New legislation redefines state-owned enterprises, limiting KPK's corruption enforcement role, suggesting heightened risks for governance.
Key Points
Corruption enforcement capabilities of the KPK are diminished, as state-owned enterprise boards are no longer classified as state administrators.
Law No. 1 of 2025 alters oversight mechanisms, allowing only the Police and Prosecutor's Office to address corruption in state-owned enterprises.
Financial supervision is maintained by the Audit Board, while KPK's authority is restricted to significant corruption cases involving state administrators.
The law may exacerbate economic challenges and public service decline due to increased corruption risks within state-owned enterprises.