The new KUHP offers a clearer framework for corporate criminal liability, but the real challenge for businesses lies beyond the text. Corporate exposure will ultimately depend on how cpurts, prosecutors and investigators interpret concept like intent, benefit, supervision, and corporate knowledge. Indonesia has long recognized corporate criminal responsibility, but the KUHP’s expanded provisions introduce both clarity and new uncertainty making interpretation, not drafting, the key determinant of risk.
a. Determining Corporate “intent” Will Be a Judicial Exercise
The new KUHP allows corporations to be held liable for crimes committed:
- for the benefit of the corporation
- within the scope of employment
- with the corporation’s knowledge or tolerance
However, determining a corporations mens rea (intent) is inherently interpretive.
Court will need to decide:
- When does a director’s employee’s intent become the corporation’s intent
- How much knowledge or negligence is enough to attribute liability
- Whether Failure to supervise equals tacit approval
These questions have no automatic answer. They depend on judicial reasoning, not statutory wording.
b. Vicarious Liability Will Expand, But How far?
The new KUHP broadens the basis for holding corporations liable for acts of:
- Employee
- Agents
- Contractors
- And even third parties acting “on behalf of” the corporation.
The phrase “on behalf of” is open textured. Its interpretation will determine the scope of corporate exposure.
Key uncertainties include:
- Will a vendor’s misconduct be imputed to the corporation
- Will a distributor’s actions trigger corporate liability
- How will courts treat outsourced functions
These are not drafting questions, they are interpretive questions.
c. Director Liability Will Be Tied to
Oversight Quality
The new KUHP strengthens the link between director oversight and corporate culpability
Courts may examine:
- Whether directors implemented adequate controls
- Whether compliance system were functional
- Whether red flags were ignored
- Whether supervision was reasonable
This shifts the focus from “Did the corporation commit a crime?” to “Did the board exercise proper oversight?”
in practice, this means:
- Weak governance becomes evidence of criminal negligence
- Poor documentation becomes a liability
- And compliance failures become prosecution
d. Internal Controls Will Become Evidence For Against the Corporation
Under the new KUHP, internal policies, SOP’s, and compliance frameworks will play a larger role in determining liability.
Courts may ask:
- Did the corporation have adequate controls
- Were those controls implemented or merely written
- Were employee trained
- Were violation reported and addressed
A strong compliance program may mitigate liability. A superficial one may be used as evidence of negligence.
This is where interpretation become decisive: two companies with similar policies may face very different outcomes depending on how courts evaluate their effectiveness.
e. Early Jurisprudence May Shape The Entire Landscape
The fist wave of cases applying the new KUHP may set the tone for:
- How broadly corporate liability is interpreted
- How aggressively prosecutors pursue corporations
- How courts balance corporate intent and employee misconduct
- How compliance programs influence culpability
These early decisions may become the de facto guide for corporate risk management more influential than the statutory text itself.
f. Enforcement Agencies Will Not Interpret The Law Uniformly
Different institutions: police, prosecutors, OJK, KPPU, sectoral regulators may interpret the new KUHP differently during the transition period.
This creates:
- Inconsistent enforcement
- Unpredictable investigations
- And uneven prosecutorial strategies
For corporations, this means risk forecasting must account for institutional behavior, not just legal doctrine.
Corporate criminal liability under the new KUHP is more than a legal update; it reshapes how responsibility, oversight, and governance will be judged. The text of the law is only the beginning; the real uncertainty lies in how intent, benefit, supervision, and corporate knowledge will be interpreted by courts and investigators.
For directors and compliance leaders, this demand stronger documentation, tighter, control, proactive risk mapping and clues attention to early jurisprudence.
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