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SOEs Law raises graft oversight concerns
Several new articles included in the revised State-Owned Enterprises (SOEs) Law suggest that state-owned firm’s directors, commissioners and supervisory board members are not considered state officials, potentially limiting the antigraft body’s authority over them.
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The logo of the State-Owned Enterprises (SOEs) Ministry is seen in front of the ministry's building in Jakarta on Jan. 1, 2025. (Shutterstock/Zaen_M)
T
he revision of the State-Owned Enterprises (SOEs) Law has recently been under spotlight after several articles were found to potentially limit the Corruption Eradication Commission’s (KPK) authority to launch graft investigations into state-owned businesses and their managements.
The law revision, which was not included in the list of bills prioritized by the House of Representatives this year, was previously criticized after being passed in February following a rushed deliberation by lawmakers.
Recently, observers highlighted that the new SOEs Law raised concerns that the KPK, the country’s leading antigraft body, may not be able to launch investigations into SOEs or their directors and commissioners.
Article 3X and 9G of the new law stipulates that employees, directors, commissioners and supervisory board members of SOEs are not considered state officials.
Meanwhile, Article 4B states that financial losses endured by SOEs are to be considered corporate rather than state losses. The explanation part of the law asserts that the losses are seen as the firm’s losses even when the capital is sourced from state funds.
Read also: Prabowo scolds ‘bad’ SOEs directors behind closed doors
According to the 2019 KPK Law, among the antigraft body’s authorities are prosecuting “law enforcement officers, state officials and any person related to them” or investigating cases that “incur at least Rp 1 billion [US$60,545] in state losses”.
