Overall, the reforms represent a deliberate move toward a more balanced and humane criminal justice system that prioritizes fairness, reduces reliance on incarceration and promotes societal healing.

Among the most significant developments in this reform is the expanded and clarified regime of corporate criminal liability, a development that signals heightened responsibilities and potential risks for businesses across Indonesia. Understanding these changes is essential for corporations, legal practitioners and stakeholders as they navigate the shifting legal landscape.

Introducing a new philosophy

The shift is the new development highlights restoration over retribution, a clear distinction from its predecessor of KUHP Lama, which has long characterized Indonesia’s criminal law. The KUHP Baru reflects a fundamental reorientation of criminal justice objectives, endorsing restorative justice as the central sentencing philosophy.

The retributive system that emphasizes punishment, particularly through incarceration, has contributed to practical challenges such as prison overcrowding and has often been critiqued for neglecting victim interests and social reintegration. In contrast, restorative justice seeks to redress this imbalance by focusing on repairing harm, rehabilitating offenders and restoring relationships between offenders, victims and the community.

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Aiming for a greater structural change in the new penal code, KUHP Baru abolishes the former categorical distinction between “crimes” and “violations,” consolidating all unlawful acts under a single classification of “offenses.” Judges now have greater discretion to apply sanctions tailored to individual circumstances, streamlining prosecution and enabling a more contextual approach to justice.

Modernized sanctions

KUHP Baru introduces a more nuanced and flexible approach to criminal sanctions, moving away from rigid frameworks toward proportionality and fairness. While the code retains the traditional categories of principal and additional sanctions, it significantly broadens the range of options available to judges, allowing penalties to be tailored to the circumstances of each case.

One of the most notable changes is the death penalty. Rather than being a standard punishment for certain crimes, it is now positioned as an exceptional measure, applied only as an alternative to life imprisonment or a lengthy fixed-term sentence. It now comes with an imposition of a ten-year probationary period, during which good behaviour may lead to a reduction to life imprisonment through presidential clemency. This reflects a more cautious and humane approach, consistent with global human rights trends.

The new code also introduces greater flexibility in its application. Fixed-term sentences can range from as little as one day to 15 years, extendable to 20 years under aggravating circumstances, while life imprisonment remains available for the most serious offences.

Meanwhile, financial penalties varies into eight tiers, ranging from Rp 1 million to Rp 50 billion, enabling courts to impose penalties that are proportionate to both the gravity of the offence and the offender’s financial capacity.

The most striking is the emphasis on non-custodial measures, where community service and supervisory sanctions are now recognised as principal options, signalling a shift toward rehabilitation and reintegration rather than mere punishment. These measures can be adapted to individual circumstances, with community service ranging from 8 to 240 hours.

Additional sanctions include the revocation of certain rights, confiscation of assets, public announcements of convictions, compensation to victims and fulfilment of customary obligations. Special measures such as counselling, rehabilitation and vocational training are also introduced in the new penal code.

Corporate criminal liability

It is underlined in articles 45 to 50 that the KUHP Baru formally recognize corporations as autonomous legal subjects capable of engaging in criminal conduct and being held liable independently of natural persons.

The new advancement acknowledges that liability extends not only to corporations but also to executives, directors, commissioners, managers and other decision makers, including external controlling parties and beneficial owners. Corporate liability arises when these actors commit crimes benefiting the corporation or on its behalf.

Beyond individual responsibilities, KUHP Baru emphasises the corporation’s duty to implement preventive measures. Failure to establish compliance, oversight or internal controls may negate defences and trigger liability.

However, KUHP Baru also allows for measures such as compensation to victims, confiscation of illicit profits, public disclosure of convictions, license revocation and even operational suspension or dissolution in extreme cases. In addition, authorities may impose special controls, including forced takeovers or state supervision, to prevent repeat offenses.

Implications for businesses and legal practitioners

KUHP Baru signals intensified enforcement against corporate wrongdoing and aligns Indonesia with global trends in corporate accountability. Businesses must strengthen governance, compliance programs and internal controls to mitigate risks. Corporate leadership should foster a culture of legal and ethical compliance supported by robust training and monitoring.

Lawyers and inhouse counsels play a critical role in guiding clients through this complex environment, advising on risk management and defence strategies. Regulators face the challenge of enforcing these laws fairly while providing clarity to encourage responsible business conduct.

In conclusion, KUHP Baru represents a paradigm shift toward fairness, rehabilitation and corporate accountability. As the effective date approaches, stakeholders must engage deeply with their provisions to ensure compliance and integrity.

This transformation does not stand alone. Alongside KUHP Baru, Indonesia is introducing a new criminal procedural law (KUHAP) to address procedural inefficiencies and human rights concerns under the current framework. Together, these reforms mark a modernization of Indonesia’s criminal justice system.

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