This edition of ICLaD is special, because this edition is released at the same time with

the day that ICJR is turning into 9-year old. Throughout the 9 years of existence, ICJR is

still constantly striving to push law reform in Indonesia, both criminal law reform and

criminal justice system reform.

What was done by ICJR to reform law in Indonesia cannot be separated from numerous

cooperation which have been established by ICJR with its partners. This partnership

enables ICJR to keep growing and developing into one of the non-governmental

organizations in the law sector that earn an extraordinary place in the field of law

reform.

The road has been passed and ICJR is not going stop for the better Indonesia.

Jakarta, August 2016

Ifdhal Kasim

Editor-in-Chief

Indonesia Criminal Law Digest ICLaD Issue No. 2/2016

Reconsidering Article 27 Paragraph (3) of Electronic Information and Transaction Law in Court Decisions

Author: Anggara

I. Introduction Ever since the internet was introduced in 1988, its development and growth ran very fast. Specific to Indonesia, the internet is used by 88.1 million out of the 250 million population, which makes Indonesia as the largest internet user in ASEAN region. Due to this rapid grwoth, policy-makers in Indonesia start looking at ways to regulate the Internet, particularly by recriminalizing acts that are already included under the Criminal Code (KUHP). Such is evident from the enactment of Law No. 11 of 2008 on Electronic Information and Transactions (UU ITE). To be more specific, this legislation stipulates provision regarding freedom of expression under Article 27 paragraph (3) in conjunction with Article 45 paragraph (1). This provision is considered as duplication and prone to multiinterpretation (pasal karet) compared to a similar provision under the existing KUHP. After UU ITE was passed, criminal defamation cases involving internet users in Indonesia are significantly increased. Due to the Indonesia’s challenging geographical situation, there are difficulties to improve access to justice for the suspects/defendants in these cases. In addition, the availability of advocates/lawyers who understand internet issues are not sufficient, especially those thaty may give human rights approach in the respective case. II. Article 27 Paragraph (3) UU ITE: The Setback of Criminal Policy

Within criminal policy, criminal law and punishment are the tools to control the community using penal approach. Therefore, criminal policy is basically a policy to determine: (a) how far the prevailing criminal provisions are necessary to be changed or updated; (b) what to do to prevent crime; (c) how to carry out the investigation, prosecution, trials, and execution.

In the context of Indonesian criminal policy, criminalization and restrictions on freedom of expression through various laws are not aligned and contradict the development of modern crime prevention in a democratic society. Criminal sanction become a major instrument in limiting freedom of expression in Indonesia. This leads to Indonesia’s status as “Partly Free” under the 2015 Freedom House’s report, sharing the same position with Singapore, Malaysia, and Cambodia. Under the current framework, criminal defamation is stipulated under Chapter XVI of KUHP and consists of seven parts: defamation, libel, mild insult, insult to civil servants, libel complaint, false allegation, and defamation of the dead. Moreover, KUHP also regulates specific forms of insult: insult to the President/Vice President, to the Head of Friend State or representative of Foreign Countries in Indonesia, to the Government of Indonesia, to the certain Group, to the General Public Bodies. In addition to KUHP, other laws are also regulating criminal contempt, including Law No. 32 of 2002 on Broadcasting; Law No. 32 of 2004 on Regional Government; Law No. 42 of 2008 on Presidential Election; Law No. 8 of 2012 on General Election; Government Regulation in lieu of Law (Perppu) No. 1 of 2014 on Election of the Governor, Mayor, and Regent; including UU ITE.

Editor in Chief:

Ifdhal Kasim

English Editor

Pirhot Nababan

Contributors:

Adiani Viviana

Anggara

Erasmus A.T. Napitupulu

Indriaswati D. Saptaningrum

Robert Sidauruk

Sriyana

Supriyadi W. Eddyono

Syahrial M. Wiryawan

Wahyudi Djafar

Wahyu Wagiman

Zainal Abidin

Specific to the UU ITE, this legislation always brings controversy since its creation, especially the criminalization part. One of the most highlighted provisions is Article 27 paragraph (3). Based on the wording of the article, there are some major drawbacks in the elements, namely:

Issues Remarks

Weak intent or deliberate element in the formulation

"animus injuriandi" is not required by Article 310 of KUIHP, but simply requires the existence of awareness, knowledge, or understanding on the perpetrators that his objective statement would result in and attack the honor or reputation of a person.

No details of the key elements Some important elements are not described, such as the meaning of 'distribute', 'transmit' and also 'make accessibility'.

The unclear elements of insult and defamation

There is no clarity of insult or defamation, and therefore it must refer to Articles 310 paragraph (2), 311 and 315 of KUHP, which is often referred to as "genus crime" of criminal insult and defamation. This provision must also be tested with element of crime, justification reasons, or common doctrines

Potential violation of privacy Legal basis to determine whether or not such acts as defamation or insult require democratic and publicity elements. Democratic requirement does not allow/justify convictions to the statements that are not spoken or written publicly. Therefore, 'private correspondence' and 'private conversation' are not a subject or object of punishment. While the publicity requirement requires such offense must be in writing on printed and electronic media or made verbally. nsult/defamation as an offense is always based on the element of 'with the intent to be known by public'.

No clarity of complaint offense (delik aduan) or not

This article formulation is not clear whether it is a complaint offense or not. Genus crime of this article, namely, Articles 310 par. (2), 311, and 315 of KUHP are complaint offenses. The law enforcement officers can process the perpetrators if there are complaints from the victim or the injured party.

Eliminating the classification of insult and defamation

Create confusion on the maximum limit sanctions of imprisonment or fines of each class of insult (defamation, libel, slander, mild insult, the complaint of slander and false presupposition).

Eliminating justification reasoning of the insult

Article 27 paragraph (3) seems to have no relation to Article 310 of KUHP, thus it is not necessary to have justification reasoning, which is then became the root of the problem.

IV. Court Decisions on Article 27 Paragraph (3) of UU ITE From 2009 to 2015, ICJR recorded 20 cases brought before the court, in which the defendants are charged with the Article 27 paragraph (3) of UU ITE. Out of these 20 cases, ICJR finds 7 court decisions that can be the basis to defend cases on Article 27 paragraph (3) of UU ITE. These cases were successful, considering several key questions regarding regular offense or complaint, distribution element, procedural and evidence law, element of "has a charge of insult and/or defamation" and additional justification reason.

No Decision No. Defendant Court Instances

1 No. 1269/PID.B/2009/PN.TNG Prita Mulyasari Tangerang District Court

2 No. 1190 /PID.B/2010/ PN.TNG Drs. Diki Candra bin Didi Kustawa Tangerang District Court

3 No. 822 K/Pid .Sus/2010 Prita Mulyasari Tangerang District Court

Supreme Court

4 No. 116/PID/2011/PT.DPS Herrybertus Johan Julius Calame, S.Pd Singaraja District Court Denpasar High Court

5 No. 1832/Pid.B/2012/PN.Jkt.Sel Muhammad Fajrika Mirza, SH alias Boy bin A. Ganie Mustafa

South Jakarta District Court

6 No. 390/Pid.B/ 2014/PN. Mks Muhammad Arsyad, S.H. Makassar District Court

7 No. 196/Pid.Sus/2014/PN.BTL Ervani Emy Handayani Binti Saiman Bantul District Court

8 No. 292/Pid.B/2014/PN.Rbi Ir. Khairudin M. Ali, M.Ap Raba Bima Court

V. Key Considerations of Court Decisions Regarding Use of Article 27 Paragraph (3) of UU ITE 5.1. Regarding the Status of Article 27 Paragraph (3) UU ITE as an Absolute Complaint Offense One fundamental weakness of Article 27 paragraph (3) of UU ITE is whether or not this offense is an ordinary offense or an absolute complaint offense. Pursuant to the Constitutional Court Decision No. 50/PUU-VI/ 2008 and No. 2/PUU-VII/2009, it was concluded that the interpretation and implementation of Article 27 paragraph (3) of UU ITE is congruent with the application and interpretation of Articles 310 and 311 of KUHP as an absolute complaint offense as stipulated in Article 72 of the Criminal Code (see also the Supreme Court Decision No. 183 K/Pid/2010). As an absolute complaint offense, only those who become 'victims' of direct insult that may report the offense, not other people. In addition, the Raba Bima District court also affirmed the importance of mentioning the name naming along with the allegations. Otherwise, the statement does not have a charge of contempt as stipulated in Article 27 paragraph (3) of UU ITE. 5.2. Regarding the Criminal Procedure and Evidence Law (Digital Evidence as "Proof") In general, there are three classifications of electronic evidence forms (digital evidence) namely electronic documents congruent as mailing documents, electronic signatures equivalent to handwritten signatures, and aligning the electronic mail with regular postal mail. These documents need further validation, similar to traditional physical evidence. Evidence in Indonesian legal framework is stipulated under procedural law, either civil or criminal. Article 184 paragraph (1) of the Criminal Procedural Code (KUHAP) stipulated five types of evidence: (1) witness statement, (2) experts statement, (3) letter (documentary), (4) directive and (5) defendant statement. Although none of the procedural law provisions state the position of the electronic evidence (digital evidence), but KUHAP has established the foundation to recognize electronic evidence under Articles 41, 184 paragraph (1) letter c, and 187 letter (d). The Supreme Court responded to the presence of electronic evidence after the enactment of the KUHAP, namely Supreme Court Letter No. 39/ TU/88/102/Pid, dated 14 January 1988. The Letter states that microfilm or microfiche can be used as legal evidence in a criminal case court. These types of document, however, must be authenticated/validated from the case registration and trial proceeding. After the Reformasi era, many laws and regulations adopt electronic evidence to become part of the legal evidence in court. In UU ITE, the electronic evidence is not only part of the documentary (letter) and directive evidence as stipulated in KUHAP, but also a new evidence other than evidence that already exist. With the current framework, electronic evidence in Indonesia can be categorized into three types at the same time: documentary evidence, directive evidence, also as stand-alone evidence.

The most important thing to understand is the acknowledgement of electronic evidence before the Court, because electronic evidence can be manipulated by a third party and raise questions and debate on who is the owner of such electronic evidence. There are five types of electronic evidence: websites, communication in social media, e-mails, text messages, and documents stored in the computer that have a unique challenge to make such electronic evidence be admitted as evidence in court. Basically, electronic evidence is only as supporting evidence which needs to be confirmed through other evidence. Electronic evidence also has a lower position than the witness statement evidence in court.

Theoretically, evidence is valid if the procedures to collect such evidence carried out according to the law and by the competent authority. Related to electronic evidence (digital evidence), UU ITE categorizes that retreiving evidence by violating the law and carried out by the incompetent authority is a crime according to Article 30 of UU ITE. Proof of conversation in the form of photocopies that was taken in an unlawful manner and without any order from the competent authority, cannot be put forward as valid evidence in court. Validation of electronic evidence (digital evidence) in criminal justice process should comply with requirements under Article 6 of UU ITE, in which electronic evidence is considered valid if: (1) accessible, (2) presented, (3) its entirety secured, and (4) can be accounted as a whole to explain a situation. These conditions are cumulative and imperative to classify on whether an evidence presented before the court is appropriate. Of the abovementioned 20 cases, ICJR noted two cases that carefully consider the electronic evidence and its validation, mainly related to the offense element of "every person". This is evident in the case of Muhammad Fajrika Firza a.k.a Boy bin A. Ganie Mustafa, who was alleged as the manager of @fajriska Twitter account that deemed to defame Marwan Effendi. In its consideration, the South Jakarta District Court confirmed ownership of the account by conducting an examination and carefully looking at all witness statements presented in court, where all witnesses did not know and see whether such Twitter account really belongs to the defendant.

Then, in Muhammad Arsyad case at the Makassar District Court, with similar legal issues, there is difference in the validation outlined by the Court. Evidence presented is a personal status print out of PIN number 215A000AA, created by Muh. Zulhamdi Alam. Therefore the Makassar District Court considered with two-way validation: First, by presenting two or more people who are friends in BBM contact with the accused PIN number to prove that the owner of the PIN BBM number is really the owner of that property; Second, if there are no witnesses who testified, then examination should be done through digital forensics by informatics expert to ensure the owner of BBM account and PIN numbers, as well as determine determine whether a series of written words is indeed coming from the accused phone with such BBM and PIN numbers.

5.3. Regarding the Justification Reasoning Another fundamental weakness of Article 27 paragraph (3) of UU ITE is regarding the chapter name of KUHP that is used to formulate an offense. Consequently, there is no insult classification model similar to KUHP and it makes the lack of justification reasoning as recognized in Article 310 paragraph (3) of KUHP. In addition, law enforcers could freely interpret as to when the provision can and cannot be used, and at the same time determine or estimate the maximum penalties of imprisonment and/or fines for each class of insult by themselves—though it is limited by the maximum criminal sanctions under Article 45 paragraph (1) of UU ITE.

Furthermore, justification reasoning under Article 27 paragraph (3) UU ITE is not clearly defined. In practice, the Court generally refers to the justification reasoning from Article 310 paragraph (3) of KUHP, that is, on the formulation of "intentionally and without right" or formulation of "without right". “Without right” element is the reason on whether a person may or may not be convicted. Justification reasoning is established in the construction of Article 310 of KUHP that is in the public interest or as necessary defense.

In the case of insult using a website, the Tangerang District Court emphasizes the source of formulation is Chapter XVI Book II of KUHP based on defamation (Article 310 of KUHP), in which the reason for unlawful acts was dismissed (Article 310 paragraph

(3) of KUHP). If it was conducted for the public interest or because it was necessary to defend himself, the defendant has the right to distribute, transmit, make accessible electronic information even though it contains an insult. Although in general the Court refers to the justification reasoning in Article 310 paragraph (3) of KUHP, but in practice, the court also recognizes other reasons such as the truth of the statement and the statement that caused by emotion of a circumstance, as well as the statement in order to obey the prevailing law, wherein these reasons had caused the defendant was not convicted.

VI. Conclusion The abovementioned various court decisions showed that the formulation of a crime under Article 27 (3) of UU ITE requires many references to the panel of judges to interpret the elements correctly. However, there are several considerations from the decisions as lesson to deal with Article 27 paragraph (3) of UU ITE: First, Article 27 paragraph (3) of UU ITE is an absolute complaint offense, the interpretation of the norm is based on the Constitutional Court Decision

No. 50/PUU-VI/2008, and therefore it cannot be separated from its genus: Articles 310 and 311 of KUHP. Second, as an absolute complaint offense, only 'victim' of direct insult may report such offense. Third, regarding validation of electronic evidence, the panel of judges need to consider the ownership of social media accounts by confirming through examination and all witnesses’ statements in court. If there are no witnesses who testified, an informatics expert must conduct digital forensic examination. Fourth, regarding validity of the evidence as key evidence to the existence of a crime, the court decided based on Article 5 paragraph (4) in conjunction with article 6 of UU ITE. Fifth, regarding justification reasoning, the Court must conduct an assessment of "without right" element, that if there are critics and for public interest, then there is no element of insult or defamation.

ICLaD is licensed under a Creative Commons Attribution 4.0

International License

Corporate Liability under the Draft Bill on Criminal Code

Author: Aulia Ali Reza

Introduction

The origins of the term “corporation” or “corporate” can be traced to the Latin language "corporatio", a

noun originated from the Latin verb corporare, which is derived from "corpus" or “body/entity”. In other

words,a corporation or a company is a body or an entity that created under a law. It has physical

structure and personality.

Within the current Indonesia legal system, the position of a corporation as a subject to the criminal law

can be found on many laws and regulations, except the existing Criminal Code (KUHP). However, the

2015 version of the Draft Bill on Criminal Code (RKUHP) accommodates corporation as a subject to the

criminal law. Nevertheless, a thorough and in-depth elaboration on this matter must be taken into

further discussion, due to fundamental difference between a corporation and a natural person

(natuurlijk person) as a subject to the criminal law. Consequently, this discussion will touch several basic

concepts such as determination of fault, criminal actor, corporate criminal liability, and many other

issues.

Regarding the determination of fault, the interpretation of this concept as an essential element of

criminal liability is originally aimed at human (natural person), and not aimed at a corporation as a legal

person (recht persoon). It is evident from the broader interpretation. Such problematic interpretation

can be seen from intentional crime (dolus) or merely a negligence (culpa).

In addition, determining a criminal actor is also another problem. Even though a corporation itself can

be categorized as a legal person—and therefore subject to liability—all of its actions are conducted by

the board of directors, which represents the corporation as a legal person. Due to this fact, members of

the board of directors will be liable for the actions that have been taken, instead of the corporation

itself. Consequently, only members of the board of directors that can be criminalized and punished.

History of Corporation as a Subject to Criminal Law

The early history of corporation establishment is still unclear. However, it is fair to say that this

establishment was aimed to fulfill certain interests that cannot be satisfied by natural persons. With the

historical development, corporation was further affected by technological progress that brought great

influence in industrial activities, including changes of organization structure, human resources, assets,

capitals, and expansion of overseas business activities. Due to this development, the industrial sector

required a legal framework that may protect the interests of the employers and the society as well. Such

protection was realized in 1855 using a limitation of corporate liability, and it was shown by using the

word “limited” at the end of every corporation’s name.

France, a country that indirectly impacting

Indonesian legal system—due to French

colonization to the Netherlands—included

corporation as a legal subject under the Code de

Commerce and Code de La Marine. This concept

was further adopted by the Dutch legal system

under the Wetboek van Koopenhandel. As a

consequence, the development of this concept

also affected Indonesia, which by that time was

the Dutch’s overseas colony territories under

the name Nederland Indies.

There are three phases of development in

which corporation is treated as a subject to the

criminal law. Firstly, determining that actions on

behalf of a corporation, only apply to natural

person. In other words, any action conducted

under the corporation’s name is considered to

be executed by the members of the board of

directors as legal persons (naturlijk person),

because they have the duties to manage the

corporation (zorgplicht). This concept was

taken into place due to the doctrine known as

societas non potest or university delinquere non

potest. When the Dutch government

passed Wetboek van Straftrecht in 1881 and

adopted the aforementioned principle, it

influenced the Indonesian Criminal Code, and

therefore limits the liablity to natural persons

when it comes to corporation.

The second phase was the acknowledgement

that a corporation can actually commit a crime

(dader). However, the liability (prosecutions

and convictions) was still aimed at the board of

directors. Lastly, the corporate criminal liability,

which started to rose after World War II. During

this phase, it was possible to claim and ask for

liability against a corporation.

Impact of "No Punishment Without Law"

Principle to the Corporate Liability

The principle of "no punishment without law" is

an essential element under the criminal

law. Nevertheless, this important principle is

not explicitly incorporated under KUHP, unlike

the legality principle that is stipulated under

Article 1 paragraph (1). In essence, this principle

forbids criminal conviction against a person

when there is no provisions under a law, even

though the respective individual had committed

a certain action categorized as crime. The 2015

version of RKUHP mentioned the principle of

"No Punishment Without Law" under Article 38

paragraph (1), stating: "No one who commits a

crime is convicted without fault".

Regardless, the problem remains on the

implementation of such principle to a

corporation, as this is heavily related to the

attitude (intent or negligence) of human as a

natural person. The element of intent or

negligence arises because of the elements of

psychological and physical which are only found

in human as a natural person. Therefore, a

corporation can be considered to have no fault.

Van Bemmelen, additionally, believed that that

common knowledge between members of the

board of directors may be regarded as the

intention of the respective corporation. Jan

Remmelink also shared similar opinion, stating

that the lack of action from a corporation, or

any action there is, will be represented by

natural person. In this regard, a corporation can

still have fault from its board of directors who

perform their duties. Hence the principle of "No

Punishment Without Law" still applies to a

corporation.

The Theory of Corporate Liablity

There are several theories in regards to the

studies of corporate liability. Some of these

theories are even disregarded the element of

fault; in otherwords, the principle of "No

Punishment Without Law " is not strictly

applied. The discussion of these issues are

limited to four theories: the identification

theory, strict liability, vicarious

liability, and functional perpetration

(functioneel daderschap). The first three were

coming from Anglo-Saxon countries and relied

on actus reus and mens rea. Meanwhile, the

last theory was coming from Continental

European countries, specifically from the

Netherlands. Theories such as vicarious

liability and strict liability are actually existed

within the civil law practice. These theories are

furhter used in criminal liablity and punishment

against corporations.

a. Identification Theory Doctrine

The identification doctrine is often referred to

as the “alter ego theory”, which is based on the

position of a particular person, such as high-

level managers whom represent the "directing

mind" and "will" of a corporation. Under this

theory, the "mens rea" element is not directly

found on corporation, but on certain individual

as the "directing mind" of a corporation, or in

other words the “ego”, “center”, and/or “vital

organ” of a corporation. There are three

requirements to implement this theory: (a) the

respective person has the duties or authorities;

(b) the action is not a fraudulent act against the

corporation; and (c) carried out to benefit the

corporation.

It is evident that this doctrine is aimed at the

board of directors or high level manager, due to

their authority to act for and on behalf of the

corporation. Therefore, this doctrine is

sometimes considered as a legal barrier to

potential liability, as it does not adress the

crimes committed by lower level employees.

Furthermore, this doctrine is problematic to be

implemented towards the current form of

corporation, due to the modern characteristics,

which separates certain position from liablity

and prevents a single individual to have a broad

authority. Thus, such separation makes

corporation a more complex entity, and it is

difficult to determine which actions performed

by high level managers are actually

representing the corporation, as there are many

other employees involved.

b. Strict Liability Doctrine

Strict liability doctrine is adopted from the civil

law and often used on the tort law. In criminal

law, strict liability overrides mens rea, as clearly

defined by the Black's Law Dictionary: "a crime

that does not require a mens rea element, such

as traffic offenses and illegal sales of

Intoxicating liquor."

Pursuant to the Black's Law Dictionary

definition, this doctrine determines a liability

with sufficient proof that the offender

committed a prohibited action or actus reus,

without having to proof mens rea. It is based

on the “res ipsa loquitur" or facts already speak

for themselves.

Under the 2015 version of RKUHP, the strict

liability is imposed for specific offenses, as

stipulated in Article 39 paragraph (1) and its

elucidation. Pursuant to this provision, a person

can be punsihed solely due to the fulfillment of

a criminal offense elements, regardless of their

faults.

c. Vicarious Liability Doctrine

Similar to strict liability doctrine, vicarious

liability doctrine is also adopted from the civil

law system, which relates to the tort law.

Referring again to the Black's Law Dictionary,

this doctrine is defined as as the subordination

of relations between employers and employees

or principle with the agent.

This doctrine solved several issues regarding

corporate liability, because the implementation

of this doctrine allows punishment to lower-

level employees, unlike the identification

theory, which was only aimed at high-level

executives and managers. This doctrine is also

beneficial in terms of prevention, which

according to Low, employers are liable for their

employees actions, and therefore the

employers need to monitor and prevent

criminal acts.

Under the vicarious liability doctrine, a

corporation can be held liable for acts

committed by employees that conduct their

duty based on an employment

relationship. Implementation can only be done

if the Law explicitly allows it.

d. Functional Perpetrator Doctrine

(Functioneel Daderschap)

The last theory related to corporate liability is

the functional perpetrator, which was evolving

from Continental European countries. This

theory was first proposed Roling in his notes

under the Hoge Raad decision, dated 31

January and 21 February 1950. Referring to

Article 15 of the Wet Economische Delicten, a

corporation is able to commit offenses other

than economic crimes.

Meanwhile, Ter Heide concluded that if this

theory is implemented, then a corporation can

also be imprisoned and consequently placing

corporations in the whole criminal law

system. Furthermore, Ter Heide believed that a

corporation as the subject to criminal law can

also be found guilty. The fault comes from

systematic actions carried out by the respective

corporation.

Meanwhile, according to Bemmelen and

Remmelink, common knowledge between the

majority of the members of the board of

directors can be considered as the intention of

the corporation. Remmelink states that

functional perpetrator is the basis to charge

corporation with liability, in which the offenses

are coming from the socioeconomic

atmosphere and involve the issue on how those

activities should be implemented and

directed/aimed at specific functional

groups. Thus, functional offenses are

considered more suitable to be applied against

corporate.

About ICJR

Institute for Criminal Justice Reform (ICJR), having established in 2007, commits to take the initiative to support measures in realizing the proposed reformation. ICJR is formed with an exclusive mission to support collective actions in honoring the Rule of Law and realizing criminal

justice system with strong human rights protection character. Jl. Cempaka No 4, Pasar Minggu, Jakarta Selatan Jakarta – Indonesia 12530 Phone/Fax : (62-21) 7945455 infoicjr@icjr.or.id | @icjrid | http://icjr.or.id

Corporation as a Subject to Criminal Law in

Indonesia

a. Model of Corporate Criminal

Accountability in Indonesia

In regards to corporate liablity, Indonesia

adopts three models, as Mardjono

Reksodiputro in his paper, who proposed the

following:

1. Board of directors as the actor and the

corporation that will be held liable

2. Corporation as the actor, while the

board of directors will be held liable

3. Corporation as the actor as well as the

party that will be held liable .

In the first model, the board of directors is

imposed with certain obligations, although such

obligations are actually imposed to the

corporation. If the board does not meet these

obligations, they may be punished. This concept

is stipulated under Article 169 of KUHP, which

emphasized that criminal act and liablity will be

the burden of the board, instead of the

corporation. Under Articles 398 and 399 of

KUHP, which stipulate the bankruptcy of a

corporation, conviction is also imposed to the

board of directors.

Furthermore, under the second model, a

corporation as the legal subject is already

acknowledged to be able to commit a crime.

However, the liability is still imposed to the

board of directors. According to Mardjono

Reksodiputro, KUHP specifically adopted this

model under Article 59, which stated that a

corporation can commit a crime, while the

liability is imposed to the board of directors,

unless the member of the board of directors

can prove that s/he was not involved.

Moreover, the third model fully recognized

corporation as a legal subject, as the actor and

the party that will be held liable. The early

legislation that adopted this model is Law on

Goods Hoarding in 1951, which was followed by

Article 15 of the Economic Crime Law of 1955.

According to Sutan Remy S., the three models

lead to four possible systems for corporate

liablity as follows:

1. Board of Directors as the actor, and will

bear the criminal liability

2. Corporation as the actor, but the board

of directors that will bear the criminal

liability

3. Corporation as the actor and also bear

the criminal liability

4. Corporation and the board of directors

are both considered as the actors and

will bear the criminal liability.

b. Laws and Regulations Stipulating

Corporationg as the Subject to Criminal Law

As mentioned earlier, the first legislation that stipulated corporation as the subject to criminal law was the Law on Hoarding Goods in 1951, and it was followed by the Law No. 7 of 1955 Drt on Economic Crime. According to Muladi, since 1955 until now there are more than 60 laws that include corporate liability, and the following paragraphs summarize the provisions provided thereunder. Criminal Code (KUHP)

Under Chapter I Article 59 of KUHAP,

corporation is not considered as a legal subject

to the criminal law. If the board of directors

committed a crime, the member of the board of

directors will bear the liability. This will not

applicable if the member of board is not

involved in such crime, even though such action

was carried out for and on behalf of the

corporation.

Other articles related to corporation are Articles

169, 398, and 399. Under Article 169, KUHP

stipulated punishment for the associations that

established to committ a crime or offense and

forbidden gathering. Meanwhile, Articles 398

and 399 regulate the crime committed by the

board of directors or commissioners related to

the bankruptcy of a corporate. Against such

crime, there is no liability against a corporation.

Law (Drt) No. 7 of 1955 on Investigation,

Prosecution, and Trial of Economy Crime

This law adopted the provisions that previously

incorporated under the Wet op de Economische

Delicten in the Netherlands in 1950. Article 15

of te Law stipulates that action carried out by or

on behalf of a legal entity, corporation,

association, or foundation, then prosecution

and criminal sanctions will be imposed to these

entities.

Law No. 41 of 1999 on Forestry (Forestry Law)

Corporate liability can be found under Article 78

paragraph (14) of the Forestry Law. Under this

provision, a corporation will be considered as

the actor, but the board of director remains as

the party that will be held liable.

Law No. 32 of 2009 on the Environment

Protection and Management (Environmental

Law)

The Environmental Law recognizes corporation

as a subject under Article 1 point 32, by

expanding the definition of "everyone" (setiap

orang), which includes a corporation. As a

result, a corporation is considered as the actor

and can be held liable. The corporate liability is

further stipulated under Articles 116 paragraph

(1) and (2)

Moreover, Article 118 of the Environmental Law

stated “business entity” as the “functional

perpetrator”, which is further elaborated under

the elucidation that "functional perpetrator in

this article is a corporation and legal entity”.

Law No. 8 of 2010 on Prevention and

Combating of Money Laundering (Money

Laundering Law)

The Money Laundering Law is another

legislation that recognizes a corporation as the

subject to criminal law. Article 1 point 9 of the

Money Laundering Law expanding the

definition of “everyone”, by including a

corporation. Further, Article 1 point 10 of the

Money Laundering Law stated that a

corporation is defined as a "group of organized

persons and/or properties, either as legal entity

or non-legal entity".

Article 6 of the Money Laundering Law further

states that corporation is not limited to legal

entity, but also to group or other associations.

In conclusion, under this law, a corporation is

considered as the actor can be held liable.

Article 6 paragraph (2) of the Money Laundering

Law regulates criminal prosecution against a

corporation if the money laundering crime:

1. Conducted or ordered by the Corporate

Controller Personnel

2. Conducted in order to fulfill the

objective and purpose of the Corporate

3. Carried out in accordance with the

duties and functions of the actors or the

order, and

4. Conducted with the purpose of

benefitting the Corporate.

Corporation under the 2015 Draft of RKUHP

(RKUHP 2015)

Article 48 of the RKUHP 2015 states

that: "corporation is a subject to criminal

offense", which means that corporation is

explicitly recognized as a subject to the criminal

law. The RKUHP 2015 defines corporation as

legal entity or non-legal, which is further

elaborated under Article 189. With this

definition, corporation also include CV, firma,

and other incorporation.

The RKUHP 2015 includes the types of crimes

that can be committed by a corporation. Article

49 of the RKUHP 2015 has the same nuance

with the Environmental Law in formulating

criminal offenses committed by a corporation,

in which a corporation is always considered to

committ a crime by the representation of

individuals. However, a question is in place in

regards to the formulation of "person with

functional position", on whether or not this

concepts shares the same definition with

"functional actors" under the Environmental

Law.

The formulation of "functional position" under

RKUHP 2015 is more focused on the person

who represents the corporation. Therefore, the

corporation is not the functional perpetrator in

this article. In addition, the formulation of

"..was identified from board faults who have

functional position .." indicates that Article 49

of the RKUHP 2015 identifies actions and faults

from a corporation as directing mind (the

identification theory).

The implementation of identification theory

creates particular criticism, in which this

doctrine is considered as legal barrier to held

corporation liable, as this doctrine only aimed

at directors or high level managers, who have

the authority to act for and on behalf of the

corporate.

On the contrary, if the functional perpetrator

theory is used, imposing liability is not only

limited to persons with certain positions, but

also people who have relationship with the

corporation, members of the board of directors,

or the any person acting for the corporation.

Conclusion

The various provisions under many laws and

regulations regarding corporate liability—other

than KUHP—has caused legal uncertainty, due

to the differences of one regulation to

another. The RKUHP 2015 may harmonize all

the provisions, however, the concept adopted

in the recent draft still has shortcomings, due to

the implementation of identification theory as

the basis for criminal liability. This doctrine

requires action performed by someone with a

high position within a corporation to be held

liable for a crime. In contrast, the

Environmental Law implements functional

perpetrator doctrine, in which the liablity can

be broaden. Therefore, the doctrine that will be

used for the corporate liability provisions must

consider that will fit the practical

implementation.

About ICLaD

Indonesia Criminal Law Digest (ICLaD) is a new feature from Institute for Criminal Justice Reform (ICJR). ICLaD is presented by

the ICJR as one of the instrument and communication medium to inform the recent development on criminal law and criminal

justice system reforms in Indonesia.