Jakarta. The Corruption Eradication Commission (KPK) faces a new legal challenge following the enactment of Law No. 1/2025 on State-Owned Enterprises (SOEs), which came into force on February 24, 2025.

Under the new legislation, members of the board of directors and board of commissioners at SOEs are no longer classified as state officials. This redefinition significantly narrows the scope of the KPK’s authority to investigate corruption within state-run corporations.

The new law, which replaces Law No. 19/2003 on SOEs, has drawn sharp criticism from anti-corruption advocates who argue it undermines the KPK’s ability to prosecute wrongdoing in companies where public funds and strategic interests are deeply involved.

Key Articles Under Scrutiny
Two specific articles in Law No. 1/2025 have become flashpoints:

Article 3X (1): “SOE officials and employees are not considered state officials.”

Article 9G: “Members of the board of directors, board of commissioners, and supervisory board of SOEs are not considered state officials.”

The explanation for Article 9G clarifies that an individual’s broader status as a state official may not be automatically revoked, but this nuance still weakens the legal foundation for KPK intervention in SOE corruption cases.

Under the KPK Law No. 19/2019, the commission is authorized to investigate corruption involving law enforcement officers, state officials, or cases involving a minimum of Rp 1 billion in state losses. With SOE directors and commissioners now removed from the category of "state officials," the KPK’s legal jurisdiction is significantly constrained.

Concerns Over Reduced Oversight
The change has sparked widespread concern, given the pivotal role SOEs play in Indonesia’s economy and the substantial risk of public fund misappropriation in the sector.

KPK spokesperson Tessa Mahardhika Sugiarto said the commission will conduct an in-depth review of the new SOE law’s legal substance. The internal review will involve the agency’s Legal Bureau and Enforcement Division to assess how the new provisions affect the KPK’s operational mandate.

“This review is essential to ensure that anti-corruption efforts can still be carried out effectively, in line with the spirit of reform and the government's commitment to preventing budget leakage,” Tessa said.

He also warned that redefining SOE executives outside the realm of state oversight could be dangerous for public accountability.

“We must not create the impression that SOEs are now immune from legal scrutiny just because of a shift in terminology. That would set a troubling precedent,” he added.

Add as a preferred source on Google +