Published on October 2, 2025, by The Jakarta Post
Under the new structure, BP BUMN will act as the sector’s regulatory agency, while Danantara will serve as the executor in charge of around 1,000 state firms and as guarantor for investment holdings.
By Ruth Dea Juwita
The House of Representatives passed sweeping revisions to the law governing state-owned enterprises (SOEs) in a plenary session on Thursday, dissolving the SOEs Ministry and establishing a new regulatory body, the SOEs Regulatory Agency (BP BUMN), as its replacement.
Around 500 staff members of the SOEs Ministry will be transferred to the new agency under civil service rules. House Speaker Puan Maharani told the plenary session that the new law aimed to prevent overlapping authority, as state firms are now placed under the state asset fund Danantara, which was established in February.
“As Pak President Prabowo Subianto has emphasized, SOEs must function and serve in line with Article 33 [of the 1945 Constitution], for the greatest benefit of the people. […] We must now ensure there is no overlap between regulator and operator,” Puan said.
Under the new structure, BP BUMN will act as the sector’s regulatory agency, while Danantara will serve as the executor in charge of around 1,000 state firms and as guarantor for investment holdings.
Administrative and Bureaucratic Reform Minister Rini Widyantini said the urgency of changing the SOEs Ministry’s nomenclature lay in the need to ensure accountability and uphold good governance. According to her, provisions in the bill were intended to improve transparency and avoid conflicts of interest.
“These changes were drafted with consideration for more progressive institutions, clearer rules of the game and stronger legal certainty in managing state firms,” Rini told the plenary session.
The revision contains 84 updates in total, including adjustments to comply with Constitutional Court rulings that bar ministers and deputy ministers from holding concurrent positions as SOE commissioners and classify SOE executives as state officials.
Ministers and deputy ministers currently holding SOE commissioner posts may continue for a maximum of two years from the Constitutional Court’s ruling on the matter.
Boards of directors, commissioners and supervisory boards of SOEs will no longer be excluded from the definition of state officials, a designation that was introduced under the February revision of the law. The Supreme Audit Agency (BPK) will now have oversight authority over SOEs and their officials.
Andre Rosiade, deputy chair of House Commission VI overseeing trade, industry and SOEs, said that the overall functions and duties of BP BUMN would be “not much different,” but that the oversight role over SOEs now rests with Danantara’s supervisory board.
“[The SOEs Ministry] has been downgraded from a ministry to an agency. The only difference is that the ministry used to handle supervision function, but that responsibility has now been shifted to Danantara’s supervisory board. That’s the only change,” he said.
That said, despite the progressive move to keep SOE directors under supervision, some experts argued that the latest draft gave more power and authority to Danantara, while falling short of establishing a stronger body to oversee the agency and improve SOE governance.
The SOE bill was first discussed on Sept. 23 and wrapped up in just three days, prompting experts to question the pace.
In February, the House similarly fast-tracked a revision to the SOE Law to provide the legal foundation for establishing Danantara, completing deliberations in just a month after talks had stalled in 2023 over management disputes.
Lawmakers and the government denied rushing deliberations, insisting all procedures had been followed and that public and stakeholder aspirations had been reflected in the final draft.
“Nothing was rushed. All procedures were carried out, committee meetings were open, article-by-article deliberations were held publicly and meaningful participation was ensured,” said Andre, who is from President Prabowo’s Gerindra Party.
Growing Danantara
In the February revision of the SOEs Law, Danantara was established and given sweeping powers, ranging from managing all SOE dividends and approving capital injections to orchestrating mergers or spin-offs and forming new holding companies.
With cumulative assets expected to reach US$1 trillion, President Prabowo aims for the agency to help the government achieve 8 percent economic growth by 2029.
The fund, set up in February with three executives, Investment Minister Rosan Roeslani as CEO, Deputy SOEs Minister Dony Oskaria as COO and entrepreneur Pandu Sjahrir, nephew of former senior minister Luhut Pandjaitan, as chief investment officer, has rapidly grown to nearly 300 staff.
On the same day the bill was passed, Danantara CIO Pandu reiterated the commitment to maintain a leaner portfolio, aiming to reduce the nation’s 1,063 state-owned firms to fewer than 200, focusing on high-performing, well-governed companies.
“Companies that are not yet national champions, we want to push them to become national champions, either by merging or consolidating. And those that don’t have that ability, for whatever reason, we can essentially liquidate or close down,” he said in an interview with CNBC.
Pandu acknowledged that investors and the public had frequently questioned the fund’s governance and business operations, noting that the firm still had much to work on. He added that Danantara’s mission is to “fully corporatize all SOEs” and gradually remove political influence from its operations.
“When we first started Danantara, I called it a trust deficit. Now, the idea is to convert that trust deficit into trust dividends,” he said.