Indonesia AI Governance: Framework, Challenges & Future Regulations

Indonesia Navigates Early Stages of AI Governance

Indonesia is rapidly emerging as a key player in the regional digital economy, with artificial intelligence (AI) poised to contribute significantly to its growth. A 2023 Kearney report projected AI could add USD366 billion to the Indonesian GDP by 2030. However, the country’s regulatory framework for AI remains in its early stages, presenting both challenges and opportunities as it seeks to balance innovation with responsible development.

Currently, Indonesia lacks a specific law or regulation dedicated to AI. Instead, the operation and use of AI fall under existing legislation governing electronic systems, notably the Electronic Information and Transactions Law, amended by Law No.1 of 2026 on Criminal Adjustment and Government Regulation No.71 of 2019. Under this framework, AI can be legally interpreted as an “electronic agent” – a device within an electronic system performing automated actions. However, legal experts note this definition may be insufficient for the complexities of modern AI systems, which often operate autonomously and exhibit adaptive behavior.

Recognizing the need for a more focused approach, the Ministry of Communication and Digital Affairs (MOCD) issued Circular Letter No.9 of 2023 on Artificial Intelligence Ethics (CL9). This circular provides general guidelines for businesses and electronic system operators, emphasizing ethical values such as inclusivity, security, accessibility, transparency, credibility, and accountability. AI operators are expected to prioritize data security, prevent discrimination, and implement robust risk and crisis management protocols.

Sector-specific regulations are also emerging. The Financial Services Authority (OJK) has published the Indonesian Banking Artificial Intelligence Governance, outlining guiding principles for AI in the financial sector. These principles include reliability, accountability, and human oversight throughout the AI lifecycle. The OJK has also introduced a Code of Conduct for Responsible and Trustworthy Artificial Intelligence in the Financial Technology Industry, focusing on fairness, transparency, and explainability.

In August 2025, the MOCD published the National AI Roadmap White Paper, outlining a conceptual framework for AI and establishing a National AI Co-ordination Task Force. This roadmap introduces an AI lifecycle encompassing conception, data collection, processing, and evaluation, with principles designed to minimize risks at each stage. Key governance principles include dignity, justice, accountability, data protection, transparency, security, sustainability, integrity, inclusivity, and human involvement.

The MOCD is also developing AI Ethical Guidelines to strengthen the framework established in CL9, offering a self-assessment questionnaire for businesses to evaluate their AI systems against ethical standards. The government is preparing a presidential regulation on AI intended to address overarching policy concerns related to accountability and security, and to serve as a central reference point for aligning AI initiatives across various ministries and agencies.

Key Legal Challenges Remain

Despite these developments, significant legal and institutional challenges persist. A primary issue is the lack of a unified legal definition of AI, leading to fragmented regulatory approaches. This fragmentation could result in overlapping authorities, inconsistent standards, and regulatory gaps, creating uncertainty for businesses. Strengthening inter-institutional coordination and developing a more integrated framework are crucial.

Privacy risks associated with AI development are also a concern. AI systems often rely on large datasets, potentially including personal information obtained through web scraping. Ensuring compliance with data protection laws, including the Personal Data Protection Law, is paramount.

Finally, the current legal framework lacks clarity regarding liability and accountability for AI-related harm. As Indonesian law does not recognize AI as a separate legal entity, liability falls on individuals or organizations designing, deploying, or using AI. The absence of court decisions or specific legal provisions addressing AI liability creates a significant legal gray area.

As Indonesia continues to integrate AI across various sectors, governance readiness remains the central challenge. While the MOCD’s roadmap represents a coordinated policy effort, meaningful progress will depend on translating these initiatives into binding legal instruments that provide legal certainty and effective enforcement. The coming months will be critical as Indonesia seeks to establish a robust and responsible AI ecosystem.