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Legal Updates | Anti-Corruption Developments in Indonesia

Anti-Corruption Developments in Indonesia

According to the Annual Report of the Corruption Eradication Commission (Komisi Pemberantasan Korupsi or “KPK”), the KPK carried out 96 examinations, 99 investigations and 76 prosecutions last year. Seventy cases were decided and received final and legally binding judgments. Judicial decisions were executed for 81 cases in 2016. These numbers show an increase from the data published in the KPK’s Annual Report for 2015.

Recent Anti-Corruption Regulations in Indonesia

There have been several developments over the last year related to corruption regulations. These include:

  1. Supreme Court Regulation No. 13 of 2016 dated December 29, 2016 regarding Procedures to Handle Criminal Acts Committed by Corporations (“Supreme Court Reg. 13”):

    The Indonesian Anti-Corruption Law (Law No. 31 of 1999 regarding the Eradication of Criminal Acts of Corruption, as amended by Law No. 20 of 2001) contains provisions on corporate liability in a criminal act of corruption. These provisions in essence stipulate that a corporation may be held liable for criminal acts of corruption if such acts are done for and on behalf of the corporation.

    To further implement the corporate liability provisions under the Anti-Corruption Law, the Indonesian Supreme Court issued Supreme Court Reg. 13, which provides guidelines for law enforcers in handling corporate crimes, including corruption, money laundering and other criminal acts involving a corporation as set out under the respective laws governing such criminal acts.

    Under Supreme Court Reg. 13, a “corporate crime” is defined as a criminal act for which a corporation may be held liable. Such crime may be committed by an individual, either jointly or severally, acting for and on behalf of the corporation based on an employment relationship or other kind of relationship that may be established by written or verbal agreement.

  2. KPK Regulation No. 7 of 2016 regarding Procedures for the Registration, Announcement and Examination of the Assets of Government Officials (“KPK Reg. 7/2016”):

    KPK Reg. 7/2016 governs the procedures for the registration, announcement and examination of government officials’ assets. Every government official in Indonesia is required to submit a State Organizer Assets Report (“Assets Report”) within three months of his/her appointment, re-appointment or retirement. Government officials must also submit an annual report to the KPK during their term of service as a State Organizer.

    The Assets Report will then be examined by the KPK before it can be made public by the government official or by the KPK, as the government official’s proxy. The provisions in KPK Reg. 7/2016 are further explained in KPK Circular Letter No. SE-08/01/10/2016 regarding Technical Guidance on the Submission and Processing of State Organizer Assets Report after the Enactment of KPK Reg. 7/2016.

  3. Constitutional Court Decision No.25/PUU-XIV/2016:

    Articles 2(1) and 3 of the Anti-Corruption Law previously stated that anyone who unlawfully enriched himself/herself, another person or a corporation which "may cause economic or financial loss to the State" was in violation of the Anti-Corruption Law.

    The above provision was recently amended by Constitutional Court Decision No. 25/PUU-XIV/2016. The court ruled that the word “may,” in the Indonesian language "dapat" was unconstitutional and had no legally binding force.

    Following the issuance of this decision by the Constitutional Court, it is now mandatory for legal enforcement agencies to prove the element of "State (economic or financial) loss" ("kerugian keuangan atau ekonomi Negara").

Future Developments

The National Legislation Programme (“Prolegnas”) for 2015-2019 includes amendments of the Anti-Corruption Law and the KPK Law (Law No. 30 of 2002). However, discussions of both laws have been dropped from the 2017 Prolegnas.

Since the two laws have not been made a priority in 2017, it will be some time before the current members of the House of Representatives complete the discussion of these amendments, if they manage to do so before their terms end in 2019.

SSEK - 30th August 2017

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Indonesia Snapshot

Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)