The Indonesian legal system is complex because it is a confluence of three distinct systems. Prior to the first appearance of Dutch traders and colonists in the late 16th century and early 17th century, indigenous kingdoms prevailed and applied a system of adat (customary) law. Dutch presence and subsequent colonisation during the next 350 years until the end of World War II left a legacy of Dutch colonial law. A number of such colonial legislation continue to apply today. Subsequently, after Indonesian declared independence on 17 August 1945, the Indonesian authorities began creating a national legal system based on Indonesian precepts of law and justice.

These three strands of adat law, Dutch colonial law and national law co-exist in modern Indonesia. For example, commercial law is grounded upon the Commercial Code 1847 (Kitab Undang-Undang Hukum Dagang or Wetboek van Koophandel), a relic of the colonial period. However, commercial law is also supplemented by a large number of new laws enacted since independence. They include the Banking Law 1992 (amended in 1998), Company Law 1995, Capital Market Law 1995, Antimonopoly Law 1999 and the Oil & Natural Gas Law 2001. Adat law is less conspicuous. However, some adat principles such as “consensus through decision making” (musyawarah untuk mufakat) appear in modern Indonesian legislation.