Friday, August 23, 2013

My New Papers on SPV's Law and Economics and Legal Positivism

It's been a while since the last time I wrote in this blog. I admit, I have sinned. But enough with the excuses. I've just finished two papers having completely different themes. The first one is titled: "Special Purpose Vehicles in Law and Economics Perspective". You can download the paper here. The second one is titled: "Legal Positivism and Law & Economics: A Defense". You can download the second paper here.

The first paper will be published in the Journal of Indonesia Corruption Watch to be published this year. In this paper, I discuss the nature of Special Purpose Vehicles (SPV) in the form of corporation, their function and benefits, their potentials for misuse, and also the techniques to solve or prevent such issue. I believe that for a developing country like Indonesia, relying on legal doctrine such as piercing the corporate veil to chase the ultimate shareholders of SPVs who conduct illegal acts would be too costly. They are just too cunning and some countries specialized in the formation of SPVs have all the incentives to assist these crimes.

So, the other solution is to ensure that those SPVs established in Indonesia will be here to stay, namely, we need to put some of their capitals as hostages in Indonesia by way of mandating minimum capital requirement or bank guarantee/insurance requirements. I also discuss the costs and benefits of these solutions as there is no such thing as a perfect solution. The rest can be read in the paper.   

The second paper will be presented in the third Indonesian national conference of legal philosophy to be held at Surabaya on 28 August 2013. I always enjoy legal philosophy, particularly Legal Positivism and I think that most Indonesian scholars misunderstand the nature of Legal Positivism by equalizing Legal Positivism with Legal Formalism or even worse, strict textual method of legal interpretation.

Of course this is wrong. Legal Philosophy is a theory of law while Legal Formalism is a theory of adjudication. But the mistake is so persistent that Legal Positivism is often blamed for many issues in Indonesian legal system! I think the conference would be a good place to present a defense on Legal Positivism so I decided to write this paper.

The paper will discuss the main thesis of Legal Positivism, i.e., the Source Thesis (that law is a social fact and can only be derived from social sources) and the Separability Thesis (that the content of the law does not have any necessary connection with its validity). People usually connect Separability Thesis with the relationship between law and morality. But I believe that the issue is wider than that, it can include religion, local custom and other type of norms.

I certainly believe that Legal Positivism (if applied correctly), is a democratic thought that will allow various legal theory to compete for domination within a legal system. I argue this by showing how Law and Economics (which is obviously not a pure theory of law) can survive in the framework of Legal Positivism but will be kicked out from the game in the framework of Natural Law (because by nature, Natural Law which supports only one absolute value will not be tolerant to other type of thoughts). As usual, the rest can be read in the paper itself.

Happy reading and hope it is useful.

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