12th April 2019 by DnT Lawyers Client Updates, White collar Criminal Defense, Civil, and Commercial Dispute 0 comments
Corporate Crime in Indonesia
Corporate Criminal Liability (CCL) has already existed since 19th century. The first case on the history was Queen versus Frat North of England Railway Co. on 1846. Many countries have applied the CCL on their laws since then. France has already acknowledged liability of legal person since 1994. Until year 2005, there are 3.782 cases applied CCL.
Indonesia stated liability of legal person on 1951 on Economic Law Number 17/1951. Today, there are more than 100 law regulations containing CCL, such as corruption, money laundering, forestry, fishery, environmental, mining, shipping, capital market, consumer protection, manpower, and more.
However, there were several limited cases which applied the criminal mechanism due to the reasons that law enforcement officers did not know to apply procedures to the criminalized corporation. The cases that applied CCL are PT. Giri Jaladhi Wana, IM2 (corruption); PT.Adei Plantation, PT. Dongwoo Environmental Indonesia, PT. Nasional Sagu Prima, PT. Kalista Alam Case (environmental crime); Suwir Laut (tax crime);
Unfortunately, we still found errors on the application. For example, Suwir Laut was charged with tax crime. But judge punished Asian Agri to pay penalty of USD 1.8 Million. The same thing also happened on PT. Adei Plantation where the corporation was sued for environmental crime. Yet, the judge convicted the Director Tan Kei Yoong for five months confinement if Adei Plantation cannot pay USD 106 Thousand fine.
Criminal penalties cannot be delegated to other parties and the judge can only convict a person/legal person based on the indictment. This means that someone cannot be convicted without being charged by the prosecutor (Article 182 Verse 4 of Criminal Procedure Code).
To fill the legal void and errors in applying the CCL, especially the procedures for examining corporations as perpetrators of criminal acts, the Supreme Court issued the Regulation of the Supreme Court (PERMA) Number 13/2016 on Case Handling Procedures for Corporate Crimes. The Regulation addresses the following principal aspects: (a) nature of corporate criminal liability, (b) investigation and trial; and (c) penalties. The main things arranged are:
The Punishable Conditions for the Corporate
Article 4 of the Regulation stipulates that in determining a sentence against a company, judges shall put the following into consideration:
Corporation is receiving profit or benefit from the crime; or the crime is perpetrated for the interest of the corporation;
Corporation allows the crime to occur; or
Corporation failed to take necessary measures to prevent a wider impact and to ensure compliance with provisions of the prevailing laws
Terms of Corporate Criminal Application
Article 3 of the Regulation stipulates that in determining Requirements for Crimes by Corporation
Employee of corporation or other relationship (performs services for/on behalf of corporation); and
In scope of corporation business or to support corporation’s business.
Can corporate criminality be applied to companies that are currently or have merged, consolidated, separated and dissolved?
Article 7 and 8 of the Regulation stipulates that in determining corporate liability in the merger, consolidation, separation and dissolution is essentially regulated:
Crimes against corporations that carry out mergers and consolidations are limited in liability by the amount of the assets placed.
Assets from disbanded corporations can still be subject to forced efforts based on legislation.
What are the forms of corporate criminal sanctions?
Article 25 stipulates that corporate criminal sanctions are in the form of primary penalties and supplemental penalties. The primary penalties consist of a fine while supplemental penalties as stipulated in the relevant legislation includes but is not limited to:
announcement of the decision
freezing of activities
revocation of business license
dissolution and / or
prohibition of corporations
seizure of corporate assets
corporate takeover by the state