22 Lives and the Failure to Calculate Risk

22 people died on 9 December 2025. They were trapped in the burning PT Terra Drone Indonesia building in Kemayoran, Central Jakarta. On 21 May 2026, the Central Jakarta District Court sentenced PT Terra Drone Indonesia’s Managing Director, Michael Wisnu Wardhana, to one year and four months in prison. The panel of judges found the defendant guilty of violating Article 474 paragraph (3) of the Criminal Code regarding negligence causing loss of life. For over two years, the company operated without fire detectors, smoke detectors, emergency staircases, evacuation routes, appropriate fire extinguishers (APAR), and fire drills. The judge described these conditions as systemic negligence in the ruling. The sentence was lighter than the prosecutor’s demand of two years in prison. No wonder the public questions whether one year and four months in prison is a proportionate punishment for the loss of 22 lives. However, for business operators, another equally important question arises: what is the actual cost of neglecting Occupational Safety and Health (K3)? If there is no inspection, implementation is often delayed. During business operations, alarms, APAR, evacuation routes, and fire drills rarely become a priority. The Terra Drone case proves such thinking is profoundly misguided. This is where the Economic Analysis of Law (EAL) approach becomes crucial. Developed by scholars including Richard Posner, this approach views human behaviour, including that of entrepreneurs, as the result of cost-benefit calculations. People will prevent risks if the cost of prevention is lower than potential losses. Many companies miscalculate this. Smoke detectors are deemed expensive, fire drills seen as disruptive to working hours, and K3 training regarded as mere formality.