Prabowo Approves DEN Proposal to Change Definition of Corruption
President Prabowo Subianto has reportedly approved a proposal by the National Economic Council (DEN) to change the definition of criminal corruption in Indonesia. DEN chairman Luhut Binsar Pandjaitan outlined the proposal after meeting Prabowo at the State Palace in Jakarta on Tuesday (20 October), stressing bribery and the need to distinguish criminal offences from ordinary business risks, Suara reported. DEN proposes that the definition of corruption refer to international provisions ratified by Indonesia.
Luhut said the approach was needed because the state-loss clause could place a burden on investment managers and state-owned enterprises (SOEs), including Danantara. He explained that the provisions cited by DEN focus on bribery. In his view, every business activity involves risk, so an investment loss does not necessarily indicate a criminal offence.
“Indonesia ratified the UN convention’s definition of corruption 20 years ago, and it is bribery. It does not refer to state losses,” said Luhut Binsar Pandjaitan, DEN chairman.
Luhut, who served as Coordinating Minister for Maritime Affairs and Investment under President Joko Widodo, highlighted the impact of the current provisions on investment managers’ ability to conduct commercial activities. Risk, he said, is inseparable from business decisions. “This does make it difficult for institutions such as Danantara to conduct business, because every business activity carries risk,” he said.
The proposal could affect how losses on state-owned companies’ investments are assessed in law enforcement proceedings. However, changing the definition of corruption would not automatically remove state losses from corruption cases, as application would depend on the wording of the law in force. Bribery, abuse of authority and unlawful acts would remain important considerations in determining whether an investment loss resulted from business risk or a criminal offence. The distinction matters to managers making investment decisions involving public funds and assets, where outcomes cannot always be certain.
Previous cases illustrate the complexity of handling investment losses. Nicko Widjaja, former president director of PT BRI Ventura Investama, was sentenced to three years in prison in a case involving investment in PT Tani Group Indonesia, or TaniHub, which was deemed to have caused losses to the state. The PT Asabri and PT Asuransi Jiwasraya cases also involved irregularities in investment management.
In both cases, law enforcers uncovered issues that went beyond investment performance and included alleged abuse of authority by parties involved. Alongside proposing a change to the definition of corruption, DEN plans to strengthen the provision of data to President Prabowo to inform government decision-making.