By KUSNANDAR & CO., Attorneys at Law – Jakarta, INDONESIA
The enactment of Indonesia’s Personal Data
Protection Law (PDP Law) marks a significant turning point for businesses
across the country, signaling a new era in the governance of digital
information amid a rapidly evolving data-driven economy. Since its
ratification, the law has triggered widespread operational changes in various
industries—from fintech and banking to healthcare, e-commerce, and
telecommunications—as companies rush to review internal policies, strengthen
cybersecurity systems, and overhaul their data collection and processing
practices.
The PDP Law legally recognizes personal data
as a protected individual right, requiring all data controllers and processors
to ensure its security and proper management. This reflects a fundamental shift
in the business mindset: data handling is no longer merely a technical matter
but a legal obligation with real consequences. Companies that fail to safeguard
personal data may face significant administrative fines, legal liability, and
even criminal sanctions in severe cases. As a result, businesses must now
revise privacy policies, adjust contract structures, and align their IT systems
with core legal principles such as explicit consent, transparency, and data
subject rights.
From a foreign investment perspective, the PDP
Law is a double-edged sword. On one hand, it reflects Indonesia’s commitment to
consumer protection and its effort to align with global standards like the
European Union’s General Data Protection Regulation (GDPR). On the other, the
law’s transitional period, uneven readiness across sectors, and ambiguity in
certain technical aspects have prompted caution among foreign investors. For
companies that rely heavily on data—such as cloud service providers and digital
platforms—the cost of compliance, along with legal risks arising from data
breaches or procedural missteps, must now be factored into business strategy
and risk assessments.
One of the primary challenges facing
corporations is the need to build robust internal mechanisms to comply with the
law’s requirements. These include appointing Data Protection Officers (DPOs),
developing incident response procedures, and managing data access or deletion requests
from individuals. Even in mergers and acquisitions, PDP Law compliance has
become a key component of legal due diligence, as data-related liabilities can
materially impact valuation and long-term viability.
At Kusnandar & Co., we encourage clients to
view the PDP Law not as a regulatory burden but as an opportunity to strengthen
market trust and build long-term reputational value. Legal compliance can serve
as a competitive advantage—particularly for firms seeking to engage with global
investors who prioritize governance, transparency, and ethical data handling.
Companies that act early, invest in sound systems, and integrate data
protection into corporate culture will be better positioned to thrive in a
data-centric environment.
The Personal Data Protection Law represents a
milestone in Indonesia’s digital regulatory evolution. Businesses must be
prepared—not just technically, but strategically and legally. With the right
legal guidance and proactive planning, companies can turn regulatory challenges
into strategic investments that ensure sustainability and growth in Indonesia’s
dynamic digital economy.
K&Co. - September 16, 2025.
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