A New Paradigm of Law Enforcement toward State-Owned Enterprises: From a Repressive Approach to a Regenerative Approach in Managing State Business

Abstract

Law enforcement against State-Owned Enterprises (SOEs) in Indonesia is frequently marked by tension between progressive legal oversight and the operational needs of the business sector, which inherently requires space for risk-taking. The growing tendency to criminalize business judgments—particularly those resulting in financial loss—has produced a deterrent effect that ultimately undermines innovation, strategic decision-making, and productivity within SOEs. This paper proposes a new paradigm for law enforcement in the SOE context: a regenerative legal approach that seeks to harmonize legal integrity, corporate sustainability, and broader national economic objectives. Using a conceptual–normative method, the study critically evaluates the limitations of the prevailing repressive paradigm in economic criminal law, which often prioritizes punitive measures over systemic improvement. The proposed regenerative legal approach reframes law enforcement as a mechanism not merely for punishment, but for institutional learning, risk-calibrated accountability, and the promotion of resilient corporate governance. By integrating preventive, corrective, and developmental legal functions, this model aims to create a regulatory environment that encourages responsible risk-taking, strengthens internal controls, and enhances managerial professionalism without compromising legal certainty. The paper contributes to the discourse on economic criminal law reform by offering a conceptual foundation for future law enforcement practices that support the long-term health, competitiveness, and productivity of SOEs. It also provides a normative guide for policymakers seeking to align legal frameworks with national economic development goals.