West Science Law and Human Rights Vol.
No.
April 2026, pp.
Corporate Liability for Environmental Crimes in Industrial Supply Chains: A Criminal and Administrative Law Approach Rani Eka Arini1.
Salwa Aulia Novitasari2.
Almira Ulimaz3
1,2 Universitas Nusa Putra
Politeknik Negeri Tanah Laut
Article Info
ABSTRACT
Article history:
This study analyzes corporate liability for environmental crimes within industrial supply chains in Indonesia through a normative legal approach integrating criminal and administrative law perspectives.
The research examines the adequacy of the existing legal framework, particularly Law No.
32 of 2009 on Environmental Protection and Management, in addressing corporate accountability for environmental harm.
By applying statutory, conceptual, and case approaches, this study identifies key challenges in enforcement, including difficulties in proving corporate intent, fragmentation of responsibility within supply chains, and the predominance of administrative sanctions over criminal prosecution.
The findings indicate that although Indonesian law formally recognizes corporate criminal liability and incorporates strict liability principles, practical implementation remains limited due to evidentiary constraints, institutional weaknesses, and regulatory gaps.
Furthermore, the complexity of industrial supply chains enables corporations to diffuse responsibility through subcontracting and outsourcing practices.
This study proposes an integrated liability model that strengthens coordination between criminal and administrative enforcement, expands corporate responsibility across supply chains, and enhances the deterrent effect of sanctions.
The study contributes to legal scholarship by offering a holistic framework for corporate environmental accountability and provides policy recommendations to support sustainable industrial governance in Indonesia.
Received Apr, 2026 Revised Apr, 2026 Accepted Apr, 2026 Keywords:
Corporate Liability Environmental Crimes Industrial Supply Chains Criminal and Administrative Law Indonesia This is an open access article under theCC BY-SAlicense.
Corresponding Author:
Name: Almira Ulimaz Institution Address: Politeknik Negeri Tanah Laut e-mail: almiraulimaz@politala.
INTRODUCTION
Environmental emerged as one of the most pressing global challenges, driven by rapid industrialization and the expansion of complex production networks across national and regional In developing countries such as Indonesia, industrial growth has contributed significantly to economic development while simultaneously intensifying environmental risks, including pollution, deforestation, and ecosystem destruction.
These risks are increasingly embedded within industrial supply chains involving multiple actors from raw material suppliers to manufacturers and distributors so that environmental harm Journal homepage: https://wsj.
westscience-press.
com/index.
php/wslhr West Science Law and Human Rights reflects systemic failures rather than isolated In Indonesia, this condition is further exacerbated by challenges in corporate accountability, where despite the recognition of corporate criminal liability as a legal framework, enforcement remains inconsistent due to structural weaknesses in regulatory Although Law Number 32 of 2009 on Environmental Protection imposes strict liability on corporations for environmental harm .
, its implementation is often inter-agency processes, resulting in minimal sanctions for offenders .
, .
Within this context, the issue of important, as corporations play a dominant role in industrial activities with significant However, traditional legal frameworks that emphasize individual liability make it difficult to assign responsibility in cases involving complex corporate structures and supply chains.
The reliance on vicarious liability further complicates accountability, as corporate administrators may be penalized without adequately addressing individual culpability .
, while the lack of harmonization between environmental and corporate regulations allows corporations to evade meaningful sanctions .
To address these challenges, strengthening administrative enforcement and judicial reforms is essential to bridge the gap between legal provisions and practical application .
Furthermore, aligning IndonesiaAos regulatory and enforcement mechanisms with international frameworks is necessary to enhance corporate accountability and support sustainable development .
Indonesia, protection is primarily governed by Law No.
32 of 2009 on Environmental Protection and Management, which establishes the legal foundation for preventing and addressing environmental damage while explicitly recognizing corporate criminal liability through administrative, civil, and criminal Despite this comprehensive framework, enforcement challenges persist, particularly in cases of environmental crimes A where proving corporate intent, identifying responsible actors within complex corporate hierarchies, and linking environmental harm to specific actions within supply chains remain difficult.
Corporations may also exploit regulatory gaps by delegating environmentally harmful activities to thirdparty contractors or subsidiaries, thereby diffusing accountability.
These challenges are further exacerbated by complex corporate structures that hinder the identification of responsible actors .
and the difficulty of establishing corporate intent, which often leads to weak enforcement outcomes .
The environmental protection laws is also constrained by the predominance of administrative sanctions, which are more frequently applied due to procedural flexibility but often lack sufficient deterrent effect when not supported by criminal Administrative measures such as fines, license revocation, and environmental restoration orders tend to be insufficient in ensuring compliance .
, particularly when limitations that reduce the effectiveness of sanctions .
To address these limitations, a more holistic approach is required, including the integration of strict liability principles to strengthen accountability .
and increased community involvement to enhance public oversight and environmental governance .
The interplay between criminal and administrative law further complicates enforcement, as criminal law emphasizes administrative law prioritizes preventive and corrective measures, creating a dualism that affects the overall effectiveness of legal Another critical issue lies in the opacity of industrial supply chains, which accountability mechanisms.
Modern supply chains involve multilayered subcontracting, outsourcing, and cross-border transactions, making it difficult for regulators to trace the origins of environmental harm and assign responsibility accurately.
This complexity Vol.
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West Science Law and Human Rights environmental risks while maintaining formal regulatory compliance, thereby undermining substantive accountability.
Consequently, there is a growing need to reassess legal doctrines and enforcement strategies to ensure that corporate liability extends beyond direct perpetrators to include entities that benefit from or exercise control over environmentally harmful activities within their supply chains.
This study is motivated by the need to critically examine the adequacy of IndonesiaAos legal framework in addressing corporate liability for environmental crimes within industrial supply chains by exploring the integration of criminal and administrative law mechanisms to enhance accountability, prevent environmental harm, and ensure sustainable industrial practices.
Adopting a normative legal approach, the research principles, and relevant case law to identify regulatory gaps and propose improvements, while offering novelty through an integrative perspective that connects corporate liability with supply chain governance.
Ultimately, this study provides both theoretical understanding of corporate liability within complex production systems and practical implications in the form of policy recommendations aimed at strengthening enforcement, and promoting corporate development in Indonesia.
LITERATURE REVIEW
1 Theoretical Foundations Corporate Liability The evolution of corporate liability reflects a fundamental recognizing corporations as legal entities capable of committing identification theory, vicarious liability, and the corporate culture model, which collectively responsibility and enable the application of strict and absolute actions rather than intent.
Identification theory attributes the actions and intent of senior management directly to the corporation, thereby enabling accountability in environmental crimes, including within recent legal reforms in Indonesia .
, while vicarious liability holds corporations responsible for employee actions performed within the scope of employment, reflecting the collective nature of decision-making processes .
, .
Furthermore, the corporate culture model permissive environments that facilitate unlawful conduct, emphasizing that corporate culture itself can drive harmful practices and thus necessitate a comprehensive framework of accountability .
2 Environmental Crimes and Legal Responsibility Environmental encompass a wide range of unlawful activities that cause significant environmental harm, including pollution, illegal waste disposal, and biodiversity loss, and are characterized by their multiple actors and long-term impacts that complicate the attribution of responsibility.
These crimes may take the form of pollution offenses such as hazardous waste dumping or natural resource crimes such as Vol.
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West Science Law and Human Rights illegal logging and wildlife trafficking .
, with ambiguous perpetrators from individuals to complicating legal responses .
In addressing these issues, criminal law plays a role in punishment and deterrence but evidentiary and procedural challenges .
, civil law focuses environmental restoration but may lack sufficient deterrent effect .
, while administrative sanctions .
Consequently, scholars emphasize the need for an integrated legal approach that combines these mechanisms to environmental crimes .
, .
, particularly given that such crimes are often perceived as victimless and receive lower priority in law enforcement .
3 Corporate Liability Environmental Law Indonesia The implementation of Law No.
32 of 2009 on Environmental Protection and Management in Indonesia accountability for environmental crimes through the recognition of corporate criminal liability and the adoption of strict enforcement without the need to prove intent, particularly in substances .
, .
However, its practical application remains A challenges, including limited weakens the effectiveness of law enforcement .
, inadequate inter-agency coordination that interpretation .
, .
, and the structures that complicates the identification of responsible actors and the proof of intent, often leading to a reliance on administrative sanctions rather than criminal prosecution .
, .
4 Industrial Supply Chains and Diffusion of Responsibility The complexities of assigning industrial supply chains are intensified by the involvement of jurisdictions, while existing legal frameworks tend to focus on direct perpetrators and overlook broader accountability for lead firms that benefit from such activities, resulting in significant regulatory gaps .
This issue is enforcement mechanisms, where sanctions rather than criminal penalties reduces deterrence against environmental crimes .
, .
In response, global trends increasingly emphasize extended corporate liability that holds parent companies and accountable for their entire supply chain .
however, in Indonesia, frameworks have yet to fully integrate this approach, allowing environmentally risky activities and evade liability, thereby highlighting the need for legal Vol.
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West Science Law and Human Rights reforms that incorporate strict liability and strengthen sanctions accountability .
5 Integration of Criminal and Administrative Law Approaches The interaction between criminal and administrative law Indonesia, where an integrated enforcement model positioning administrative sanctions as the initial response and criminal however, its implementation remains constrained by several Administrative law provides flexible and rapid compliance mechanisms but often lacks sufficient deterrent effect when applied alone .
, while criminal law offers stronger punitive sanctions yet faces inconsistent application due to regulatory complexity and enforcement limitations .
, .
These issues are further exacerbated by institutional overlapping authorities and weak inter-agency coordination enforcement .
, as well as the absence of clear guidelines for violations into criminal cases, accountability .
6 Research Gap and Contribution Based on the existing literature, it is evident that significant progress has been made in developing legal However, several gaps remain.
First, most studies focus on either criminal or administrative law in isolation, without adequately examining their Second, limited attention has been given to the role of industrial supply chains in shaping corporate liability.
Third, there is a lack of comprehensive analysis that integrates these dimensions within the Indonesian legal This study seeks to address these gaps by providing a holistic analysis of corporate crimes within industrial supply chains, using both criminal and administrative law perspectives.
By doing so, it contributes to the integrated and effective legal framework that reflects the industrial systems and supports governance in Indonesia.
METHODS
1 Research Approach This study employs a normative legal research approach, also known as doctrinal research, which focuses on analyzing legal norms, principles, and doctrines governing corporate liability for environmental crimes within industrial supply chains by examining statutes, regulations, and judicial decisions rather than relying on empirical data.
Using a qualitative analytical method, the research emphasizes interpretation, comparison, and critical assessment of legal materials to evaluate the adequacy and coherence of existing legal frameworks, particularly in exploring how criminal and administrative implemented, and potentially integrated within the Indonesian legal system to address corporate environmental accountability.
2 Types of Legal Approaches Vol.
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West Science Law and Human Rights To ensure a comprehensive analysis, this research employs several legal approaches commonly used in normative legal studies, including the statutory approach, which examines relevant laws and regulations such as Law No.
32 of 2009 on Environmental Protection and Management to identify normative provisions and approach, which analyzes legal doctrines and theoretical frameworks related to corporate liability, environmental crimes, and supply chain governanceAisuch as strict liability, vicarious liability, and corporate culture theoryAito provide a strong theoretical the case approach, which reviews judicial decisions to understand the practical application of legal principles, patterns of judicial reasoning, and consistency of and a supporting comparative approach, which incorporates insights from international legal developments and best practices to identify gaps in IndonesiaAos legal framework and inform potential legal 3 Sources of Legal Materials This research relies on three categories of legal materials to support its analysis, namely primary, secondary, and tertiary sources.
Primary legal materials consist of binding legal instruments such as statutes, government regulations, and court decisions, with the main reference being Law No.
32 of 2009 on Environmental Protection and Management along with other relevant legislation on corporate responsibility and environmental governance.
Secondary legal materials include legal literature such as textbooks, journal articles, research reports, and expert opinions that provide theoretical support and scholarly perspectives on corporate liability, environmental law, and supply chain governance, while tertiary legal materialsAisuch encyclopedias, and reference sourcesAiare utilized to clarify legal concepts and terminology employed in the study.
4 Techniques of Legal Material Collection The collection of legal materials is conducted through library research .
esk This involves systematically gathering legal documents, academic publications, and other relevant sources from databases.
The materials are selected based on their relevance to the research topic and their contribution to understanding corporate liability and environmental law in Indonesia.
5 Data Analysis Technique The analysis of legal materials in this study is conducted using qualitative juridical analysis, which involves interpreting legal norms and provisions to understand their meaning and scope, systematically organizing legal materials to identify relationships among legal rules, evaluating the consistency and effectiveness of existing frameworks in addressing corporate environmental liability, and drawing logical conclusions based on legal reasoning and doctrinal analysis.
This analysis is further complemented by a prescriptive approach, whereby the study not only describes current legal conditions but also formulates recommendations for improving the legal framework, including strategies to integrate criminal and administrative law mechanisms and to strengthen accountability within industrial supply chains.
RESULTS AND DISCUSSION
1 Legal Construction Corporate Liability Environmental Crimes Indonesia The analysis reveals that IndonesiaAos legal framework has formally recognized corporations as subjects of criminal and administrative liability in environmental law, marking a significant shift from individualbased Law No.
32 of 2009 on Environmental Protection and Management explicitly provides that corporations can be held responsible for environmental crimes, either directly or through their management, and introduces the principle of strict liability.
Vol.
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West Science Law and Human Rights which allows accountability without the need to prove intent or negligence.
This principle is intended to streamline enforcement and strengthen corporate responsibility .
, .
, although its practical application remains challenged by regulatory gaps and corporate evasion strategies .
From a doctrinal perspective, strict liability plays a central role in Indonesian environmental law, particularly in cases involving hazardous and toxic substances, as it reduces the burden of proof for prosecutors by focusing on the consequences of corporate actions rather than intent.
However, in practice, enforcement often reverts to faultbased approaches that require proof of intent or negligence, thereby creating a discrepancy between normative legal provisions and their Additionally, enforcement practices tend to rely more heavily on administrative measures rather than criminal sanctions, which can weaken deterrence and limit the effectiveness of environmental protection efforts .
, .
Furthermore, corporate liability is frequently interpreted through the actions of corporate management, reflecting the identification theory, which attributes responsibility to corporations based on the conduct of their leaders.
While this approach provides a basis for assigning liability, it may be insufficient in addressing complex decentralized decision-making or systemic Therefore, strengthening regulatory frameworks and improving coordination among stakeholders are essential to ensure more effective enforcement and to bridge the gap between legal principles and practice .
, .
2 Challenges Criminal Enforcement Corporate Environmental Liability Despite the availability of criminal sanctions, the enforcement of corporate criminal liability for environmental crimes in Indonesia remains limited, primarily due to difficulties in establishing mens rea .
riminal inten.
within complex corporate structures A where responsibility is diffused across hierarchical levels.
Corporations operate through multilayered systems, making it challenging to identify individuals whose actions can be attributed to the entity as a whole, while existing legal frameworks such as Law No.
32 of 2009 often face limitations in proving corporate responsibility amid strong economic influence from corporate actors .
, .
Ramdani et al.
, 2.
Evidentiary complicate enforcement, particularly in establishing causation between corporate activities and environmental harm, as environmental crimes typically involve longterm, cumulative, and multi-source impacts, such as pollution cases where multiple contributors are involved .
These complexities make it difficult to trace direct links between specific corporate actions and weakening legal accountability and reducing the effectiveness of criminal prosecution In practice, law enforcement agencies often prioritize administrative sanctions over criminal proceedings due to considerations of efficiency, cost, and procedural complexity, even though such measures like fines or warnings may lack sufficient deterrent effect, especially for large corporations with substantial resources .
This tendency is reinforced by weak criminal liability interpretations, which lead to varying outcomes in similar cases and undermine legal certainty, ultimately reducing the overall enforcement .
, .
3 Role of Administrative Law in Environmental Governance Administrative law plays a dominant role in regulating corporate behavior in environmental matters in Indonesia through mechanisms such as environmental permits, compliance monitoring, and administrative sanctions, which are designed to prevent environmental harm before it occurs.
practice, administrative sanctions including license suspension, revocation, and finesAiare Vol.
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West Science Law and Human Rights more frequently applied than criminal penalties due to their flexibility and lower evidentiary requirements, making them the These measures are considered effective in restoring environmental functions and improving compliance, particularly when supported by transparent monitoring systems .
, .
However, despite their practical advantages, administrative sanctions face significant limitations in terms of deterrence and enforcement effectiveness.
Corporations may treat fines as operational costs, especially when penalties are relatively low compared to the economic benefits of non-compliance, thereby undermining their intended impact.
Furthermore, weak monitoring systems and limited enforcement capacity reduce the effectiveness of administrative measures, while the impersonal nature of corporate entities complicates the imposition of criminal penalties and reinforces reliance on administrative approaches .
, .
In addition, the dominance of administrative law raises concerns regarding regulatory capture and potential conflicts of interest, particularly when regulatory agencies maintain close relationships with the industries they oversee.
Such conditions may lead to lenient enforcement practices and reduced accountability, ultimately weakening the overall effectiveness of environmental governance and limiting the ability of the environmental misconduct comprehensively.
4 Corporate Liability within Industrial Supply Chains One of the key findings of this study is that the complexity of industrial supply chains significantly affects the attribution of corporate liability, as modern production systems involve multiple actors such as suppliers, subcontractors, and distributorsAi each contributing to different stages of This fragmentation creates responsible parties for environmental harm, where lead firms may benefit from environmentally harmful practices without A direct involvement, while smaller suppliers with limited capacity to comply with environmental standards often bear the direct legal consequences.
The Indonesian legal framework tends to limit liability to the entity directly responsible for violations, thereby neglecting the broader role of corporations in shaping supply chain practices .
, .
The compounded by limitations in applying vicarious liability, which makes it difficult to hold corporations accountable for the actions of their supply chain partners, as well as the absence of comprehensive regulations addressing large-scale environmental harm such as ecocide .
, .
In addition, existing sanctions for corporate environmental violations are often relatively light and insufficient to deter harmful practices, environmental risks by outsourcing high-risk activities to third parties .
This situation highlights the structural weaknesses of the current legal framework in addressing the interconnected nature of environmental harm within supply chains.
To address these gaps, a more holistic enforcement approach is required, including the integration of strict liability principles with stronger criminal sanctions to enhance corporate accountability .
Furthermore, environmental oversight can strengthen monitoring and compliance mechanisms, ensuring more effective enforcement of environmental laws .
Without explicit legal provisions that extend liability across supply accountability will remain incomplete, underscoring the need for regulatory reform that reflects the realities of modern industrial 5 Integration of Criminal and Administrative Law Approaches The findings highlight the need for a more integrated approach to corporate environmental liability that combines criminal and administrative law mechanisms, which currently operate in parallel with Vol.
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West Science Law and Human Rights limited coordination.
An integrated model would position administrative sanctions as a preliminary enforcement tool, followed by criminal prosecution in cases of serious or repeated violations, thereby creating a system of escalating consequences that strengthens Moreover, the integration of these approaches can be enhanced through the use dataAisuch environmental monitoring reports and compliance recordsAias evidence in criminal proceedings, helping to overcome evidentiary However, achieving such integration requires strong institutional coordination among regulatory agencies, law enforcement bodies, and the judiciary, supported by clear guidelines for escalating administrative violations into criminal cases, as well as effective mechanisms for information sharing and inter-agency 6 Toward a Strengthened Model of Corporate Environmental Liability Based on the analysis, this study proposes a strengthened model of corporate liability for environmental crimes in Indonesia, particularly within industrial supply chains, which includes several key These include the adoption of extended corporate liability to hold parent companies and lead firms accountable for environmental harm caused by their supply corporations from evading responsibility through outsourcing.
the strengthening of strict liability principles to reduce reliance on proving intent and facilitate enforcement, especially in high-risk or large-scale environmental damage cases.
and the enhancement of administrative sanctions through higher fines, stricter compliance requirements, and more rigorous monitoring to increase their deterrent effect.
In addition, the model emphasizes the development of integrated enforcement mechanisms that combine criminal and administrative law approaches, including clear escalation procedures, improved interagency coordination, and the use of administrative data as evidence in criminal proceedings, as well as the promotion of transparency and accountability through mandatory due diligence and reporting requirements within supply chains.
Overall, the findings indicate that although Indonesia has established a strong legal foundation for corporate environmental liability, significant challenges remain in its implementation, requiring not only legal reform but also institutional strengthening and a shift toward more integrated and systemic approaches to environmental governance.
CONCLUSION
This study demonstrates that IndonesiaAos legal framework has formally environmental crimes through both criminal and administrative law mechanisms, with the recognition of corporations as legal subjects and the incorporation of strict liability principles reflecting significant progress in environmental governance.
however, its effectiveness remains limited due to difficulties in proving corporate intent, evidentiary complexities, and inconsistent judicial interpretation.
The findings further indicate that although administrative law plays a dominant role, it often lacks sufficient deterrent effect without strong criminal enforcement, while the fragmentation of responsibility within industrial supply chains enables corporations to shift environmental risks to third parties, revealing critical gaps in the current framework.
To address these issues, a more integrated approach is administrative mechanisms through stronger application of strict liability, clear escalation pathways, and the extension of corporate liability across supply chains, alongside greater transparency through due diligence Overall, despite a solid normative foundation.
Indonesia must undertake Vol.
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West Science Law and Human Rights substantial reforms to align its legal system
with the complexities of modern industrial A accountability in support of sustainable REFERENCES