On Wednesday, 10 February 2021, the Faculty of Law of Universitas Gadjah Mada (UGM), in collaboration with the Financial Services Authority (Otoritas Jasa Keuangan/OJK), organized a National Webinar entitled “The Implications of Fiduciary Security Execution Processes in the Financing Industry Following the Constitutional Court Decision.” The event was held in response to legal issues arising from Constitutional Court Decision No. 18/PUU-XVII/2019 and formed part of the series of activities commemorating the 75th Anniversary of the Faculty of Law UGM.
Moderated by Annisa Syaufika Yustisia Ridwan, S.H., M.Hum., the webinar featured distinguished speakers, including Bambang W. Budiawan (Head of Non-Bank Financial Industry Supervision Department 2B, OJK), Suwandi Wiratno (Chairperson of the Indonesian Financing Companies Association/APPI), Dr. Ninik Darmini, S.H., M.Hum. (Lecturer at the Department of Civil Law, Faculty of Law UGM), and Edy Wibowo, S.H., M.H. (Assistant to the Chief Justice of the Chamber for Judicial Development of the Supreme Court of the Republic of Indonesia). The event also welcomed a keynote address from I Gusti Agung Sumanatha, S.H., M.H., Chief Justice of the Civil Chamber of the Supreme Court, represented by Rahmi Mulyati, S.H., M.H.
The webinar was officially opened by Dr. Mailinda Eka Yuniza, S.H., LL.M., Vice Dean for Research, Community Service, Cooperation, and Alumni Affairs of the Faculty of Law UGM. In her remarks, she expressed appreciation to all participants and emphasized the importance of fostering a common understanding of OJK policies concerning financing institutions among judicial stakeholders and legal academics.
Opening remarks were also delivered by Prof. Dr. Paripurna P. Sugarda, S.H., M.Hum., LL.M., Vice Rector for Cooperation and Alumni Affairs of Universitas Gadjah Mada. He highlighted the significance of the topic, noting that fiduciary security plays an essential role in supporting national economic growth.
The first presentation was delivered by Bambang W. Budiawan, who discussed several challenges in implementing the Fiduciary Security Law. Among the issues identified were inconsistencies in regulatory implementation that could lead to regulatory arbitrage; delays or failures by financial institutions to register fiduciary securities despite contractual obligations; the use of intimidating debt collection practices by outsourced personnel; complaints regarding repossession fees; and cases where motor vehicles were repossessed without valid fiduciary security certificates.
To address these challenges, he outlined several measures undertaken by OJK, including regulatory improvements, supervisory actions accompanied by sanctions for non-compliant financing companies, and enhanced coordination with relevant government institutions.
The second presentation was delivered by Suwandi Wiratno, who discussed the impact of the Constitutional Court decision on the financing industry. He emphasized that financing companies largely rely on funds originating from the banking sector, which ultimately represent public funds. Consequently, when debtors fail to fulfill their repayment obligations, financing companies may encounter difficulties in meeting their own obligations to banks and depositors.
Dr. Ninik Darmini then presented an academic perspective on the Constitutional Court decision and proposed several recommendations. She suggested the issuance of implementing guidelines concerning fiduciary security execution, particularly regarding the interpretation of default agreements and voluntary surrender by debtors. She also recommended that financing institutions clarify the legal significance of spousal consent during the establishment of fiduciary security arrangements, especially in anticipation of future execution proceedings.
The final presentation was delivered by Edy Wibowo, who proposed several solutions to address legal issues related to fiduciary security execution. These included the development of a Supreme Court Regulation governing fiduciary security execution procedures, strengthening educational and supervisory initiatives by OJK, and encouraging financing companies to improve risk mitigation strategies and financing assessments.
Following the presentations, participants engaged in an interactive question-and-answer session. The event concluded with a group photo session, marking the successful completion of the webinar and its contribution to ongoing discussions regarding fiduciary security law and financing industry practices in Indonesia.
