Wakaf-- a donation from Moslem to other Moslems usually in the form of assets or property—has been a part of Indonesian society since Islam was firstly introduced to the land. Responding to the practices of wakaf in the society, the Dutch colonial government once included wakaf dispute settlement within the authority of the Priestraad (Religious Court) based on Staatblaad No.152 Year 1882.

After the independence, the Basic Agrarian Law, Law Number 5 Year 1960 mandated the government to issue a Government Regulation (“GR”) concerning wakaf. This is later materialized through GR Number 28 Year 1977 Concerning Wakaf on Land Properties. Following the GR, the government issued several other ministerial regulations concerning registration of properties subjected to wakaf and delegation of authority to enact the deed of wakaf pledge from the Minister of Religious Affair to the Chiefs of Subdistrict’s Office of Religious Affairs. Administration of the wakaf has further improved since the enactment of Law Number 7 Year 1989 Concerning Religious Court, in which in its Article 49(1)(c) is authorized to adjudicate disputes arising out of wakaf and shadaqah. Waqaf properties’ certification was later regulated in 1990 by a joint decree of the Minister of Religious Affairs and the Chief of the National Land Administration Authority (“BPN”).

Recently, The State Secretariat issued Law No. 41 of 2004 on Wakaf (the “Law”) which becomes the law of the land through Presidential signature on 27 of October 2004. The intent of the Law is to ensure that wakaf donations are effectively and efficiently managed and protected. The Law consists of 11 Chapters and 71 Articles.

The first Chapter defines the terms used in the law. Wakaf may be in the form of fixed assets or movable properties such as shares, bond or money. Wakif, the person/organization/legal entitiy who donates the wakaf, donates the wakaf to the Nazhir. The Nazhir is responsible for the overall management of the wakaf. The Wakaf’s pledge (ikrar) will become legal once embodied in the form of Deed, wrapped up by the officer in charge in drafting the deed and reporting it to the Minister of Religious Affair, the “PPAIW”. The Law also establishes the independent Indonesian Wakaf Board (the “Board”). The Board is to be responsible for developing the wakaf system and the overall management to ensure and maintain efficiency and the effectiveness of the endeavour.

Wakaf can only be legally made if it is made in accordance with the prevailing syariah principles. Once it is pledged, the wakaf is irrevocable. Wakif, during the pledge, may declare the manner he intended the wakaf to be used. If the wakif is absent in expressing his intended manner of use, the nazhir may decide how the wakaf will be utilized.

The law also stipulate formalities of the pledge process. It determines that wakif must be a mentally healthy, adult, Moslem Indonesian national legally owning the object of the wakaf and is not barred by the law from conducting such legal deed. Nazhir may obtain no more than 10% of the profit resulted from the management of the wakaf. A wakaf pledge must be conducted before the PPAIW in attendance of two witnesses. A wakaf object may not be subjected to guarantee, seizure, re-donation, sale, swap or is transferred by any other form. A swap is possible however, subsequent to the approval of the Minister.

Basically, utilization of the wakaf objects must be performed in a manner intended by the wakif. Nazhir is prohibited from modifying the manner in which the wakaf utilization is performed. As an exception to this rule, is when such manner as intended by the wakif is not possible to performed. The Nazhir may then perform necessary modification after obtaining approval from the Board.

Article 62 of the law provides that in cases of dispute, a resolution shall be endeavored through consultation, Alternative Dispute Resolution or ordinary Court System.  The Law also allows for criminal punishments to be handed down including a maximum term of imprisonment of 5 years and/or a maximum fine of IDR 500 million. The Minister is authorized to issue administrative sanctions for failure to register wakaf objects to PPAIW or Syaria financial institutions.  

Article 70 of the Law stipulates that all previous pieces of legislation regulating wakaf will remain in force except where they are in conflict with this Law. This would mean that the authority to enact the wakaf deed will remain with the Chiefs of Subdistrict’s Office of Religious Affairs, until the government issue further regulation designating particular office with such authority. (mma)