Unravelling Investment Problems
President Prabowo Subianto has issued Presidential Decree Number 4 of 2026 (Keppres No. 4/2026) establishing a Task Force for the Acceleration of Government Programmes to Support Increased Economic Growth. The purpose of Keppres No. 4/2026 is to focus on accelerating the implementation of economic packages and unravelling investment and licensing barriers. The issuance of Keppres No. 4/2026 follows the weakening of the rupiah exchange rate, the decline in the Composite Stock Price Index (IHSG), and several other investment problems indicating that many investment issues need to be addressed.
Referring to the World Bank report on the ease of doing business in Indonesia, the main investment problems in Indonesia are legal certainty related to licensing and law enforcement. These two issues are the primary factors behind the stagnation and weakening of the ease of doing business index, which serves as a reference for investors. This means that both issues indeed require government attention.
Meanwhile, referring to the index released in early 2026 by the World Justice Project, legal certainty in Indonesia in 2025 was very low, with an index of 5.5, whereas the lowest country index is 4.0 and the highest is 9.0. The survey conducted by the World Justice Project is not the only index, but several similar surveys show more or less the same index, so this issue also requires serious attention.
Tracing back at least ten years, these two issues have been classic problems since the era of President Joko Widodo, and even previous presidents. During President Joko Widodo’s tenure, deregulation, licensing, and law enforcement were also ‘classic’ investment problems in Indonesia. At that time, economic acceleration and deregulation packages were also issued during President Joko Widodo’s first term.
The suboptimal performance of these packages was then followed up with various electronic-based licensing regulations known as the online single submission (OSS) system, which has never functioned perfectly and has continually undergone system, model, and technical improvements to this day. The culmination was the creation of the omnibus law, the Job Creation Law, which was expected to be a ‘game changer’, but in fact the Job Creation Law ‘withered before it bloomed’ and did not make a significant contribution. Currently, the omnibus Job Creation Law is in a ‘tattered’ condition because many articles have been annulled and amended by the Constitutional Court.
SOLUTION
The question then is how to solve the existing problems so that ease of doing business can be realised and investor confidence can be built. The problems hampering investment have now been identified, namely licensing issues and legal certainty issues in relation to law enforcement. The optimism that can be built is that at least the problems have been identified and validated by various credible surveys and reports.
The spirit to simplify licensing as a form of realising ease of doing business in Indonesia was initially set out in Presidential Regulation Number 91 of 2017 on the Acceleration of Business Implementation. Government Regulation Number 24 of 2018 on Electronically Integrated Business Licensing Services and Presidential Instruction Number 7 of 2019 on the Acceleration of Ease of Doing Business constitute the operational foundation of Presidential Regulation Number 91 of 2017. In this regard, one way to realise ease of doing business is to use an electronically integrated business licensing service model.
First, regarding the classic licensing problem, the difficulty and length of licensing procedures in Indonesia, the solution is actually to realise a proper OSS-based licensing system. There are two essences of OSS-based licensing: online, meaning all licensing processes can be carried out online and in an integrated manner so that they are easily accessible while simultaneously resolving bureaucratic problems in licensing procedures. Single submission itself means that data uploaded, sent, and received can function identically and be accepted across agencies, given that licensing procedures in Indonesia often involve many institutions.
The meaning of single submission that must also be realised is moving towards integrated, unified licensing procedures and realising data sharing between agencies. Without integrated licensing procedures, ease of doing business cannot be realised because investors will still have to deal with lengthy licensing bureaucracy full of uncertainty.
These efforts need to be accompanied by reducing the number of licences that must be obtained. This issue was once a focus when the omnibus Job Creation Law was being drafted. Efforts to shorten the procedures (duration) of licensing stages can be realised if OSS-based licensing can accommodate data sharing functions between agencies, thereby unravelling the lengthy bureaucracy in licensing procedures.
Likewise, data sharing is also seen as capable of realising legal certainty because it provides the same data foundation for every agency in licensing procedures. Data sharing between agencies can also be used to realise the integrated nature of licensing procedures, meaning investors do not need to obtain repetitive licences from different agencies, so both the number of licences required and the procedural stages of licensing can be reduced through data sharing between agencies.
The second problem is legal certainty in relation to law enforcement. In this matter, the focus is on how rules and laws can be applied by law enforcement officials to business activities and how these rules are used as they should be. Legal certainty through ideal law enforcement occurs when laws and regulations are enforced effectively, including the realisation of transparent and fast administrative processes in law enforcement.
Likewise, efforts to improve legal certainty in relation to law enforcement involve using the business judgement rule (BJR) doctrine to assess whether an investment process falls within the business and civil domain or enters the criminal domain that must be resolved through criminal law. If the BJR doctrine is set aside and criminal measures are used carelessly, this will become a worrying condition for both domestic and global investors.
INVESTMENT RISK IS NOT CRIMINAL
Recently, a debate has emerged in society about whether losses in business or investment fall within the civil or criminal domain. This includes defaults on credit agreements provided by banks owned by state-owned enterprises, whether they fall within the civil or criminal domain. Some parties consider losses as business risks whose accountability is civil in nature, while others consider that losses to the state by state-owned enterprises have criminal consequences and fall within the corruption domain.
To assess whether a loss constitutes a risk or whether there was bad intent to harm another party, it must be viewed comprehensively as a series of events. This means it cannot be immediately determined that a loss falls within civil or criminal resolution. The terminology of risk is not specifically regulated in the Civil Code, but various legal literature explains that risk is a condition not expected by the parties.
Furthermore, risk can be divided into risks that can be anticipated by the parties and risks that cannot be anticipated by the parties. The qualification of a condition as a risk places it within the civil domain with no bad intent in the criminal context. This requires that the assessment of whether a condition or loss constitutes a risk or not must be evaluated comprehensively from before the agreement was made until the occurrence of the loss.
This means there are three important elements in assessing whether a condition qualifies as a risk. First, an assessment of whether the condition was expected or not by the parties. Second, whether the condition had been anticipated by the parties at the time the agreement was made; if anticipated, it means the parties had incorporated risk factors into the agreement. Third, whether the condition was beyond the parties’ anticipation based on their best knowledge. The terminology of risk in business losses cannot be applied broadly, although risk must also be acknowledged as an inseparable part of a business or investment, so that if it can later be proven that a condition or loss constitutes a form of risk, it must be resolved through civil mechanisms.
By elaborating each element of risk in civil terms, it simultaneously answers whether criminal liability attaches to the parties in a loss. The first element is whether the condition was expected or not by the parties, meaning whether the condition or loss occurred ‘by design’ or was already expected by the parties. If the condition or loss occurred ‘by design’, it means that from the pre-contractual stage there was already intent to cause loss, thus having criminal consequences. Conversely, if the condition or loss was not ‘by design’ or was not expected by the parties, it falls within the civil domain and its resolution is civil, not criminal.
Second, whether the condition or loss was anticipated by the parties. This needs to be proven by the existence of risk clauses in the agreement; it is common in credit agreements and investment agreements to have risk clauses or risk limitation clauses. This means that if the condition or loss was not ‘by design’ and was agreed upon by the parties in the agreement, then the attached responsibility and resolution are civil because they have been contractually regulated, as long as no bad intent is found manifested in concrete actions causing the loss. This includes the absence of any party benefiting from the condition or the occurrence of the loss.
Third, if the condition or loss was not anticipated by the parties, this also does not automatically constitute a criminal act. Referring to the corporate doctrine of fiduciary duty of care, as long as the management of the business entity and/or the parties have made decisions with sufficient data, proper processes, and appropriate due diligence, then the unanticipated risk is reasonably beyond the parties’ anticipation. These three elements must be fulfilled cumulatively for the risk to fall within the civil domain.
BUSINESS JUDGEMENT RULE DOCTRINE
The business judgement rule (BJR) doctrine has recently appeared frequently in various arguments in criminal courts. The BJR legal doctrine is actually a corporate law doctrine used to release business entity management from legal liability in the event of losses. The BJR legal doctrine is a continuation of the corporate doctrine of fiduciary duty of care regarding whether or not legal liability attaches to business entity management or business decision-makers in a loss situation.
The BJR legal doctrine is understood as a rule for decision-makers who make decisions based on best practices for business interests at the time the decision is made. The BJR legal doctrine views liability for losses based on the three elements of risk fulfilment as described above. This means that if it can be proven that the loss was ‘by design’ and intentional, or if a party is found to have benefited from the loss, then the BJR doctrine cannot apply.
The essence of the BJR legal doctrine is actually simple: ‘business’ means using the best measure for business interests. ‘Judgement’ means the assessment or decision is based on the needs or for the good of the business. Whether the decision was carried out with proper consideration and actions for the good of the business at the time the decision was made, meaning the assessment is made at the time the decision was taken, not retroactively when the loss occurred (using an assessment when the business condition already shows losses).
Simply put, if no intentional loss (by design) is found and the decision was taken properly with no party gaining profit or benefit from the loss, then even if a business loss occurs, it falls within the civil domain and must be resolved through civil legal mechanisms. The measure of risk and the BJR doctrine have provided clear and firm boundaries regarding liability in the civil domain and the criminal domain.
Resolution through criminal mechanisms needs to be carried out with caution and selectivity regarding business losses, given that not all business losses have criminal consequences. The incorrect and excessive application of criminal mechanisms is feared to create negative sentiment in the current investment climate.
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