Foundations of Indonesian law: indigenous traditions and Dutch colonial rule, independence, Pancasila, the sources and hierarchy of law, the civil law tradition and legal pluralism

Adat. Long before colonial rule, the peoples of the archipelago lived under unwritten customary law (adat): rules of family, land, inheritance and community life that differed from one region to another. The Dutch scholar Van Vollenhoven described nineteen adat law regions. Islam, Hinduism, Buddhism and later Christianity influenced local custom in different ways, and the result is a very diverse customary law that still operates in villages today.

Dutch colonial rule. The Dutch East India Company arrived in the seventeenth century and the Dutch state governed the Netherlands Indies until 1942. Its legal policy was dualist: European law (the codes of the Netherlands, adapted) applied to Europeans, adat applied to the indigenous population, and a third group, the Foreign Orientals, such as the Chinese, had their own mixture. The Civil Code (Burgerlijk Wetboek) and the Commercial Code came into force in 1848, the Criminal Code (Wetboek van Strafrecht) in 1918, and procedure was governed by regulations such as the HIR. After the Japanese occupation (1942–1945), the Republic proclaimed independence on 17 August 1945, adopted the 1945 Constitution the next day, and obtained Dutch recognition of sovereignty in December 1949.

The republic. The Constitution of 1945 was replaced for a time by federal and provisional constitutions, then restored in 1959. Under President Suharto’s New Order (1966–1998) power was concentrated in the presidency. After 1998 (Reformasi), the 1945 Constitution was amended four times (1999–2002): it introduced direct presidential elections, limited the presidency to two terms, added a chapter on human rights, created the Constitutional Court and made the People’s Consultative Assembly a joint sitting of the elected parliament and the regional council (Module 2). A transitional provision keeps earlier laws in force until they are replaced, which is why many Dutch-era codes continued to apply for decades.

Pancasila. The Preamble of the Constitution states the five principles of the state: belief in the One and Only God; just and civilised humanity; the unity of Indonesia; democracy guided by wisdom in deliberation among representatives; and social justice for all the people of Indonesia. The Law on Lawmaking declares Pancasila the source of all sources of state law, so every statute and regulation must be consistent with it, and courts and lawmakers use it to interpret the Constitution. Pancasila also explains why Indonesia is neither a secular state in the Western sense nor an Islamic state: it is a state based on belief in one God, which guarantees freedom of religion (Module 5) and does not make one body of religious law the law of the whole country.

The hierarchy. The Law on Lawmaking (Law 12 of 2011, as amended) orders the types of regulation. Higher regulation prevails over lower regulation, and a lower rule that conflicts with a higher one can be annulled. Statutes are reviewed by the Constitutional Court, and regulations below statutes by the Supreme Court (Module 4).

Omnibus law. Indonesia has used the technique of an omnibus statute, amending dozens of laws in one: the Job Creation Law (2020, re-enacted in 2023) changed many rules on investment, labour, land and licensing. In 2021 the Constitutional Court found that the first version was conditionally unconstitutional because of its lawmaking procedure, and the government responded by amending the Law on Lawmaking and re-issuing the statute. Many business rules (Modules 6 and 7) are therefore found in the omnibus statute and its implementing regulations.

A civil-law system with a history. The Civil Code of 1848 is still in force, with its four books (persons, things, obligations and evidence), but large parts were replaced: the Basic Agrarian Law of 1960 replaced the Code’s land rules, the Marriage Law of 1974 its rules on marriage, and many special statutes cover companies, security and bankruptcy. The courts apply statutes first. There is no doctrine of binding precedent, but consistent decisions of the Supreme Court (yurisprudensi) guide lower courts, and Supreme Court circulars and regulations give them practical direction.

Pluralism. Indonesia has one national legal order and three sources of rules about personal and community life. State law (statutes and regulations) is the general law. Islamic law applies to Muslims in defined areas, mainly marriage, divorce, inheritance, wills, endowments (waqf) and Islamic economics, through the Religious Courts, and applies more widely in Aceh (Module 3). Customary law (adat) is recognised by the Constitution for traditional communities that still exist and whose rules fit the unitary state and national development (Article 18B), and it shapes land, inheritance and village life. Indonesia is therefore a civil-law state with real legal pluralism.

• What stays common to all. The Constitution, the codes and statutes, the courts and the rules on business and crime apply to everyone in Indonesia, including foreigners.
• What differs. Family and inheritance law follow religion and custom, and land and community rights can involve adat.
• For a foreigner. Ask early which law governs a person’s marriage, inheritance and land, since the answer may depend on religion and region.