JP/Seto Wardhana

The notion of whether authentic deeds made traditionally can be maintained or replaced with digital deeds (electronic deeds) became an important issue in the 29th International Congress of Notaries in Jakarta this year.

In civil law (Latin law) countries, authentic deeds serve as evidence that can be submitted before the court. Involving 88 civil law country members, the congress will focus on the influence of Industry 4.0 on clerical work amid the rapid changes in the way of doing business in Indonesia.

In the process of improving our ease of doing business (EODB) rank, the role of the notary has evolved to not only making authentic deeds for businessmen and investors but also being one of the government’s public relations tools in the accomplishment of business ease in this country. Indonesia is considered to have the highest number of notaries among civil law countries. With this hidden potential, how can an electronic deed be able to provide legal certainty for investors in digital disruption?

An authentic deed must be made (by a notary) in the traditional way. The traditional method refers to requirements, such as the presence of business owners or clients, the process of reading out the entire contents of the deed and closed by signing the deed by clients, notary and witnesses.

Since it first emerged more than a decade ago, the notion of electronic legal documents has been accommodated into Law No. 11/2008 as amended by Law No. 19/2016 — the Electronic Information and Transactions (ITE) Law. The regulation of electronic signature use on legal documents opened the discourse of the application of electronic signatures to transform an authentic deed into a digital one. This is a challenge for practitioners who still adhere to the traditional principle of authentic deeds. Nevertheless, while the ITE Law still limits the enactment of electronic signatures for notarial deeds or deeds made by deed officials, the impact of Industry 4.0 on clerical work is inevitable.

The judge has the obligation to use authentic deeds as a legal witness in a trial if needed. A deed acts as strong evidence to guarantee legal certainty for the parties in the deed. Unlike common law countries, which only require the ratification of documents (called legalization in Indonesian provisions), authentic deeds are documents that are kept as state archives.

Unfortunately, the basic principles of authentic deeds that are traditionally made will continue to experience great pressure by shifting to a more simplistic yet modern electronic form.

This will raise the issue of whether electronic deeds serve the same legal certainty as traditional authentic deeds. Do clauses of a deed that has been transformed into a digital format weaken the legal elements of the document?

Among all the complex investment problems in the ease of doing business, it cannot be denied that a trouble-free issuance of licenses in the early stages of establishing a company will attract investors. Up to now, we are still holding on to a paradigm of investment that requires foreign investors to establish a business entity that must have partners. It is unjust to say that some cases of local partner and foreign investor disputes represent the legal problems of national investment. According to the Investment Coordinating Board (BKPM), Indonesia ranks 146th in enforcing contracts out of 190 countries in the EODB index.

While common law countries are quickly absorbing digital changes in the Industry 4.0 scheme, civil law countries like Indonesia need to be more open and adaptable. Reform on ease of doing business, which measures the success of a government in improving its EODB rank, has not yet touched on issues that are intrinsic to investors.

The use of online media has become the main media for transforming business ease. In deed-making nowadays, legal action is still required in the form of the presence of business actors before a notary to convey the purpose and objectives of the deed, to sign the deed directly by business owners, notary and witnesses.

If the use of video conferences can be treated the same as face-to-face meetings, then this situation will lead to the elimination of traditional requirements for authentic deed-making. In addition, if an electronic signature on a contract has the same legitimacy as a written signature, then the authenticity of the document does not need to be questioned. In this respect, digitalization has fulfilled the requirements of authentic document-making.

The purpose of utilizing technology in clerical work is to facilitate the process and accelerate the completion of the work. In the aspect of creating authentic documents, the element of legal certainty becomes the main objective of providing protection for those who carry out these legal actions.

The strongest argument for maintaining the continuity of traditional authentic deed- and document-making is to prevent future financial losses from the vulnerability of claims to a contract. There is also the thought that the traditional nature of making authentic deeds provides multiple layers of protection because it undergoes a process of direct verification of the legal persons and their supporting identities, as well as determined formal conditions.

Thus, a more open mind toward digital disruption has to focus on the challenges of developing digital data security systems and strengthening preventive regulations.

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