Bill on Hospitals

The Minister for Health submitted this Bill to the Special Committee of Commission IX of the House of Representatives (DPR) on 2 July 2008 for the purposes of this Bill being discussed and then enacted into law.

The basic premise for this Bill is that the expansion in medical knowledge and technology combined with concurrent pushes for globalization and decentralization, plus greater demands from the community that health services be more open and transparent has meant that the managing of a hospital has become increasingly complex.

This complexity demands that there be strict regulations in place that are conducive to legal enforcement and thereby providing greater levels of community satisfaction and legal certainty.

The Bill contains 15 Chapters and 58 Articles:

Chapter I – deals with the general definitions of the terms used;

Chapter II – states that the Bill is based on Pancasila whilst incorporating norms of humanity, benefits, justice, equality of rights and anti-discrimination, protection and safety of patients, and the social functions performed by hospitals;

Chapter III – states the functions and duties of hospitals;

Chapter IV – deals with the obligations of both the Central and Regional Governments with respect to providing hospitals to meet the basic needs of the surrounding communities, including the provision of medical services to the disadvantaged;

Chapter V – regulates the physical requirements of a hospital with regard to location, infrastructure, equipment, and pharmacy issues;

Chapter VI – regulates the types and classifications of hospitals;

Chapter VII – stipulates licensing requirements;

Chapter VIII – sets out the rights and obligations of both hospitals and their patients;

Chapter IX – addresses the issues relating to hospital management;

Chapter X – regulates matters with regard to hospital fees, funding, and subsidies;

Chapter XI – stipulates the provisions regarding the recording of data, reporting, and the obligation to use an information management system for this purpose;

Chapter XII – deals with matters relating to guidance and supervision of hospitals;

Chapter XIII – sets out the criminal provisions;

Chapter XIV and XV – deal with transitional and closing provision respectively.

All of the factions in the DPR have already agreed to proceed with discussion on the Bill. However, it is expected that this process may take some time in spite of the enthusiasm of the various factions to discuss it. The responses of some of the factions indicates that there will be issues to be resolved such as whether hospitals should be left completely to market forces or if not what involvement should the government have. Or is the most natural mechanism to have a private and public hospital system catering to different parts of the community.

Syariah Banking

The House of Representatives (DPR) passed the Bill on Syariah Banking on Tuesday (17/06/08). This is the culmination of considerable effort to ensure that Indonesia is in a position to capitalize on the expanding global demand for Syariah based banking and financial services and products. The Minister of Religion, Maftuh Basyuni, has stated that the new law was necessary to accommodate changes in the banking sector as those changes relate specifically to Syariah banking. It is clear to the Minister that this is a sector that is growing rapidly and a sector that Indonesia can quickly develop expertise in.

Previously Syariah banking was regulated under the Banking Law, Law No. 7 of 1992 as amended by Law No. 10 of 1998, and it was becoming increasingly evident that the provisions contained in the Banking Law were not suitable in terms of regulating the needs of a vibrant Syariah based banking sector.

Conventional banks, banks that other banking services other than Syariah based ones will have to establish Syariah Business Units (Unit Usaha Syariah / UUS) and ensure that these units are separate from their other banking activities. It is expected that Syariah based banks will not only offer Syariah based variants of traditional banking products but will also offer other Syariah based fund managing alternatives.

Generally, Bank Indonesia will play the primary supervision role. However, the new law calls for the establishment of a Syariah Supervisory Board (Dewan Pengawas Syariah / DPS). The DPS will include a role for the Indonesian Ulemas Council (Majelis Ulama Indonesia / MUI). The MUI is expected to provide advice on the validity of any Syariah based banking product.

Interestingly, the Religious Courts are given primary responsibility for resolving disputes. This is interesting in the sense that the Religious Courts have traditionally dealt with Islamic family law matters. Therefore, to ensure that litigants have confidence in the court’s ability to handle what are likely to be complex financial transactions and issues it is expected that the court will see the appointment of specialized expertise in this area. Nevertheless, it must be noted that the new law permits alternative dispute resolution to take place and it does not absolutely absolve the general courts from the dispute resolution process.

Bank Indonesia is responsible for drafting and enacting implementing regulations in order to give effect to many of the provisions.