations,
court decisions and administrative procedures. Second, there is an obligation to
immediately publish instruments of harmonization so that they are immediately
known by the governments of WTO member countries and traders. Third,
before being published, the instrument may not be applied. Fourth, in
22
Aditya, Oktaviano. (2017). Peran World Trade Organization (WTO) Dalam Menyelesaikan Sengketa
Perdagangan Daging Sapi Antara Amerika-Indonesia Tahun 2012-2016, Jurnal FISP Vol. 4. No.2, p.2
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Legal Consequences Dispute Settlement
administering harmonization instruments must be done fairly, uniformly, and not
discriminatory.
23
CONCLUSION
Legal protection for farmers to respond to an increasingly open world trade
system in the form of positivation of norms as outlined in a statutory regulation is needed
in Indonesia, because the majority of Indonesian farmers are small farmers. The
formulation of these rules must be in line with the provisions of international trade
agreements, as a consequence of Indonesia as part of the international community which
has declared an active participation in carrying out world order and must abide by the
principles of international treaties.
A. Regulation on the protection of farmers in Indonesia according to Law Number 19 of
2013 concerning Protection and Empowerment of Farmers in an increasingly open
world trade system is formulated in Article 30 Paragraph (1) and Article 101 of this
article aimed at protecting farmers as food producers from risk losses prices due to
uncontrolled imports of agricultural commoditiesli.
B. The actions that must be taken by the government in relation to WTO DS 477-478's
decision on Law number 19 of 2013 concerning the protection and Empowerment of
Farmers revise (amend) the substance of Article 30 Paragraph (1) because the
content of the article is contrary to the principle of quantitative restrictions that are
applies to WTO provisions. The revision to the substance of the article should still be
used as an instrument to provide legal protection to farmers as the main producers of
food in the country by harmonizing the provisions contained in the WTO. Adjustment
to Article 101 as a consequence of amending Article 30 Paragraph (1).
SUGGESTION
The formulation of a safeguard policy for farmers as food producers from
dishonest behavior in international trade is better set forth in the form of regulations
under the law because in the form of laws when it is decided by the WTO to be changed
in the stages of change requires a lengthy procedure requires mutual agreement
between the Government and the House of Representatives so that it is not effective. If
the rules are realized in the form of government regulations, presidential regulations or
ministerial regulations when getting complaints from international trading partners, the
change process is easier to implement.
23
Sutrismo, N. (2007). Memperkuat Sistem Hukum Remedi Perdagangan, Melindungi Industri Dalam
Negeri. Jurnal Hukum IUS QUIA IUSTUM, 14(2). p.233
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72 |
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