Business Can Suffer Losses Without Corruption: Luhut Seeks Greater Clarity in Legal Regulations

On 20 October 2026, the Chair of the National Economic Council (DEN), Luhut Binsar Pandjaitan, stated that President Prabowo Subianto had approved the DEN’s study on revising the definition of criminal acts of corruption to align it with international standards, namely the United Nations Convention Against Corruption (UNCAC). The statement was made following a meeting at the Merdeka Palace in Jakarta, as reported by ANTARA.

Luhut highlighted the element of state financial loss in the handling of corruption cases in Indonesia. According to him, this approach differs from UNCAC, which does not make state financial loss a general element of criminal acts of corruption. He also considered that the existing provisions could potentially impede business decisions, given that every business activity involves risks.

The statement subsequently sparked debate regarding the possibility of changing the state financial loss element in criminal acts of corruption. However, one day later, DEN clarified that the proposal was not intended to eliminate the state financial loss element, but rather to clarify the evidentiary requirements and broaden the scope of criminal acts of corruption. DEN affirmed that Articles 2 and 3 of the Law on the Eradication of Criminal Acts of Corruption (Anti-Corruption Law), as well as Articles 603 and 604 of the Criminal Code, would remain in force. (ANTARA, 20–21 October 2026).

DEN also proposed the addition of a business judgment rule provision to protect business decisions made in good faith and in accordance with proper procedures, as well as the adoption of categories of criminal offences under UNCAC that have not yet been regulated under national law, including the bribery of foreign public officials.

The question, therefore, is whether Indonesia’s definition of corruption actually needs to be revised.

How Is Corruption Regulated under Indonesian Law?

Indonesia regulates criminal acts of corruption through Law Number 31 of 1999, as amended by Law Number 20 of 2001 concerning the Eradication of Criminal Acts of Corruption (Anti-Corruption Law). Since the entry into force of the national Criminal Code on 2 January 2026, provisions concerning corruption involving unlawful enrichment and abuse of authority have also been regulated under Articles 603 and 604 of Law Number 1 of 2023 concerning the Criminal Code.

Article 2 of the Anti-Corruption Law governs acts of unlawfully enriching oneself, another person, or a corporation that cause losses to state finances or the state economy. Meanwhile, Article 3 governs acts of benefiting oneself, another person, or a corporation through the abuse of authority, opportunities, or facilities available by virtue of one's office or position, which cause losses to state finances or the state economy.

Accordingly, these two articles do not make state financial loss the sole element of corruption. The unlawful act or abuse of authority, the purpose of benefiting a particular party, and the element of state financial loss must also be assessed in accordance with the wording of the applicable article.

On the other hand, Indonesia has ratified UNCAC through Law Number 7 of 2006. The Convention does not provide a single definition encompassing all forms of corruption, but instead regulates various acts that are to be criminalized, such as bribery of public officials, embezzlement of assets by public officials, abuse of functions, and laundering of proceeds of crime.

This means that aligning Indonesian law with UNCAC does not entail eliminating the state financial loss element. Adjustments may be made by clarifying the formulation of criminal offences while also regulating other corrupt acts that are not yet adequately covered under national law.

Corruption under UNCAC

UNCAC itself does not establish a single definition of corruption. However, Chapter III of UNCAC regulates various forms of corrupt conduct, including:

1. Bribery and embezzlement of assets in the public sector;

2. Bribery and embezzlement of assets in the private sector;

3. Trading in influence;

4. Abuse of functions;

5. Illicit enrichment;

6. Money laundering;

7. Concealment; and

8. Obstruction of justice.

Article 15 of UNCAC, for example, regulates the bribery of national public officials, whether in the form of offering an undue advantage or soliciting or accepting such an advantage. Article 16 regulates the bribery of foreign public officials. Meanwhile, Article 19 addresses the abuse of functions or position to obtain an undue advantage.

Another important provision is Article 3(2) of UNCAC. This provision states that, unless otherwise provided in the Convention, the application of UNCAC provisions does not require the offences established therein to result in damage or harm to state property. This means that a criminal act of corruption does not necessarily have to cause loss or damage to state property to fall within the scope of UNCAC.

The Convention establishes minimum standards and various forms of criminal offences that should be regulated, while allowing States room to regulate their own criminal laws. Indeed, several provisions of UNCAC require States to consider criminalization rather than imposing an absolute obligation to criminalize the conduct concerned.

Accordingly, aligning Indonesian law with UNCAC does not automatically require the elimination of the state financial loss element. One area for improvement lies precisely in regulating forms of corruption that are not yet adequately covered under national law.

A comparison of the regulation of corruption in Indonesia and under UNCAC reveals differences in the scope of criminal offences and the formulation of their constituent elements. Articles 603 and 604 of Indonesia’s Criminal Code specifically require losses to state finances or the state economy, whereas UNCAC regulates various forms of corruption that do not necessarily require loss or damage to state property, as reflected in Article 3(2). However, this does not mean that Indonesian law must eliminate the state financial loss element. Alignment with UNCAC would be more appropriately directed towards evaluating the scope of criminalization and compliance with the Convention’s obligations, particularly in relation to forms of corruption that are not yet adequately regulated under national law.

Legal Certainty Without Creating Opportunities for Corruption

The principal issue raised by DEN’s proposal is how to distinguish risky business decisions from conduct that satisfies the elements of a criminal offence of corruption.

In this regard, the Business Judgment Rule (BJR) may serve as one approach to protecting business decisions made in good faith, with due care, without conflicts of interest, and in accordance with proper procedures. Business losses, including those arising from the management of State-Owned Enterprises (SOEs), do not automatically establish the existence of corruption, as legal assessments must be based on the elements of the relevant criminal offence.

However, the BJR cannot serve as legal immunity for decision-makers who engage in corruption. Accordingly, improvements to Indonesian law should be directed towards clarifying the formulation of criminal offences and the limits of protection for business decisions, while ensuring that the scope of criminalization is consistent with UNCAC. In this way, legal certainty can be strengthened without eliminating the state financial loss element under Articles 603 and 604 of the Criminal Code or disregarding Indonesia’s obligation to regulate various forms of corruption in accordance with the Convention.