Medios Interactivos y Alternativos

The Summary of the Case

The Indonesian Supreme Court Decision Number 787 K/PID.SUS/2014 (hereinafter referred to as Indar Atmanto Case) is the most recent case related to the imposition of the criminal sanctions on corporations for violating the Law on Eradication of Corruption.352 This

351 _{The Indonesian Supreme Court Decision in that case is an executable decision, even though Asian Agri was}

not the subject of the case, the corporation must comply with that decision. See Romli Atmasasmita, Hukum Kejahatan Bisnis: Teori dan Praktik di era Globalisasi, (Jakarta: Prenadamedia Group, 2014), p. 203.

case reached the final decision by the Indonesian Supreme Court on July, 10th 2014. The defendant of this case was Indar Atmanto, the former director of Indosat Mega Media (IM2), a subsidiary of PT Indosat, a telecommunication services and networks provider company in Indonesia. The case is concerned with a cooperation agreement that allowed IM2 to use Indosat’s resources in order for IM2 to provide internet services to the public. The prosecutor accused that by renting the frequency from Indosat, IM2 had unlawfully used the 2.1-gigahertz frequency and enjoyed the lower tax rate for a public company (Indosat) and did not pay the duties incurred by such use. That act resulted in a financial loss to the state.

The Corruption Court of the Central Jakarta District Court found Indar Atmanto guilty for corruption crimes by representing IM2 when entering into a cooperation agreement with Indosat, which lead to illegally enriching the company and creating a financial loss for the state. The District Court sentenced Indar Atmanto to four years imprisonment and fined him 200 million Rupiah (equal to 12,900 Euro). In its decision, the District Court had also ordered IM2 to pay 1.3 trillion Rupiah (equal to 81,250,000 Euro) to the state as a compensation for financial loss. The defendant then filed an appeal to the Jakarta High Court, which agreed with the District Court Decision but annulled the imposition of the sanction to the corporation (IM2) to pay the state compensation. The High Court stated that since the corporation is the subject of the Law on Eradication of Corruption, the imposition of any criminal sanction related to the corruption offences should include the corporation as the defendant. Therefore, in its decision, the Jakarta High Court only imposed the criminal sanction on Indar Atmanto, the defendant of that case. The High Court sentenced Indar Atmanto to eight years imprisonment and fined him 200 million Rupiah (equal to 12,500 Euro).

The case went to the Indonesian Supreme Court when both the prosecutor and the defendant filed the cassation. The prosecutor filed the cassation because the Jakarta High Court had annulled the imposition of the compensation of the state loss on the corporation. The final decision by the Indonesian Supreme Court accepted the cassation by the prosecutor by sentencing Indar Atmanto to eight years imprisonment and fined him 300 million Rupiah (equal to 18,750 Euro). The Supreme Court did not agree with the decision of the Jakarta High Court that annulled the imposition of the compensation of the state loss. The Supreme Court reinstated the sanction on the corporation. That means that IM2 had to compensate for the losses incurred by the State by paying a fine of 1,3 trillion Rupiah (equal to 81,250,000 Euro).

The Way the Legal Enforcers Implemented Corporate Criminal Liability in the Indar Atmanto Case

The Indar Atmanto case is another example of the position of the Indonesian Supreme Court that opens the opportunity to sanction the corporation when it is not the defendant of the case. The prosecution of Indar Atmanto, the former director of the corporation, is the first prosecution related to the corruption offence that emerged from the contract between Indosat and IM2. Actually, the prosecutor’s office will prepare the second prosecution directly to the corporation, in this case the IM2, for committing corruption since the corporation already became the suspect in the same case.353 It seems the prosecutors intended to wait for the final and binding decision in the first case. The prosecutor uses that strategy to provide solid proof to establish the criminal liability of corporations by using the conviction of the director of the corporation. However,in the Indar Atmanto case, the prosecutor formulated the charge to Indar Atmanto in such a way that they did not only ask the court to impose the imprisonment and fine on Indar Atmanto himself as the defendant, but also sanction the corporation to compensate the state’s loss from the corruption.

The prosecutor’s opinion expressed in its bill of indictment was that Indar Atmanto’s misconduct was committed in his capacity as a director of the corporation and for the benefit of the corporation; therefore, the corporation should compensate the state’s loss from corruption. The way the prosecutor formulated the bill of indictment has led to questions about the requested sanction on the corporation, since the corporation was not the defendant in that case, but was in the latter case when the prosecutor filed a second prosecution against the corporation.

Surprisingly, the request of the prosecutor to sanction the corporation was accepted by The District Court. In their decision, the District Court stated, firstly, that the defendant committed the misconduct in his capacity as the director of the corporation when signing the contract between Indosat and IM2. The District Court said that based on vicarious liability theory, the corporation could be liable for the act of their employee during employment. In this case, the conduct of Indar Atmanto as the director of corporation could lead to the responsibility of IM2. Therefore, the District Court stated that both Indar Atmanto and IM2 were the subject of the case even though formally, the defendant was only Indar Atmanto. Secondly, the District Court

353 _{Perusahaan Indosat dan IM2 Jadi Tersangka (Indosat and IM2 Became the Suspect), Kompas.Com, 5 January}

found that all profits from the contract between IM2 and Indosat were enjoyed by the corporation; therefore, in the District Court’s view it is fair for the corporation to compensate the state’s loss.

The Jakarta High Court demonstrated a different opinion in their appeal decision. The court stated that a corporation is also a legal subject in the Law on Eradication of Corruption. Therefore, a corporation must become the defendant within the case if the court wants to impose a criminal sanction. Since the IM2 was not the defendant, the imposition of the sanction to the corporation in the Indar Atmanto case was improper. Moreover, the additional sanction is a type of sanction that follows primary sanction to the same subject. In that case, the primary sanction was imposed to Indar Atmanto, but the additional sanction was imposed on another subject, that is the corporation. The Jakarta High Court also mentioned that if the prosecutor wanted the corporation to compensate the state’s loss, the prosecutor should prosecute the corporation itself as the defendant or file a case in civil court.

The decision of the Jakarta High Court related to the imposition of a criminal sanction on the corporation is the correct approach for punishing a corporation. Surprisingly the Supreme Court had a different view. In their cassation decision, the Supreme Court annulled the decision of the appeal court in favour of the argument of the District Court. The Supreme Court stated that the Law on Eradication of Corruption recognizes natural persons and legal persons as the legal subjects. Article 20 Paragraph 1 the Law on Eradication of Corruption states that if the criminal act of corruption is committed by or on behalf of a corporation, the lawsuit and the sentence can be instituted against and imposed on the corporation and/or its board of directors. In the view of the Supreme Court, that article has an alternative cumulative liability system in prosecuting and punishing corruption crimes conducted by or on behalf of a corporation. Thus, even though the prosecutor did not specifically or formally prosecute the corporation, since the defendant committed the misconduct on behalf of the corporation and in his capacity as the director of the corporation, the additional punishment to compensate the state’s loss can be imposed on the corporation.