Objetivos, Políticas y Estrategias de los Procesos

The Summary of the Case

The Indonesian Supreme Court Decision Number 862 K/Pid.Sus/2010 (hereinafter referred to as the Dongwoo Case) was the first Indonesian Supreme Court decision related to the criminal liability of corporations.335 _{This case is regarding the alleged violation of the}

Environmental Law, especially the violation of the Article 41 of the Environmental Law which states that:

Article 41

1. Any person who in contravention of the law intentionally carries out an action which

results in environmental pollution and/or damage, is criminally liable to a maximum imprisonment of 10 (ten) years and a maximum fine of Rp.500,000,000 (five hundred million rupiah).

2. If a criminal action as provided for in (1) above causes the death or serious injury of a person, the person who carried out the criminal action is criminally liable to a maximum imprisonment of 15 (fifteen) years and a maximum fine of Rp.750, 000,000 (seven hundred and fifty million rupiah).

The Dongwoo Environmental Indonesia (DEI) was the foreign investment company from South Korea that specialized in hazardous waste management. The company was located in Bekasi, West Java Indonesia. The core business of this company was to collect the hazardous waste from other companies and then conduct several waste treatments before sending it to the final waste disposal facility. During the period of 2005 to 2006 this corporation collected 468.2 tons of hazardous waste, but only 58.2 tons were sent to the final disposal facility. The other 410.2 tons of hazardous waste was kept in the company’s warehouse without any further treatment. The improper treatment of the hazardous waste caused the waste to leak into the ground and polluted the groundwater around the warehouse, causing several illnesses to the people around the company’s waste warehouse after consuming the polluted water.336

Since the case mentioned above involved a corporation, the way the prosecutor brought that case before the court is an interesting issue to discuss. In response to the violation of the Environmental Law by Dongwoo Corporation, the prosecutor firstly prosecuted all natural persons within the corporation who were involved in the misconduct, including the President Director of the DEI, Kim Young Woo and the Director of the DEI Kim Byung Seop. Those two directors were found guilty for the violation of Article 41 of the Environmental Law and sentenced to 6 months imprisonment and were fined 100 million Rupiah (approximately equal to 6400 Euro).337 Based on that decision, the prosecutor filed a new case against the same misconduct but with a different subject, this time against the legal person, which in this case was DEI. In the bill of indictment, the prosecutor accused the corporation for the violation of the Article 41 of the Environmental Law in conjunction with the Article 45 and 47 of the Environmental Law and the Article 64 Paragraph 1 of the KUHP.338 In the District Court, DEI was found guilty for intentionally polluting the environment and fined 350 million Rupiah (approximately equal to 21,800 Euro). In case the corporation failed to pay the fine, the court also imposed six months imprisonment on the corporation. Unsatisfied with this Bekasi District Court’s decision, the defendant appealed to the Bandung High Court. In its decision, the

336 _{The chronology is based on the fact In the Indonesian Supreme Court Decision Number 862 K/Pid.Sus/2010.} 337 _{The Bandung High Court Decision Number 157/Pid /2009 /PT.Bdg, on 11}th _{May 2009.}

338 _{The Article 45 of the Environmental Law regulates that the fine for corporations should be increased by a-}

third. The Article 64 Paragraph 1 of the KUHP regulates about the continuous act which may be resulted in the increasing of the criminal sanction.

Bandung High Court agreed with the decision of the Bekasi District Court. Filing the cassation to the Supreme Court was the last effort taken by the defendant. The Indonesian Supreme Court agreed with the former decision but changed the punishment for the defendant to a fine of 650 million rupiahs (approximately equal to 40,600 Euro) and if the defendant failed to pay the fine, the Supreme Court would also impose 6 months imprisonment. In addition, the court also imposed additional punishments by depriving the proceeds of crime, in this case 410 tons of sludge that came from the illegal activities of the corporation.

The Way the Legal Enforcers Implemented Corporate Criminal Liability in the Dongwoo Case

The Dongwoo Case has several interesting issues when analysing the way the prosecutor and the court examined the case. Furthermore, this case was the first decision of the Indonesian Supreme Court in corporate criminal liability case.

In that case, the inconsistency of writing the defendant’s identity led to confusion about who was the actual subject of the case (the defendant). The inconsistency began during the process in the District Court. In the bill of indictment, the prosecutor who wanted to prosecute the corporation, appointed Kim Young Woo, the director of the DEI, as a representative of the corporation and as the defendant in their indictment instead of directly pointing the corporation itself as the defendant. In the bill of indictment, the prosecutor mentioned the identity of Kim Young Woo as the representative of the corporation and as the defendant and did not mention the identity of the corporation at all. The prosecutor seemed to be confused about the subject in that case when formulating the bill of indictment for legal persons. Instead of mentioning the identity of the corporation as the defendant, the prosecutor mentioned that the defendant is

Kim Young Woo, the director and representative of the corporation.

Surprisingly, the District Court accepted the method employed by the prosecutor to formulate the identity of the defendant. In its decision, the District Court formulated the identity of the defendant in equivalent way as the prosecutor. The District Court was not consistent in formulating the defendant’s identity. In the judgment part of the district court’s decision, the formulation of the defendant’s identity changed. The District Court stated that the defendant was the corporation (DEI) and imposed a fine of 350 million rupiah.

The Indonesian Supreme Court didn’t do anything with the inconsistency of the identity of the defendant and still followed the form of the lower court’s decision. This is shown in the first page of the Supreme Court decision that mentioned the identity of Kim Young Woo as the

representative of the corporation and as the defendant as the natural person. Then, during the declaration of guilt of the accused, the Supreme Court declared that DEI was the defendant and convicted this corporation.339 In the memory of cassation filed to the Supreme Court, the defendant mentioned that the decision was obscure because the subject meant by the prosecutor was a corporation but in the bill of indictment the prosecutor mentioned the natural person. However, the court denied that claim when examining the case. The court did not consider the importance of a correct formulation of the defendant’s identity when the case involved the corporation as the defendant. The approvals of how the prosecutor formulated the identity of the defendant and then changed that formulation of the defendant’s identity in the court decision is proof of acceptance of the court.

The second controversy in the Dongwoo Case is the decision of the court to impose imprisonment in lieu of fine if the corporation failed to pay the fine. Similar to the inconsistency of writing the defendant’s identity, the imprisonment in lieu of fine was imposed based on the bill of indictment. That fact is further proof of the prosecutor’s confusion in determining the subject of the case. The request to impose imprisonment in lieu of fine when the defendant is a corporation, leads to the theoretical question who should undergo the imprisonment, in case the corporation fails to pay the fine. If the director and representative of the corporation is imprisoned when the corporation fails to pay a fine, the director would be the party that suffers most from the criminal sanctions, since they would be sanctioned as the natural person as well as the representative of the corporation. Moreover, the decision to impose imprisonment as the subsidiary sentence if the corporation failed to pay the fine is an improper sanction for corporations since it does not fit with the characteristics of the defendant.

Even though the way the formulation of the defendant’s identity and the requested sanction raised a question, the courts, from the District Court to the Supreme Court accepted the bill of indictment and imposed that sanction on the defendant. Even then, the court changed the way the prosecutor formulated the identity of the defendant. When the controversy of this case was inquired to the Supreme Court, the Chief of the Supreme Court Criminal Law Chamber, Artidjo Alkostar, stated that imprisonment as an alternative sanction is improper, since the subject of the decision is a corporation. However, considering the fact that the case was examined by other Supreme Court judges, he did not want to give further comment.340

339_{The Indonesian Supreme Court Decision Number 862 K/Pid.Sus/2010, p. 95.}

340 _{Interview with Artidjo Alkostar (The Chief of Criminal Law Chamber, Indonesian Supreme Court), (Jakarta,}

In establishing the criminal liability of the corporation in the Dongwoo case, the Court at least based its decision on three facts. The first fact is that the misconduct was committed and ordered by Kim Young Woo, the director of the DEI. The second fact is that Kim Young Woo as a natural person was found guilty of causing the environmental pollution in an earlier trial, which became solid proof that the corporation could also be considered as the perpetrator in the misconduct. The third is that the court also based its decision on the fact that the misconduct of the corporation was committed within the daily activity of the corporation and was related to the business core of the corporation. Therefore, the court decided that the corporation intentionally committed the environmental pollution.