It was a historic day on 6 December 2022 for Indonesia since the new draft of criminal code was approved by the House of Representatives. Despite ongoing objections from various elements, the House and the government proceeded anyway. The Minister of Law and Human Rights, Yasonna Laoly, as quoted by Kompas.com, said that it is impossible to gain 100% approval from the public. Subsequently, those who object the draft bill that is becoming the law, may lodge a judicial review through the Constitutional Court. Despite the promulgation of this new criminal code, this new law will only be effective 3 years afterwards. Any implementing regulations of the new criminal code must be enacted no later than 2 years since the law is promulgated.
One of the new provisions under the new criminal code is the stipulation of a corporation as a subject of criminal offense. Even though this is not an entirely new concept, the previous criminal code has not stipulated the same. This article will discuss the various aspect on corporation in the new criminal code.
A corporation is widely defined. A corporation includes legal entity (limited liability company, foundation, cooperative, state-owned enterprises, regional-owned enterprises), as well as association, whether it is a legal entity or not, firm, limited partnership. This means that the code covers all types of organization in Indonesia. The criminal offense by a corporation is a crime conducted by its manager having a functional position in the organizational structure of the corporation or under the employment relationship or other relationship that is acting for and on behalf of the corporation, for the interest of a corporation, within the business or activity of that corporation, whether individually or jointly performed. This “functional position” is related to a person’s authority to represent, decide, and do any supervision over the corporation, including those who are positioned as instructor, also those who does the action, provokes or assists others to do the crime. Moreover, the criminal offense of a corporation can also be performed by an instructor, controller, or beneficial owner of a corporation outside the organization structure but can control the corporation.
Not all criminal offense is related to a corporation. The corporation’s criminal offense is subject to several factors, namely if it is within the business or activity scope as per the articles of association or other provisions applicable to a corporation, it is beneficial to a corporation but unlawfully, admitted as a corporation’s policy, no preventions are made to avoid greater consequences and to ensure the compliance of the applicable provisions to avoid the occurrence of a crime and or that corporation lets the crime occurs. The code explains that there are three alternatives when it comes to a corporation as a criminal offense subject, namely the prosecution and criminal penalty is imposed to the corporation only, or corporation and its manager, or its manager. The other limit is what is called as justifying reason and forgiving reason. Both reasons can be submitted by a corporation, its manager, instructor, controller, and beneficial owner. The code provides an example of a justifying reason, namely an employee of a company who damages a waste disposal pipe owned by the government to save the company’s employees. Even though it is a prohibited act, but it is justified and therefore not considered as a crime.
Specifically for a corporation, the punishment consists of principal and additional punishment. The principal punishment is not an imprisonment but a fine punishment. This fine punishment is from Rp 2 billion to Rp 50 billion. The additional punishment includes among others compensation payment, remedy, revocation of specific license, dissolution of a corporation. Both of fine and additional punishment are limited of time. If not performed by a corporation, the district attorney is authorized to seize and auction the corporation’s asset or revenue. In addition to the punishment, a corporation can be imposed with a certain action, namely, take over and put under supervision.
The new criminal code makes clear the position of a corporation as a crime subject. This is highly appreciated. But the code does not let go the people “behind the scenes.” They might also be punished. In addition, this code also rekindles the importance of good corporate governance (GCG). Avoidance, assurance, and not “closing eyes” to a crime are important factors to consider on whether there is a crime by a corporation. Hope a corporation can use these 3 years to set a goal to revise its existing GCG or to determine it.