West Science Law and Human Rights Vol.
No.
April 2025, pp.
Juridical Analysis of Unlawful Acts at the Indonesian Exim LPEI Bank: Analysis of Decision No.
42/PDT/2025/PT MDN of the Medan
High Court
Emmi Rahmiwita Nasution Universitas Asahan Article Info
ABSTRACT
Article history:
This study explores the issue of unlawful acts .
erbuatan melawan huku.
within the Indonesian Export-Import Bank (LPEI), focusing on the analysis of Decision No.
42/PDT/2025/PT MDN issued by the Medan High Court.
Utilizing a normative juridical approach, the research examines the legal principles underlying the court's judgment, including breaches of fiduciary duties, negligence in risk management, and the application of Articles 1365 and 1366 of the Indonesian Civil Code.
The findings reveal significant governance lapses within LPEI, leading to financial losses and diminished accountability.
The study highlights the need for strengthened internal controls, enhanced risk management systems, and regulatory reforms to improve the governance of state-owned enterprises.
This analysis contributes to the understanding of legal accountability in financial institutions and offers recommendations for preventing similar cases in the future.
Received April, 2025 Revised April, 2025 Accepted April, 2025 Keywords:
Unlawful acts.
Indonesian Civil Code.
Fiduciary duties.
Financial governance.
State-owned enterprises This is an open access article under the CC BY-SA license.
Corresponding Author:
Name: Emmi Rahmiwita Nasution Institution: Universitas Asahan e-mail: emminasution0303@gmail.
INTRODUCTION
The Indonesian Export-Import Bank (Lembaga Pembiayaan Ekspor Indonesia or LPEI) plays a vital role in facilitating international trade by providing financial and advisory services to exporters and importers.
As a state-owned financial institution.
LPEI operates under a strict regulatory framework Indonesian law .
However, instances of unlawful acts within its operations have raised serious concerns about governance, oversight, and legal accountability .
These issues underscore the need for robust oversight mechanisms and the effective enforcement of legal standards to prevent misconduct and maintain institutional integrity .
The effectiveness of current regulations in deterring such violations is increasingly under scrutiny, highlighting the necessity of strengthening governance structures and enhancing accountability frameworks .
Furthermore, as LPEIAos support significantly influences IndonesiaAos export and import activities, its credibility and compliance are crucial to sustaining the trust of stakeholders and ensuring that its operations align with national and international trade policies .
Ae.
One notable case that underscores the legal accountability of fiduciary actors within the Indonesian Export-Import Bank (LPEI) is Journal homepage: https://wsj.
westscience-press.
com/index.
php/wslhr A West Science Law and Human Rights encapsulated in Decision No.
42/PDT/2025/PT
MDN, issued by the Medan High Court, which highlights alleged violations and breaches of fiduciary duties by key actors within the institution.
This case serves as a significant reference point for understanding the legal principles surrounding unlawful acts .
erbuatan melawan huku.
as stipulated in the Indonesian Civil Code, particularly Articles 1365 and 1366, which form the cornerstone of civil liability by focusing on restitution for damages caused by wrongful actions (Aditya et al.
, 2.
Article 1365 stipulates that any act causing harm to another obligates the perpetrator to compensate for the damages, while Article 1366 extends liability to include negligence, emphasizing the duty of due care in preventing harm (Aditya et al.
, 2.
Within this framework, fiduciary duties require directors and key actors to act in the best interest of the organization and its breachesAisuch mismanagement or misuse of fundsAican lead to personal liability under civil law .
The case of Aksi Cepat Tanggap (ACT) further illustrates this, where misuse of charitable constituted an unlawful act under Article 1365, resulting in material damage and erosion of public trust .
To mitigate such violations, continuous legal education and oversightAiespecially for legal professionals notariesAiare recommendations for ongoing training and audits to ensure compliance .
The legal framework also recognizes the dual nature of fiduciary obligations, both civil and criminal, particularly when fiduciary assets are transferred without proper consent, thereby reinforcing the mechanisms for accountability and legal recourse .
This study aims to conduct a comprehensive juridical analysis of this case, employing a normative approach to examine the legal frameworks, judicial reasoning, and broader implications for financial governance.
By scrutinizing the Medan High Court's decision, this paper seeks to illuminate how Indonesian law addresses complex cases of financial misconduct within state-owned enterprises and the gaps that may exist in regulatory oversight.
LITERATURE REVIEW
1 Legal Concept of Unlawful Acts In Indonesian law, the concept of unlawful acts is grounded in Articles 1365 and 1366 of the Civil Code, where Article 1365 defines an unlawful act as any action that causes harm to another party, thereby obligating the perpetrator to compensate for the damage.
Jurisprudence from the Indonesian Supreme Court further elaborates that an act is considered unlawful if it violates statutory provisions, infringes upon the rights of others, contradicts societal norms, or neglects the principles of propriety and Legal scholars such as Subekti and Sudikno Mertokusumo underscore that establishing an unlawful act requires the presence of four essential elements: .
the existence of an act, .
the act being unlawful, .
a causal relationship between the act and the damage, and .
the occurrence of harm.
This structured legal framework plays a crucial role in ensuring clear liability, especially in contexts involving financial institutions, where the preservation of trust and adherence to fiduciary duties are of utmost importance.
2 Regulatory Framework for State-Owned Enterprises State-owned enterprises (SOE.
, including Lembaga Pembiayaan Ekspor Indonesia (LPEI), operate under stringent regulatory frameworks to ensure compliance with national laws and alignment with the public interest, as mandated by Law No.
19 of 2003 concerning State-Owned Enterprises, which emphasizes principles of transparency, accountability, and efficiency.
For financial SOEs like LPEI, additional oversight is enforced through banking and financial regulations under the Financial Services Authority (Otoritas Jasa Keuangan or OJK).
However, safeguards, instances of financial misconduct and governance failures continue to surface.
Legal and financial experts have noted that the complexity of SOE operations, combined Vol.
No.
April 2025: pp.
West Science Law and Human Rights with gaps in oversight and weak enforcement mechanisms, creates systemic vulnerabilities to unlawful acts.
This reality underscores the urgent need for continuous legal reform and strengthened institutional capacity to effectively address governance challenges and uphold the integrity of SOEs in Indonesia.
3 Case Law on Financial Misconduct Case law analysis is essential for understanding how courts interpret and apply the law in cases of unlawful acts within financial institutions, as demonstrated in Decision No.
42/PDT/2025/PT MDN, which reflects the judiciary's approach to evaluating evidence, establishing liability, and imposing sanctions on perpetrators.
These judicial decisions frequently expose recurring problems such as inadequate internal controls, collusion among key stakeholders, and weaknesses in corporate governance structures.
Previous rulings have consistently emphasized the significance of fiduciary duties in financial institutions, where officers and directors are legally and ethically bound to act in the best interests of the institution and its Breaches of these duties are classified as unlawful acts, given their potential to destabilize institutions and erode public trust.
Legal analysis of such rulings offers critical insights into both preventive and corrective strategies that can be implemented to mitigate the risk of financial misconduct and enhance overall institutional METHODS The normative juridical approach is centered on the analysis of legal norms, regulations, and judicial interpretations, making it particularly suitable for studying unlawful acts within the frameworks of civil law and financial governance.
This method involves several components, including statutory analysisAireviewing key legal provisions such as Articles 1365 and 1366 of the Indonesian Civil Code and laws regulating state-owned enterprises.
case law analysisAiexamining judicial reasoning and Decision No.
42/PDT/2025/PT MDN to understand the practical application of legal principles.
doctrinal studyAidrawing upon legal doctrines and scholarly interpretations to support a deeper understanding of legal concepts and their practical implications.
The data utilized in this study are secondary, derived from a variety of legal and academic sources, including primary legal materials such as statutes and court rulings.
legal materials such as scholarly journals, legal commentaries, and textbooks on unlawful acts and financial governance.
tertiary legal materials like legal dictionaries and encyclopedias that aid in clarifying legal The central legal reference for this study is Decision No.
42/PDT/2025/PT
MDN, which is analyzed to explore its judicial reasoning and its broader implications for governance and accountability in financial The analysis employs a qualitative approach, emphasizing the interpretation of legal texts and judicial decisions to uncover the principles and doctrines applied in the The steps include legal interpretationAi analyzing Articles 1365 and 1366 of the Civil Code in relation to the LPEI case.
reasoning analysisAiassessing the arguments and legal rationale employed by the court in Decision No.
42/PDT/2025/PT
MDN,
including how evidence was weighed and legal norms were applied.
analysisAievaluating similar judicial cases to detect recurring patterns, gaps, or best practices in managing unlawful acts in financial institutions.
and synthesisAi integrating findings from statutory, doctrinal, and case law analyses to formulate comprehensive conclusions and practical recommendations aimed at strengthening accountability in IndonesiaAos financial sector.
RESULTS AND DISCUSSION
Findings Decision No.
42/PDT/2025/PT MDN
The Medan High Court's decision in this case highlights several critical issues related to unlawful acts within the operations Vol.
No.
April 2025: pp.
West Science Law and Human Rights of LPEI.
First, the court found that senior officials at LPEI had violated their fiduciary duties by authorizing transactions that breached internal policies and regulatory These contravened the institutionAos governance protocols but also led to substantial financial losses and negatively impacted stakeholders.
This violation underscores the importance of adhering to fiduciary responsibilities, especially within state-owned financial institutions where public trust and institutional integrity are paramount.
Second, the court emphasized the existence of serious deficiencies in LPEI's internal oversight and risk management These shortcomings enabled unauthorized and harmful activities to take place, eroding both trust and accountability within the institution.
To establish liability, the court relied on Articles 1365 and 1366 of the Indonesian Civil Code, which form the legal foundation for civil responsibility due to unlawful acts and negligence.
The ruling clearly demonstrated a causal link between the unlawful conduct and the resulting damage, thereby affirming the legal obligation of the responsible parties to provide restitution.
2 Judicial Reasoning The judicial reasoning in Decision No.
42/PDT/2025/PT
MDN
application of fundamental principles in Indonesian civil law, particularly in defining and interpreting unlawful acts.
The court embraced a broad definition of unlawful conduct, extending beyond mere statutory violations to include breaches of fiduciary duties and deviations from societal norms.
This approach is consistent with established legal doctrine, which holds that unlawful acts encompass any behavior that violates standards of propriety, caution, and fairness.
Such an inclusive interpretation ensures that individuals in positions of trust, particularly within financial institutions, are held to a high standard of ethical and legal responsibility.
In assessing the case, the court placed significant emphasis on documentary evidenceAisuch as internal reports, financial records, and transaction logsAito substantiate A the claims.
This was complemented by witness testimonies and expert analyses, which helped clarify the scope of the misconduct and quantify the damages Importantly, the court also applied the principle of proportional liability, assigning responsibility based on the level of involvement and authority of each individual.
Senior officials who directly authorized the unlawful transactions bore the brunt of legal accountability, while those with peripheral roles were subject to lesser sanctions, reflecting a nuanced and fair application of civil liability.
3 Implications for Governance and Accountability The findings of this case carry significant implications for improving governance and accountability within stateowned financial institutions.
One of the most urgent lessons is the necessity of strengthening internal controls to prevent unauthorized transactions and misconduct.
Financial institutions like LPEI must implement clear operational policies, backed by systematic audits and strong oversight mechanisms to detect and deter irregularities.
Additionally, the case emphasizes the critical role of robust risk management frameworks in safeguarding institutional integrity.
Proactive risk assessment and timely mitigation strategies are essential to anticipate and respond to vulnerabilities that may threaten the organizationAos financial stability.
Beyond structural improvements, fostering a culture of accountability is equally This includes continuous training on ethical behavior, establishing transparent reporting lines, and strictly enforcing consequences for violations.
A culture rooted in responsibility and ethical conduct can serve as a preventive barrier against unlawful acts.
Moreover, the case highlights the pressing need for legal and regulatory reforms that reflect the dynamic nature of the financial Policymakers must ensure that laws governing state-owned enterprises are not only comprehensive and enforceable but also adaptable to emerging financial risks and governance challenges, thereby reinforcing institutional resilience and public trust.
Vol.
No.
April 2025: pp.
West Science Law and Human Rights 4 Comparative Analysis with Similar Cases A comparison with similar cases reveals recurring themes in financial misconduct within state-owned enterprises (SOE.
, structures, inadequate oversight, and conflicts of interest.
These systemic issues are evident across various countries and sectors, emphasizing the urgent need for the adoption of best practices in governance to mitigate risks and enhance institutional integrity.
Implementing international standards for financial reporting and compliance, such as the King Code, has been shown to improve transparency and accountability, thereby reducing the risk of mismanagement and corruption .
Establishing independent oversight bodies is equally critical, as demonstrated in the cases of Brazil and Portugal, where the absence of effective oversight mechanisms contributed persistent governance failures .
, .
These bodies serve as essential checks and balances, ensuring that SOEs function ethically and Furthermore, whistleblower protection is vital for uncovering misconduct early.
Without such mechanisms, corruption and mismanagement may remain undetected and perpetuate institutional decline .
Promoting a culture of transparency and legal safeguards for whistleblowers enhances the ability of institutions to detect and address financial .
Collectively, strategies underscore the importance of aligning governance practices with global standards to foster accountability and prevent financial misconduct within SOEs.
CONCLUSION
The analysis of Decision No.
42/PDT/2025/PT MDN provides critical insights into the challenges of addressing unlawful acts within state-owned financial institutions in Indonesia.
The courtAos ruling highlights breaches of fiduciary duties, governance failures within the Indonesian Export-Import Bank (LPEI).
By applying Articles 1365 and 1366 of the Indonesian Civil Code, the Medan High Court emphasized the legal principles of causation, liability, and restitution, setting a precedent for similar To prevent future occurrences, the study underscores the importance of implementing robust internal controls, enhancing risk management frameworks, fostering a culture of accountability, and pursuing legal and regulatory reforms tailored to the unique challenges of stateowned enterprises.
These measures are essential for ensuring the stability and safeguarding public trust, and promoting good governance.
This research contributes to the broader discourse on improving accountability and legal compliance within IndonesiaAos financial sector.
REFERENCES