Santiago Principles Self-Assessment

Indonesia Investment Authority

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  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

Lembaga Pengelola Investasi or Indonesia Investment Authority (“INA”) is a sui generis legal entity established under Law Number 11 of 2020 on Job Creation (“Law 11”) and Government Regulation Number 74 of 2024 on Indonesia Investment Authority (“PP 74”), which are publicly available and accessible. 

INA is wholly owned by the Government of the Republic of Indonesia (“the Government”) and is responsible directly to the President. As an investment institution of the Government, INA has its own capital injected by the Government. It is also granted certain privileges under Law 11 and PP 74, which allow  it to manage its investments through, among others, the establishment of funds or direct investments with its potential partners.

Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

Per GAPP2, the Government has given a clear mandate to INA to support national development and achieve optimal financial returns,  focusing on long- term sustainability. 

The Supervisory Board has two minister representations (Minister of Finance and Minister of SOE) and three independent members to provide governmental and external perspectives, and  monitor INA’s performance and governance. The Supervisory Board’s committees oversee areas such as Remuneration, Audit and Ethics. 

The Board of Directors has full independence and accountability for the overall portfolio and its governance, including  decisions on asset allocations and effective management of the capital injection from the Government. The Board of Directors’ committees also oversee critical areas such as investment and risk and have oversight over the respective investment risk and enterprise-wide risk faced by INA. 

As part of its formative steps in 2021, INA created the charters for its committees and the relevant policies and procedures to support its operations. The Board of Directors Charter sets out the terms of the appointment and responsibilities of its members, while the Investment and Risk Committee Charters detail each Committee’s specific responsibilities as support for the Board of Directors. 

The Board of Directors submits quarterly financial reports that have been reviewed by the Audit Committee and semi-annual self-assessment reports to the Supervisory Board. 

The Board of Directors submits an annual report, which includes externally audited financial statements, to the Supervisory Board. The Supervisory Board will submit this with the Supervisory Board’s annual report to the President as part of INA’s accountability to deliver on its mandate. 

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

The Board of Directors approve investment decisions while keeping the investments within the boundaries of the investment mandate from the government and INA’s  risk appetite. Any investments and risks taken are monitored with oversight from the Investment and Risk Committee and reported to the Board of Directors accordingly. 

There is currently no allocation to external investment managers. As INA grows, clear mandates will be given to both internal and external managers to define the range of their activities and authority.

INA investment process follows the guidelines clearly written in the Investment Policy, ensuring transparency from deal sourcing to closing to portfolio monitoring and exit.