By Timur Sukirno* and Reno Hirdarisvita* (Baker McKenzie Indonesia)
1. Domestic bribery (private to public)
1.1 Legal framework
Bribery of public officials is regulated under the Indonesian Anti- Bribery Law and Anti-Corruption Law. In practice, however, prosecutions of bribery in Indonesia generally invoke the more recent Anti-Corruption Law.
1.2 Definition of bribery
The Anti-Bribery Law describes bribery as giving or promising something to someone with the intention to persuade the recipient to do or not to do something, which is contrary to the recipient’s authority or obligations that relates to public interest. Under the Anti- Bribery Law, the recipient is not restricted to civil servants/public officials. Rather, it applies to anyone holding a position of authority over any matter of public interest, such as a private surveyor entrusted with verifying an applicant’s eligibility to receive fiscal facility. Under the Anti-Bribery Law, the giver and the recipient are equally liable.
Note that the Anti-Bribery Law does not apply where the Anti- Corruption Law and the Indonesian Criminal Code already apply.
Under the Anti-Corruption Law, bribery is one of the acts defined as corruption. The definition of bribery is provided in Article 5 of the Anti-Corruption Law, that is: (i) giving or promising something to a civil servant or state administrative official with the intention that the recipient do or not do something in his position that is contrary to his obligations; and (ii) giving something to a civil servant or state administrative official because of or in connection with something that is contrary to his obligations, whether or not performed in his position. The central thrust of Article 5 is the corrupt offering of a gift (or gratification) related to a specific action or non-action of the recipient, in contravention of his obligations or duty.
1.3 Definition of public official
The Indonesian Anti-Corruption Law and Anti-Bribery Law have a fairly broad definition of public officials, including employees and officers of corporations financed by or using the facilities of the state or the public. A person who is not on the government payroll (the classic civil servant) may nevertheless be regarded as a civil servant if he or she is employed by a corporation that is financed by the state (i.e., the Republic of Indonesia or a region within the Republic of Indonesia). State administrative officials who carry on executive, legislative and judicial functions also fall under the definition of public official for the purpose of the Anti-Corruption Law (e.g., members of the House of Representatives, ministers, judges and head of a state university).
1.4 Consequences of bribery
Any party who violates Article 5 of the Anti-Corruption Law is subject to imprisonment for a minimum of one year and a maximum of five years, and/or a penalty in a minimum amount of IDR 50 million and a maximum amount of IDR 250 million.
(a) For the individuals involved
The Indonesian Anti-Corruption Law establishes the same penalties for public officials as for individuals that bribe public officials. The penalties are the following:
- Up to five years in jail
- A penalty in a minimum amount of IDR50 million and a maximum amount of IDR250 million
(b) For the corporation/legal entity involved
The Indonesian Anti-Corruption Law provides that criminal charges may be imposed on the corporation / legal entity or on its management.
- Penalties for the corporation’s management.
- Fines for the corporation itself.
- Imprisonment for the corporation’s officers if they are proven to have conducted the criminal act of corruption in their duties for the corporation.
1.5 Political contributions
Contribution to political parties is regulated under the Indonesian Political Parties Law. In general terms, the following contributions to political parties are allowed:
(a) For individuals who are not members of the political party, contributions not exceeding IDR 1 billion in one financial year
(b) For corporations / legal entities, contributions not exceeding IDR 7.5 billion in one financial year
1.6 Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)
The Indonesian Anti-Corruption Law classifies hospitality expenses such as gifts, travel, meals and entertainment as gratification. Note that under the Indonesian Anti-Corruption Law, every gratification given to a public official is potentially a bribe, but to be an actionable crime it must be given with some connection to the public official’s position and involve a quid pro quo by the recipient to do or not to do something in contravention of his obligations or duties. The penalty for a public official who receives gratification that is proven to be a bribe is as follows:
- Imprisonment for four years up to 20 years
- Depending on the circumstances, life imprisonment is also possible.
- A fine of IDR200 million up to IDR1 billion
This provision applies to gratification performed both in Indonesia and outside of Indonesia. Article 12 C of the Indonesian Anti Corruption Law permits the recipient to avoid any form of prosecution in connection with receiving gratification if he reports the gratification to the Indonesian Corruption Eradication Commission (KPK) in a timely manner. The KPK must then decide if the public official can keep the gratification or if the gratification belongs to the state.
2. Domestic bribery (private to private)
2.1 Legal framework
The Indonesian legal system does not specifically regulate bribery in the private sector. The provision that best captures the act of bribery between private entities is Article 378 on fraudulent acts.
2.2 Definition of private bribery
The Indonesian legal system does not have a specific definition of private bribery.
2.3 Consequences of private bribery
Under Article 378 of the Indonesian Criminal Code, fraudulent acts are punishable with a maximum of four years’ imprisonment.
2.4 Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)
The Indonesian legal system does not recognize the concept of hospitality expenses between private entities.
3. Corruption of foreign public officials
Indonesian law does not regulate specifically the practice of corruption that involves foreign public officials. However, as long as it can be proven that the purpose of the alleged corruption harms the public interest, then the provision of the Indonesian Anti-Corruption Law that applies to the act of corruption of public officials also applies to the party who bribes or commits the corruption act of foreign public officials.
4. Facilitation payments
There is no exception for facilitation payments under Indonesian laws.
Under the Indonesian Anti-Corruption Law, facilitation payments may fall under the category of gratification. Article 12 B of the Indonesian Anti-Corruption Law sets out the threshold for determining who carries the burden of proving whether a gratification is a bribe or not:
(a) For amounts of IDR 10 million and above, the burden to prove that it is not bribery lies with the recipient.
(b) For amounts below IDR 10 million, the burden to prove that it is not bribery lies with the prosecutor.
5. Compliance programs
5.1 Value of a compliance program to mitigate/eliminate criminal liability for legal entities
Indonesian law does not specifically recognize compliance programs as instruments to mitigate or eliminate liability for legal entities before the crime of corruption takes place. However, a recent Supreme Court Regulation on the Management of Criminal Cases Committed by Corporations introduced new parameters to assist judges in assessing a corporation’s criminal liability. The test for one of these parameters is whether the corporation has put in place preventive measures, which may include compliance programs and training. The other parameters are: (i) whether the corporation obtains profit or benefit from the crime or whether the crime is committed in the interests of the corporation; and (ii) whether the corporation allows the crime to take place..
5.2 Absence of a compliance program as a crime
Indonesian law does not treat the absence of a compliance program as a crime. However, failure to take preventive steps such as adopting a compliance program may affect the court’s assessment of a corporation’s liability, as set out in the aforementioned Supreme Court Regulation.
5.3 Elements of a compliance program
(a) Legal framework
Indonesian law does not regulate the elements of a compliance program.
(b) Recommended practice
Legal entities are encouraged to have a compliance program in place as a strategy to mitigate the risk of corruption.
6. Regulator with jurisdiction to prosecute corruption
IIn general, the police and the prosecutor have the authority to investigate any alleged corruption. In 2002, the government of Indonesia established the KPK to fight corruption more effectively. KPK has the authority to investigate and prosecute corruption that: (i) involves law enforcement officials, state administrative officials or other people that are related to the corruption committed by law enforcement officials or state administrative officials; (ii) attracts the public’s attention; and/or (iii) involves state loss of at least IDR 1 billion. In carrying out its duty, the commission has the authority to request meetings and reports in the course of its investigation. It can also authorize wiretaps, impose travel bans and request financial information about suspects.