Two of the largest corruption cases in the country’s history took place in the last couple of years.

The first was the corruption scandal at state-owned life insurance company PT Asuransi Jiwasraya, which caused Rp 16.8 trillion (US$1.2 billion) in state losses. The second was the corruption case involving PT Asabri (Persero), a state-owned insurance and pension fund for the military, the police and Defense Ministry employees, which incurred Rp 22.78 trillion in losses to the state.

In the Jiwasraya case, the suspects placed big investments in questionable stocks brokered by several investment management companies. As for the Asabri case, the scheme was more complex, involving stock manipulation plotted by the main suspects.

Following an investigation, the Attorney General’s Office (AGO) named 20 suspects in the Jiwasraya case, of which six have been convicted by the Jakarta Corruption Court. The remaining 14 suspects are now facing separate trials each. As for the Asabri case, the AGO named 23 suspects, who are now standing trial.

In spite of the large amount of losses, it is worth noting that 13 corporations were indicted in the Jiwasraya case and 10 corporations in the Asabri case. They may mark the first time in the country’s history that so many companies were charged with corruption within a single year.

In the first four years since Supreme Court Regulation (Perma) No. 13/2016 on prosecuting corporations for corruption crimes came into force, only six companies were charged with corruption.

Even though corporate liability for criminal acts of corruption was promulgated since the enactment of Anticorruption Law No. 31/1999, the provision was first enforced only in 2016 following the issuance of Perma No. 13/2016. In that year, the Corruption Eradication Commission (KPK) named PT NKE (formerly PT DGI) as a suspect of corruption in relation to the construction of an infectious diseases and tourism hospital at Udayana University in Denpasar, Bali. The company was later found guilty and fined Rp 700 million.

In the following four years, five corporations were accused of corruption, including state-owned enterprise PT Nindya Karya.

The relatively small number of companies indicted in corruption cases in the last few decades may raise many eyebrows. If we take a look at the current legislation, however, we will understand the difficulties law enforcement face. Prior to the passage of Perma No. 13/2016, there were no specific procedural guidelines for investigating a corporation as a corruption suspect.

Moreover, the Criminal Code (KUHP) only acknowledges a (natural) person as a suspect, since human beings are the ones who have a motive (intent). Therefore, most corruption investigations that involve a corporation only ensnare the directors or relevant employees, not the corporation.

The AGO’s courage to indict corporations in the Jiwasraya and Asabri cases should be appreciated, irrespective of the outcome. In dealing with the complex transactions, the AGO has at least uncovered a criminal act in the strictly supervised capital market. This should also challenge the AGO, the KPK and the National Police to further step up their efforts to discover the truth behind the “normal” losses at state-owned enterprises.

The enactment of Perma No. 13/2016 was a milestone in enforcing criminal liability for a corporation, not only for corruption but also other criminal acts. While a criminal charge against a person can serve as a deterrent effect, a criminal charge against a corporation can be a tool to recover state losses. Any corporation found guilty of corruption would be sanctioned with a fine equal to the amount that the corporation has benefited from the act of corruption. In addition, restitution can also be applied as an additional sentence to corporations found guilty of corruption.

However, as an emergency legal instrument created to fill the void in the absence of a guideline on investigating and indicting corporations, Perma No. 13/2016 is nowhere near perfect. Hence, a more comprehensive provision and amendment of the existing Criminal Code Procedure is urgently needed to strengthen the enforcement of corporate liability in corruption cases.

The flip side of the coin is that the more companies are indicted for criminal liability in corruption cases, the stronger the pressure will become for corporations to comply with the law and regulations. Compliance with the applicable regulations and standard operating procedures is the only way for corporations to avoid criminal charges.

The next challenge would be how to enforce fines if the convicted corporation does not comply with the court order. Recovering assets from convicted persons or corporations has always been problematic for corruption cases. Prosecutors thus tend to include anti-money laundering charges in addition to corruption charges in order to ease asset tracing.

In addition, another challenge would be how to determine the additional sentences that can be imposed on a convicted corruptor. Six types of additional sentences can be adopted from the anti-money laundering law for sanctioning a convicted corporation: publish the court decision, freeze business activities in part or in whole, revoke its business licenses, liquidize and/or ban the corporation, seize its assets for the state, and finally, take over the corporation as a state acquisition.

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The writer is managing partner of ADP Counsellors at Law. The views expressed are personal.