UPDATE: DRAFT IMPLEMENTING REGULATIONS OF INDONESIA PERSONAL DATA PROTECTION LAW
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インドネシア法弁護士
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Indonesian law has recognized the concept of electronic transactions and e-signatures since 2008 under the Electronic Information and Transaction Law (also known as the “ITE Law”). The ITE Law has undergone several revisions: it was initially amended in 2016 and further on January 2, 2024, with the enactment of the second amendment to the ITE Law. The ITE Law and its implementing regulations provide the general legal framework for electronic transactions, including e-signatures.
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An electronic signature, as defined by the regulation, is a signature that consists of electronic information that is embedded in, associated with, or linked to other electronic information and is used as a means of verification and authentication.
Based on this definition, an e-signature must be digitally created from the outset, with embedded data ensuring its authenticity. Therefore, a scanned image of a handwritten signature does not qualify as an "e-signature" or "electronic information" under the regulation, as it lacks the necessary digital elements to meet the criteria of an e-signature.
In general, ITE Law explicitly recognizes electronic information and documents as lawful evidence.
As a result, documents created in electronic format—such as letters, statements, agreements, and application forms—are considered to have evidentiary value in court. Electronic information and documents generated by electronic systems in compliance with the ITE Law, along with their hard copies, are admissible as evidence in court.
In addition to that, Indonesian law does not require a handwritten signature (which we often called a "wet" signature) for agreements to be legally binding. Under the Indonesian Civil Code, an agreement is considered valid if it meets the following conditions:
As long as these conditions are met, the agreement is valid whether it is made verbally, in writing, or electronically. The regulation also confirms that an e-sign has the same legal standing as a handwritten signature. Therefore, electronic documents signed with e-sign are just as legally valid in court as those signed with handwritten signatures.
There are however certain requirements for an e-signature to be considered legally valid and enforceable under Indonesian law. These requirements are important, because the validity and enforceability of e-signatures can be questionable if one of the requirements are not met.
a. the “Electronic Signature Creation Data,” which means personal codes, biometric codes, cryptographic codes, and/or codes generated from converting a manual signature into an Electronic Signature (as well as other codes produced through Information Technology developments), must be uniquely linked to the signatory.
b. during the signing process, only the signatory must have control over the Electronic Signature Creation Data. This control guarantees that the e-signature is genuinely executed by the intended signatory and not tampered with by others.
c. any changes to the e-signature after it has been signed must be clearly detectable. If the e-signature or the associated data is modified after signing, the system should automatically flag the changes, ensuring transparency and preventing fraud.
d. any modifications to the electronic information linked to the e-signature after signing must be clearly visible.
Similar to the e-signature itself, any changes to the electronic document or information it is linked to after signing must also be easily detectable.
e. a specific method must be used to identify the signatory.
f. a specific method must be in place to confirm that the signatory has consented to the electronic information in the document.
This could be done through a click-to-sign process, where the signatory explicitly agrees to the terms before applying their e-signature, or through a confirmation step that records their consent. This step is essential for upholding the enforceability of the document and ensuring that the e-signature reflects the signatory’s true intention.
Although the regulations generally recognize the admissibility of electronic information/documents or hardcopies in court, electronic information/documents cannot be used if the prevailing laws and regulations require otherwise. An example would be documents that must be produced as a notarial or land conveyancer deed.
The regulations divide E-signatures into two types:
Although many well-known CAs operate worldwide, an e-signature is only deemed certified if issued by an Indonesian CA. Therefore, e-signatures issued by a foreign CA are classified as Non-Certified E-signatures.
Currently, several Indonesian CAs are listed on the Indonesian Ministry of Communication and Informatics’ website (https://pse.kominfo.go.id/home).
The main difference is their evidentiary value. While both are considered valid as signatures, Non-Certified E-signatures are considered to have less evidentiary value in court than Certified E-signatures.
Previously, using e-signatures secured by an electronic certificate was optional. However, with the second amendment to the ITE Law issued in January 2024, it has become compulsory for transactions classified as high-risk electronic transactions.
Article 17, paragraph (2a) of the second amendment to the ITE Law states: "High-risk electronic transactions for the parties involved must use an electronic signature secured by an electronic certificate."
Since electronic transactions rely heavily on the secure transmission of data, ensuring security is a crucial concern. Currently, specific examples of "high-risk electronic transactions" have not been provided, and the definition is broad, referring mainly to "financial transactions that occur without physical, face-to-face interaction."
Future implementing regulations are expected to clarify the scope of high-risk electronic financial transactions, which may include those involving electronic system operators.
The use of e-signatures in Indonesia has increased due to government efforts to streamline business processes, attract investors, and the pandemic’s impact. However, some government institutions and courts still require hardcopy documents with wet signatures, and therefore it is always important to consult with the relevant authorities before using an e-signature on a particular type of document.
At ZeLo, we provide legal services to support Japanese companies expanding overseas, including to Indonesia, as well as foreign companies entering the Japanese market.
Please let us know if you have further questions or may need assistance on this matter. For further information on the above, about our firm or any other matters, please contact through the form (https://zelojapan.com/en/contact).
The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only. Readers of this article should contact an attorney to obtain advice with respect to any particular legal matter.