Article 1 paragraph 7 of the Protocol Law defines state officials as leaders and members of state institutions as referred to in the 1945 Constitution and state officials expressly stipulated by law. In addition, state officials who carry out legislative, judicial, executive, or other functions and duties related to state administration following the provisions of the law are referred to as state administrators.

The Board of Directors is an organ of SOEs responsible for safeguarding the interests and objectives of the company and representing the company in and out of court. The Board of Directors of a PT is usually considered the organ of the company that is authorized and fully responsible for the management of the company following the aims and objectives of the company. The Board of Directors is also responsible for representing the company, both inside and outside the court, following the provisions of the articles of association.

Meanwhile, the Commissioner is a limited liability organ responsible for supervising and advising the board of directors in managing the limited liability. The BUMN commissioner and the supervisory board are responsible for overseeing the BUMN. The board of commissioners of a PT is a corporate organ responsible for conducting general or special supervision following the articles of association and advising the board of directors.

According to Article 33 of the BUMN Law, commissioner members are prohibited from holding concurrent positions as:

1. Member of the board of directors at BUMN, regionally-owned enterprises (BUMD), privately-owned enterprises, and other positions that may cause conflicts of interest; and/or
2. Other positions follow the provisions of laws and regulations.

The prohibition of concurrent positions is intended to avoid conflicts of interest and ensure that commissioner members truly devote all their attention and energy to the duties, obligations, and achievement of the company’s objectives.

Members of the board of commissioners may not hold concurrent positions as members of the board of directors of SOEs or other business entities. They must also not hold positions that are prohibited by laws and regulations to be held concurrently with the position of a member of the board of commissioners or supervisory board of an SOE, or positions that may be related to the SOE concerned.

Directors of SOEs may also not hold concurrent positions. If they do not fulfill the requirements as directors of SOEs according to the provisions of the articles of association and laws and regulations, including prohibited concurrent positions, their positions may be terminated.

The prohibited positions include:

1. Directors of BUMN and other business entities;
2. Board of Commissioners/supervisory board in other SOEs;
3. Other structural and functional positions in central and/or regional government agencies/institutions;
4. Other positions following the provisions in laws and regulations;
5. Political party administrators, legislative members, and/or regional heads/deputy regional heads;
6. Other positions that may cause a conflict of interest; and/or
7. Legislative candidates or candidates for regional head/deputy regional head.

According to Article 76 paragraph (1) letter c of the Local Government Law and its explanation, the governor is prohibited from being the management of a company, whether private, state-owned, or regional, or the management of a foundation in any field. In this case, the governor is prohibited from becoming a board of directors or commissioners of a company, whether private state or regionally owned, or the management of a foundation. Governors who violate these provisions are subject to sanctions of temporary dismissal for 3 months by the president.

Meanwhile, in Article 23b of the State Ministry Law, ministers are prohibited from concurrently serving as commissioners or directors of state companies or private companies.

As for Constitutional Court judges, Article 17 letter c of the Constitutional Court Law and its explanation prohibit each constitutional judge from concurrently being a businessman, namely a director or commissioner of a company.

Legal Basis:

1. The 1945 Constitution of the Republic of Indonesia;
2. Law Number 28 of 1999 on Clean and Free State Administration from Corruption, Collusion, and Nepotism;
3. Law Number 19 of 2003 concerning State-Owned Enterprises;
4. Law No. 24 of 2003 on the Constitutional Court;
5. Law Number 40 of 2007 on Limited Liability Companies;
6. Law Number 39 of 2008 concerning the Ministry of State;
7. Law Number 9 of 2010 concerning Protocol;
8. Law Number 8 of 2011 on the Amendment to Law Number 24 of 2003 on the Constitutional Court;
9. Law Number 4 of 2014 on the Stipulation of Government Regulation instead of Law Number 1 of 2013 on the Second Amendment to Law Number 24 of 2003 on the Constitutional Court into Law;
10. Law Number 23 of 2014 concerning Regional Government;
11. Law Number 2 of 2015 on the Stipulation of Government Regulation instead of Law Number 2 of 2014 on Amendments to Law Number 23 of 2014 on Regional Government into Law;
12. Law Number 9 of 2015 on the Second Amendment to Law Number 23 of 2014 on Regional Government;
13. Law Number 7 of 2020 concerning the Third Amendment to Law Number 24 of 2003 concerning the Constitutional Court;
14. Government Regulation instead of Law Number 2 of 2022 concerning Job Creation;
15. Law Number 20 of 2023 concerning the State Civil Apparatus;
16. Law Number 6 of 2023 on the Stipulation of Government Regulation instead of Law Number 2 of 2022 on Job Creation into Law;
17. Law Number 61 of 2024 Concerning the Amendment to Law Number 39 of 2008 Concerning the Ministry of State;
18. Regulation of the Minister of State-Owned Enterprises Number PER-3/MBU/03/2023 of 2023 concerning Organs and Human Resources of State-Owned Enterprises.

Reference:

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