TERMS OF REFERENCE
International Roundtable on Civil Service Legislation, Systems and Reforms to be
held on 17-18 March in Jakarta, Indonesia
Introduction
Law 43/1999 on the Civil service amending Law 8/1974 is the primary legal
framework covering the Indonesian civil service. Under the law, there is a large volume
of secondary legislation, such as government regulations (PP)1, presidential decrees
(Keppres) and other forms of implementing regulations. This regulatory framework
covers all civil servants in all three branches of the state as well as in the independent
Supreme Audit Institution. In parallel to this regulatory framework, there are separate
laws regulating the national police (POLRI) and the armed forces (TNI). However, this
legal set-up leaves a large number of state officials and employees in various elected,
auxiliary or ad hoc institutions unregulated in terms of responsibilities, accountability,
performance and remuneration.
Current situation
Currently, Indonesia is implementing a civil service reform concept in large scale
targeting the population covered by Law 43/1999. The concept is called the Bureaucracy
Reform Initiative and was originally designed and implemented in the Ministry of Finance
starting late 2006. The concept focuses on improved institutional structures, more
efficient business processes and reformed human resources management. In early
2007, the Ministry of Finance reforms were expanded to two more institutions: the
Supreme Audit Institution (BPK) and the Supreme Court. Later in 2007, the Government
of Indonesia endorsed the Bureaucracy Reform concept as a concept for all central
government institutions to implement (Law 17/2007 on Mid-term and Long-term
Planning), with additional 15 central institutions to be reformed starting in 2009 and the
remaining 55 central government institutions in 2010 and 2011.
The reforms are coordinated and monitored by the National Committee for
Bureaucracy Reform, chaired by the State Minister for Administrative Reforms
(MenPAN) and with the reforming institutions as members. The Commission for
Eradication of Corruption (KPK) is part of the National Committee with the specific
mandate to push and monitor reforms as well as to evaluate reform outcomes in
reforming institutions. KPK has defined civil service reform as one fundamental pillar of
its national corruption prevention strategy.
Issues to be resolved
MenPAN, as the central policy making and regulatory body, aims to resolve two
problems. One is to regulate responsibilities, accountability and employment conditions
(especially remuneration conditions) for officials and employees financed by the state
budget but not subject to the civil service regulatory framework. As mentioned, this
includes a wide variety of elected and appointed officials as well as other groups of
1
There are five important government regulations (PP) regulating main CS functions: on Recruitment and
Selection; on Promotion Requirements: on Discipline: on Performance Measurement; and PP on
Remuneration
employees. The other is to adapt central policies and regulations so that they will
accommodate outcomes of the Bureaucracy Reform Initiative in order to make these
outcomes sustainable.
The draft law on Human Resources Management in the State Apparatus
MenPAN has drafted the Law on Human Resources Management in the State
Apparatus with the aim to resolve both problems stated above with one piece of
legislation. The draft law is not intended to replace Law 43 but to become an additional
piece of legislation: an “umbrella” law making all kinds of officials and employees,
financed by the state budget, subject to Law 43/1999 and its secondary legislation.
The draft law focuses on improved legal certainty, accountability, professionalism
and performance in the civil service. For this purpose, MenPAN is revising the main
secondary legislation under Law 43/1999 to accommodate the outcomes of the
Bureaucracy Reform Initiative including revision of the five important government
regulations mentioned above. At the same time the law aims to provide for
standardization or harmonization of remuneration for unregulated officials (including the
President and Members of Parliament, among others). Such officials would indirectly
become subjects to the civil service regulatory framework by being included as subjects
to this draft law.
Focus Areas and Issues
To provide comparative input to enrich considerations related to the draft law,
representatives of other countries are asked - to the extent possible - to cover the
following areas and issues in their presentations of their country systems:
Area
1. Scope of primary
legislation
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Issues
What is the scope of the primary Civil Service Law,
e.g. does it cover staff in the executive, legislative
and judicial branches of the State as well as in the
Supreme Audit institution?
What does the primary Civil Service Law contain in
terms of substance and detail?
Are civil servants in regional and local governments
subject to the same legislation as civil servants in
central government?
How are teachers, doctors, nurses and other nonadministrative professions regulated?
How are political appointees (e.g. Ministers and
political officials) regulated?
How are non-civil servants employed in the
Administration regulated?
How are elected officials (e.g. Heads of State,
Members of Parliament, Regional/Local Heads and
MPs, etc) regulated?
How are employees in state owned enterprises
regulated?
How is Conflict of Interests for state officials defined
and regulated?
2. Scope of secondary
legislation
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3. Remuneration and
financing
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5, The Civil Service
system and management
of civil servants
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What is regulated by secondary legislation?
Who has authority to issue secondary legislation for
central government and how many levels of such
legislation is there?
Who has authority to issue secondary legislation for
regional and local governments and how many
levels of such legislation is there?
Who has authority to issue secondary legislation for
teachers, doctors, nurses and other nonadministrative staff?
Who has authority to issue secondary legislation for
staff in the legislative and judicial branches of the
State as well as in the Supreme Audit institution?
Do civil servants have one single salary or do they
have a basic salary complemented by allowances?
If allowances, how are they determined and by
whom?
If allowances, what is the ratio between basic salary
and allowances in take-home pay?
What is the process for determining yearly salary
increments?
What is the process for determining individual salary
increases?
Who has the authority to determine remuneration
levels in government, in the legislative, in the
judiciary, in the Supreme Audit institution and in
state owned enterprises?
How are remuneration levels harmonized between
the different branches of the state?
Who has the authority to determine remuneration
levels for elected officials, such as Heads of State,
MPs and regional and local elected officials, and
how is their remuneration harmonized with civil
service/government salaries?
To what extent is the wage bill financed by the state
budget?
Is the staff budget allocation part of an institution’s
operational budget or is it a separate allocation?
To what extent are staff funds fungible, i.e. can they
be used for other purposes, providing incentives for
rationalization?
Is the CS system a career system, i.e. with entry at
bottom level only, based on exams and educational
level, or is it a position based system, i.e. with entry
at any level based on matching professional
criteria?
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5, Grading
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6. Payroll and HRIS
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If a career system, to what extent are there separate
corps in the service, e.g. one corps for diplomats,
one for prosecutors, one for tax officials, etc?
If a career system, to what extent does it allow for
open recruitment at any level of certain specialists to
certain positions or to certain specialized
institutions?
How are organizational structures in CS institutions
determined and by whom?
How are number and levels of jobs/positions in CS
institutions determined and by whom?
How is recruitment into the service undertaken, by
whom and based on what criteria?
Are there career paths and what are the criteria for
promotion?
What kind of training is offered to civil servants and
by whom?
How is training budgeted and financed?
To what extent is management of civil servants
performance based?
What kind of key performance indicators (KPI) are
used and are the same kind of KPIs used in the
whole administration?
Is there one single grading scheme for the whole
civil service or are there several schemes, e.g.
different schemes for different corps?
If different, how are the different schemes
harmonized?
How many grades are there in the scheme(s)?
Is there a clear separation between management
positions and professional (functional) positions in
the grading scheme(s)?
If so, are there big differences in remuneration for
managerial and professional positions of the same
grade?
Based on what criteria are civil servants allocated to
grades?
To what extent are jobs professionally classified and
defined by job descriptions?
How is payroll organized and how are
responsibilities distributed at the institutional level as
well as at the central level?
What kind of ICT support is used?
How are HR information systems organized and
responsibilities distributed at the institutional level as
well as at the central level?
Who sets the standards for HRIS and what kind of
software is in use?
7. Civil service pensions
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How do payroll and HRIS feed into data bases of
the central CS authorities?
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Is the CS pension scheme a defined benefit pay-asyou-go scheme or a pre-financed defined
contribution scheme?
If pay as you go, how much of GDP does civil
service pension spending represent?
Is the full pension liability known?
Does the pension scheme cover elected officials
and state employees?
Who determines eligibility to pension and based on
what criteria?
Are pension entitlements based on basic salary only
or on gross emoluments, i.e. including allowances?
Who calculates pensions and who manages
pension funds?
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