Jakarta – (30/09/21) In commemorating the Right to Know, which falls on September 28, 2021, PWYP Indonesia organized a Multi Stakeholders Forum entitled “Disclosure of Beneficial Ownership Data; Opportunities and Challenges.” In the multi-stakeholder forum, Henri Soebagijo was present as a policy-brief presenter, Agus Cahyono from the EITI Indonesia Secretariat, and Alamsyah Saragih was a public policy observer. The discussion was opened with remarks from Ferdian Adi from Stranas PK – KPK.

The first presentation was opened with a brief policy dissemination from Henri Soebagijo. Henry’s expression conveyed the mechanism and stages of beneficial owner information disclosure. The policy brief was prepared considering the importance of disclosure of practical owner information to prevent corporate crime, reduce financial risk and encourage a fair and sustainable investment climate. The revelation of beneficial owner data has been regulated in Presidential Regulation No. 13/2018.

In his presentation, Henri mapped out the relationship approach to implementing the regulation, including; (i) the relationship between the corporation and the authorized agency; (ii) the relationship between the interested agency and the authorized agency; (iii) the relationship between the reporter and the authorized agency; (iv) the relationship between the public and the authorized agency. The pattern of relations between these stakeholders will determine the regulatory model in the context of supervision and accountability from implementing the principle of data disclosure of beneficial owners. The relationship pattern is regulated in the Minister of Energy and Mineral Resources Decree 243/2019 and Minister of Finance 156/2017.

Regarding implementation, there is a memorandum of understanding between several agencies consisting of the Ministry of Law and Human Rights, Ministry of Energy and Mineral Resources, Ministry of Industry, Ministry of Spatial Planning, and Ministry of Finance related to strengthening and utilizing the beneficial ownership database. The memorandum of understanding details several matters related to maintaining, synchronizing, and operating valuable ownership data and increasing human resource capacity and other activities. However, several things have yet to be specifically regulated in the memorandum of understanding, including officials authorized for exchange/access; data exchange mechanism; limitation of Beneficial Ownership data exchanged; standards and mechanisms for protecting Beneficial Owner’s data.

The presentation also discussed how PR 13/2018 still needs to regulate the exchange of information/access between institutions (free flow of information) in more detail. Perpres 13/2018 still needs to give a unique mandate to institutions to synchronize regulations and information exchange/access systems between information and access between institutions and with the public. The Ministry of Law and Human Rights, PPATK, and OJK have the opportunity to become the leading sector in strengthening the implementation of PR 13/2018, including data exchange/inter-institutional. Nevertheless, it also requires the support of other agencies.

In his study, Henri provided recommendations for unhindered access that need to be considered. This unhindered access is essential to support data exchange between corporations, authorities, and requesting parties. For this reason, a rule that acts as a leading sector is needed. In addition, there need to be uniform regulations and information technology systems that support free-flow information. A proactive disclosure approach without reducing information-based services is becoming increasingly crucial in connection with the ease of access to data. In addition, protecting several points related to personal data for publication also needs to consider public-interest-autonomy-dignity-security aspects.

The study also emphasized the importance of a system that regulates proactive disclosure and its data disclosure mechanism. Beneficial owner data that can be partially closed includes NIK, date of birth, and address.
Meanwhile, data that needs to be fully disclosed contains full name, place of birth, nationality, NPWP, and the relationship between the corporation and the beneficial owner.

The forum continued with a presentation from Agus Cahyono from the Indonesian EITI Secretariat. In his presentation, Agus Cahyono stated that the disclosure of Beneficial Ownership data reflects Indonesia’s commitment to implementing the Extractive Opening Program with several other countries, including Argentina, Ghana, Liberia, Mexico, Mongolia, Nigeria, Philippines, and Zambia. In its implementation, the Ministry of Energy and Mineral Resources has designed a Beneficial Ownership database that is integrated with data on beneficial owners through a web service / API mechanism owned by the Directorate General of General Legal Administration, Ministry of Law and Human Rights and the Taxpayer Identification Number (NPWP) database owned by the Directorate General of Taxes, Ministry of Finance.
Agus Cahyono also explained the achievements of company compliance with beneficial ownership data disclosure. So far, there are 1102 SKK Migas companies, 873 mineral and coal companies, 103 electricity companies, and 28 new energy, renewable and energy conservation companies that have complied and sent valuable ownership documents.

In the multi-stakeholder forum, Agus Cahyono highlighted several challenges in strengthening the beneficial ownership database, including business compliance, verification, and validation of valuable owner data. To follow up on these challenges, a regulatory framework is needed to implement beneficial ownership data optimally. In addition, coordination with the Ministry of Law and Human Rights is also necessary to coordinate and provide standardized guidelines that apply nationally to verify data on beneficial owners. The imposition of a blocklist for companies that do not comply with the Beneficial Ownership provisions can also be the basis for verifiers to refuse licenses.

Continuing Agus Cahyono’s presentation, Alamsyah Saragih outlined some fundamental principles and risk mitigation in managing Beneficial Ownership information, which is private. Such information is only open if: (i) declared open by law, or (ii) can be opened by the law in a manner regulated by law but is only relevant to be opened as long as it is for utilization by the principal. Alamsyah Saragih also emphasized the importance of risk mitigation in the technical provision of such information. If there is no optimal agreement on the risk tolerance the parties are willing to bear, the decision is left to the legitimate authority.

In the presentation, Alamsyah also explained details related to the risk matrix that needs to be considered by benefit ownership data managers. According to Alamsyah, risks can be mapped through an analysis matrix because it is closely related to mitigating risks that may arise. So far, the beneficial ownership data manager has no standard compliance for risk mitigation.

Some of the risk mitigation techniques and procedures can be seen in two approaches. The first approach is through a blackout, informed consent, destruction based on achieving goals, and access without documents.

Meanwhile, the second approach to risk mitigation can be made through digital restriction according to purpose and a digital-based destruction system or document expiration.

Alamsyah recommends making a complete and integrated regulation. In addition, the existence of dispute resolution institutions and exchange management institutions is becoming increasingly important. Alamsyah also mentioned the importance of infrastructure and technology professionals in managing beneficial ownership information. In his closing statement, Alamsyah Saragih said, “High-risk countries welcome all investors with great joy. Smart countries are only friendly to quality investors. If we can build good beneficial ownership data disclosure, we should see it as Indonesia’s effort to become a smart country in the context of investment, not to disrupt investment.”

In the discussion session with participants, the importance of verification of beneficial ownership data before the data is shared was also discussed. It aims to ensure that the data transmitted is properly confirmed to avoid money laundering practices. Several discussion points with participants raised the link between disclosing Beneficial Ownership data and increased investment.

Author: Azhania Nurhidayah Siswadi
Editor: Aryanto Nugroho