Legal Protection for Directors of State-Owned Enterprises Against Corruption Criminal Liability in Corporate Action Decisions Under the Business Judgment Rule Principle

Abstract

This study examines the adequacy of the Business Judgment Rule (BJR) as a legal protection mechanism for directors of State-Owned Enterprises (SOEs) against corruption criminal liability arising from corporate action decisions. The issue is significant because SOE directors in Indonesia often face criminal prosecution when high-value business decisions result in financial losses, particularly in transactions involving acquisitions, mergers, divestments, or restructuring. Although Law Number 1 of 2025 has formally codified the BJR through Article 9F, its effectiveness remains uncertain due to the continuing tension between corporate law, state finance doctrine, and anti-corruption enforcement. This research employs normative or doctrinal legal research by analysing statutes, court decisions, legal doctrines, and relevant scholarly literature. The study uses statutory, conceptual, and case approaches, supported by grammatical, systematic, and teleological interpretation. The findings show that Article 9F provides only qualified protection, not absolute immunity, because directors must prove the absence of fault or negligence, good faith and prudence, no conflict of interest, and efforts to prevent losses. However, the protection remains inadequate in practice. The provision still contains multi-interpretable terms, while the legal status of SOE assets and the public-law position of SOE directors remain contested, especially after the deletion of Article 9G by Law Number 16 of 2025. Law enforcement institutions also tend to begin from the premise of state financial loss rather than first assessing whether the decision satisfies the BJR threshold. Consequently, the BJR functions as preventive protection only de jure, but often becomes merely repressive protection in court proceedings. This study contributes to doctrinal scholarship by showing that codification alone cannot ensure legal certainty. It recommends binding judicial guidance and mandatory independent legal audits for corporate actions to operationalise the BJR as a predictable preventive safeguard.