Criminal Sanctions Proposed in Cooperatives Bill DIM
Minister of Cooperatives Ferry Juliantono has proposed the creation of a cooperative deposit guarantee institution within the Bill on the Fourth Amendment to Law Number 25 of 1992 concerning Cooperatives. Ferry stated that the establishment of this institution aims to increase the confidence of members and the public in using savings and loan services offered by cooperatives, without fear of default as occurred in 2020.
The proposal for a deposit guarantee institution is one of five put forward by the Ministry of Cooperatives during the bill’s deliberation. In a working meeting with Commission IV of the House of Representatives, Ferry also proposed the formation of an institution responsible for licensing, regulating, and supervising cooperative savings and loan businesses. He explained that this body would be tasked with regulation, supervision, governance, compliance oversight, and protecting members and the public from harmful cooperative business practices. The institution would also have the authority to impose administrative sanctions and prevent the misuse of corporate legal entities for purposes contrary to the law and cooperative principles.
Ferry further proposed the inclusion of criminal sanctions, arguing they are necessary to protect the interests of cooperative members and the wider community. However, he stressed the need for caution in their formulation to ensure the sanctions are not counterproductive, misdirected, or open opportunities for criminalisation, taking into account the literacy levels of administrators, supervisors, members, and the general public.
The revision of the Cooperatives Law has been mandated since 2014, following Constitutional Court Decision Number 28/PUU-XI/2013. Ferry assessed that the 34-year-old law is no longer relevant to current developments, necessitating a comprehensive overhaul of cooperative life in Indonesia. The Gerindra Party politician expressed confidence that the revision could realise the aspiration of making cooperatives the backbone of the Indonesian economy, including the ambition for several Indonesian cooperatives to rank among the world’s top 300 within the next 10 to 20 years.