Indonesia has entered a new phase in its criminal law framework with the full entry into force of the new Criminal Code (KUHP 2023) and Criminal Procedure Code (KUHAP 2025). Together, these reforms represent the most significant restructuring of Indonesia’s criminal justice system in decades. While public discussion has largely focused on civil liberties and individual rights, the new framework also has far-reaching implications for corporations, senior management, and corporate governance.

Under the new Criminal Code, corporations are explicitly recognised as subjects of criminal law. This marks an important shift from the previous approach, where corporate criminal liability existed primarily through sector-specific legislation, such as environmental or anti-corruption laws. The new KUHP consolidates corporate liability within the general criminal law, clarifying that corporations may be held criminally responsible for offenses committed within the scope of their activities or for their benefit.

Crucially, liability is no longer limited to acts carried out by formally appointed directors or officers. The new framework allows criminal responsibility to be attributed based on functional authority and effective control. Individuals who exercise decision-making power, give instructions, benefit from misconduct, or fail to prevent or address known risks may expose both themselves and the corporation to criminal liability. This significantly raises the stakes for boards, senior executives, and managers, particularly in complex or matrixed organizational structures.

The procedural reforms under KUHAP 2025 further deepen corporate exposure by expanding investigative and enforcement tools available to law enforcement authorities. One of the most consequential developments is the formalisation of asset and access blocking as a coercive measure. Investigators may temporarily block bank accounts, digital platforms, transactional systems, or other assets during the investigation stage. While such measures are subject to legal challenge, their immediate operational and reputational impact can be severe, potentially disrupting business continuity even before guilt or liability is established.

At the same time, the new framework introduces a range of resolution-focused mechanisms that allow certain cases to be resolved without a full trial. These include deferred prosecution agreements for corporations, restorative justice mechanisms, administrative settlements such as “denda damai” (procedural mechanism to stop a case outside court by paying a fine, applicable to specific economic crimes) and plea bargaining for limited categories of offenses. These tools reflect a shift toward negotiated and managerial justice, aligning Indonesia more closely with enforcement practices in other jurisdictions.

Access to these mechanisms, however, is not automatic. Outcomes will depend heavily on how a corporation conducts itself before and after an alleged offense. Authorities are likely to assess the credibility of compliance systems, the effectiveness of internal controls, the speed and seriousness of remedial action, and the degree of cooperation with investigators. As a result, compliance is no longer merely a formal requirement but a central factor shaping legal exposure and resolution options.

For corporate leaders, the combined effect of the new KUHP and KUHAP is a recalibration of criminal risk. Criminal law now reaches deeper into organizational behavior, linking individual conduct, corporate governance, and institutional responsibility. Failures in oversight or compliance may no longer be viewed as isolated lapses but as indicators of broader organizational shortcomings.

In this evolving landscape, the central challenge for companies operating in Indonesia is preparedness. This includes active board-level engagement with compliance issues, clear documentation of decision-making authority, effective risk assessment and escalation mechanisms, and the capacity to respond swiftly and credibly when issues arise. As implementation of the new laws continues to develop, judicial interpretation and regulatory guidance will further shape enforcement practice. What is already clear, however, is that Indonesia’s new criminal codes have transformed the relationship between the state and corporate actors, making criminal law an increasingly central feature of economic governance.

Sources

• Law No. 1 of 2023 on the Criminal Code (Kitab Undang-Undang Hukum Pidana – KUHP).
• Law No. 1 of 2025 on the Criminal Procedure Code (Kitab Undang-Undang Hukum Acara Pidana – KUHAP).
• The Jakarta Post, “New KUHP, KUHAP meets legal pushback in Constitutional Court”, January 7, 2026.
• Earth.org, Austin Jenish, “How Malicious Lawsuits Are Silencing Activists in Indonesia”, January 19, 2026.
• The Jakarta Post, Michael H. Hadylaya, “KUHP and the limits of legal decolonization in corporate liability”, January 13, 2026.
• Hogan Lovells, “Indonesia’s new criminal codes take effect — Is your company ready?”, January 27, 2026.