Capturing Corporate Crimes

Rogue corporations can now no longer be complacent. At the end of 2016, the Supreme Court issued Supreme Court Regulation (Perma) No. 13 of 2016 regarding the procedure for the handling of criminal offenses by corporations that will serve as a guideline for law enforcement in responding to corporate crime.

Perma No. 13 of 2016 expressly regulates law enforcement in demanding legal responsibility from a person listed on the deed of the corporation as a person in charge of the corporation, for example, the chief executive or member of the board of directors. Meanwhile, the corporation itself will be fined in accordance with legislations.

The Supreme Court’s step in publishing the Perma is gladly welcomed by the law enforcement, which so far does not have sufficient legal confidence in investigating the role of corporations in various crimes including corruption, as the Criminal Procedural Code (KUHAP) has not specifically contain provisions on indictments against corporations.

KPK leader Laode M Syarif admitted that the Commission and other law enforcement agencies have been hesitant in ensnaring corporations as perpetrators of corruption cases, because there is no sufficient guideline, despite the fact that some corruption cases indicate the involvement of corporations. 

KPK’s hesitancy is understandable, as this anti-corruption institution has an unblemished record of punishing corruption defendants at the Corruption Court. A case involving a corporation, when faced with a judge with a different view of the procedural law, resulting in rejection of KPK’s charge, will damage the credibility of the Commission itself.

On the other hand, many cases of corruption and bribery in the bidding process have involved corporate executives. Unfortunately, sanctions are only given against te owners, managers, or executives of the corporation. The corporations, having benefited from the corruption, continue to exist free from criminal charges, as they can appoint new CEOs. 

In terms of losses, state losses due to corporate crime is huge. According to KPK’s study in 2010 on the forestry sector in four provinces in Kalimantan (West Kalimantan, Central Kalimantan, South Kalimantan and East Kalimantan), it is estimated that the state lost Rp 15.9 trillion annually due to mining conducted without permits in forest areas. The figure does not include the unprovided land compensation, unprovided reclamation costs, and unpaid fees for the damages incurred to the forest conservation area to the amount of Rp 225 billion.

The state also has a huge potential for losses from corruption in the forestry sector. The case of corruption in the granting of permission to exploit the forest in Pelalawan is estimated to cause Rp 1.3 trillion of losses to the state. The case involves Pelalawan Regent Tengku Azmun Jaafar and officials of the Riau Forestry Service. Another corruption case is the granting of permission to open one million hectares of oil palm plantations in Penajam Utara, Berau, East Kalimantan - estimated to cause a state loss of up to Rp 346 billion.

The publication of the Perma is a step forward to address the issue of corporate crime. The law enforcement must now quickly accelerate to investigate all crimes committed, so that economic growth and the national economy are not negatively affected by rogue rent seeking corporations. Successes in ensnaring corrupt corporations may become the starting point for the law enforcement to investigate corruption done purely by the private sector (market corruption), as has been mandated by UNCAC, ratified in Law No. 7 of 2006. (SNYT)


Kelompok masyarakat sipil melakukan aksi "Tolak Bala" di depan Gedung Merah-Putih KPK, 20 Desember 2019, menjelang pelantikan Pimpinan KPK dan Dewan Pengawas KPK Terpilih (Dok. ICW)

Pimpinan KPK dan Dewan Pengawas resmi dilantik oleh Presiden Joko Widodo.
Foto: LKPP, 2019

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