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View all search resultsKUHP and the limits of legal decolonization in corporate liability
By personalizing liability for organizational failure, the new KUHP assigns risk to corporate managers even when they do not control the full set of variables that produce harm.
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Illustration of a Criminal Code (KUHP) book next to a gavel and a Lady Justice statue. (Shutterstock/La Terase)
T
his year marks a new phase in Indonesia’s criminal law, with both the Criminal Code (KUHP) and Criminal Law Procedure Code (KUHAP) entering a new stage of implementation. Their adoption is often framed as a moment of legal decolonization. Yet, legal independence is not defined by where or when legal texts are produced, but by how power, responsibility and risk are exercised through law.
This becomes most visible in the architecture of corporate criminal liability. The change is subtle but consequential. It emerges quietly in how risk, responsibility and failure are reassigned within corporate structures.
Through this design, criminal law begins to move beyond its traditional role and, in this context, assumes the function of an economic governance tool. Herbert Packer long warned that criminal sanctions have functional limits and lose legitimacy when they are used to compensate for regulatory failure rather than to respond to culpable conduct.
Articles 48 and 49 of the new Criminal Code extend liability beyond the corporate entity to functional managers, controlling persons and beneficial owners. This design is reinforced by the new Criminal Procedure Code, which personalizes enforcement through procedural mechanisms applicable to corporations and their representatives, including compulsory appearance and deferred prosecution arrangements under Articles 326 to 328.
Corporate criminal liability is thus framed through open-ended standards that attach responsibility not only to acts committed but also to failures to prevent or to act. It is this combination of substantive liability and procedural pressure that shifts criminal law away from a response to concrete wrongdoing and toward a system for managing economic risk.
Corporate criminal liability is never neutral. It is not simply about punishing misconduct, but about deciding who bears the cost of systemic risk. Every regulatory regime must answer a basic economic question: When harm occurs, who is best placed to prevent it at the lowest overall social cost? As Guido Calabresi has long argued, the core problem lies in allocating responsibility to the "least cost avoider."
However, the new Criminal Code does the opposite. By personalizing liability for organizational failure, it assigns risk to corporate managers even when they do not control the full set of variables that produce harm. Complex supply chains, regulatory overlap and market volatility are compressed into individual culpability. This does not sharpen accountability; it distorts incentives.
