Corporate Criminal Liability:

A Threat to Indonesia’s Business World?

William Edward Sibarani

Fresh Graduate from Padjadjaran University, Faculty of Law

Email: hi.williamedwr@gmail.com

The growth of the business world in the 4.0 era. nowadays marks the

complex change of Indonesian society, which was originally an agrarian

society into an industrial and commerce society. It is undeniable that this

massive process of change is motivated by the rapid globalization and

modernization that affect economic, social, political even technological and

information developments. Not only the people, the government and

corporation also receives the benefits. All three are participants in

generating a healthy business climate to stimulate growth in Indonesia.1

Some recent examples that indicate the participation of government,

corporations and the public can be seen in the collaboration carried out by

Bank BRI as a State-Owned Enterprise with Investree, a financial

technology company operated in funding for loans.2 With this partnership,

Small & Medium Enterprise businesses can increase productivity by easily

obtaining credit loans through corporations that work with the

1 Budi Suhariyanto, “Pertanggungjawaban Pidana Korporasi Berdasarkan Corporate

Culture Model dan Implikasinya Bagi Kesejahteraan Masyarakat”, Jurnal Rechtsvinding:
Volume 6, Number 3, December 2017, pg. 1.
2 https://money.kompas.com/read/2019/08/26/215829626/permudah-pembiayaan -
untuk-ukm-investree-dan-bri-perkuat-kolaborasi, accessed on August 27th of 2019, 14:33
WIB.
Corporate Criminal Liability: A Threat to Indonesia’s Business World?
William Edward Sibarani

government. Also, the latest form of cooperation can further be seen

between the Indonesia’s Police and GoJek as a unicorn corporation of online

transportation in terms of driver license extension payment through GoPay

method.3 The encouragement of a paperless and cashless culture also

integrated with an effective payment system benefits all parties.

However, these various facilities made the boundaries of the country's

sovereignty faded with the emergence of possible negative impacts in the

future. One of the things that must be observed by the state is the presence

of a new form of a criminal act that comes in conjunction with the absence

of regulations governing it. The complexity of globalization and

modernization encourages the role of corporations as one of the legal

subjects recognized in Indonesia in committing criminal acts. Especially

with the current model of corporate culture as if by opening the path of the

corporation to get the maximum profit so that the victims are the people.

Strictly speaking, the Indonesian Penal Code does not recognize the

corporation as one of its legal subjects, but in the Netherlands, the position

of the corporation is recognized as a general criminal law subject that can

be sued and sued (commune strafrecht).4 The position of the corporation as

a legal subject in Indonesia is scattered in various laws and regulations

which are a lex specialis of the provisions in the Criminal Code. The

disparity between special regulations and general regulations is resolved

by the inclusion of corporations as common criminal law subjects in the new

RKUHP’s draft. It becomes important because the more modern a country's

3 https://kumparan.com/@kumparanbisnis/foto-pembayaran-perpanjang-sim-dengan-
gopay-1rkIAYW6pQs?utm_source=msnid&utm_medium=Aggregator, accessed on
August 27th of 2019, 14.43 WIB.
4 Schaffmeister, Hukum Pidana (Editor: J.E. Sahetapy), Yogyakarta: Liberty, 1995, pg. 423.

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William Edward Sibarani

society is, the more complex the need for regulations governing the life

patterns of that society.5

Apart from that, it can not be denied that the presence of various types

of corporations has made a major contribution in increasing state revenue

from the taxation sector, creating jobs and encouraging the acceleration of

technology for people's lives. But the corporation is also a means to commit

various criminal acts (corporate crime) that bring harm to society and the

country.6 To achieve the maximum profit, many corporations put forward

unfair business actions and also violate laws. Also, corporations supported

by qualified technology and information make transnational crime a

corporate crime.

Furthermore, a large number of complex layering and level of

approval causes corporate criminal acts including transnational organized

crime.7 By involving solid internal corporate procedures, corporate crime

usually involves professionals who know the company's behavior so that it

belongs to the white-collar crime8, which is carried out by someone in the

upper-middle-class society in carrying out his position.

Through the 5th and 6th UN Congress on The Prevention of Crime

and The Treatment of Offenders, it was stated explicitly about the dangers

5 Satijpto Rahardjo, Hukum, Masyarakat dan Pembangunan, Bandung: Alumni, 1980, pg.
3-4.
6 Considerations letter (a), Supreme Court Regulation Number 13 of 2016 regarding
Procedures for Handling Criminal Cases by Corporations
7 Eddy O.S., Hiariej, Prinsip-Prinsip Hukum Pidana, Yogyakarta: Cahaya Atma Pustaka,

2014, pg. 163.

8 Mardjono Reksodiputro, Kemajuan Pembangunan Ekonomi dan Kejahatan, Jakarta: Pusat

Pelayanan Keadilan dan Pengabdian Hukum Lembaga Kriminologi Indonesia, 1994, pg.
103.

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William Edward Sibarani

of the emergence of various crimes in the field of business so the

cooperation of all members is needed to prevent unexpected losses. The

justification of corporate criminal liability is also based on the integralists

philosophy that to achieve order between individual interests and the

interests of the state there must be no crime that is not dealt with. Then, the

state is also obliged to secure all national wealth according to the mandate

of Article 33 of the 1945 Constitution as a form of responsibility for the

welfare of the people.

On the other hand, the rapid number of corporations in new business

sectors that have arisen cannot be prevented, inversely proportional to the

provisions of the legislation which are quite time-consuming. Not without

effort, the government through Perma Number 13 of 2016 regarding

Procedures for Handling Criminal Cases by Corporations (hereinafter

referred to as Corporate PERMA) made efforts to penetrate the vacancy of

the procedural law contained in the Criminal Procedure Code. However,

the issuance of the Corporate PERMA poses a high legal risk to the

community, workers, and employers.

After reaching the point where the corporation is recognized as a legal

subject that can bear rights and obligations, the next issue concerns the form

of corporate criminal liability. In contrast to humans who are natuurlijk

persoon who have souls and minds, proving whether or not there is an

element of error (Mens Rea) in corporations raises a debate. The

conventional group argues that "corporation has no soul to be damned".9 This

argument is also supported by the logic of thinking that puts corporate

9Anthony O Nwator, Corporate Criminal Responsibility: A Comparative Analysis, Journal

African Law: Volume 57, April 2013, pg. 83.

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William Edward Sibarani

actions are human actions as well so that the top of the acts and minds are

humans. While other groups argue that, when the corporation receives

profits from these crimes, it can be ascertained the corporation is also

obliged to be responsible for the crime.10

With the emergence of this debate, efforts to overcome corporate

crime are both a challenge and a threat to the growth of the business world

in Indonesia. A corporation can be considered committing a criminal

offense if it is proven to have been committed by a person who carries out

corporate operational affairs.11 This means that corporate crime was

committed by the management who has authority over the corporation.

However, how to find out the limits that corporate crime was committed to

provide benefits for the corporation or management in the corporate office

is still complicated.

Through the provisions in Article 4 paragraph (2) of the Corporate

PERMA, it is said that the indicators that are considered as corporate

criminal offense, if:

a. The corporation gains or benefits from a criminal offense or even that

criminal act was committed in the interests of the corporation;

b. Corporations inadvertently allow criminal acts to occur; or

c. The corporation does not take steps to prevent the occurrence of

criminal acts.

10A Pinto QC dan M Evans, Corporate Criminal Liability, Edisi Kedua, Sweet & Maxwell,
2008, pg. 39.
11 Hasbullah F. Sjawie, Direksi Perseroan Terbatas serta Pertanggungjawaban Pidana

Korporasi, Bandung: Citra Aditya Bhakti, 2013, pg. 262.

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William Edward Sibarani

With the indicators above, it is difficult to know the limits that

corporate management has acted under the authority or not. If it is proven

in the court that the corporation has conducted its business operations in

accordance with the SOP (Standard Operating Procedure) but the crime can

not be avoided, the corporation can still be convicted. That way, a simple

conclusion can be drawn that corporations can be held responsible for

mistakes they don't make. Although ahistorically, many believe that a

corporation is not possible to commit a crime (societas delinguere non

potest), but to prove the corporation’s error (mens rea) can only be done by

proving the wrongdoing of the executive organs.12

Moreover, our positive law gives the authority to the judge to impose

a crime against the corporation and / or its management as well.13 The

management referred to in the Corporate PERMA also does not yet have a

clear definition because it is normatively limited by "work relationships"

and also "other relationships" within the scope of the corporation

concerned. The lack of a clear interpretation of anyone who can be said to

have committed a corporate crime also blurred the line of liability of

management in a corporation.

The many regulations governing corporations as one of its legal

subjects also provide different forms of liability. For example in Law

Number 41 of 1999 concerning Forestry implies a form of corporate

responsibility that is proven to have committed a criminal offense against

only its management.14 This becomes an obstacle for the enforcement of

12 Budi Suhariyanto, Op.cit., pg. 442.

13 Act 23 of Corporate PERMA.
14 Act 79 paragraph 14, Laws 41 of 1999 regarding Forestry

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William Edward Sibarani

corporate criminal acts in the forestry sector because in the case of logging,

generally, those who commit crimes are field workers, not the high-level

management of the corporation.

This form of liability is shared by countries who adopt the Anglo

Saxon legal system, criminal responsibility is imposed directly (identification

theory).15 The point is, mistakes in the occurrence of a corporate criminal act

are taken as mistakes of high-level managers or director level of the

corporation. To determine corporate mistakes, you can also look at who acts

as the mind of the company.16 Based on this theory, precisely the job as a

high-level manager in a corporation is very dangerous because it has a very

thin border with punishment. If a corporation has hundreds of branches

and a crime is committed by a manager at one of the subsidiary's branches,

then the mistake is blamed on the high-level manager. Using identification

theory to emphasize the responsibility of corporate criminal acts will be

very difficult to apply given the complexity of the chain of command from

the executive organs to the field perpetrators.

Another case is the responsibility stated in Law Number 32 of 2009

regarding Environmental Protection and Management. Strictly stated that

those who are entitled to be responsible for criminal acts committed by

corporations in the environmental sector are business entities and/or people

who give orders to commit criminal acts or who act as leaders of these

15 Muladi, Dwidja Priyatno, Pertanggungjawaban Pidana Korporasi, Jakarta: Kencana

Prenada, 2011, pg. 84.
16 Sutan Remi Sjahdeini, Pertanggungjawaban Pidana Korporasi, Jakarta: Grafiti Press,

2006, pg. 100.

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William Edward Sibarani

crimes.17 This regulation is more collective and gives a broader view of the

background of corporate crime. Not only the management, but if the field

perpetrators are proven to be the top of the mind from the occurrence of

criminal acts, then they are responsible. Although the application is

considered to be more applicable, it still makes it difficult for law enforcers

to take action against corporations that commit criminal acts because of the

lack of procedural law governing it.

Fortunately, Corporate PERMA which was published in 2016, uses a

much more modern philosophical approach, the Corporate Culture Model.

With this approach, criminal liability towards corporations is broadened to

focus on corporate policy either explicitly or implicitly. The purpose is to

see how far a corporation operates on Good Corporate Governance, good

Business Judgment Rules and fiduciary duties that are right on target. In

other words, the procedures, work systems or corporate culture already

reflect a healthy operational climate and good intentions to prevent

criminal acts.18

Applicatively, the Corporate Culture Model approach can be applied if

it fulfills several conditions, namely:19

1) Evidence that shows unwritten regulations in a corporation leads to

incompliant actions;

17 Act 116 paragraph (1) Law Number 32 of 2009 regarding Environmental Protection
and Management
18 Barda Nawawi Arief, Bunga Rampai Kebijakan Hukum Pidana, Bandung: Citra Aditya

Bhakti, 2002, pg. 251.

19 Ibid., pg. 252.

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William Edward Sibarani

2) Ethics, policies, and corporate governance related to the crime that

occurred;

Even though normatively, Corporate PERMA fills the vacancy of

procedural law in the enforcement of corporate criminal acts in Indonesia,

yet it is still philosophically not satisfactory to all relevant stakeholders. If

we draw a simple conclusion based on the previous arguments, then in

plain sight the corporation must be responsible for the crime even if the

corporation does not commit a crime. In the context of handling corruption,

if the corporation does not receive the benefit of the crime, but the crime is

carried out by the management, the application of the corporate culture model

as stated in the Corporate PERMA becomes less relevant. The corrupt

behavior of corporate workers will harm a corporation (other than state

losses) whose work culture is already conducive. Even if the corporation is

deemed unable to prevent a crime, shortly after the start of the investigation

process and known to the public then at that time also the reputation of a

corporation will fall and be "considered guilty" by the public.

Based on the negligence and inability of the corporation to prevent the

occurrence of a criminal offense, law enforcement of corporate criminal acts

no longer emphasizes the evidence of whether there is an error or

background behind the occurrence of a criminal offense. This does not

guarantee the business climate in Indonesia because of the safety of

investors to invest in Indonesia. Based on this element, a paradigm will

emerge that the management will always take shelter under the auspices of

the corporation to cover up the crime. With the aspiration to develop

industry and trade to meet the era of modernization of the world, the

immeasurable risk to investors as one of the main stakeholders in the

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William Edward Sibarani

business world will simply disappear. Also, if the management pretends to

commit a crime in accordance with the authority given by the corporation.

While corporations as legal subjects cannot defend themselves because they

must be represented by the organ of management as a representation of the

company.

The blur of the boundary to know when a corporation's criminal

offense is committed by an administrator for its benefit or for and on behalf

of the corporation concerned is not only detrimental to investors. Those

who feel the direct impact are consumers in the narrow sense of

shareholders and in a broad sense that is society as a whole. 20 For

shareholders, a corporation that is caught in crime is not fit to buy its assets.

In fact, shortly after the start of the investigation process, it could be that

the value of a corporation's stock has fallen and no longer has competitive

value and capable sale value. The impact on the community is also clearly

felt by corporations engaged in the production sector of goods.21 Production

processes that can occur incorrectly due to criminal interventions can be

harmful to the health of the people who use the product. Especially because

the occurrence of criminal acts in the production process for goods that

cannot be substituted is forced to stop, the community has no choice

because it is already dependent on these products. As a result, scarcity can

occur in the midst of society and have concrete impacts that can not be

predicted such as disease.

20 Marshall B. Clinard dan Peter C. Yeager, Corporate Crime, New York: The Free Press,
1980, pg. 93.
21 Yehezkiel Kristian, “Urgensi Pertanggungjawaban Pidana Korporasi”, 44 th Jurnal

Hukum dan Pembangunan, Number. 4, October-December 2013, pg.. 586.

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William Edward Sibarani

Then, clearly who will be harmed by implementing the corporate

culture model is its workers, especially for labor-intensive corporations

whose workforce reaches thousands. Indonesian labor law does not only

guarantees employers, in this case corporations, but also general protection

of its labor.22 If a corporate criminal offense is convicted of an error that can

not be proven as a collective error, the fate of the thousands of workers will

result in dismissal. As a result, all health facilities, wages and other social

security previously obtained by workers are lost and this leads to an

increase in unemployment.

Finally, who has the most disadvantages is the government as the

highest authority in a country. In environmental cases, we knew the

Lapindo’s hot mud case in 2006 in Sidoarjo caused by the negligence of PT

Lapindo Brantas for prevention. The impact of agricultural, residential and

industrial areas in the Renokenogo Village has been damaged due to

improper drilling activities. The state as the licensor of business licenses

clearly loses the value of the benefits of natural resources which should be

an income in the taxation sector. 23 Not to mention the recovery effort which

until now has not been carried out by PT Lapindo Brantas, until the

government intervened to build part of the reservoir area to prevent

mudflow. Also, other cases that did not directly harm the country such as

administrative violations by corporations which were very numerous

before the Corporate PERMA was published.

22 Taun, “Pertanggungjawaban Pidana Korporasi dalam Tindak Pidana

Ketenagakerjaan”, Jurnal IUS Vol. VI. Number 2, August 13th of 2018, pg. 241.
23 Marshall B. Clinard dan C. Yeager, Op.cit., pg. 93.

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William Edward Sibarani

We can conclude continuously that if the investment climate is not

supported by a guarantee of investor-friendly protection, it can have a fatal

impact on Indonesia's national economic growth in the 4.0 era. Capital

owners who are afraid of the risk of investing their capital will reduce the

level of productivity on existing companies. As a result, a large number of

Indonesian workers are unable to be employed due to the inability to pay

wages. The production that is not optimal, affects the price of goods on

demand and supplies that are not comparable. And, the latest impact is felt

by the government on the lack of revenue from the tax sector and the slow

pace of enforcement of corporate criminal acts.

Referring to the disparity in the forms of responsibility towards

different corporations in several of the regulations above, the presence of

Corporate PERMA is a milestone in the hope of future enforcement of a

corporate crime. With this breakthrough, although it is still far from

perfection, this instrument must be used to the maximum extent possible

by law enforcers to take action.

For corporations that do not want to be caught in a crime, one effective

way to reduce this paradigm is to strengthen good corporate internal rules

through AD / ART, SOP, Business Judgment Rules and other corporate

principles. Placing the right person in the right position can minimize the

efforts of non-compliance with company rules and procedures. By applying

corporate governance to the principles of a good and right company, the

gap to prove the existence of intentions to not comply with the positive

rules that exist will be lost.

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Corporate Criminal Liability: A Threat to Indonesia’s Business World?
William Edward Sibarani

It is not impossible the worst possibilities described above just did not

happen at all. That is, to view Corporate PERMA as a form of challenge to

eradicate crime and not a threat to the business world, all related parties

must work together to distance themselves from violations, subject to

applicable regulations and follow the appeal given by the government. The

existence of this regulation is also expected to not be used as a law

enforcement tool to arbitrarily criminalize corporations suspected of

committing criminal acts. Because after all, legal policies in the economic

world are considered to be pro-active towards entrepreneurs without

having to ignore the concerns of the state in the welfare of the lives of its

citizens.

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William Edward Sibarani

Citations

Books
A Pinto QC dan M Evans, Corporate Criminal Liability, Edisi Kedua, Sweet &
Maxwell, 2008.
Barda Nawawi Arief, Bunga Rampai Kebijakan Hukum Pidana, Bandung:
Citra Aditya Bhakti, 2002.
Eddy O.S., Hiariej, Prinsip-Prinsip Hukum Pidana, Yogyakarta: Cahaya Atma
Pustaka, 2014.
Hasbullah F. Sjawie, Direksi Perseroan Terbatas serta Pertanggungjawaban
Pidana Korporasi, Bandung: Citra Aditya Bhakti, 2013.
Mardjono Reksodiputro, Kemajuan Pembangunan Ekonomi dan Kejahatan,
Jakarta: Pusat Pelayanan Keadilan dan Pengabdian Hukum Lembaga
Kriminologi Indonesia, 1994.
Marshall B. Clinard dan Peter C. Yeager, Corporate Crime, New York: The
Free Press, 1980.
Muladi, Dwidja Priyatno, Pertanggungjawaban Pidana Korporasi, Jakarta:
Kencana Prenada, 2011.
Satijpto Rahardjo, Hukum, Masyarakat dan Pembangunan, Bandung: Alumni,
1980.
Schaffmeister, Hukum Pidana (Editor: J.E. Sahetapy), Yogyakarta: Liberty,
1995.
Sutan Remi Sjahdeini, Pertanggungjawaban Pidana Korporasi, Jakarta: Grafiti
Press, 2006.

Regulations
Law Number 41 of 1999 regarding Forestry
Law Number 32 0f 2009 regarding Environmental Protection and
Management
Supreme Court Regulations Number 13 of 2016 regarding Procedures for
Handling Criminal Cases by Corporations

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Corporate Criminal Liability: A Threat to Indonesia’s Business World?
William Edward Sibarani

Journal
Anthony O Nwator, Corporate Criminal Responsibility: A Comparative
Analysis, Journal African Law: Volume 57, April 2013.
Budi Suhariyanto, “Pertanggungjawaban Pidana Korporasi Berdasarkan
Corporate Culture Model dan Implikasinya Bagi Kesejahteraan
Masyarakat”, Jurnal Rechtsvinding: Volume 6, Number 3, December
2017
Yehezkiel Kristian, “Urgensi Pertanggungjawaban Pidana Korporasi”, 44th
Jurnal Hukum dan Pembangunan, Number 4, October-December 2013.
Taun, “Pertanggungjawaban Pidana Korporasi dalam Tindak Pidana
Ketenagakerjaan”, Jurnal IUS Vol. VI. Number 2, August 13th of 2018.

Internet
https://money.kompas.com/read/2019/08/26/215829626/permudah-
pembiayaan-untuk-ukm-investree-dan-bri-perkuat-kolaborasi, accessed
on August 27th of 2019.
https://kumparan.com/@kumparanbisnis/foto-pembayaran-perpanjang-
sim-dengan-gopay-
1rkIAYW6pQs?utm_source=msnid&utm_medium=Aggregator,
accessed on August 27th of 2019.

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