State Conflicts of Interest: Comparative Governance of Indonesian SOEs and Singaporean GLCs
Article Sidebar
Main Article Content
Abstract
This article examines structural dissonance in the governance of Indonesian state-owned enterprises following the enactment of Law Number 16 of 2025, which establishes the BPI Danantara superholding. Operating under a doctrinal legal methodology with a functional comparative approach against Temasek Holdings in Singapore, this study investigates the dogmatic conflict between the Business Judgment Rule and public finance law. The findings reveal that the current legislative framework creates a legal illusion of corporate autonomy. The retention of absolute veto rights through the Golden Share perpetuates political agency costs and nullifies the separate legal entity doctrine. Consequently, state corporate executives remain highly vulnerable to criminal liability under corruption laws for pure business losses. This induces a deeply systemic conservative bias. To resolve this institutional prematurity, this study urges the immediate codification of a Lex Specialis Sovereign Wealth Fund that formally ratifies the Santiago Principles, guarantees constitutional insulation, and establishes independent oversight mechanisms.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Alexius, Susanna, and Staffan Furusten. “Exploring Constitutional Hybridity.” In Managing Hybrid Organizations, 1–25. Cham: Springer International Publishing, 2019. https://doi.org/10.1007/978-3-319-95486-8_1.
Benuf, Kornelius, and Muhamad Azhar. “Metodologi Penelitian Hukum Sebagai Instrumen Mengurai Permasalahan Hukum Kontemporer.” Gema Keadilan 7, no. 1 (April 1, 2020): 20–33. https://doi.org/10.14710/gk.2020.7504.
Chen, Christopher. Solving the Puzzle of Corporate Governance of State-Owned Enterprises: The Path of the Temasek Model in Singapore and Lessons for China. Northwestern Journal of International Law and Business. Vol. 36, 2016. https://ink.library.smu.edu.sg/sol_research/1693/.
Clark, Gordon L., Adam D. Dixon, and Ashby H. B. Monk. “The Rise of Sovereign Wealth Funds.” In Sovereign Wealth Funds, 13–29. Princeton University Press, 2013. https://doi.org/10.23943/princeton/9780691142296.003.0002.
Dharwadkar, Ravi, Gerard George, and Pamela Brandes. “Privatization in Emerging Economies: An Agency Theory Perspective.” The Academy of Management Review 25, no. 3 (July 2000): 650–69. https://doi.org/10.2307/259316.
Disyon, Huta, Elisatris Gultom, and Ema Rahmawati. “The State’s Position as a Shareholder of Dwiwarna Shares in The Privatization of State-Owned-Holding-Members-Companies.” Jurnal Penelitian Hukum De Jure 23, no. 3 (September 4, 2023): 299–312. https://doi.org/10.30641/dejure.2023.V23.299-312.
Duygun, Meryem, Yilmaz Guney, and Abdul Moin. “Dividend Policy of Indonesian Listed Firms: The Role of Families and the State.” Economic Modelling 75 (November 2018): 336–54. https://doi.org/10.1016/j.econmod.2018.07.007.
Fama, Eugene F., and Michael C. Jensen. “Separation of Ownership and Control.” The Journal of Law and Economics 26, no. 2 (June 1983): 301–25. https://doi.org/10.1086/467037.
Farizy, Mohammad Rafi Al, Fiska Maulidian Nugroho, and Bhim Prakoso. “State Financial Position as State Equity Participation in Indonesia Investment Authority.” JURNAL USM LAW REVIEW 7, no. 3 (December 3, 2024): 1528–41. https://doi.org/10.26623/julr.v7i3.10453.
Gonzalez-Garcia, Jesus. “Data Transparency and Sovereign Financing Conditions.” Empirical Economics 66, no. 4 (April 13, 2024): 1735–55. https://doi.org/10.1007/s00181-023-02498-4.
———. “Improving Sovereign Financing Conditions Through Data Transparency.” IMF Working Papers 2022, no. 230 (November 2022): 1–15. https://doi.org/10.5089/9798400224232.001.
Hidayatulloh, Hidayatulloh, and Éva ErdÅ‘s. “State-Owned Enterprise’s Debt in the State Financial Regime.” Sriwijaya Law Review 7, no. 1 (January 27, 2023): 105–20. https://doi.org/10.28946/slrev.Vol7.Iss1.1843.pp105-120.
Jahja, Nathan Junino, Nor Farizal Mohammed, and Norziana Lokman. “Corporate Governance and Indonesian State-Owned Companies’ Performance: Agency and Institutional Perspectives.” Edelweiss Applied Science and Technology 8, no. 3 (April 4, 2024): 181–96. https://doi.org/10.55214/25768484.v8i3.867.
Kusumadewi, Ni Luh Gde Lydia, and Ratna Wardhani. “The Effect of Three Types of Agency Problems on the Firm Performance: Evidence from Indonesia.” International Journal of Monetary Economics and Finance 13, no. 3 (2020): 279. https://doi.org/10.1504/IJMEF.2020.108824.
Leutert, Wendy. “Singapore’s Temasek Model and State Asset Management in China.” Asian Survey 64, no. 4 (August 1, 2024): 700–726. https://doi.org/10.1525/as.2024.2122271.
Lori, McMillan. “The Business Judgment Rule as an Immunity Doctrine.” William & Mary Business Law Review 4, no. 2 (2014): 521-526. https://scholarship.law.wm.edu/wmblr/vol4/iss2/5/.
Megginson, William L., and Veljko Fotak. “Rise of The Fiduciary State: A Survey of Sovereign Wealth Fund Research.” Journal of Economic Surveys 29, no. 4 (September 8, 2015): 733–78. https://doi.org/10.1111/joes.12125.
Milhaupt, Curtis, and Mariana Pargendler. “Governance Challenges of Listed State- Owned Enterprises Around the World: National Experiences and a Framework for Reform.” Cornell International Law Journal 50, no. 3 (2017): 473–542. https://scholarship.law.cornell.edu/cilj/vol50/iss3/3/.
Organisation for Economic Co-operation and Development. OECD Guidelines on Corporate Governance of State-Owned Enterprises 2024. OECD Publishing, 2024. https://doi.org/10.1787/18a24f43-en.
Pargendler, Mariana. “State Ownership and Corporate Governance.” SSRN Electronic Journal, 2011. https://doi.org/10.2139/ssrn.1854452.
Pickering, Murray A. “The Company as A Separate Legal Entity.” The Modern Law Review 31, no. 5 (September 18, 1968): 481–511. https://doi.org/10.1111/j.1468-2230.1968.tb01206.x.
Puchniak, Dan W., and Luh Luh Lan. “Independent Directors in Singapore: Puzzling Compliance Requiring Explanation.” SSRN Electronic Journal, 2015. https://doi.org/10.2139/ssrn.2604067.
Putusan MA No. 2501 K/Pid.Sus/2019 (2019).
Putusan Mahkamah Agung No. 5643 K/Pid.Sus/2022 (2022).
Putusan MK No. 48/PUU-XI/2013 dan Putusan MK No. 62/PUU-XI/2013 (2013).
Stuenkel, Oliver. “Aldo Musacchio and Sergio G. Lazzarini: Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond.” Journal of Economic Issues 50, no. 3 (July 2, 2016): 910–11. https://doi.org/10.1080/00213624.2016.1213602.
Tan, Kevin YL. The Constitution of Singapore: A Contextual Analysis. Oxford: Hart Publishing, 2015.
Thabane, Tebello. “Rebooting State-Owned Companies in South Africa: Exploring the Viability of Singapore’s State Holding Company (Temasek) Model of Ownership and Control.” Potchefstroom Electronic Law Journal 27 (October 17, 2024). https://doi.org/10.17159/1727-3781/2024/v27i0a17022.
Trihatmoko, Roderikus Agus, and Y. Sri Susilo. “Conditions, Challenges and Prospects of State-Owned Enterprises in Indonesia: The Governance Perspective Based on Economic Constitution.” Applied Research in Quality of Life 18, no. 5 (October 6, 2023): 2459–84. https://doi.org/10.1007/s11482-023-10194-9.
Wardani, Desty Sari. “Perlindungan Direksi Terhadap Keputusan Bisnis Melalui Penerapan Prinsip Business Judgement Rules Di Amerika Serikat, Jepang, Dan Indonesia.” Dharmasisya Jurnal Program Magister Hukum FHUI 2, no. 3 (2023): 1139–52. https://scholarhub.ui.ac.id/dharmasisya/vol2/iss3/8/.
Wardhani, Ratna, Hilda Rossieta, and Dwi Martani. “Good Governance and the Impact of Government Spending on Performance of Local Government in Indonesia.” International Journal of Public Sector Performance Management 3, no. 1 (2017): 77. https://doi.org/10.1504/IJPSPM.2017.082503.