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Under Indonesia’s expanded corporate criminal liability, corporations are judged not just on whether fraud or corruption occurs, but on whether it could have been prevented. With “adequate” prevention often unclear, boards and senior leaders face real uncertainty. Reference guidance on adequate procedures provides a practical framework to demonstrate thoughtful, proportionate preventive efforts—helping organizations manage scrutiny with clarity.
In brief
- This publication by EY Indonesia Forensics and Integrity Services (Forensics) provides reference guidance for corporations operating in Indonesia to navigate the new legal landscape, mitigate risks, and safeguard both their operations and reputation.
- In today’s evolving landscape of corporate accountability, robust compliance is more than protection—it builds trust, ensures business continuity, and turns proactive prevention into a competitive advantage.
Business integrity in Indonesia has entered a new era. Corporations can now be held criminally liable for offenses committed by their employees—including fraud, corruption, and other criminal acts. Under the revised Indonesian Criminal Code, effective 2 January 2026, corporations, along with their key executives and ultimate beneficiaries, may face legal accountability, significant sanctions, and, critically, reputational damage. This concept is known as Corporate Criminal Liability (“CCL”).
Until now, corporate criminal liability in Indonesia was largely confined to the public sector, particularly under anti-corruption laws. Since 2017, law enforcement, guided by Supreme Court Regulation No.13 of 2016, could determine corporate guilt where a corporation: (1) benefited from a crime, (2) allowed a crime to occur, or (3) failed to implement adequate preventive measures.
With the revised Criminal Code, this framework now extends to the private sector, affecting the broader business landscape and raising the stakes for all corporations operating in Indonesia.
Among these three criteria, the third—failure to implement adequate preventive measures—poses the greatest challenge. What qualifies as “adequate”? How can corporations credibly demonstrate their preventive efforts? These are the critical questions executives must address to protect their businesses and organizations.
In this article, EY Forensics provides overview of reference guidance for corporations operating in Indonesia to navigate the new legal landscape, mitigate risks, and safeguard both their operations and reputation. Whether you are an Indonesian company or an international organization with local operations, the principles outlined here are essential for ensuring compliance and demonstrating accountability.
Where it matters most, corporations that prioritize prevention are better equipped to make confident decisions, protect their people, and sustain long-term growth even amid complex and evolving regulatory environments. In the evolving landscape of corporate accountability, proactive prevention is not just prudent - it’s a competitive advantage.