A proposal, not presidential approval
Coordinating Minister for Law, Human Rights, Immigration and Corrections Yusril Ihza Mahendra described the president's position after a meeting at the Jakarta Presidential Palace on October 26, 2026. He said Prabowo's request for a study did not signal agreement with the National Economic Council (DEN). Instead, the president wanted a definition appropriate to Indonesia's circumstances, with the state-loss element remaining part of the discussion.
DEN Chairman Luhut Binsar Pandjaitan had brought the proposal to Prabowo at Jakarta's Merdeka Palace on October 20. As Kompas reported the following day, the proposed approach drew on the United Nations Convention Against Corruption (UNCAC) and international standards, emphasizing bribery rather than calculations of state losses. DEN cited Indonesia's ratification of UNCAC through Law No. 7 of 2006 as a basis for its proposal.
On October 21, Luhut clarified that state losses should remain an element of corruption, supported by clear, objective evidence so that offenders do not escape accountability. "A person who makes decisions or takes actions in good faith should not be penalized without a solid basis," he said. DEN also proposed incorporating UNCAC offenses not yet covered by Indonesian law.
Luhut linked his concerns to business risk, saying the state-loss concept burdens entities such as the sovereign wealth fund Danantara. He also claimed that Indonesia is the only country to use state loss as a measure of corruption. The Jakarta Post reported that the proposal sought to give Danantara greater room to take business risks.
Objections and an alternative route to reform
The Corruption Eradication Commission (KPK) opposes eliminating the state-loss element altogether. Chairman Setyo Budiyanto said on October 21 that the agency's study found it still necessary in Indonesia, where methods of corruption are becoming more complex.
Setyo suggested a different way to bring national law closer to UNCAC: amend the Anti-Corruption Law to cover foreign bribery, trading in influence, private-sector bribery and illicit enrichment. Those changes, he said, would be a more appropriate response if the convention were the reference point.
Indonesia Corruption Watch (ICW) also rejected the proposal. Researcher Wana Alamsyah warned on October 21 that removing the state-loss provision could produce an apparent sharp decline in corruption without reducing the conduct itself. In his view, such a decline would reflect a law reshaped to serve powerful interests.
Wana cited ICW's records of 2024 corruption verdicts: 83 percent of defendants were convicted under Articles 2 and 3 of the Anti-Corruption Law, which concern state losses.
Opposition has also crossed political lines. The Jakarta Post reported objections from politicians belonging to the pro-government Nasdem Party, Prosperous Justice Party (PKS) and National Awakening Party (PKB), as well as a politician from the quasi-opposition Indonesian Democratic Party of Struggle (PDI-P).
Actual losses and legitimate business risks
The legal backdrop includes Constitutional Court Decision No. 25/PUU-XIV/2016, issued January 25, 2016. It removed the word "can" (dapat) from Article 2(1) and Article 3 of the Anti-Corruption Law, Law No. 31 of 1999. Under the ruling, possible or estimated harm to state finances is insufficient: prosecutors must establish an actual, concrete and measurable state financial loss.
The decision changed the provisions from formal offenses to material offenses, making proof of actual loss a requirement rather than relying on the potential for loss.
In its October 27 editorial, Kompas argues that Indonesia's anti-corruption efforts have fallen short, pointing both to lenient punishments and to the criminalization of people making business decisions at state-owned enterprises. It draws a distinction between corruption and investments that fail despite decisions made in good faith, through proper procedures and without abuse of authority.
Markets can change, economic turmoil can disrupt investments, and business calculations can prove wrong, the editorial notes. It distinguishes those risks from losses caused by unlawful conduct, abuse of power or efforts to enrich oneself, other people or corporations.
Kompas supports retaining the state-loss element because it allows officials to be held accountable for public funds and assets intended to benefit the population. It warns that removing the element without legal safeguards could leave openings for misconduct.
The editorial places the responsibility on law enforcement to separate reasonable business losses from corrupt acts. It also calls for legal certainty and protection for everyone, arguing that those in power must not use anti-corruption law as a means of holding people hostage.
