Makarim & Taira S.
  November 16, 2008 - Indonesia

Law on Information and Electronic Transactions in Indonesia

The Government of the Republic of Indonesia ("GOI") understands that Indonesia is becoming part of the globalization of information. Consequently many new forms of legal actions which were not covered by current Indonesian laws and regulations now have to be regulated. On 21 April 2008, after being approved by the House of Representatives, the GOI enacted Law No 11 of 2008 regarding Information and Electronic Transactions ("Law No 11 of 2008"). Law 11 of 2008 came into effect and full force as of its date of enactment.

Law No 11 of 2008 applies to everyone (individuals or legal entities whether Indonesian or foreign) conducting legal actions regulated under Law 11 of 2008 in the territory of the Republic of Indonesia or outside the territory of the Republic of Indonesia to the extent such legal actions have legal consequences in the territory of the Republic of Indonesia and/or outside the territory of the Republic Indonesia and cause a loss to Indonesia. Law No 11 of 2008 regulates, among other things:
(i) the use of electronic documents and/or information as evidence before Indonesian Courts;
(ii) electronic signatures;
(iii) electronic transactions;
(iv) domain name, intellectual properties, and protection of personal rights; and
(v) the illegal actions and criminal penalties may be imposed by GOI.

Law No 11 of 2008 officially recognizes electronic information/documents and/or its printed results as legal and valid evidence provided that (i) it is generated from an Electronic System which fulfills requirements as provided under Law No 11 of 2008, among other things, it can protect the availability, completeness, authenticity, secrecy, and accessibility of the electronic information and it has a sustainable mechanism to ensure the relevance, clarity, and accountability of the procedures or guidelines and (ii) it does not apply for certain documents required by law to be in hard copy form (e.g. notarial deeds, letter of court summons, bond certificates, and others). In light of this, the validity of electronic information/documents as evidence before the courts will depend on compliance of such electronic systems with Law No 11 of 2008.

In addition, electronic signatures are only valid and legally binding if they meet the requirements under Law No 11 of 2008, among other things, if:
(i) there is a way to identify the signatory;
(ii) there is a way to show that the signatory has approved the related electronic information; and
(iii) there is a system to identify any changes to the electronic signature after the electronic signature has been applied.

Electronic transactions must be conducted in good faith and may be made in an electronic contract. An Electronic Contract is defined as an agreement between the parties through an electronic system. The parties may choose a law applicable to their electronic contract as well as an alternative dispute settlement method.

Law No 11 of 2008 provides that all government authorities, individuals, legal entities may own domain names based on "the first to register" principal. Further, the law provides that the organizer of a domain name may be the GOI and/or members of the public. However, if there is dispute over a domain name, the GOI may temporarily take control of the management of the disputed domain name. The GOI recognizes the organizers of domains outside the territory of the Republic of Indonesia and domain names registered with it to the extent they are not contrary with Indonesian laws and regulations.

Electronic information and/or documents in the form of intellectual property, and web sites are protected as intellectual property under Indonesian laws on intellectual property. Further, unless otherwise determined by Indonesian laws and regulations, the use of information through electronic media which is related to personal data (either individual data or legal entity data) must be approved by the relevant individuals or legal entities.

Many actions are deemed to be criminal acts under Law No 11 of 2008, among others, distributing and/or transmitting and/or making accessible electronic information/documents which are contrary to moral norms in Indonesia or related to gambling or insulting or blackmailing or threatening other people. The law also prohibits illegal access to other people’s computers in any way whatsoever. These restrictions are also applicable to other people who commit such acts outside the territory of the Republic of Indonesia against electronic systems in the territory of the Republic of Indonesia. Criminal penalties imposed by Law No 11 of 2008 are imprisonment and/or fines depending on the seriousness of the criminal act committed by the relevant parties.

The GOI will enact Government Regulations to implement the provisions of Law No 11 of 2008, including but not limited to the provisions referred to above.