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View all search resultsWhen investor protection risks becoming financial immunity
Indonesia’s push to lure capital through Danantara’s special bonds risks turning investor protection into a legal shield for financial crime and tax evasion.
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A woman walks past the Wisma Danantara Indonesia building on Aug. 11, 2026, on Jl. Jend. Gatot Subroto in South Jakarta. (JP/Iqro Rinaldi)
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t the Constitutional Court hearing on Oct. 13, the government defended Article 50A of the Financial Sector Development and Strengthening Law (P2SK Law), arguing that protection for purchasers of Danantara’s special bonds, including Patriot Bonds and Merah Putih (Red and White) Bonds, is necessary to attract capital and provide legal certainty.
These are legitimate objectives. However, legal certainty for investors must not come at the expense of the state’s ability to trace and prosecute financial crimes.
The main concern lies in Article 50A(5), which provides protection against criminal prosecution, including tax crimes, and civil lawsuits relating to the purchase of these instruments. Article 50A(6) further restricts the use of transaction data for tax assessments and as evidence in court. Read broadly, these provisions risk going beyond investor protection and limiting the state’s access to information needed to uncover criminal conduct.
The government presented Anggito Abimanyu, Paripurna P. Sugarda and Muhammad Fatahillah Akbar as expert witnesses. Their arguments explain the importance of investor protection but do not resolve the fundamental questions concerning its limits and implications for law enforcement.
First, the need to attract capital does not justify broad legal immunity. Economics professor Anggito explained that Article 50A aims to mobilize new funds, repatriate capital, expand long-term financing and encourage investment that might not otherwise occur.
These objectives are understandable. However, institutional investors need predictable rules, enforceable contracts and protection against arbitrary action. They do not need guarantees that their investments will be shielded from legitimate investigations into suspected crimes.
Excessive protection may instead undermine market confidence. Indonesia is now a full member of the Financial Action Task Force (FATF), which emphasizes beneficial ownership transparency and the ability of authorities to trace suspicious transactions. Financial market credibility depends not only on attracting capital but also on ensuring that the funds originate from legitimate sources.
