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The Measures Taken by the Indonesian Government against Netherlands Enterprises

  • The Board of Editors
Extract

1. On 7th November, 1957, nearly two weeks before the debate on Western New Guinea (“West Irian”) opened in the (twelfth) General Assembly of the United Nations, President Sukarno declared in a speech: “So far we have waged the struggle for the freedom of West Irian in the United Nations. But if the U.N. is unable to help us, we shall resort to means which will startle the world.” What these means were was soon to become apparent, after the resolution on New Guinea sponsored by Indonesia and 18 other countries had failed to obtain a two thirds-majority—or even, indeed, an absolute majority—in the vote in the General Assembly on 29th November, 1957.

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page 227 note 1 Copies in the Indonesian language of all decrees and regulations mentioned below are available to the Editors.

page 228 note 1 In Indonesian: “dikuasai”.

page 228 note 2 “Lembaran Negara” (Official Journal) 1958, Nos. 19 and 21.

page 228 note 3 Published in “Berita Negara” (Official Gazette) 1957, No. 29.

page 229 note 1 Law 74/1957, “Lembaran Negara” 1957, No. 160. This law came into force on the day of its promulgation.

page 229 note 2 This “state of war” under the 1957 Law corresponds in broad outline to the “state of siege” under the 1939 Regulations.

page 229 note 3 This Presidential decree was ratified by the Law of 27th December, 1957, “Lembaran Negara” 1957, No. 170.

page 229 note 4 Government decree 1958, No. 23 (“Lembaran Negara” 1958, No. 39).

page 229 note 5 The agricultural estates are also covered by Government decree No. 23.

page 229 note 6 Govt. decree No. 22/1958, L.N. 1958, No. 38.

page 230 note 1 An official commentary on this decree appeared in Supplement (“Tambaban”) No. 1565 to the “Lembaran Negara”.

page 230 note 2 The General Authorization Ordinance empowered the Governor-General (and hence his successor, the President of the Republic,) to enact emergency legislation, such as the Enterprises Cooperation Decree, by Government Decree.

page 231 note 1 Mentioned above under 3.

page 231 note 2 Instituted by Government decree No. 14/1955 of 28th March, 1955 (“Lem-baran Negara” 1955, No. 23). Commentary in Supplement No. 788 to the “Lembaran Negara”.

page 232 note 1 After 17th April, 1958 (for the significance of this date, cf. s. 60 of the State of Danger Law), it was no longer thought necessary to impose a ban on transfers of movable goods (Most Netherlands nationals had already left Indonesia by then anyway). But a prohibition was maintained in respect of immovable property.

page 234 note 1 And the control over K.P.M.'s vessels was indeed only temporary. On 21st March, 1958, they were returned to K.P.M.; but only because the Indonesian Government thought that it would be much more disadvantageous to K.P.M. if the vessels were returned than if K.P.M. were to be indemnified by Lloyds, with whom the vessels were insured against “seizure and/of capture”. (See in this connection the frank statement by the Indonesian Ministry of Information of 22nd March, 1958, in “Siaran Kementerian Penerangan” (Min. of Inf. Bulletin) of 27th 03, 1958, Vol. III, No. 33). K.P.M.'s shore installations, which were also seized but which were not insured with Lloyds, were accordingly not returned by the Government.

page 235 note 1 Badan Pusat Penjelenggaraan Perusahaan-perusahaan Industri dan Tambang.

page 236 note 1 The Military Authority at Jakarta went a step further and ruled on 13th January, 1958, that funds and financial instruments belonging to Netherlands nationals might only be withdrawn from banks in Jakarta after permission had been obtained from the War Administration of the Greater Jakarta Area. The term “withdrawal” included transfer to a bank outside Jakarta.

page 237 note 1 Art. 44 of the Indonesian Commercial Code: “The company shall be administered by Managers appointed in that behalf by the Members (shareholders) ‥”.

page 238 note 1 The Netherlands Minister of Foreign Affairs, Mr. Luns, declared in the General Assembly of the U.N. on 25th November, 1957: “Finally, it is serious because the Indonesian Government has allowed foreign nationals living in Indonesia and for whose safety and well-being the Indonesian Government bears full responsibility, to be molested, and has even incited the population to commit these outrages”. This statement by Mr. Luns, was not contradicted by the Indonesian delegate.

page 238 note 2 See, for example, the Order of the Army Chief of Staff dated 10th December, 1957: the taking over or placing under supervision of enterprises already carried out or which might subsequently be carried out by others (i.e. not by the Military Authority) is to be annulled by the Military Authority concerned and “performed anew in accordance with this Order” (“harus ditertibkan kembali sesuai dengan perintah ini”).

page 238 note 3 See, for example, Prime Minister Djuanda in his statements to the press on 28th December, 1957, in reply to newspaper articles by Hatta (“Keng-Po”— Antara news agency, 29–12–57). Also the Minister of Agriculture at the opening on 4th March, 1958, of the first P.P.N.-baru conference at Bandung: “the taking over of the firms constitutes a concrete measure to substantiate the abrogation of the economic and financial agreements with the Netherlands as embodied in the R.T.C. Agreement of 1949.”

page 239 note 1 “Regeling op de Staat van oorlog en van beleg”, Neth. Indies “Staatsblad” 1939, No. 582.

page 239 note 2 Section 33: “The military authority shall be authorized in urgent circumstances, after obtaining the approval of the Governor-General, to deviate from general regulations and to take measures other than those it is authorized to take under this chapter and under chapter IV.”

Section 37 (1): “The military authority shall be authorized to deviate from provisions of general regulations and to take measures of any kind other than those it is authorized to take under the provisions of chapter II and chapter IV in conjunction with section 35, if it deems such measures to be called for by the current emergency.”

page 240 note 1 “Verorderung Medewerking Bedrijven”, Neth. Indies “Staatsblad” 1945, No. 136.

page 240 note 2 Section 28: “Taking into possession of enterprises by the State.

(1) By special authorization of the Governor-General, acquiescence (Dutch: “gedogen”) may be demanded in the temporary taking into possession of enterprises by the State and in their being placed under the management and control of persons or bodies to be designated by the Governor-General.

(2) Regulations shall be issued by the Governor-General concerning the way in which the taking into possession is to be effected and the management and control are to be exercised.”

page 242 note 1 Wortley, Observations on the public and private international law relating to expropriation, The American Journal of Comparative Law, 1956, p. 581.

page 242 note 2 “Tambaban Lembaran Negara” (Supplement to the Official Journal) No. 1565.

page 243 note 1 “Die entschädigungslose Enteignung von Ausländern ist völkerrechtlich nicht zulässig. Der Territorialstaat ist wohl frei, innerhalb seiner Grenzen zu enteignen wen er will. Sind aber Ausländer davon betroffen, besteht eine völkerrechtliche Schadenersatzpflicht, selbst dann, wenn die eigenen Bürger des Konfiskationsstaates keine Entschädigung erhalten sollten.” (Annuaire Suisse de droit international, 1954, pp. 9798).

page 243 note 2 This view had previously been defended by Niederer in his essay on the protection of private property under international law (“Der völkerrechtliche Schutz des Privateigentums”) in Lewald, Festschrift Hans, 1953, p. 552.

page 243 note 3 “Two cases concerning confiscation of foreign property”, p. 56 ff, p. 61.

page 243 note 4 Nordisk Tidsskrift for International Ret, 1954, p. 16.

page 243 note 5 1956, p. 592.

page 244 note 1 See the list of writers cited in Mann, , “International Delinquencies”, in the Law Quarterly Review, 04 1954, p. 88, note 32, to which may be added: Rubin, S. J., Private Foreign Investment (1956), p. 10; Foighel, Isi, Nationalization (1957), p. 75; Delson, Robert, Columbia Law Review, 06, 1957, p. 763.

page 244 note 2 Friedman, S., Expropriation in International Law (1953), p. 190.

page 244 note 3 See for instance, in addition to the writers cited by Friedman, : Strupp, Recueil des Cours de l'Académie de Droit International (1934, I), Vol. 47, p. 540; Freeman, , Denial of Justice (1938), p. 517; Herz, John H., Expropriation of Foreign Property, A.J.I.L. 1941, p. 249; Guggenheim, , Annuaire suisse de droit international, 1956, p. 58; Foighel, Isi, Nationalization (1957), p. 46 ff.; Delson, , Columbia Law Review, 06 1957, pp. 762, 765.

page 245 note 1 Department of State Bulletin vol. 19 (1948), p. 408; Foighel, Isi, Nationalization, p. 72.

page 245 note 2 Oppenheim-Lauterpacht, , International Law, eighth edition, p. 350.

page 246 note 1 Press conference of 18th 12, 1957.

page 246 note 2 Amsterdam Court of Appeal, 15th March, 1956, reproduced in the opinion of the Attorney-General leading to the Supreme Court's decision of 18th April, 1958 (Nederlandse Jurisprudentie 1958, No. 308).

page 247 note 1 Published by “l'Institut de droit comparé de l'Université de Paris”, under the direction of Henry Puget (1958).

page 247 note 2 “to transform private enterprises into mixed enterprises, i.e. managed jointly by the State and the former (capitalist) owner under State supervision; such transformation is a kind of camouflaged nationalization”.

page 247 note 3 “that the former owners have not been dispossessed, but they have to manage their enterprises jointly with the State”.

page 247 note 4 “The ultimate aim is to substitute public ownership for private ownership”.

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Netherlands International Law Review
  • ISSN: 0165-070X
  • EISSN: 1741-6191
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