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View all search resultsAn unpatriotic proposition
Coming so soon after Indonesia drew a disapproving global eye toward its financial market and economic policymaking, perhaps the legal protections afforded to buyers of Patriot and Merah Putih bonds in the amended law demands a rethink, if not an overhaul.
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A woman walks past the headquarters of state asset fund Danantara on Jl. Jend. Gatot Subroto in South Jakarta on May 6, 2026. (JP/Iqro Rinaldi)
An amendment to the Financial Sector Development and Strengthening (PPSK) Law, which appears to promise investors in Danantara’s novel Patriot Bonds and Merah Putih Bonds far-reaching legal immunity, has rightly raised alarm bells.
On the face of it, it is difficult to conceive of any righteous explanation for Article 50A, which was slipped into the law last month.
Why should buyers of these debt obligations be afforded protection “from prosecution under the general crimes law, special crimes law, including tax crimes, and from civil lawsuits” as stated in the article’s paragraph 5?
Nobody could be faulted for feeling that this clause could be used to whitewash all sorts of nefarious activity. Paragraph 6 doubles down on the point by clarifying that information arising from the bond purchases “may not be used as the basis for tax assessment and may not be admitted as legal evidence in court”.
It remains to be seen how these norms will translate into the forthcoming government regulation on the matter, but based on the wording in the law, the resulting public concern is unsurprising.
Given that there is no business case for investing in the Merah Putih Bond with its 3 percent coupon rate, and even less for the Patriot Bond with 2 percent, what possible motivation could there be for someone to buy these debt securities?
