Revision of the MSME Law to Impose Stronger Corporate Sanctions

The Ministry of Micro-, Small-, and Medium-scale Enterprises (“MSMEs”) and Commission VII of the House of Representatives of the Republic of Indonesia (DPR RI) have agreed to prepare a draft amendment to Law No. 20 of 2008 concerning MSMEs, as amended by Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation (collectively referred to as “Law 20/2008”). Evita Nursanty, Deputy Chairperson of Commission VII of the DPR RI, stated that Law 20/2008 needs to be updated to align with developments in the digital economy.

“This MSME Law was enacted in 2008, which was quite a long time ago. Since then, the era has shifted from traditional to digital,” said Evita.

According to Evita, the revision is necessary as an effort to adjust the treatment of the MSME ecosystem, which has developed rapidly. Commission VII is encouraging the bill to be drafted through a government initiative mechanism. 

Minister of MSMEs, Maman Abdurrahman stated that the revision is necessary because one of the main current obstacles lies in the provisions on sanctions, which remain merely normative for companies that fail to provide assistance or protection to MSMEs. The revision is expected to strengthen the protection and empowerment aspects through more robust enforcement mechanisms.

“This has become one of our obstacles concerning reward and punishment because the sanctions imposed on those who do not or have not provided assistance, empowerment, support, or protection for MSMEs are still normative in nature,” said Maman.