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