When Can a Corporation Be Held Criminally Liable Under the New Criminal Code?

Under Law Number 1 of 2023 as the New Criminal Code ("New Criminal Code"), it is explicitly affirmed that corporations are recognized as subjects of criminal law in Indonesia, as provided under Article 45, marking a fundamental shift from the paradigm of the previous Criminal Code. In its implementation, corporate criminal liability cannot be separated from various doctrines developed in modern criminal law, such as strict liability, vicarious liability, and identification theory, which in principle serve as the conceptual basis for assessing the extent to which a corporation, as well as the parties who direct it, may be held liable for the occurrence of a criminal offense.

Accordingly, Articles 46 and 47 of the New Criminal Code exhaustively regulate the parties whose acts may be attributed to a corporation, namely: management holding functional positions within the organizational structure, any person who based on an employment relationship or other relationship, acts for, on behalf of, or in the interest of, the corporation within the scope of its business activities, whether individually or jointly including those who give orders, those who hold control, and beneficial owners who, although outside the formal organizational structure, factually have the capacity to control the corporation.

Furthermore, Article 48 of the New Criminal Code substantively regulates the parameters that give rise to a corporation's criminal liability, namely if the act falls within the scope of business as determined in the articles of association or other internal provisions, unlawfully provides a benefit to the corporation, and there is a failure by the corporation to take appropriate preventive measures, to prevent broader impact, and to ensure compliance with applicable legal provisions, or even allows the criminal offense to occur. If one or more of these elements are satisfied, then under Article 49 of the New Criminal Code, the corporation may be declared to have committed a criminal offense and may accordingly be held criminally liable in accordance with the applicable provisions.