THE BUSINESS JUDGMENT RULE IN THE CASE OF KAREN AGUSTIAWAN: A LEGAL ANALYSIS OF THE CRIMINALIZATION OF BUSINESS DECISIONS IN PERTAMINA

Abstract

This study looks at how the Business Judgment Rule (BJR) was applied in the case of Karen Agustiawan, the former President Director of PT Pertamina (Persero), who faced criminal charges over an investment choice that caused financial loss. Even though the decision went through the company’s internal processes and was part of a long-term plan, Karen was still taken to court. The research uses a legal approach to check if BJR exists in Indonesian law, especially in Article 97

paragraph (5) of the Limited Liability Company Law, and how it can protect state- owned enterprise (SOE) directors when making business choices. The results show

that BJR can help tell the difference between normal business risks and actual criminal behavior, stopping honest decisions made carefully and without personal gain from being treated as crimes. Karen’s case shows the need for better rules and understanding of BJR to give SOE directors clear legal support when making important business choices.