KPK Responds to Luhut’s Proposal to Exclude State Losses from Corruption

KPK chairman Setyo Budiyanto has responded to National Economic Council (DEN) chairman Luhut Binsar Pandjaitan’s proposal that state losses should not be classified as corruption. Setyo said there was indeed a difference in interpretation between the United Nations Convention Against Corruption (UNCAC) and Indonesia’s Corruption Law.

“There is a difference in the interpretation of the state-loss requirement in UNCAC and Articles 2 and 3 of the Corruption Law,” Setyo said on Wednesday (21 October 2026), when asked about Luhut’s proposal.

Setyo explained that Indonesia has specific considerations in handling corruption, based on the methods frequently used by offenders.

“But it must also be recognised that Indonesia’s particular circumstances should be taken into account, especially the methods that have commonly been used,” Setyo said.

Setyo said that if Luhut was using UNCAC as a reference, the more appropriate approach would be to amend the Corruption Law. He said additional types of corruption should be included in the legislation.

“If UNCAC is the reference, it would be more appropriate to amend the Corruption Law to criminalise foreign bribery, trading in influence, bribery in the private sector and illicit enrichment,” he said.

Luhut had previously proposed a review of the definition of corruption offences in Indonesia. He put the proposal directly to President Prabowo Subianto.

The proposal was raised when Luhut and other DEN members met Prabowo at Merdeka Palace in Central Jakarta on Tuesday (20 October).

“The President also agreed with the study prepared by the National Economic Council team on the definition of corruption,” Luhut said on Wednesday (21 October).

His proposal is that state losses should not constitute a corruption offence. He said this was consistent with UNCAC, which the government has ratified.

“We are referring to the UN Convention’s chapter on the definition of corruption. The definition in the UN Convention, which the government ratified 20 years ago, is bribery; it does not discuss state losses,” Luhut said.

He said Indonesia was the only country to treat state losses as one of the forms of corruption. According to Luhut, this places a burden on the business operations of state-owned enterprises, including Danantara’s ability to undertake corporate actions.

“Because Indonesia is the only country that applies the issue of state losses, this makes it difficult for entities such as Danantara to do business, when every business carries risks. That is why I think this is important,” Luhut said.