Corporate compliance key to corruption prevention

Sechabudin and Imelda Napitupulu
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PREMIUM

Jakarta / Thu, July 25, 2019 / 11:52 am

Corporate compliance key to corruption prevention

Illustration of corruption (JP/Budhi Button)

Law No. 17/2003 on state finances, as affirmed by Constitutional Court Decision No. 62/PUU-XI/2013, stipulates that state-owned enterprises (SOE) shall be considered state assets. As a consequence, the stipulation, “unlawfully or intentionally enriching oneself or another person or corporation causing state losses” in articles 2 and 3 of Law No. 31/1999, as amended by the 2001 Corruption Law, also cover losses suffered by SOEs. The scope of state losses covered under the Corruption Law has had a significant impact on the organizing of SOEs. The management of SOEs, particularly the board of directors, face two crucial issues, pursuing profit and avoiding losses, which may be considered a criminal act of corruption, regardless of whether losses in a particular field of business are unpredictable. As a result, Indonesian courts have handed down several verdicts involving the ...