JAKARTA: The appointment of the board of commissioners of the Financial Services Authority (OJK) by the president is considered more effective than by the legislative body, which involves more people.
The government will not back off to maintain the concept during the follow-up deliberation next year. Head of the Capital Market Market and Financial Institution Supervisory Agency (Bapepam-LK) Ahmad Fuad Rahmany viewed the OJK Bill proposed by the government was better than the concepts of independent supervision adopted by other countries since Indonesia drafted the concept after the 2008 crisis. "The OJK we design will be better for not only us but also the state. However, if no compromising point is reached, it will be better for us not to have the OJK. We want to have an ideal OJK," he told when visiting Bisnis editorial office yesterday. According to him, the government-sponsored OJK was better since the concept had put into account lessons from several countries during the 2008 crisis.For example, the concept includes ex-officio commissioners at the OJK Board of Commissioners to distribute microeconomics information to the monetary and fiscal regulators. Moreover, the appointment of the board of commissioners by the President would be better since, with only one person appointing the commissioners, the competency of the OJK commissioners would be more guaranteed. If the commissioners were named by the president, he argued, it would be more effective and efficient compared to if they were named by 50 lawmakers. "We believe the state will select the best people. It doesn't mean that the House won't be able to find the best commissioners. However, we have to remember there is a political process at the House, which has nine political factions and different kinds of lawmakers." Therefore, he added, the House only needed to confirm the names proposed by the president. During the confirmation process, he continued, the House could reject or accept the candidates based on their track records. The mechanism also adopted the concepts ran in South Korea, England, and Japan. The mechanism to select commissioners is the main reason for the failed go-ahead for the OJK Bill last week, despite the fact that Law 3/2004 on the central bank (BI) fixes the deadline for the creation of the OJK on December 31, 2010. The government insists on having seven commissioners named by the president, with the House only acting to confirm the names, and having two ex-officio commissioners from the BI and the Ministry of Finance. Moreover, the ex-officio commissioners should have voting rights. On the other hand, the House wants three commissioners selected and appointed by the House, four commissioners are named by the president, and two commissioners are ex-officio ones without voting rights. In response to the government's strong stance, Chairperson of the House OJK Special Committee Nusron Wahid alleged the executive branch of violating Article 34 of Law No. 3/2004 on the independence of the OJK. "If the government really wants to co-opt the OJK, it will be better for them not to propose the OJK Bill. Instead, they should suggest amending the BI Law." Nusron questioned the accountability of the OJK if the House only served to give confirmation. Such a thing, he added, would be against the principle of democracy and might even lead to a conflict of interests. Fuad countered that the commissioners named by the President could not be fired by the president, thus, maintaining the independence of the commissioners. (20/wiw)
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