On 22 November 2023, Indonesia’s House of Representatives (Dewan Perwakilan Rakyat – “DPR”) approved the Draft Bill (“Draft Bill”) on the Second Amendment to Law No. 11 of 2008 on Electronic Information and Transactions, which was previously amended by Law No. 19 of 2016 (collectively referred to as “Law 11/2008”) and which will be further deliberated during a forthcoming plenary meeting.

In light of this approval, the Minister of Communication and Information Technology (“Minister”) has now affirmed that the introduction of the Draft Bill is not only aiming to offer a further comprehensive framework that will hopefully be able to resolve existing concerns relating to multiple interpretations and areas that have proved controversial among the Indonesian general public but should also ensure that the various criminal and administrative sanctions that originally featured under Law 11/2008 are in line with those set out under the recently introduced national criminal law framework of Law No. 1 of 2023 on the Criminal Law Code (“Law 1/2023”).

At the time of writing, the Draft Bill set out 14 updated provisions, whilst simultaneously introducing five additional articles that specifically relate to the electronic information and transactions sector. The aforementioned adjustments that feature under the Draft Bill broadly encompass the following aspects:

Against the above backdrop, this edition of Indonesian Legal Brief (“ILB”) summarizes the new provisions that have been introduced under the Draft Bill, specifically as they relate to the following matters:

1. PSrE: Adjusted Legal Status and Clarified Services;
2. Additional Mandate for Electronic System Providers (Penyelenggara Sistem Elektronik - “PSE”): Protecting Child Users;
3. International Contracts Containing Standard Clauses;
4. Additional Law Enforcement Measures; and
5. Adjusted Prohibitions.

PSrE: Adjusted Legal Status and Clarified Services

Pursuant to Law 11/2008, PSrE are currently classified as either Indonesian or foreign PSrE. These classifications require the relevant entities to comprise Indonesian legal entities that are either simultaneously domiciled in Indonesia (for Indonesian PSrE) or registered in Indonesia (for foreign PSrE). However, under the Draft Bill, these classifications no longer feature, while any PSrE that operate within Indonesia will be required to comprise Indonesian legal entities that are domiciled in Indonesia, thus removing the registration requirement that previously applied to foreign PSrE.

Nevertheless, under the Draft Bill, the requirement to be an Indonesian legal entity exempts PSrE that provide electronic certification (“Certification”) services that are not yet available in Indonesia. Moreover, the Draft Bill also states that the mutual recognition of interstate Certification will be carried out in accordance with applicable cooperation agreements. It should also be noted that despite not previously featuring under the framework of Law 11/2008, provisions that specifically address the mutual recognition of interstate Certification feature under Regulation of the Minister No. 11 of 2022 on Management Procedures for the Organization of Electronic Certification (“Regulation 11/2022”).

In addition to the above matters, the Draft Bill has also now introduced a clear set of limitations regarding the various activities that may be carried out by PSrE, which encompass the following services:

While the above-described newly introduced aspects of PSrE and their services have yet to be further elaborated on in the current version of the Draft Bill, it is expected that if the Draft Bill ultimately comes into force, details relating to these matters will be further addressed under a forthcoming Regulation of the Government.[12]

Additional Mandate for PSE: Protecting Child Users

If it ultimately comes into force, then the Draft Bill will mandate that PSE must ensure protection for children who utilize or who have access to Systems. This protection mandate and its various measures should be implemented through the application of appropriate technologies and technical/operational measures, which should be applied from the development phase up until the organization of Systems themselves. In order to ensure that children are protected, PSE will be obliged to provide the following:

Any failure to comply with the above-outlined obligations may ultimately result in the imposition of administrative sanctions that range from written reprimands to termination of access. Further provisions that address both child protection measures and relevant applicable sanctions are expected to be outlined under a forthcoming Regulation of the Government.

International Contracts Containing Standard Clauses

As currently featured under the framework of Law 11/2008, all Transactions that have been drafted as electronic contracts legally bind both of the relevant contracting parties. However, one new feature of the Draft Bill is that all International Contracts that are drafted by PSE and that utilize standard clauses (klausula baku) must adhere to Indonesian laws in line with the following conditions:

It should also be noted that the above-mentioned International Contracts must utilize language that is concise, clear and easily understood while upholding the principles of good faith action and transparency.

Additional Law Enforcement Measures

The current framework of Law 11/2008 mandates that the government should prevent the dissemination of all unlawful electronic information and/or documents, however, the Draft Bill has now expanded the scope of this authority and, if ultimately enforced, the new framework will authorize the government to order relevant PSEs to terminate access to and/or moderate content in relation to any electronic information and/or documents that feature content relating to any of the following areas:

In addition, the Draft Bill also authorizes the government to order relevant PSE to make any necessary adjustments to their Systems and/or take certain measures, with the ultimate goal of establishing a fair, accountable, safe and innovative digital ecosystem. As such compliance with such orders is mandatory, while any PSE that fail to comply with issued orders will be subject to the imposition of administrative sanctions.

Adjusted Prohibitions

In comparison with Law 11/2008, the Draft Bill has now made several adjustments to various elements of the currently prohibited acts, as well as the criminal sanctions that are applicable in relation to said prohibitions. A brief comparison between the applicable prohibitions, as featured under both the Draft Bill and the current framework of Law 11/2008, is provided in the following table:

In addition to the above adjustments, the Draft Bill will ultimately add a number of additional prohibitions, which include the following:

It is interesting to note that while the prohibitions outlined with asterisks (*) in the diagram above may initially appear to be newly featured under the Draft Bill, said prohibitions were previously introduced as part of the guidelines for the enforcement of Law 11/2008, as featured under Joint Decree of the Minister of Communication and Information Technology, the Attorney General and the Head of the Indonesian Police Force  No. 229 of 2021, No. 154 of 2021 and No. KB/2/VI/2021 (“Joint Decree”).

Source : hukumonline.com