Regarding the Corruption Eradication Commission of Indonesia’s (KPK) authority to handle cases following the provision in the State-Owned Enterprises (SOE) Law that states that members of the Board of Directors and Commissioners of SOEs are not classified as State Organizers, I would like to convey the following:
- The authority of the Corruption Eradication Commission of Indonesia (KPK) is lex specialis, as stipulated in Law of the Republic of Indonesia Number 30 of 2002 concerning the Corruption Eradication Commission of Indonesia, as amended by Law of the Republic of Indonesia Number 19 of 2019. According to Indonesian legal principles, a lex specialis statute like the KPK Law cannot be overridden or limited by a general law such as Law of the Republic of Indonesia Number 19 of 2003 concerning State-Owned Enterprises (SOE Law). The SOE Law regulates corporate governance and operations but does not have jurisdiction over criminal procedural matters or corruption investigations. Since no amendments have been made to the KPK Law limiting its reach over public officials or entities managing state assets, any conflicting provision in the SOE Law must be disregarded in the context of KPK’s mandate.
- The definition of “state organizer” (penyelenggara negara) is clearly outlined in Law of the Republic of Indonesia Number 28 of 1999 concerning State Administration that is Clean and Free from Corruption, Collusion, and Nepotism. This law is also part of Indonesia’s lex specialis framework that supports anti-corruption governance, and its application remains valid and binding. This means the SOE Law cannot alter or redefine this term in a way that undermines anti-corruption law enforcement. It is unclear what legislative rationale (memorie van toelichting) justified the attempt to regulate law enforcement through a business entity law such as the SOE Law.
- Strengthening the governance of State-Owned Enterprises (SOEs) and eradicating corruption must go hand-in-hand. Attempting to separate these goals, such as by removing SOEs from the scope of the Corruption Eradication Commission of Indonesia’s jurisdiction, is both conceptually flawed and legally perilous. Profits earned by SOEs will be hollow and unsustainable if systemic corruption remains unchecked. Worse, if such corruption becomes immune to investigation due to shielded legal provisions in the SOE Law, it would deeply harm Indonesia’s economic resilience and public trust.
- The Corruption Eradication Commission of Indonesia’s (KPK) institutional foundation is designed to promote accountability, integrity, and transparency. Accordingly, the KPK is obliged to uphold Law of the Republic of Indonesia Number 31 of 1999 on the Eradication of Criminal Acts of Corruption, as amended by Law of the Republic of Indonesia Number 20 of 2001, alongside Law of the Republic of Indonesia Number 28 of 1999 and the KPK Law itself. These three laws form the primary anti-corruption legal framework in Indonesia. The KPK is not bound to enforce corporate or commercial laws outside its jurisdiction, nor should legislative revisions be used as instruments to weaken its law enforcement mandate.
- At the regional level in Southeast Asia, there is a growing trend where anti-corruption agencies such as the Corrupt Practices Investigation Bureau (CPIB) of Singapore address more corruption cases in the private sector than in the public sector. Similarly, in Malaysia, the 1MDB scandal stands as a prominent example of corruption linked to the mismanagement of Sovereign Wealth Funds (SWF), investigated by the Malaysian Anti-Corruption Commission (SPRM). These cases underscore the significant risk of corruption within the private sector and State-Owned Enterprises (SOEs). If such risks are not properly addressed, Indonesia stands to lose the critical momentum needed to ensure that strategic government projects, Danantara, and SOEs are equipped with effective safeguards to prevent misconduct. Therefore, the role of the Corruption Eradication Commission (KPK) in legal enforcement and supervisory interventions is essential to reinforce the integrity and sustainability of Danantara and SOEs in the future.
Southeast Asia Anti-Corruption Syndicate (SEA ACTIONS)
M. Praswad Nugraha
Managing Chairman
