Second Amendment of the Electronic Information and Transactions Law: New Regulatory Framework in the Indonesian Digital Landscape
On January 2, 2024, the Government of the Republic of Indonesia enacted Law Number 1 of 2024 on Second Amendment of Law Number 11 of 2008 on Electric Information and Transactions (“Law 1/2024”). Law 1/2024 was amended in order to provide legal certainty; protect public interest from potential disruptions caused by the abuse of electronic information; and to provide a digital space that is clean, healthy, ethical, productive, and fair. The enactment of this regulation as part of the 2020-2024 National Legislation Program is aimed to foster the development of Indonesia’s digital economy which, according to the Ministry of Communications and Information Technology of the Republic of Indonesia, will be valued at US$ 315,5 billion by 2030.
Overview
The newly-enacted Law 1/2024 contains a total of 19 (nineteen) amendments from its predecessor, Law Number 11 of 2008 on Electronic Information and Transactions (“Law 11/2008”). The changes of Law 11/2008 in Law 1/2024 have the potential to affect different aspects of the digital sector, including but not limited to electronic information and/or electronic documents, electronic certification organizers, electronic transactions, international electronic contracts, and civil servant investigators.
Key Observations
With the enactment of Law 1/2024, below are the key significant changes to be considered in the implementation of the digital sector in Indonesia:
| Law 11/2008 | Law 1/2024 | |
Electronic Information (“E-Information”) and/or Electronic Documents (“E-Documents”) | Validity as Legal Forms of Evidence | The following E-Information and/or E-Documents cannot be admitted as valid legal forms of evidence:
[Article 5(4)] | Under this new regime, the types of E-Information and E-Documents that cannot be admitted as valid legal forms of evidence are not explicitly mentioned, unlike its predecessor.
E-Information and E-Documents cannot be admitted as valid legal forms of evidence if regulated as such in Laws. [Article 5 (4)] |
Electronic Certification Organizers (Penyelenggara Sertifikasi Elektronik / “PSE”) | Legal Status | PSEs can be divided into 2 (two) types: Indonesian PSEs and foreign PSEs. [Article 13 (3)] Indonesian PSEs must be Indonesian legal entities and domiciled in Indonesia. [Article 13 (4)]
Foreign PSEs operating in Indonesia are required to be registered in Indonesia. [Article 13 (5)] | Under this new regime, there is no differentiation between Indonesian PSEs and foreign PSEs.
PSEs operating in Indonesia must be Indonesian incorporated entities and domiciled in Indonesia. [Article 13 (3)]
However, the requirement above is excluded if the implementation of PSE services is not yet available in Indonesia. [Article 13 (4)] |
| Scope of Services | Provide and audit Electronic Certificates (“E-Certificates”) (Article 1.10) | Under this new regime, the scope of services for PSEs are broadened.
PSEs are able to provide services in the form of Electronic Signatures (“E-Signatures”), Electronic Seals (“E-Seals”), Electronic Timestamps, recorded electronic delivery services, website authentication, preservation of E- Signatures and E-Seals, digital identity, and other services that use E-Certificates. (Article 13A (1)) |
| Child Protection | N/A | PSEs are required to provide protection for children who use or access Electronic Systems. [Article 16A (1)]
PSEs shall provide:
[Article 16A (4)] |
Electronic Transactions (“E-Transactions”) | High-Risk E-Transactions | N/A | High risk E-Transactions use E-Signatures secured by Electronic Contracts. [Article 17 (2a)] |
International Electronic Contracts (“E-Contracts”) | Governing Law | N/A | International E-Contracts with standard clauses made by PSEs must be governed by Indonesian law if:
|
Civil Servant Investigators | Authority | Receive reports and complaints, summon every Person or other parties for hearing and/or inspection, review the validity of the report or information, examine the related equipment and/or facilities, search certain places, seal and confiscate equipment and facilities, request assistance from experts, and stop the investigation of criminal acts. [Article 45 (3)] | Under this new regime, the authority of civil servant investigators remains the same, with the addition of 1 (one) new authority: order PSEs to temporarily terminate Access to social media accounts, bank accounts, electronic money, and/or digital assets. [Article 45 (3)] |
Key Takeaways
- The enactment of Law 1/2024 has resulted in several additions and changes to the previous regulation.
- The enactment of Law 1/2024 contributes to the strengthening of Indonesia’s digital ecosystem by: (a) broadening the scope of e-information and e-documents that can admitted as valid legal forms of evidence (b) easing the requirement for foreign PSEs to conduct business in Indonesia, (c) broadening the scope of services of PSEs, (d) making it mandatory for PSEs to provide protection for children who use or access their services, (e) securing high-risk E-Transactions through E-Signatures in E-Contracts, (f) ensuring the implementation of Indonesian law as the governing law in International E-Contracts to protect national interests, and (g) adding a new authority to civil servant investigators.
- The enactment of Law 1/2024 is expected to establish stronger legal certainty within Indonesia’s digital landscape, thereby encouraging PSEs to conduct their business without fear of violating the relevant laws and regulations.