Legal Literacy - This article discusses corporate criminal liability in the new Criminal Code. Want to know about criminal liability? Let's take a look
Written by: Wilson Fu, S.H. (Legal Intern at Schinder Law Firm)
Ratification of the New Criminal Code
On January 2, 2023, the Draft Criminal Code Criminal Law has been enacted into Law Number 1 of 2023 concerning the Criminal Code (New Criminal Code). The enactment of the law aims to replace Law Number 1 of 1946 concerning Regulations Criminal Law (Old Criminal Code). The promulgation of the New Criminal Code marks the beginning of the transition to the era criminal law made in Indonesia. This is because the Old Criminal Code is known as the Dutch colonial heritage Criminal Code.
Renewal of the Old Criminal Code and New Criminal Code Provisions
One of the differences between the Old Criminal Code and the New Criminal Code is related to the regulation of corporate responsibility. Prior to the enactment of the New Criminal Code, the regulation of corporate criminal liability was scattered in various laws, such as the Emergency Law on Investigation, Prosecution, and Adjudication of Economic Crimes; the Law on Corruption; the Law on Environmental Protection; and others. In the New Criminal Code, corporate criminal liability is regulated in Articles 45 to 50. With this regulation, corporations can be held accountable for criminal acts in general, so that it is not only limited to several criminal acts regulated in the several laws mentioned above.
Expansion of the Definition of Corporation in the New Criminal Code
The definition of corporation in the New Criminal Code has also been expanded. Based on Article 45 of the New Criminal Code, a corporation is a subject of criminal acts that includes legal entities in the form of limited liability companies, foundations, cooperatives, state-owned enterprises, regional-owned enterprises, or those equated with them, as well as associations whether they are legal entities or not legal entities or business entities in the form of firms, limited partnerships, or those equated with them in accordance with the provisions of laws and regulations.
This expansion can be seen in the affirmation of “associations whether they are legal entities or not legal entities.” The affirmation of unincorporated associations is not found in the Emergency Law on Investigation, Prosecution, and Adjudication of Economic Crimes which is a reference in economic crimes. Article 618 letter (b) of the New Criminal Code also affirms that the definition of corporation in laws and regulations outside the Criminal Code is equated with the definition of corporation specified in the Criminal Code.
A criminal act committed by a corporation is a criminal act committed by a management who has a functional position in the organizational structure of the corporation or a person who, based on a working relationship or based on another relationship, acts for and on behalf of the corporation or acts in the interests of the corporation, within the scope of the corporation's business or activities, either individually or jointly.
Not only that, corporate crimes can be committed by those who give orders, controllers, or beneficial owners of the corporation who are outside the organizational structure, but can control the corporation. Based on the explanation of the article, the controller of the corporation is the policy maker of the corporation or a person who has the authority to carry out the corporation's policies without having to obtain authorization from his superiors.
The criminal act by the corporation can be accounted for after fulfilling the following requirements:
- Included in the scope of business or activities as determined in the articles of association or other provisions applicable to the corporation. Based on the explanation of the article, “scope of business or activities” also includes business activities generally carried out by the corporation.
- Illegally benefits the corporation;
- Accepted as corporate policy.
If a criminal act is committed by and for a corporation, prosecution can be carried out and accountability for the criminal act can be imposed on the corporation, management with functional positions, order givers, controllers, and/or beneficial owners of the corporation. However, Article 50 of the New Criminal Code also provides an opportunity for these subjects to release themselves from criminal liability by submitting justifying reasons. The explanation of the article provides an example of a company employee who damages a government-owned waste disposal pipe to save the company's employees.
Corporate Criminal Liability
A corporation proven to have committed a criminal act will be subject to criminal sanctions in the form of principal and/or additional penalties. Based on Article 119 of the New Criminal Code, the principal penalty for corporations is a fine. Meanwhile, based on Article 120 of the New Criminal Code, additional penalties for corporations consist of payment of compensation, remediation of the consequences of the criminal act, implementation of neglected obligations, fulfillment of customary obligations, financing of job training, confiscation of goods or profits obtained from the criminal act, announcement of court decisions, revocation of certain permits, permanent prohibition from committing certain acts, closure of all or part of the place of business and/or activities of the corporation, freezing of all or part of the business activities of the corporation, dissolution of the corporation.
In addition to criminal sanctions consisting of principal and additional penalties, based on Article 123 of the New Criminal Code, corporations can also be subject to action sanctions, which consist of corporate takeover, financing of job training, placement under supervision, placement of the corporation under guardianship.
Regulations corporate criminal responsibility in the New Criminal Code results in corporations being more at risk of criminal liability because corporations can be held accountable for general criminal acts or, in other words, all criminal acts. Therefore, corporations must be more careful in taking actions to avoid these legal risks. The New Criminal Code will come into effect 2 (two) years from the date of enactment.
*This article represents the personal opinion of the author and does not represent the views of the editorial team Legal Literacy Indonesia.
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