Auction for NPL Asset Recovery: Indonesia and Kazakhstan from Human Rights and Substantive Justice Perspectives

Abstract

This study examines the comparative legal framework of auctions for Non-Performing Loan (NPL) asset recovery in Indonesia and Kazakhstan through human rights and substantive justice This study examines the comparative legal framework of auctions for Non-Performing Loan (NPL) asset recovery in Indonesia and Kazakhstan through human rights and substantive justice perspectives. The main issue is how each country balances banking stability with debtor protection, particularly regarding fair asset valuation, procedural transparency, and the prohibition of arbitrary deprivation of property. Employing a normative legal method with statutory and conceptual approaches, this study analyzes national legislations alongside international human rights standards. The findings reveal that Indonesia emphasizes legal certainty and debtor protection under the Mortgage Law (Law No. 4/1996) and Fiduciary Law (Law No. 42/1999). However, its banking recovery efficiency is constrained by procedural rigidity and extensive litigation. Conversely, Kazakhstan demonstrates higher economic efficiency by engaging Private Bailiffs to accelerate asset liquidation, yet this creates severe human rights risks, including undervaluation, inadequate notice, and limited judicial remedies for debtors. The study concludes that Indonesia must enhance procedural efficiency without compromising constitutional rights, while Kazakhstan needs to strengthen public oversight over private actors to fulfill international human rights obligations. Ultimately, both systems must integrate market functionality with human rights principles to build a balanced, fair, and non-discriminatory asset recovery model within the banking sector