ALSA LC UGM once again held one of its flagship annual events -- ALSA Legal Discussion 2020 -- on Wednesday, August 19, 2020. Unlike previous years, ALSA Legal Discussion 2020 was conducted entirely online via Zoom Meeting and the ALSA LC UGM YouTube live stream, in line with government guidance on efforts to curb the spread of COVID-19 in Indonesia. The event drew 90 participants on Zoom and 690 viewers on the live YouTube stream. Participants were predominantly university students from various regions across Indonesia, along with representatives of government institutions such as the Supreme Audit Agency (Badan Pemeriksa Keuangan/BPK) and regional inspectorates from various areas. ALSA Legal Discussion 2020 aimed to discuss the issue of corruption within state-owned enterprises (Badan Usaha Milik Negara/BUMN), bringing together practitioners and academics from different legal backgrounds, under the theme "BUMN Running at a Loss -- Does This Constitute Corruption?"
Three speakers served as resource persons for the discussion: Dr. Darminto Hartono, S.H., LL.M., a lecturer in the Department of International Law at the Faculty of Law, Universitas Diponegoro, who is also one of the Petitioners in Constitutional Court Decision No. 48/PUU-XI/2013, which tested Law No. 17 of 2003 on State Finance against the 1945 Constitution; Dr. Yadyn Palebangan, S.H., M.H., a Prosecutor in the Deputy Attorney General's Office for Special Crimes at the Attorney General's Office of the Republic of Indonesia, and one of the Prosecutors handling the PT Asuransi Jiwasraya corruption and money laundering case; and Dr. Oce Madril, S.H., M.A., a lecturer in the Department of State Administrative Law at the UGM Faculty of Law.
The event commenced at 3:10 p.m. WIB and was attended by Dr. Heribertus Jaka Triyana, S.H., LL.M., M.A., Head of the UGM Faculty of Law Undergraduate Program, who delivered remarks on behalf of the faculty. The talkshow-style discussion was moderated by Agathon Henryanto, S.H., ACIArb., Teaching Assistant in the Department of State Administrative Law at the UGM Faculty of Law. Throughout the discussion, the moderator posed prompting questions to the three speakers on topics including state equity participation in BUMN capital, losses in BUMN, criminal liability of BUMN directors, and related matters.
The moderator opened by asking about the relationship between the regulation of BUMN finances and state finances, and their connection to state losses. Dr. Darminto Hartono offered an argument from the perspective of commercial law, stating that if a BUMN incurs a loss, the state also suffers a loss - but only to the extent of the state's position as a shareholder. He also noted the importance of determining whether risk mitigation had been undertaken beforehand, in order to establish the cause of the loss. In response, Dr. Yadyn Palebangan stated that although BUMN assets are separated from state assets, BUMN directors bear not only civil and administrative liability but also criminal liability where unlawful conduct and conflicts of interest are found in connection with BUMN losses. From a state administrative law perspective, Dr. Oce Madril argued that there are many overlapping regulations governing BUMN losses, making it quite difficult to identify a regulatory basis on which to qualify a BUMN loss as a criminal act of corruption.
At the close of the discussion, the moderator asked all three speakers for their hopes regarding the issue of criminal liability for corrupt BUMN directors in Indonesia. Dr. Yadyn Palebangan argued that while the existing regulations require synchronization, one must also recognize the larger state interest at stake: the state's equity participation in a BUMN cannot release its directors from accountability. As long as a business decision was made in good faith and losses arose from the business process itself, no criminal liability attaches. However, if a decision was based on an unlawful act, intent, or criminal conspiracy that gives rise to fraud or irregularities violating the Anti-Corruption Law (UU PTPK) or the BUMN Law, directors must be held accountable. Dr. Darminto Hartono emphasized that if problems arise in a Limited Liability Company (Perseroan Terbatas/PT), they should first be addressed and approached through the framework of the Limited Liability Company Law. If fraud or intention to defraud is present, the intent element causing the loss must be examined, and it must be considered whether good faith was present. Finally, Dr. Oce Madril explained that the concept of state control over state assets must be maintained and cannot be relinquished. As long as state assets are involved, they must remain subject to applicable public regulation. He also affirmed that the debate over whether separated state assets fall within the definition of state finances is beside the point -- the focus should shift instead to how to build far better corporate governance, since good faith is difficult to assess when procedures have been widely violated.
Throughout the discussion, participants actively submitted questions to each speaker, which were selected and read out by the moderator during the Q&A session. The event concluded with a symbolic presentation of appreciation to the three speakers and the moderator, followed by a group photo session. The overall conclusion drawn from ALSA Legal Discussion 2020 was that qualifying a BUMN loss as a criminal act of corruption is no simple matter, requiring in-depth analysis. Most importantly, the priority must remain on improving BUMN performance in order to enhance the welfare of the people.
