The Presence of Government in Managing SOEs: A Criticism from the Perspective of Law

Abstract

Referring to Article 33 of the 1945, government Constitution establish and control production sectors affecting sustainable livelihoods of most people. As legal state, government consider enforcing Law number 19 of the Year 2003 about SOEs, due to the inferior role of SOEs. The article addressed the research problem concerning the role of law in repositioning government in the SOEs management. The method applied was normative juridical with library research. The result showed that SOEs were treated differently from other private business because of their status as state enterprises. The society expectation to gain benefits from the SOE still cannot be optimally fulfilled. Issues concerning the bureaucracy and centralism, politic, and various potential deviations are parts of the non-optimal role of SOEs as business entities. The presence of the government as an authority with the power to issue regulations must be able to improve the performance of SOEs to be more effective and efficient to prosper the people. In conclusion, the presence of the government in the management of SOEs has not yet improved the performance of these state companies in achieving their founding goals. It is necessary to reformulate the position and controlling of the government in managing the SOEs as mandated in the constitution.