About PMN

Pusat Mediasi Indonesia (The Indonesian Mediation Center, or PMN), is a professional dispute resolution center providing mediation training and services.


Pusat Mediasi Nasional (PMN) as an independent Alternative Dispute Resolution (ADR) body dedicated to resolving commercial disputes was officially inaugurated on September 4, 2003 by the Coordinating Minister for Economic Affairs Dorodjatun Kuntjororo-Jakti and Chief Justice of the Supreme Court Bagir Manan. The establishment of a sustainable ADR facility in Indonesia is as a necessary complement to various policy initiatives aimed at revitalizing Indonesia ‘s economy, especially in terms of stimulating businesses that are major participants in the chain of jobs creation, foreign direct investment, industrial orders and production.

PMN founders include persons with Jakarta Initiative Task Force experience (JITF: a quasi government institution established in November 1998 under the auspices of the Financial Sector Policy Committee) who effectively used mediation in assisting disputants to restructure their corporate indebtedness of more than USD 20.5 billion, and other like-minded individuals such as prominent lawyers and a retired Supreme Court judge. Experience at JITF clearly demonstrated to the market that the use of internationally practiced ADR-mediation processes can be a viable out-of-court alternative in Indonesia , where the courts remain seen by the private sector as largely dysfunctional.

PMN is being implemented in a new legal, economic, and institutional environment. On September 11, 2003 , the Chief Justice issued Supreme Court Regulation No. 2 regarding Court Annexed Mediation which now requires all civil disputes to be first mediated prior to litigation. The Supreme Court intends that this regulation will help reducing the inflow of new cases while the court system at present is struggling with a serious case backlog. In supporting the Supreme Court Regulation, PMN has been appointed as one of its main mediation training providers for judges. Sponsored by the International Monetary Fund and the World Bank, PMN has provided three series of 40-hour mediation training for 72 judges from Central Java in Semarang (Capital City of Central Java Province) and Jakarta Larger Area (JABOTABEK).


JITF Ends Mandate, Completes Most Tasks
Source: The Jakarta Post, Friday, December 19th, 2003

Dadan Wijaksana, The Jakarta Post, Jakarta

The government, without much fanfare, dissolved on Thursday the Jakarta Initiative Task Force (JITF) after it completed a fairly successful five-year mandate of restructuring most of the private sector’s huge debts as it had been asked to do.

Having handed over a total of 102 cases worth of US$26.9 billion in debts, JITF managed to restructure 96 cases worth $20.5 billion, or close to 80 percent of the total value, JITF Chairman Bacelius Ruru told reporters.

“Most of the debts were dealt with in the form of rescheduling. But there are other ways, which are also popular: debt-to-equity swaps, debt-to-asset swaps and buybacks,” Bacelius said.

While rescheduling extends the date of maturity, a buyback scheme allows debtors to purchase back their debts at discounted prices.

JITF was a state-funded agency which, similar to the Indonesian Bank Restructuring Agency (IBRA), was tasked to help clean up the mess resulting from the financial crisis in late 1990s, as many loans had turned bad following the rupiah’s massive depreciation.

While JITF is focused on tackling debts owed by the private sector, IBRA was assigned to tackle bad loans from the banking sector that have become non-performing.

Upon the request of the International Monetary Fund (IMF), the World Bank and the United States Agency for International Development (USAID), the agency was established in 1998 with its main task being to restructure huge dollar-denominated debts owed by the private sectors to creditors, mostly foreign banks. A successful debt restructuring would allow companies to seek new loans to strengthen their capital, or to use as working capital.

Although there are many companies that had sought to settle their debts with creditors by themselves, hundreds of companies turned to the JITF for help.

At the start of the crisis, Indonesia’s companies owed an estimate of $120 billion to both domestic and foreign creditors, of which $60 billion was said to be in a “distressed condition”.

The agency was initially set to close in 2002, but its mandate was extended by the government for another year because there were still a lot of debts in the corporate sector yet to be restructured. Furthermore, the agency had been performing efficiently.

Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro-Jakti hailed the closure of the agency, saying it should show signs that the country’s economic recovery was on the right track.

“I’m pleased about this, especially as we’re also about to witness the closure of IBRA which is also an agency inherited from the crisis,” Dorodjatun said.

IBRA is slated for termination by the end of February.

With the JITF mandate having expired, many of its members have now joined the National Mediation Center, a newly established agency with the purpose of facilitating and mediating commercial disputes between debtors and creditors, he added.

JITF, supervised by the Financial Sector Policy Committee — a powerful grouping which consists of senior economic ministers — was staffed by a multinational team of local and expatriate professionals and support staff.

Samuel Tobing, JITF Chief Operating Officer, said that most Indonesian corporations have successfully lessened their debts by as much as 50 percent, making them well capitalized to meet the next phase of economic expansion.