The Search of the Ombudsman Office and the Test of Institutional Integrity

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The search of the office of the Ombudsman Republic Indonesia by investigators from the Kejaksaan Agung Republic Indonesia has drawn significant public attention. An institution known for supervising public services is now involved in a legal investigation. This situation raises questions among the public regarding the integrity of state institutions and the effectiveness of the existing oversight system.

The Ombudsman plays an important role in monitoring public services and handling public complaints related to maladministration by government institutions. Therefore, when this supervisory institution becomes part of a legal investigation, public trust may be affected. People may begin to question how an institution responsible for oversight could become involved in a law enforcement process.

However, the action taken by the Attorney General’s Office can also be seen as a demonstration of law enforcement that does not discriminate. In a state governed by the rule of law, no institution or individual is above the law. If there are allegations that certain parties are involved in a case, investigators have the authority to conduct searches and examinations to uncover the facts.

This case also highlights that the fight against corruption in Indonesia remains complex. Corruption often involves broad networks that may include private actors as well as public institutions. In such situations, law enforcement agencies must work professionally, transparently, and based on strong evidence so that the legal process can proceed fairly and without creating unnecessary speculation in society.

At the same time, the public should observe this case objectively while upholding the principle of the presumption of innocence. Legal processes must be allowed to run their course without excessive pressure or premature conclusions. If violations of the law are proven, those responsible must be held accountable according to existing regulations. Conversely, if no sufficient evidence is found, the reputation of the institution concerned should be restored.

This incident should serve as a moment of reflection for all state institutions to strengthen their internal integrity systems. Transparency, accountability, and ethical standards among public officials must remain priorities in carrying out governmental duties. By doing so, public trust in state institutions can be maintained.

Ultimately, strengthening institutional integrity is essential to building clean and credible governance. Public trust is a fundamental asset for ensuring that oversight, public service, and law enforcement functions operate effectively in Indonesia. Without that trust, efforts to create good governance will be difficult to achieve.

By : K&Co - March 9, 2026

Alert Status 1 and the Test of Civilian Supremacy in Indonesia

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The recent instruction by the Indonesian Armed Forces (TNI) leadership to enter Alert Status 1 has sparked a serious public debate. Civil society organizations argue that this policy is not only procedurally problematic but may also contradict constitutional principles. This criticism should not be dismissed as mere political polemic; rather, it serves as an important reminder about the relationship between the military, the state, and democracy in Indonesia.

The Civil Society Coalition for Security Sector Reform considers the instruction inconsistent with the constitution because military deployment is fundamentally under the authority of the President, as the highest commander of the Army, Navy, and Air Force, according to the 1945 Constitution. They also cite Law No. 34 of 2004 on the TNI, which stipulates that decisions regarding military deployment are vested in the President, not the TNI Commander.

From a state‑administration perspective, this criticism has solid grounding. In a modern democracy, the military must be under civilian oversight. Civilian supremacy is not only about formal command but also about accountability and political legitimacy. When decisions that could mobilize military forces are made without clear communication from the highest civilian authority, public concern is entirely understandable.

Furthermore, the civil society coalition questioned the urgency of declaring Alert Status 1. According to them, the current national security situation is still under the control of civilian government and law enforcement agencies, and there is no immediate threat to national sovereignty requiring widespread military mobilization.

The question of urgency is crucial. Alert Status 1 represents the highest level of military readiness, meaning troops and equipment are fully prepared for deployment. Without transparent explanations, this policy leaves room for speculation. In a democratic state, sensitive security policies require clear public communication to avoid unnecessary fear or suspicion.

Indonesia’s historical experience with military dominance in politics during the New Order era makes this issue particularly sensitive. The 1998 Reformasi period marked a major shift, separating military roles from civilian affairs and emphasizing TNI professionalism as a national defense institution. Any policy that blurs the line between military and civilian authority naturally triggers public sensitivity.

These concerns are not baseless. In recent years, debates about the TNI’s involvement in civilian roles and non‑combat operations have resurfaced, raising fears that security sector reform is not fully entrenched.

Nevertheless, civil society criticism should not be interpreted as being anti-military. On the contrary, such scrutiny is a vital mechanism in democracy to ensure that the military remains professional and operates within constitutional boundaries. A strong military in a democracy is not one above civilian control, but one whose legitimacy stems from adherence to law and democratic principles.

Ultimately, this controversy highlights the importance of transparency and public communication by both the government and the TNI. Clear explanations regarding the reasons, objectives, and legal basis for Alert Status 1 are necessary to prevent misunderstandings.

If managed well, this debate could strengthen Indonesia’s democracy. Civil society oversight, open government response, and adherence to the constitution form the foundation to ensure that the relationship between the military and the state remains firmly within democratic norms.

By : K&Co - March 9, 2026

Indonesia’s 25-Day Fuel Reserve as a Warning for National Energy Security

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The statement by Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, that the country’s fuel reserves can only last around 20–25 days should be taken as a serious warning about the fragility of Indonesia’s energy security. For a country with a large population, growing economic activity, and heavy reliance on fossil fuels, such a reserve level is relatively low. This situation is not merely a technical issue related to storage capacity but also reflects deeper structural challenges in the management of the nation’s energy system.

When compared with many other countries, the standard for strategic oil reserves is generally much higher. Several nations maintain energy reserves that can cover around 90 days of consumption as a precaution against potential disruptions in global supply. Such disruptions may arise from geopolitical conflicts, economic crises, or natural disasters that interfere with energy distribution routes. In these situations, countries with larger reserves are better positioned to maintain economic and social stability.

Indonesia actually possesses considerable natural energy resources. However, over the years, national energy demand has continued to rise alongside population growth and economic development. At the same time, domestic oil production has gradually declined and is no longer able to fully meet the country’s needs. As a result, Indonesia has become increasingly dependent on imported fuel. This dependence makes the nation more vulnerable to fluctuations in global oil prices as well as disruptions in international supply chains.

In his remarks, Bahlil emphasized that the main issue lies not only in the availability of oil but also in the limited storage infrastructure. In other words, even if the government intends to increase the national fuel reserve, the current storage facilities are not sufficient to accommodate a larger supply. This indicates that energy infrastructure development in the past may have focused more on distribution and consumption while paying less attention to strategic reserve capacity.

The government’s plan to develop larger fuel storage facilities should therefore be appreciated as an important initial step toward addressing this problem. If Indonesia manages to expand its storage capacity so that reserves can cover up to three months of consumption, the country’s energy security would become significantly stronger. Adequate reserves are crucial not only for responding to global crises but also for helping the government stabilize domestic fuel prices when international markets experience volatility.

However, building storage infrastructure alone will not be enough. Indonesia also needs to accelerate the diversification of its energy sources by developing renewable energy such as solar power, wind energy, geothermal energy, and bioenergy. This strategy is essential for gradually reducing the country’s dependence on petroleum. In addition, policies promoting energy efficiency must be strengthened so that national energy consumption can be managed more responsibly.

The issue of a 25-day fuel reserve should not be viewed merely as a temporary technical problem but rather as an opportunity to conduct a broader evaluation of Indonesia’s national energy strategy. Energy security is a fundamental component of national resilience. Without a strong and sustainable energy system, economic stability and long-term development could be put at risk.

Therefore, the government should treat this issue as a strategic priority. Investment in energy infrastructure, expansion of strategic reserves, and acceleration of the transition toward cleaner energy sources must move forward simultaneously. If these measures are implemented consistently, Indonesia will not only strengthen its energy security but also ensure more sustainable national development in the future.

By : K&Co - March 5, 2026

Greater Transparency in Share Ownership as a Step Toward a Stronger Capital Market

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The recent policy allowing broader public access to share ownership information in Indonesia’s capital market marks an important step toward improving transparency and governance. Under the new rule, information about shareholders who own more than 1 percent of shares in publicly listed companies can now be accessed by the public. This initiative is part of efforts by regulators and market institutions such as Indonesia Stock Exchange and Indonesia Central Securities Depository under the supervision of the Financial Services Authority to improve the quality of information available to investors.

Previously, public disclosure generally focused on shareholders who owned more than 5 percent of a company’s shares. By lowering the disclosure threshold to 1 percent, the structure of share ownership becomes far more transparent and detailed. This change allows investors, analysts, and the public to gain deeper insights into who actually holds significant influence within listed companies.

Transparency is a fundamental pillar of a healthy capital market. In the investment world, information is one of the most valuable assets. Investors rely heavily on accurate and accessible data to understand company structures, identify potential risks, and evaluate corporate governance practices. When information about significant shareholders is easily available, investors can make more rational and informed investment decisions rather than relying solely on speculation or market rumors.

Moreover, increased transparency may help strengthen investor confidence, particularly among international investors. Global investors often view transparency and strong governance standards as key indicators of a reliable financial market. By adopting policies that promote openness, Indonesia demonstrates its commitment to improving market credibility and aligning itself with international best practices. This could also support the country’s efforts to enhance its standing within global market indexes and attract more foreign investment into the national capital market.

However, while greater transparency brings many benefits, it also presents certain challenges. On the positive side, open access to ownership information can improve accountability and reduce opportunities for market manipulation or hidden control structures within companies. Investors can more easily detect concentration of ownership, potential conflicts of interest, or unusual accumulation of shares by certain parties.

On the other hand, some observers argue that excessive disclosure could potentially be exploited by market speculators. Detailed ownership data might enable certain market players to monitor the strategies of major investors and react quickly in ways that create volatility. For this reason, transparency must always be accompanied by strong regulatory oversight and monitoring to ensure that the information is used responsibly.

Another important factor is investor education. Making data publicly available does not automatically mean that all investors will be able to interpret it effectively. Many retail investors still rely heavily on trends, social media discussions, or informal recommendations rather than conducting thorough analysis. The availability of detailed ownership information should therefore be supported by broader financial literacy initiatives so that investors can use the data wisely and productively.

Furthermore, greater transparency may encourage better corporate governance among publicly listed companies. When ownership structures are visible to the public, companies and major shareholders are more likely to act responsibly and consider the reputational impact of their decisions. Public scrutiny can serve as an additional layer of accountability, encouraging more ethical and strategic management practices.

In conclusion, the policy to open access to share ownership information above 1 percent represents a positive development for Indonesia’s capital market. By strengthening transparency, the market can become more credible, efficient, and attractive to investors. Nevertheless, the success of this policy will depend not only on data disclosure but also on effective supervision, investor education, and the commitment of all market participants to maintain integrity within the financial system.

By : K&Co - March 5, 2026

Rupiah Under Pressure : A Test of Indonesia’s Economic Resilience

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The Middle East conflict has flared up again after attacks on Iran, sending shockwaves through global financial markets. Investors are flocking to safe-haven assets like the US dollar and gold, leaving emerging markets, including Indonesia, vulnerable. The rupiah has felt the impact, weakening against the dollar in recent trading sessions.

In this situation, the role of Bank Indonesia is crucial. BI has pledged to maintain rupiah stability through interventions in the foreign exchange market, including spot transactions and derivative instruments. This is not just a technical routine—it signals that the state is ready to uphold economic stability amid global uncertainty.

Many might wonder: why does a conflict in the Middle East affect the rupiah? The answer lies in global financial interconnectedness. When geopolitical risks rise, investors tend to reduce exposure to emerging-market assets and move capital into what they perceive as safer assets, like the US dollar. This increases demand for the dollar while putting downward pressure on currencies like the rupiah.

However, it is important to note that the rupiah’s weakening in this context does not necessarily reflect weak domestic fundamentals. Rather, it is a sentiment-driven reaction. As long as inflation is controlled, foreign reserves are sufficient, and economic growth remains stable, external pressures are usually temporary.

This is where the credibility of the central bank is tested. BI is not just managing exchange rates; it is maintaining market confidence. When markets trust that the central bank has the tools and willingness to act, volatility can be mitigated. Confidence, in modern financial systems, is the most valuable currency.

Of course, interventions are not a long-term solution to all external pressures. Rupiah stability also depends on the strength of Indonesia’s domestic economy. Diversifying exports, reducing energy import dependency, and strengthening industrial and downstream sectors are crucial to lowering vulnerability to external shocks.

Global conflicts are beyond Indonesia’s control. The country cannot stop wars or dictate international politics. But what it can control is policy response and the resilience of its economic system. With careful, measured, and consistent policies, external shocks can be absorbed without triggering a crisis.

This moment should also serve as a reminder: economic stability is not automatic. It is built on fiscal discipline, credible monetary policy, and public trust. When these are balanced, even global turbulence cannot easily shake domestic foundations.

Pressure on the rupiah from international conflicts is real and should not be ignored—but panic is not the answer. What is needed is vigilance, coordinated policy, and clear communication to the public.

Ultimately, this is about more than just exchange rates. It is a test of Indonesia’s economic resilience in an increasingly uncertain world. With strong fundamentals, global storms can be weathered. With weak foundations, even minor shocks can escalate into major crises.

Right now, that test is underway.

By : K&Co - March 2, 2026

Internet Quota : A Right or Just an Active Period?

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

The recent decision by Indonesia’s Constitutional Court to reject the judicial review against the unilateral internet quota expiration scheme marks a pivotal moment in the ongoing debate over digital rights, consumer protection, and regulatory fairness in the digital economy. While the ruling might reflect judicial restraint and deference to legislative discretion, it also highlights a broader challenge: ensuring that laws keep pace with how modern society uses digital resources and how these resources have become essential to daily life and livelihood.

At the core of the case were consumers — including a ride-hailing driver and a food vendor — who argued that unused internet data, once paid for, should not simply vanish without clear justification or compensation. For many digital service users today, internet data is not a luxury; it is a tool of trade, essential to earning income and staying connected. In this context, losing unused data because of arbitrary time limits imposed by service providers feels, understandably, like a loss of both value and justice.

Critics of the current system have drawn comparisons to prepaid electricity tokens, where unused kilowatt-hours can be consumed at any later time without expiry. The logic is compelling: if customers pay in advance for a quantifiable good, they should retain access to that good until it is exhausted, regardless of arbitrary time constraints. While telecommunications and energy operate on different technical frameworks, the public perception of fairness can’t be ignored.

The Constitutional Court’s decision to reject the review does not mean the issue is unimportant — it simply delays a possible substantive debate on how consumers are protected under evolving digital service models. The ruling might signal that the Court believes legislative judgment should stand unless it clearly violates constitutional guarantees. However, unanswered questions about consumer rights, economic fairness, and how digital services are regulated remain pressing.

One of the central concerns is the power imbalance between telecommunications companies and everyday users. Operators, under the current framework, retain significant discretionary authority to design products and expiration schemes. Meanwhile, users shoulder the consequences, often with limited options or awareness of how these schemes are structured. This imbalance is symptomatic of a broader issue in digital consumer markets: regulations often lag behind market innovation, leaving consumers exposed.

Economists and consumer advocates also warn that while mandatory data rollover or refund schemes might impose costs on operators, these should be examined within a broader social lens. Digital access has become intertwined with access to economic opportunity, education, and civic participation. If data expiration policies disproportionately affect low-income users who cannot afford frequent renewals, then regulatory frameworks should evolve to protect equitable access.

Ultimately, the Constitutional Court’s refusal to revise the law should not be the end of this conversation — but rather a call to deepen it. Lawmakers, regulators, industry stakeholders, and civil society must work together to craft policies that reflect the realities of digital life in the 21st century. Transparency, fairness, and consumer protection should be at the forefront, ensuring that the benefits of digital connectivity are shared broadly and justly, not limited by outdated norms or unchecked corporate discretion.

The debate is far from over — and for the sake of fairness and digital dignity, it should not be.

By : K&Co - March 2, 2026

The Trade Gatekeeper and the Fragility of State Integrity

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The arrest of Budiman Bayu Prasojo by the Komisi Pemberantasan Korupsi (KPK) at the headquarters of the Direktorat Jenderal Bea dan Cukai is not merely another law-enforcement headline. It is a stark reminder of a deeper irony within state governance: the very institution entrusted with guarding the nation’s trade flows and securing state revenue is once again entangled in allegations of corruption. This episode does more than expose an individual—it highlights structural vulnerabilities that continue to haunt strategic public institutions.

Customs and Excise occupies a critical position in Indonesia’s economic architecture. It regulates imports and exports, safeguards tariff compliance, and protects domestic markets from illicit goods. When officials within such an institution are suspected of bribery or illicit gratification, the damage extends far beyond personal misconduct. State revenues may erode, compliant businesses suffer unfair competition, and illegal goods gain privileged access. In this context, corruption is not a mere administrative offense; it is an assault on economic justice and national credibility.

The fact that the arrest reportedly took place at the central office sends a strong symbolic message: no institutional space should be immune from accountability. Yet symbolism alone cannot substitute for systemic reform. The recurring emergence of corruption cases within the same sector raises a pressing question—why do such practices persist despite repeated enforcement actions? If internal controls were sufficiently robust and compliance systems genuinely effective, irregularities should be detected long before they escalate into criminal investigations. The repetition of scandals suggests that structural loopholes remain open.

The core problem lies not solely with individuals but with the ecosystem of authority in which they operate. Customs administration inherently involves discretion—valuation decisions, inspection prioritization, and clearance approvals. Without rigorous transparency and comprehensive digitalization, such discretion can evolve into negotiation space. Where manual processes and face-to-face interactions dominate, opportunities for illicit arrangements inevitably arise. Bureaucratic reform must therefore move beyond integrity slogans and toward systemic redesign that narrows the margin for abuse.

It is tempting to interpret each high-profile arrest as proof that anti-corruption efforts are working. To an extent, this is true. Enforcement matters. However, genuine success is not measured by the number of officials detained but by the shrinking probability of corruption itself. If similar patterns continue to surface within the same institution, the focus must shift from individual culpability to organizational culture and oversight architecture.

The KPK is fulfilling its reactive mandate—investigating, prosecuting, and deterring misconduct. Yet reactive enforcement, by definition, operates after harm has occurred. The next challenge lies with policymakers and institutional leaders to ensure that preventive mechanisms become more powerful than punitive ones. Without comprehensive reform—strengthened internal audits, data-driven risk management, transparent clearance systems, and uncompromising accountability—the public will merely witness a cycle of scandal, arrest, reform rhetoric, and renewed scandal.

This case should serve as a moment of reflection rather than fleeting spectacle. Public trust in state institutions is built not on declarations but on consistent integrity. When corruption allegations repeatedly strike agencies at the heart of national economic governance, what erodes is not only personal reputation but institutional legitimacy. Indonesia does not lack regulations; it requires the political and administrative courage to reduce discretionary opacity and fortify systemic safeguards until corruption becomes not merely risky, but structurally improbable.

Otherwise, each arrest will remain just another chapter in a recurring narrative—dramatic, necessary, yet fundamentally incomplete.

By : K&Co - February 27, 2026

BPR Consolidation : Genuine Reform or Structural Camouflage?

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia.

The decision by Otoritas Jasa Keuangan (OJK) to approve the merger of four rural banks (BPR) in West Java into PT BPR Nusamba Tanjungsari is more than a routine corporate action. It signals a clear regulatory direction: the BPR industry must shrink in number to grow in strength. Consolidation has become the chosen prescription.

In theory, the rationale is compelling. BPRs operate under significant pressure—limited capital buffers, fluctuating non-performing loans, weak competitiveness against commercial banks and fintech lenders, and the high cost of digital transformation. Economies of scale promise efficiency, stronger capital structures, and broader lending capacity. From a regulatory standpoint, fewer and larger entities are easier to supervise and potentially more resilient.

But public policy must not stop at theoretical elegance. The central question remains: does consolidation cure the illness, or merely move multiple patients into a single ward?

Merging small institutions that share similar structural weaknesses does not automatically produce a healthy institution. If the core problems lie in weak governance, inadequate internal controls, politically entangled ownership structures, or lax credit underwriting standards, then a merger simply aggregates risk rather than eliminates it. Four fragile institutions combined do not magically become one robust institution; they may simply become one larger fragile entity.

There is also the danger of creating an illusion of stability. A larger balance sheet may appear stronger. Capital figures may look more convincing. Operational structures may seem more streamlined. Yet without a fundamental shift in risk culture, transparency, and accountability, the newly consolidated entity could become more systemically sensitive at the local level. A single failure would have broader repercussions than the collapse of several smaller, isolated institutions.

This is where sharp criticism becomes necessary: consolidation risks becoming a regulatory shortcut. Instead of rigorously addressing governance deficiencies, strengthening supervisory enforcement, and forcing deep internal reform, structural simplification is presented as the primary solution. Yet the real challenges are deeply rooted—human capital quality, integrity of management, risk assessment discipline, and long-term strategic viability.

BPRs have historically derived their strength from proximity. Their intimate understanding of local communities and micro-entrepreneurs allowed them to extend credit based on contextual knowledge rather than rigid algorithms. Consolidation, however, often leads to centralized decision-making and bureaucratic standardization. Credit processes become more procedural and less relational. In attempting to professionalize, BPRs may lose the very social capital that once differentiated them from larger banks.

More concerning is the moral hazard dimension. If market participants perceive consolidation as an implicit safety mechanism—an eventual regulatory “rescue through merger”—managerial discipline may erode. Shareholders and executives could take excessive risks, assuming that structural absorption will mitigate consequences. In such an environment, market accountability weakens, and systemic fragility quietly grows.

OJK’s argument for consolidation is not without merit. Industry fragmentation complicates oversight and increases vulnerability to localized failures. However, consolidation must complement, not substitute, strict supervision. Without comprehensive asset quality reviews, transparent due diligence, and enforceable governance reform, mergers risk becoming cosmetic rearrangements rather than substantive restructuring.

The BPR industry does not merely need larger legal entities; it needs a governance revolution. Digitalization must extend beyond mobile applications into integrated risk management systems. Capital strengthening must reflect genuine loss-absorbing capacity, not symbolic compliance. Most importantly, commitment to grassroots economic empowerment must not be sacrificed on the altar of structural efficiency.

If this consolidation marks the beginning of deep institutional reform—professionalized management, uncompromising oversight, and transparent accountability—then it deserves support. But if it merely repackages structural weaknesses into a more orderly configuration, it postpones rather than resolves risk.

A bigger BPR is not necessarily a stronger BPR. Strength lies in discipline, integrity, and sustainable governance—not in size alone.

By : K&Co - February 27, 2026

 

RI–US Trade Deal : Expanding Access or Creating New Risks?

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The public debate surrounding the ratification of the Agreement on Reciprocal Trade (ART) between Indonesia and the United States has grown increasingly intense. What initially appeared to be a strategic economic breakthrough is now facing scrutiny from civil society, particularly the Center of Economic and Law Studies (Celios), which has formally submitted objections to President Prabowo Subianto. The concerns raised go beyond technical trade clauses; they touch on fundamental questions of economic sovereignty, regulatory authority, and democratic process.

The ART agreement is presented by the government as a significant step forward in strengthening Indonesia’s trade relations with the United States. Expanded market access, potential tariff reductions, and increased export opportunities for Indonesian goods are central to its promise. In a global environment marked by protectionism and geopolitical tension, securing preferential access to one of the world’s largest consumer markets is understandably attractive.

However, economic diplomacy must be assessed not only by its projected benefits but also by its structural implications. Celios has reportedly outlined 21 substantive objections, including concerns over increased energy imports, the relaxation of non-tariff barriers, and the possible weakening of domestic content requirements. Critics argue that such provisions may disproportionately advantage foreign producers while placing additional strain on Indonesia’s domestic industries, particularly small and medium enterprises that are less equipped to compete with large multinational corporations.

One of the core issues raised is regulatory balance. Trade liberalization, while essential for competitiveness, should not come at the expense of national policy autonomy. For example, domestic content requirements have historically been used as instruments of industrial policy to strengthen local supply chains and encourage technology transfer. If such measures are diluted without adequate safeguards, Indonesia risks reinforcing dependency rather than fostering resilience.

Another area of concern involves data governance and regulatory standards. As cross-border digital trade expands, agreements that affect data flows and regulatory recognition must be carefully aligned with national legal frameworks. Any perceived mismatch between international commitments and domestic legislation could create legal uncertainty, potentially inviting disputes and undermining investor confidence.

Beyond substance, there is also the procedural dimension. Under Indonesian law, international agreements that significantly affect sovereignty, public finance, or fundamental rights typically require parliamentary involvement. A transparent and participatory ratification process is not merely a formal requirement; it is a democratic safeguard. Broad consultation with stakeholders—ranging from industry associations to labor groups—can strengthen the legitimacy and durability of any international commitment.

This debate reflects a broader tension facing many emerging economies: how to integrate more deeply into global markets while safeguarding domestic priorities. The choice is not between isolation and openness. Rather, it is about negotiating from a position of strategic clarity. Trade agreements must serve as instruments of national development, not ends in themselves.

Constructive criticism, such as that voiced by Celios, should therefore be seen as part of a healthy democratic ecosystem. Scrutiny does not equate to opposition to trade; instead, it signals the importance of ensuring that agreements are balanced, transparent, and aligned with long-term development goals.

Ultimately, the ART agreement represents both opportunity and responsibility. If carefully calibrated, it could enhance Indonesia’s export competitiveness and strengthen bilateral ties. If inadequately scrutinized, it could generate unintended economic and legal consequences. The path forward requires not only diplomatic agility but also institutional rigor—ensuring that trade expansion proceeds hand in hand with economic sovereignty, regulatory coherence, and democratic accountability.

By : K&Co - February 25, 2026

The Hidden Costs of Flag Borrowing in Public Procurement

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The ongoing investigation by the Komisi Pemberantasan Korupsi (KPK) into alleged corruption in the advertising procurement process at Bank Pembangunan Daerah Jawa Barat dan Banten (Bank BJB) has once again brought public attention to a recurring corporate malpractice commonly referred to as “flag borrowing.” While this scheme has long existed in certain business practices, its presence within a regionally owned bank raises profound legal and governance concerns.

From the perspective of Kusnandar & Co., a law firm specializing in corporate governance and regulatory compliance, “flag borrowing” is far more than a procedural irregularity. It is potentially a structured mechanism designed to circumvent procurement requirements, conceal the actual controlling parties behind a contract, and distort fair competition. When such practices occur within a state-owned or regionally owned enterprise, the legal implications extend beyond corporate misconduct into the realm of public accountability and anti-corruption enforcement.

Legally, the “flag borrowing” scheme may trigger multiple layers of liability. First, it undermines the principle of fair competition by creating the illusion of legitimate participation in a tender process. A procurement process that appears competitive on paper may in fact be pre-arranged, thereby defeating the transparency and equal opportunity principles that govern public contracting. Second, if a corporate identity is used without proper authorization or to mask the fact that the true executing party does not meet regulatory qualifications, such conduct could constitute document misuse, misrepresentation, or fraud. Third, within a public financial institution, any facilitation or tolerance of such a scheme may amount to abuse of authority, particularly if decision-makers knowingly allowed irregularities to proceed.

As a regional development bank, Bank BJB is not merely a commercial entity; it is also an institution entrusted with public resources. Its board of directors and commissioners owe fiduciary duties to ensure that every allocation of funds aligns with legal standards and the best interests of the institution. If the investigation establishes that senior officials were aware of, or negligently ignored, irregular procurement practices, liability may extend beyond operational staff to those responsible for oversight and governance.

This case also highlights the inherent vulnerabilities in procuring intangible services such as advertising. Unlike infrastructure projects with measurable physical outputs, advertising services often involve performance metrics that are less tangible—media exposure, branding value, or campaign impact. Such ambiguity can create room for inflated pricing, manipulated deliverables, or preferential arrangements. When combined with a “flag borrowing” arrangement, the risk of financial loss and regulatory evasion significantly increases.

In our view, enforcement alone will not be sufficient. While criminal prosecution and asset recovery are essential components of accountability, systemic reform is equally critical. Strengthening internal control mechanisms within regionally owned enterprises, mandating disclosure of beneficial ownership for all vendors, and implementing transparent conflict-of-interest declarations for executives should become standard safeguards. Independent audits must also go beyond formal documentation reviews to assess substantive compliance and value for money.

The broader lesson from this case is that corporate integrity cannot rely solely on written procedures. Effective governance requires an institutional culture that prioritizes compliance and transparency over short-term gains. Without structural improvements, similar schemes will continue to evolve and exploit regulatory loopholes.

Ultimately, the alleged corruption in Bank BJB’s advertising procurement serves as a stark reminder that public trust is built on accountable management of public funds. “Flag borrowing” is not a harmless administrative shortcut; it is a distortion of the legal framework designed to ensure fairness and responsibility. As a nation committed to the rule of law, Indonesia must treat such practices not as technicalities, but as serious breaches that undermine both economic integrity and institutional credibility.

By : K&Co - February 25, 2026

Reforming Indonesia’s National Health Insurance Through Debt Relief

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The government’s plan to write off Rp 26.47 trillion in overdue BPJS Kesehatan contributions is more than a technical fiscal decision—it is a defining moment for Indonesia’s national health insurance system. The proposed policy, reportedly awaiting final approval, touches on three fundamental issues: social justice, financial sustainability, and the state’s responsibility in guaranteeing access to healthcare.

At its core, the National Health Insurance (JKN) program was established to ensure that healthcare is not a privilege, but a right. In principle, it embodies the constitutional mandate that every citizen deserves access to medical services. Yet, in practice, millions of participants have fallen into inactive status due to unpaid premiums. For many, arrears accumulated not out of deliberate negligence but because of economic hardship, job loss, informal employment instability, or administrative barriers. When contributions go unpaid, access to healthcare services can be suspended, placing vulnerable families in an even more precarious position.

From a humanitarian perspective, the proposed write-off offers relief to millions of Indonesians. It provides an opportunity for inactive participants—particularly low-income, informal sector workers—to regain access to essential healthcare without the burden of overwhelming debt. In times of rising living costs and economic uncertainty, such a policy signals that the state prioritizes public welfare over rigid financial enforcement. It reframes the government not as a debt collector, but as a social protector.

However, this policy also raises critical concerns about the long-term sustainability of BPJS Kesehatan. The JKN system has historically faced financial pressure due to the imbalance between collected premiums and healthcare claims paid out. The existence of massive arrears reveals deeper structural issues: inconsistent premium compliance, weaknesses in contribution collection mechanisms, and outdated or fragmented participant data. Writing off Rp 26.47 trillion may resolve an administrative backlog, but it does not automatically solve the underlying systemic challenges.

There is also the issue of fairness. Millions of Indonesians have consistently paid their premiums despite economic difficulties. For them, a blanket write-off could appear inequitable, potentially creating a moral hazard where participants perceive that non-payment carries little consequence. If not carefully designed, the policy may unintentionally weaken payment discipline in the future. This is why the government must ensure that any debt relief mechanism is targeted—limited to genuinely vulnerable groups verified through accurate and integrated social welfare data.

The success of this policy ultimately depends on accompanying structural reforms. First, the government should strengthen data integration across ministries and agencies to ensure accurate classification of beneficiaries and contributors. Second, BPJS Kesehatan must modernize its collection and monitoring systems, possibly leveraging digital tools to track contributions in real time and reduce administrative gaps. Third, public education campaigns are needed to reinforce the principle that JKN is built on shared responsibility: solidarity works only when contributions are consistent.

Moreover, policymakers must treat this write-off not as a one-time political gesture, but as part of a broader reform agenda. Sustainable universal health coverage requires predictable funding, improved governance, and transparent accountability. Without these, similar arrears could re-emerge in the future, forcing the state into repeated cycles of financial forgiveness.

Rp 26.47 trillion is a significant figure, but the real issue goes beyond numbers. It reflects the tension between compassion and fiscal prudence, between social protection and institutional discipline. If implemented carefully and paired with systemic improvements, the policy could strengthen public trust in the national health insurance system. If handled poorly, it risks undermining financial stability and fairness.

Ultimately, the government faces a delicate balancing act: ensuring healthcare access for the most vulnerable while preserving the integrity and sustainability of Indonesia’s universal health coverage system.

By : K&Co - February 11, 2026

Manipulated Exports, Broken Oversight

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The alleged manipulation of POME (Palm Oil Mill Effluent) exports, which reportedly caused state losses of up to Rp14 trillion, is not merely another corruption case. It reflects deeper structural weaknesses in Indonesia’s trade governance system—weaknesses that allow regulatory loopholes, collusion, and administrative manipulation to persist. If such practices were carried out over a significant period and involved multiple actors, then the issue goes beyond individual misconduct. It points to systemic failure.

POME is essentially liquid waste generated from palm oil processing. When products that should have been classified as crude palm oil (CPO) or its derivatives were allegedly mislabeled as POME to avoid export duties and regulatory obligations, this indicates deliberate administrative manipulation. Such a scheme could not have succeeded without serious lapses in oversight—or worse, internal complicity. This suggests that Indonesia’s export monitoring system still relies too heavily on individual integrity rather than robust institutional controls.

The government cannot position itself solely as a victim of dishonest business actors. The state possesses regulatory authority, enforcement agencies, and technological capacity. If manipulation of Harmonized System (HS) codes and export documentation could occur at a scale large enough to cause losses in the trillions of rupiah, then there has been a structural breakdown in cross-ministerial verification—whether within the Ministry of Trade, Customs and Excise, or other relevant agencies.

One fundamental issue lies in fragmented data and poor inter-agency integration. Indonesia’s export system still allows discrepancies between technical documentation, customs declarations, and production reports. Without an integrated digital system capable of tracking goods from origin to export in real time, opportunities for manipulation will always exist. Digital reform is no longer optional—it is essential.

In addition, the government must critically evaluate its palm oil export policies, which have often been revised and layered with complex requirements. When regulations are frequently changed or overly complicated, they create uncertainty. In such an environment, opportunistic actors can exploit ambiguity for personal gain. Regulatory inconsistency not only undermines compliance but also weakens enforcement.

Nevertheless, firm law enforcement remains the key to restoring public trust. This case must be investigated thoroughly and transparently, regardless of whether it implicates high-ranking officials or major corporations. The public has the right to know how the scheme operated, who benefited from it, and how the state intends to recover the losses. Selective enforcement would only deepen skepticism toward the government’s anti-corruption commitment.

Beyond prosecution, preventive measures are equally important. The government should implement at least three concrete reforms. First, it must establish an integrated digital verification system connecting all export-related institutions, minimizing opportunities for data manipulation. Second, it should conduct routine and random audits of companies exporting strategic commodities such as palm oil. Third, it must impose stricter administrative and criminal sanctions, including license revocation for companies proven to have engaged in fraudulent practices.

The palm oil sector is one of Indonesia’s largest sources of foreign exchange. Its strategic importance demands governance grounded in transparency, accountability, and integrity. Without good governance, the sector’s enormous potential can easily turn into a channel for revenue leakage.

Rp14 trillion is not an abstract number. It represents public funds that could have financed infrastructure, education, healthcare, or social protection for millions of Indonesians. When such a sum disappears due to manipulation and collusion, it is not merely the state that suffers—it is the public at large.

If the government is serious about strengthening anti-corruption efforts, this case must serve as a catalyst for systemic reform in export governance. Without structural improvements, similar scandals will inevitably reappear—perhaps under different schemes, but with the same consequence: public loss and eroded trust.

By : K&Co - February 11, 2026

 

Fighting for Access : The Struggle to Reactivate BPJS PBI in Yogyakarta

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The long queues of Yogyakarta residents waiting since early morning to reactivate their BPJS Health Insurance under the Contribution Assistance Recipient (PBI) scheme reveal more than just an administrative issue. This phenomenon reflects deeper structural problems in public service delivery, data management, and social protection policies that directly affect vulnerable communities.

At the beginning of February, many residents were surprised to discover that their BPJS PBI status had been deactivated following a government data update process. As a result, hundreds of people flocked to the Public Service Mall in Yogyakarta, hoping to restore their health insurance coverage. Some arrived before office hours, standing in line for hours simply to secure a queue number. Among them were elderly citizens, informal workers, and families who rely heavily on BPJS for routine medical treatment.

The government’s intention behind updating beneficiary data is, in principle, commendable. Through the implementation of a unified national socio-economic data system, authorities aim to ensure that social assistance programs are more accurate and reach those who truly need them. In theory, such data cleansing is essential to prevent mistargeting and budget inefficiency. However, the implementation of this policy has exposed significant shortcomings, particularly in communication and transition mechanisms.

For many affected residents, the deactivation happened abruptly and without sufficient prior notice. Some only realized their BPJS was no longer active when they arrived at health facilities and were asked to pay medical costs out of pocket. This situation is especially alarming considering that healthcare is a basic necessity and, for low-income families, an unexpected medical expense can be financially devastating.

The long queues also highlight the population’s strong dependence on BPJS as a primary gateway to healthcare. Many participants require regular treatment for chronic illnesses or ongoing medical supervision. The temporary loss of coverage does not merely cause inconvenience; it potentially disrupts treatment continuity and places patients at serious health risk. For vulnerable groups such as the elderly and people with disabilities, waiting for hours in crowded service centers adds an additional physical and emotional burden.

Furthermore, the situation reveals an inequality in administrative access. Not all citizens have the same ability to take time off work or travel to service centers to resolve bureaucratic issues. Informal workers may have to close their small businesses for a day, while caregivers must leave family responsibilities behind. Although the local government has introduced online services and digital platforms to facilitate reactivation, many residents still prefer or are forced to come in person due to limited digital literacy or incomplete documentation.

To its credit, the government has responded by allowing reactivation for individuals with severe or catastrophic illnesses, ensuring that critical patients do not lose access to healthcare. This step demonstrates policy responsiveness. However, reactive measures alone are not enough. A more proactive approach is needed to prevent similar situations in the future, including clearer public communication, gradual implementation, and automatic safeguards for vulnerable groups.

In the end, the struggle of Yogyakarta residents lining up before dawn is not merely about patience or perseverance. It is a reminder that well-intentioned policies can produce unintended hardships when implementation overlooks human realities. Ensuring that social protection systems are not only accurate on paper but also accessible and humane in practice is crucial. Healthcare, as a fundamental right, should never become collateral damage in the process of administrative reform.

By : K&Co - February 10, 2026

Corruption in the Courtroom : Lessons from Depok

By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

  

The recent sting operation (OTT) by Indonesia’s Corruption Eradication Commission (KPK) targeting the Chief of the Depok District Court has sent shockwaves through public trust in the judiciary. This case is not merely about alleged bribery involving individuals; it also symbolizes deeper systemic issues concerning integrity, oversight, and institutional culture within Indonesia’s judicial system.

Courts are supposed to be the last bastion for justice. Judges, especially the heads of courts, hold a critical role in ensuring that law is applied fairly, independently, and free from external influence. When the very leaders of a judicial institution are caught allegedly engaging in corrupt practices, it is not only their personal reputations that suffer—it is the authority and credibility of the entire institution. Naturally, the public begins to question whether justice is genuinely upheld within the courtroom.

The OTT targeting the Depok District Court Chief also illustrates that corruption in the judiciary remains a serious problem. Despite ongoing reforms, such as increased trial transparency and strengthened codes of ethics, the occurrence of such cases indicates significant gaps in internal oversight. This serves as a stark warning that administrative supervision alone is insufficient without a strong culture of integrity and anti-corruption principles.

At the same time, the KPK’s actions deserve acknowledgment. The operation underscores that law enforcement cannot be selective, even when it concerns a “sacred” institution like the judiciary. Holding judicial officials accountable is crucial to demonstrate that no one is above the law. In this context, KPK fulfills its role as a guardian of the legal system’s moral integrity, even though such actions often generate inter-institutional tension.

However, enforcement alone is not enough. This case should serve as an opportunity for the Supreme Court and the Judicial Commission to conduct a comprehensive evaluation—not only targeting individuals but also addressing systemic issues: how judges are promoted and transferred, how high-value cases are monitored, and how reporting mechanisms for misconduct are implemented and protected.

Public trust in the judiciary is a foundational pillar of the rule of law. Without it, court decisions, no matter how correct, will always face suspicion. Perhaps the most damaging consequence of corruption within the judiciary is not financial loss, but the erosion of public confidence, which is far harder to restore.

Ultimately, the KPK’s sting operation against the Depok District Court Chief should be seen both as a stark warning and an opportunity. A warning that corruption can infiltrate even the institutions expected to be most virtuous, and an opportunity to implement meaningful reforms. If this case ends solely with the punishment of individuals, without systemic reform, public skepticism is justified. Yet, if treated as a turning point to strengthen judicial integrity, this crisis could still yield renewed hope for justice in Indonesia.

By : K&Co - February 9, 2026

When Land Certificates Are No Longer Absolute, A Call for Reform in Indonesia’s Land Administration System

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

In Indonesia, land certificates have long been regarded as the strongest and most authoritative proof of land ownership. Issued by the state through the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN), these certificates provide a sense of legal certainty for landowners. However, the fact that land certificates can be annulled under certain conditions challenges the common perception that they are absolute and untouchable. This reality reveals deeper structural issues within Indonesia’s land administration system that deserve serious attention.

According to existing regulations, a land certificate may be canceled due to administrative or juridical defects in its issuance, or as a result of a court decision that has obtained permanent legal force. There are at least seventeen conditions under which a land certificate can be annulled, including procedural errors, overlapping land rights, incorrect data, abuse of authority, or criminal acts such as fraud and document falsification. From a legal standpoint, this is reasonable. In a state governed by the rule of law, no legal document should be immune from review if its issuance violates legal procedures or material requirements.

The principle of legal certainty requires not only the existence of official documentation, but also the assurance that such documentation is produced through a lawful, transparent, and accurate process. If a certificate is issued improperly, it may create more harm than protection, especially when it leads to prolonged land disputes. In this sense, the possibility of canceling a defective land certificate serves as a corrective mechanism to uphold justice and legality.

Nevertheless, the frequent occurrence of certificate cancellations also exposes weaknesses in the system. For landowners who obtained certificates in good faith, annulment can be deeply unsettling. A certificate that has been recognized for years may suddenly lose its legal standing due to errors committed by administrative authorities or due to disputes that emerge long after issuance. This situation undermines public trust in the land registration system and creates uncertainty that extends beyond individual owners.

The impact of such uncertainty is not limited to personal ownership. It also affects the broader economic ecosystem, including banking, investment, and infrastructure development. Land certificates are commonly used as collateral for loans. When the legal status of a certificate is questioned or revoked, both financial institutions and borrowers face significant risks. Investors may also hesitate to engage in land-based projects if ownership rights are perceived as unstable or vulnerable to cancellation.

Another critical issue highlighted by these conditions is the lack of reliable and fully integrated land data. Cases of overlapping certificates or conflicting claims suggest that land records are not always accurate or properly synchronized. Despite ongoing digitalization efforts, data verification and coordination among institutions remain problematic. This indicates the need for a more robust, transparent, and accountable land information system supported by regular audits and strict oversight.

Furthermore, legal protection for certificate holders must be strengthened. Although mechanisms exist to challenge or defend the validity of land certificates, the process is often complex, time-consuming, and costly. Many landowners are unaware of their rights or the limited time frame available to file objections or legal remedies. As a result, they may lose opportunities to protect their interests effectively.

In conclusion, the annulment of land certificates should not be viewed merely as a legal anomaly or systemic failure. Instead, it should serve as a reminder that legal certainty is built not only on documents, but on the integrity of the processes behind them. To ensure genuine legal protection, Indonesia must continue reforming its land administration system by improving data accuracy, strengthening institutional accountability, and enhancing public access to legal information. Only then can land certificates truly fulfill their role as reliable guarantees of ownership and justice.

By : K&Co - February 4, 2026

IHSG’s Sharp Decline: A Market Shock That Forces Long-Overdue Capital Market Reform

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The sharp decline of Indonesia’s Composite Stock Price Index (IHSG) over two consecutive trading days is not merely a routine market correction. It represents a critical stress test for Indonesia’s capital market structure and a clear warning that long-standing structural weaknesses can no longer be ignored. The scale and speed of the sell-off—severe enough to trigger trading halts—signal a crisis of confidence rather than a temporary bout of volatility.

At the core of this turbulence lies global investor concern, particularly following warnings from Morgan Stanley Capital International (MSCI). As a key global index provider, MSCI plays a central role in shaping international portfolio allocations. Its concerns regarding transparency, free-float calculation, and ownership structure in Indonesia’s stock market have profound implications. When doubts emerge over the reliability of market data and investability standards, global investors tend to react swiftly—and decisively—by reducing exposure.

The market’s reaction was immediate. Foreign investors engaged in aggressive sell-offs, liquidity thinned rapidly, and price discovery turned disorderly. This response highlights an uncomfortable reality: confidence in capital markets is built not only on economic growth prospects, but also on governance, clarity of regulation, and trust in data integrity. Without these foundations, even fundamentally strong markets become vulnerable to sudden capital flight.

In response to the turmoil, Indonesia’s Financial Services Authority (OJK) announced three major reform initiatives aimed at strengthening the capital market. These reforms focus on improving free-float requirements, enhancing transparency of share ownership, and reinforcing regulatory oversight of market data and trading mechanisms. Conceptually, these measures are well-targeted. Higher free float can improve liquidity and price efficiency, while clearer ownership disclosure enhances accountability and reduces information asymmetry.

However, the timing of these reforms raises important questions. Why did such fundamental adjustments only gain urgency after a market shock? Structural reforms are most effective when implemented proactively, not reactively. Markets tend to penalize delayed responses, interpreting them as signs that risks were underestimated or overlooked. In this sense, the IHSG correction exposes not only market fragility but also the cost of regulatory inertia.

Beyond short-term stabilization, the real challenge lies in restoring and sustaining long-term investor confidence. Global institutional investors do not evaluate markets based on isolated policy announcements. They assess consistency, enforcement, and the credibility of institutions over time. For OJK’s reform agenda to succeed, it must be implemented transparently, communicated clearly, and enforced without exception. Half-measures or prolonged uncertainty would only deepen skepticism.

It is also important to recognize that the damage from market turmoil extends beyond index levels. Volatility of this magnitude undermines domestic investor sentiment, discourages retail participation, and raises capital costs for Indonesian companies. If left unaddressed, such conditions could weaken the broader financial ecosystem and reduce the attractiveness of Indonesia as a long-term investment destination.

In the short term, market volatility is likely to persist as investors reassess risks and await concrete implementation of reforms. In the medium to long term, however, this episode can serve as a turning point. If regulators use this moment to genuinely align Indonesia’s capital market with global best practices, the crisis could evolve into an opportunity.

Ultimately, the recent IHSG plunge should not be viewed simply as a market setback. It is a powerful reminder that credibility, transparency, and governance are the true currencies of modern capital markets. Whether Indonesia emerges stronger from this episode will depend not on how quickly the index recovers, but on how decisively reforms are executed to rebuild trust and resilience for the future.

By : K&Co - February 2, 2026

Why MSCI’s Request Matters for Indonesia’s Stock Market Credibility

By Kusnandar & Co. Attorneys At Law – Jakarta, Indonesia

 

The recent request by MSCI, one of the world’s most influential index providers, for greater transparency in Indonesia’s stock ownership data should not be viewed as a mere technical issue. Instead, it reflects a deeper concern about the credibility, governance, and reliability of Indonesia’s capital market in the eyes of global investors. MSCI’s call for the Financial Services Authority (OJK) to disclose beneficial ownership (ultimate beneficial owner/UBO) data, including holdings below five percent, is a clear signal that transparency has become a non-negotiable standard in today’s global financial ecosystem.

This issue gained prominence following a sharp decline in Indonesia’s stock market, which even triggered a temporary trading halt. Market participants linked the volatility to MSCI’s assessment of Indonesia’s free float quality and ownership transparency—two critical indicators used to evaluate market investability. When investors are unable to clearly identify who ultimately controls listed shares, uncertainty increases. For global institutional investors, such uncertainty often translates into higher risk premiums or even capital withdrawal.

In this context, OJK’s response—committing to provide beneficial ownership data to MSCI, starting with major index constituents such as the IDX100—deserves recognition. The move signals that Indonesian regulators are willing to align with international best practices rather than adopt a defensive stance. Transparency is no longer just about regulatory compliance; it is about maintaining credibility in an increasingly competitive global capital market.

However, the decision to open beneficial ownership data also comes with significant challenges. Beneficial ownership information is inherently sensitive, as it reveals control structures that are often deliberately complex. In many cases, layered ownership is not only a business strategy but also a means of protecting privacy and commercial interests. Therefore, OJK must strike a careful balance between meeting global transparency standards and safeguarding legitimate data protection concerns. Transparency should strengthen trust, not create new vulnerabilities.

Beyond the immediate issue, MSCI’s request exposes a broader structural question: how mature is Indonesia’s capital market governance framework? While regulations on free float and disclosure already exist, MSCI’s concerns suggest that the available data may not sufficiently reflect the true ownership landscape. This highlights a gap not in regulation alone, but in data quality, consistency, and accessibility—factors that increasingly define a market’s standing at the international level.

The discussion around raising the minimum free float requirement to 15 percent further reinforces this point. If implemented effectively, such a policy could improve market liquidity, reduce price manipulation risks, and enhance overall market resilience. More importantly, it would signal that Indonesia is moving beyond symbolic reforms toward substantive improvements in market structure. For long-term investors, this kind of reform matters far more than short-term market fluctuations.

At the same time, the strong market reaction to MSCI’s assessment serves as a reminder of how interconnected Indonesia’s capital market is with global perceptions. MSCI’s influence is significant; its evaluations can affect portfolio allocations worth billions of dollars. Speculation about a potential downgrade in market classification—even if unlikely—illustrates how governance issues can quickly escalate into reputational risks if not addressed decisively.

Ultimately, OJK’s willingness to engage with MSCI on beneficial ownership transparency should be seen as a strategic opportunity. By improving disclosure standards and data integrity, Indonesia can strengthen investor confidence, reduce volatility driven by uncertainty, and enhance its position within global capital flows. The challenge lies in execution: transparency must be implemented carefully, consistently, and credibly. If done right, this moment could mark a meaningful step forward in Indonesia’s journey toward a more trusted and globally competitive capital market.

By : K&Co - January 30, 2026