COVID-19 Pandemic: Utilization of Digital Signature Based on Indonesian Prevailing Laws and Regulations

In response to the current spreading of the COVID-19 pandemic, the Indonesian government has urged its citizen to limit their social and physical interactions through numerous policies to minimize the potential local transmission of the coronavirus.

The unfolding pandemic has required most companies to quickly adapt and implement the remote-working policy and avoid any physical meetings to protect its employees and public health. Nevertheless, the businesses shall keep moving, corporate and legal actions shall be done despite the challenge in fulfilling the formalities such as providing wet-signatures on the contracts and/or other legal documents.

Legal Frameworks: Our below executive summary refers to the following regulations:

  1. Indonesia Civil Code (“ICC”);
  2. Law No. 11 of 2008 on Electronic Information and Transaction as amended by the Law No. 19 of 2016 (“EIT Law”);
  3. Government Regulation No. 71 of 2019 on Organization of Electronic Systems and Transaction (“GR 71/2019”); and
  4. Minister of Communication and Informatics (“MoCI”) Regulation No. 11 of 2018 on Organization of Electronic Certification (“MoCI Regulation 11/2018”).

Main Keys on the Utilization of Digital Signature: We have managed to provide you the following main keys on the utilization of digital signature amidst the COVID-19 pandemic.

Definition of Digital Signature: We note that the EIT law defines digital signature as signature that consists of Electronic Information that is attached, associated, or related to other Electronic Information that is used as a verification and authentication tool (Art. 1 point 12 of EIT Law).

Furthermore, we noted that the GR 71/2019 acknowledges a digital signature which is used to represent a business entity, its digital signature is referred to as an electronic seal.  (Art. 59 (2) of GR 71/2019).

Classification of Digital Signature: Furthermore, we note that the GR 71/2019 classified the digital signature to:

  1. Certified digital signature: Digital signature which is made by using a certified digital signature producing device as provided by an Indonesian registered electronic certificate provider and has fulfilled the validity of legal force (Art. 60 (3) GR 71/2019); and
  2. Uncertified digital signature: Digital signature which is made without using the services of Indonesian registered electronic certificate providers. (Art. 60 (4) GR 71/2019)

Note: Please be advised that Indonesian law acknowledges both certified and uncertified digital signatures. Nevertheless, there should be a difference in the evidentiary value of the signature (Elucidation of Art. 60 (2) of GR 71/2019).

Certified Digital Signature Providers: We note that the MoCI has certified the following electronic signature providers: (a) Digisign.id; (b) Privy.id; and (c) Vida.id.

Note: You may check further updates on the certified digital signature providers here.

The validity of a Contract with Digital Signature: We refer to the ICC, contracts are generally valid inasmuch as it has fulfilled the requirements as stipulated under Art. 1320 of ICC which are consent, competency of parties, certainty, and permissible clause. Hence, we are in the view that a wet-signature is not inevitably required for a contract to be binding.

Furthermore, we note that Article 59 (3) of GR 71/2019, a digital signature would have a valid legal force if it has fulfilled the following requirements (“Digital Signature Requirements”):

  1. the digital signature data is only related to the signer;

  2. the data of digital signature upon the electronic signing process should be in the authority of the signer;

  3. any changes to the digital signature after the singing should be discoverable;

  4. any changes to the electronic information related to such digital signature after the signing is discoverable;

  5. there are certain methods provided to identify who is the signer; and

  6. there are certain methods to recognize that the signer has provided approval for the relevant electronic information.

As such, forasmuch that the contact has fulfilled the ICC requirements and the signature has fulfilled the Digital Signature Requirements, such contract is valid and binding therefore it indeed has legal implications.

Application of Digital Signature in Indonesia: Regardless of the provided legal framework of the digital signature, in practice, most courts and government institutions will prefer any documents to be in a physical original document with wet-signatures. Hence, in practice, it is best to provide physical documents with wet-signatures, especially for documents that may have caused disputes (such as documents that are signed in the form of a notarial deed, property transfer agreements, employment-related documents, etc.).

The article above was prepared by Marshall S. Situmorang (Partner) and Aniendita Rahmawati (Associate). 

Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances. For more information, please contact us at mail@nusantaralegal.com.