Shaping Artificial Intelligence Governance and Risk Management in the Public Sector: Regulatory Insights

Gandung Troy  Sulistyantoro; Akhsanul  Khaq; Md Zubair Kasem  Khan; Al Amin; Abdullah-Al-Monzur  Hussain

doi:10.58829/lp.11.1.2024.161-181

Authors

Gandung Troy Sulistyantoro Universitas Islam Sultan Agung, Indonesia
Akhsanul Khaq Universitas Pakuan, Indonesia
Md Zubair Kasem Khan City University of New York, United States
Al Amin University of Aberdeen, Scotland
Abdullah-Al-Monzur Hussain Dhaka International University, Bangladesh

DOI:

https://doi.org/10.58829/lp.11.1.2024.161-181

Keywords:

Governance, Risk Management, Data Privacy, Public Sector

Abstract

As AI continues to transform public services by enhancing efficiency, transparency, and decision-making, it also brings forth significant challenges related to data privacy and misuse. This research explores the intersection of risk management and AI governance within Indonesia's public administration, by conceptualizing how Indonesia's legal frameworks, regulations, and policies should evolve to accommodate AI technologies responsibly. The research employs a conceptual approach to analyze existing laws, including the Personal Data Protection Act and the Information and Electronic Transactions Law, alongside international best practices. The findings emphasize the need for a clear and cohesive regulatory framework that governs AI usage, with a focus on data privacy, ethical AI use, and transparency. It is concluded that Indonesia must strengthen its data protection laws, address the shortage of AI professionals, and improve infrastructure to ensure the responsible implementation of AI in public administration.

References

AI Watch. Global Regulatory Tracker. New York: White & Case. n.d, https://www.whitecase.com/insight-our-thinking/ai-watch-global-regulatory-tracker#home.

Al-Ansi, Abdullah M., Askar Garad, Mohammed Jaboob, and Ahmed Al-Ansi. “Elevating e-government: Unleashing the power of AI and IoT for enhanced public services.” Heliyon 10, no. 23 (2024): 41-54.

Alhosani, Khalifa, and Saadat M. Alhashmi. “Opportunities, challenges, and benefits of AI innovation in government services: a review.” Discover Artificial Intelligence 4, no. 1 (2024): 18-34.

Amancik, Sonia Ivana Barus, Putra Perdana Ahmad Saifulloh, Novendri M. Nggilu, and Asrul Ibrahim Nur. “Reforming the Indonesian Bureaucracy through State Civil Apparatus Reform, Could It be Optimized with Technology?.” Journal of Law and Legal Reform 5, no. 3 (2024): 102-125.

Amarathunga, Buddhini. “ChatGPT in education: unveiling frontiers and future directions through systematic literature review and bibliometric analysis.” Asian Education and Development Studies 13, no. 5 (2024): 412-431.

Analytica, Oxford. “California’s AI Safety Bill faces political obstacles.” United State: Expert Briefings, 2024.

Apruzzese, Giovanni, Pavel Laskov, Edgardo Montes de Oca, Wissam Mallouli, Luis Brdalo Rapa, Athanasios Vasileios Grammatopoulos, and Fabio Di Franco. “The role of machine learning in cybersecurity.” Digital Threats: Research and Practice 4, no. 1 (2023): 1-38.

Astuti, Endah Fuji, Achmad Nizar Hidayanto, Sabila Nurwardani, and Ailsa Zayyan Salsabila. “Assessing Indonesian MSMEs' Awareness of Personal Data Protection by PDP Law and ISO/IEC 27001: 2013.” International Journal of Safety & Security Engineering 14, no. 5 (2024): 1559–1567.

Brundage, Miles, Shahar Avin, Jack Clark, Helen Toner, Peter Eckersley, Ben Garfinkel, Allan Dafoe et al. “The malicious use of artificial intelligence: Forecasting, prevention, and mitigation.” arXiv preprint arXiv 14, no. 3 (2018): 132-146.

Budiyanto, Arip. “Pemanfaatan Kecerdasan Buatan dalam Lembaga Pemerintah: Meningkatkan Efisiensi dan Pelayanan Publik yang Lebih Baik.” DJKN Kemenkeu, Retrieved August 29, 2023. https://www.djkn.kemenkeu.go.id/kpknl-manado/baca-artikel/16383/Pemanfaatan-Kecerdasan-Buatan-dalam-Lembaga-Pemerintah-Meningkatkan-Efisiensi-dan-Pelayanan-Publik-Yang-Lebih-Baik.html.

Busuioc, Madalina. “Accountable artificial intelligence: Holding algorithms to account.” Public administration review 81, no. 5 (2021): 825-836.

Chen, Tao, Wenshan Guo, Xian Gao, and Zhehao Liang. “AI-based self-service technology in public service delivery: User experience and influencing factors.” Government Information Quarterly 38, no. 4 (2021): 101520-101531.

De Lima Junior, Oswaldo Pereria, Prabhpreet Singh, and Albin Anto. “From Ethics to Action: an Analysis of Ai Public Policies in Brazil and India.” In International Conference on Smart Systems: Innovations in Computing, pp. 765-776. Singapore: Springer Nature Singapore, 2023.

Department for Science, Innovation & Technology. “Cyber Security Risks to Artificial Intelligence”. Research and analysis, Retrieved May 15, 2024. https://www.gov.uk/government/publications/research-on-the-cyber-security-of-ai/cyber-security-risks-to-artificial-intelligence.

Desouza, Kevin C., Gregory S. Dawson, and Daniel Chenok. “Designing, developing, and deploying artificial intelligence systems: Lessons from and for the public sector.” Business Horizons 63, no. 2 (2020): 205-213.

Eggers, William D., David Schatsky, and Peter Viechnicki. “AI-augmented government. Using cognitive technologies to redesign public sector work.” Deloitte Center for Government Insights 1, no.3 (2017): 24-39.

European Parliament. “EU AI Act: First Regulation on Artificial Intelligence.” last modified Retrieved June 1, 2023, https://www.europarl.europa.eu/topics/en/article/20230601STO93804/eu-ai-act-first-regulation-on-artificial-intelligence.

Filipova, Irina A. “Legal Regulation of Artificial Intelligence: Experience of China.” Journal of Digital Technologies and Law 2, no. 1 (2024): 46-73.

Gamito, Marta Cantero, and Christopher T. Marsden. “Artificial intelligence co-regulation?: the role of standards in the EU AI Act.” International Journal of Law and Information Technology 32, no. 1 (2024): eaae011.

Garibay, Ozlem Ozmen, Brent Winslow, Salvatore Andolina, Margherita Antona, Anja Bodenschatz, Constantinos K. Coursaris, Gregory Falco et al. “Six human-centered artificial intelligence grand challenges.” International journal of human computer interaction 39, no. 3 (2023): 391-437.

Gesk, Tanja Sophie, and Michael Leyer. “Artificial intelligence in public services: When and why citizens accept its usage.” Government Information Quarterly 39, no. 3 (2022): 101704-101718.

Greshake, Kai, Sahar Abdelnabi, Shailesh Mishra, Christoph Endres, Thorsten Holz, and Mario Fritz. “Not what you've signed up for: Compromising real-world llm-integrated applications with indirect prompt injection.” In Proceedings of the 16th ACM Workshop on Artificial Intelligence and Security 4, no. 3 (2023): 72-89.

Gupta, Maanak, CharanKumar Akiri, Kshitiz Aryal, Eli Parker, and Lopamudra Praharaj. “From chatgpt to threatgpt: Impact of generative ai in cybersecurity and privacy.” New Jersey: IEEE Access (2023), 80218-80245.

Helmiatin, Anto Hidayat, and Muhammad Ridwan Kahar. “Investigating the adoption of AI in higher education: a study of public universities in Indonesia.” Cogent Education 11, no. 1 (2024): 2380175.

Huang, Changwu, Zeqi Zhang, Bifei Mao, and Xin Yao. “An overview of artificial intelligence ethics.” IEEE Transactions on Artificial Intelligence 4, no. 4 (2022): 799-819.

Husna, Hanifah Triari. “Kominfo Berkomitmen Atur Regulasi, Beri Peluang Pemanfaatan AI.” Aptika Kominfo, November 1, 2023, https://aptika.kominfo.go.id/2023/11/kominfo-berkomitmen-atur-regulasi-beri-peluang-pemanfaatan-ai/.

Keith, Andrew J. “Governance of artificial intelligence in Southeast Asia.” Global Policy 15, no. 5 (2024): 937-954.

Kulal, Abhinandan, Habeeb Ur Rahiman, Harinakshi Suvarna, N. Abhishek, and Sahana Dinesh. “Enhancing public service delivery efficiency: Exploring the impact of AI.” Journal of Open Innovation: Technology, Market, and Complexity 10, no. 3 (2024): 100329.

Kulkov, Ignat, Julia Kulkova, Rene Rohrbeck, Loick Menvielle, Valtteri Kaartemo, and Hannu Makkonen. “Artificial intelligence‐driven sustainable development: Examining organizational, technical, and processing approaches to achieving global goals.” Sustainable Development 32, no. 3 (2024): 2253-2267.

Kusumasari, Bevaola, and Bernardo Nugroho Yahya. “Algorithmic governance and AI: balancing innovation and oversight in Indonesian policy analyst.” Ai & Society 5, no. 4 (2024): 1-13.

Latupeirissa, Jonathan Jacob Paul, Ni Luh Yulyana Dewi, I. Kadek Rian Prayana, Melati Budi Srikandi, Sahri Aflah Ramadiansyah, and Ida Bagus Gde Agung Yoga Pramana. “Transforming public service delivery: A comprehensive review of digitization initiatives.” Sustainability 16, no. 7 (2024): 2818.

Laux, Johann, Sandra Wachter, and Brent Mittelstadt. “Trustworthy artificial intelligence and the European Union AI act: On the conflation of trustworthiness and acceptability of risk.” Regulation & Governance 18, no. 1 (2024): 1-32.

Lestari, Ahdiana Yuni, Misran Misran, Trisno Raharjo, Muhammad Annas, Dinda Riskanita, and Adya Paramita Prabandari. “Improving Healthcare Patient Data Security: An Integrated Framework Model For Electronic Health Records From A Legal Perspective.” Law Reform: Jurnal Pembaharuan Hukum 20, no. 2 (2024): 329–352.

Madan, Rohit, and Mona Ashok. “AI adoption and diffusion in public administration: A systematic literature review and future research agenda.” Government Information Quarterly 40, no. 1 (2023): 101774-101788.

Mahamidi, Alvin. “Pemanfaatan Kecerdasan Buatan (AI) dalam Pemerintahan.” DJKN Kemenkeu, Retrieved June 27, 2023. https://www.djkn.kemenkeu.go.id/kanwil-banten/baca-artikel/16228/Pemanfaatan-Kecerdasan-Buatan-AI-dalam-Pemerintahan.html.

Makridakis, Spyros. “The forthcoming Artificial Intelligence (AI) revolution: Its impact on society and firms.” Futures 90, no. 3 (2017): 46-60.

Maragno, Giulia, Luca Tangi, Luca Gastaldi, and Michele Benedetti. “Exploring the factors, affordances and constraints outlining the implementation of Artificial Intelligence in public sector organizations.” International Journal of Information Management 73 (2023): 102686.

Menard, Philip, and Gregory J. Bott. “Artificial intelligence misuse and concern for information privacy: New construct validation and future directions.” Information Systems Journal 19, no. 3 (2024): 13-32.

Mergel, Ines, Helen Dickinson, Jari Stenvall, and Mila Gasco. “Implementing AI in the public sector.” Public Management Review (2024): 1-14.

Montag, Christian, and Michèle Finck. “Successful implementation of the EU AI Act requires interdisciplinary efforts.” Nature Machine Intelligence 8, no. 2 (2024): 1-13.

Mulligan, Scott J. “There Are More Than 120 AI Bills in Congress Right Now.” MIT Technology Review, Retrieved September 18, 2024. https://www.technologyreview.com/2024/09/18/1104015/here-are-all-the-ai-bills-in-congress-right-now/.

Mulyawan, Rahman. “Can trust in government help to enhance Indonesian citizens' involvement in Al-based public service?.” Journal of Entrepreneurship and Public Policy 13, no. 4 (2024): 509–540.

Otoritas Jasa Keuangan (OJK). “Panduan Kode Etik Kecerdasan Buatan (AI) yang Bertanggung Jawab dan Terpercaya di Industri Teknologi Finansial.” Otoritas Jasa Keuangan (OJK), 4 Desember 2023. https://ojk.go.id/id/berita-dan-kegiatan/publikasi/Pages/Panduan-Kode-Etik-Kecerdasan-Buatan-AI-yang-Bertanggung-Jawab-dan-Terpercaya-di-Industri-Teknologi-Finansial.aspx.

Pembaruan Hukum. “Regulation of Artificial Intelligence in Indonesia.” SSEK Legal Consultants, February 29, 2024, https://ssek.com/blog/indonesia-law-update-regulation-of-artificial-intelligence/?lang=id.

Praditya, Editha, Syamsul Maarif, Yusuf Ali, Herlina Juni Risma Saragih, Rui Duarte, Firre An Suprapto, and Riant Nugroho. “National Cybersecurity Policy Analysis for Effective Decision-Making in the Age of Artificial Intelligence.” Journal of Human Security 19, no. 2 (2023): 91-106.

Putri, Diva Lufiana, and Inten Esti Pratiwi. “Data KAI Commuter Diduga Bocor dan Dijual, KCI: Peretasan Menggunakan Akun Pegawai.” Kompas, Retrieved July 3, 2024. https://www.kompas.com/tren/read/2024/07/03/081500465/data-kai-commuter-diduga-bocor-dan-dijual-kci--peretasan-menggunakan-akun%20pegawai.

Rahman, Rofi Aulia, Valentino Nathanael Prabowo, Aimee Joy David, and József Hajdú. “Constructing Responsible Artificial Intelligence Principles as Norms: Efforts to Strengthen Democratic Norms in Indonesia and European Union.” Padjadjaran Jurnal Ilmu Hukum 9, no. 2 (2022): 231-252.

Rahmawan, Ardianto Budi, and Gabriela Eliana. “Deploying AI in taking down Indonesian regulatory problems: A study on early pandemic regulations.” Kasetsart Journal of Social Sciences 43, no. 4 (2022): 931-940.

Roh, Yuji, Geon Heo, and Steven Euijong Whang. “A survey on data collection for machine learning: a big data-ai integration perspective.” IEEE Transactions on Knowledge and Data Engineering 33, no. 4 (2019): 1328-1347;

Russell, Stuart J., and Peter Norvig. Artificial intelligence: a modern approach. London: Pearson, 2016, 132.

Saputra, Beny, and Olivér Bene. “Hungary’s AI Strategy: Lessons for Indonesia’s AI Legal Framework Enhancement.” Jambe Law Journal 7, no. 1 (2024): 25-58.

Saragih, Arfah Habib, Qaumy Reyhani, Milla Sepliana Setyowati, and Adang Hendrawan. “The potential of an artificial intelligence (AI) application for the tax administration system’s modernization: the case of Indonesia.” Artificial Intelligence and Law 31, no. 3 (2023): 491-514.

See also, Steimers, André, and Moritz Schneider. “Sources of risk of AI systems.” International Journal of Environmental Research and Public Health 19, no. 6 (2022): 3641.

Shevlane, Toby, Sebastian Farquhar, Ben Garfinkel, Mary Phuong, Jess Whittlestone, Jade Leung, Daniel Kokotajlo et al. “Model evaluation for extreme risks.” arXiv preprint arXiv 19, no. 2 (2023): 21-34.

Sun, Tara Qian, and Rony Medaglia. “Mapping the challenges of Artificial Intelligence in the public sector: Evidence from public healthcare.” Government Information Quarterly 36, no. 2 (2019): 368-383.

Sutrisni, Ni Komang, Putu Angga Pratama Sukma, Rahimah Embong, and Khanlar Haydarov. “The Compliance of Governance on Family Data Protection Regulation.” Journal of Human Rights, Culture and Legal System 4, no. 3 (2024): 706-741.

Symon, Evan. “Two AI Bills Introduced in California Senate: Bills Would Add Guardrails, Promote AI Growth.” California Globe, January 5, 2024. https://californiaglobe.com/fr/two-ai-bills-introduced-in-california-senate/.

Taeihagh, Araz. “Governance of artificial intelligence.” Policy and society 40, no. 2 (2021): 137-157.

Tempo. “Daftar Kebocoran Data Pribadi di Era Jokowi, Paling Banyak di Instansi Pemerintah.” Tempo, Retrieved September 21, 2024. https://www.tempo.co/politik/daftar-kebocoran-data-pribadi-di-era-jokowi-paling-banyak-di-instansi-pemerintah--7403.

Van Noordt, Colin, and Gianluca Misuraca. “Exploratory insights on artificial intelligence for government in Europe.” Social Science Computer Review 40, no. 2 (2022): 426-444.

Van Noordt, Colin, and Luca Tangi. “The dynamics of AI capability and its influence on public value creation of AI within public administration.” Government Information Quarterly 40, no. 4 (2023): 101860-101874.

Wadipalapa, Rendy Pahrun, Riris Katharina, Poltak Partogi Nainggolan, Sitti Aminah, Tini Apriani, Diana Ma’rifah, and Azmi Listya Anisah. “An Ambitious Artificial Intelligence Policy in a Decentralised Governance System: Evidence From Indonesia.” Journal of Current Southeast Asian Affairs 43, no. 1 (2024): 65-93.

Wardani, Agustin Setyo. “Data Diduga Milik Kominfo Bocor, Dijual Rp 1,9 Miliar di BreachForums.” Liputan6, Retrieved July 2, 2024. From https://www.liputan6.com/tekno/read/5632942/data-diduga-milik-kominfo-bocor-dijual-rp-19-miliar-di-breachforums?page=3.

World Economic Forum, “Unlocking Public Sector Artificial Intelligence,” n.d. https://www.weforum.org/projects/unlocking-public-sector-artificial-intelligence/.

Yerlikaya, Sertaç, and Yaman Ömer Erzurumlu. “Artificial intelligence in Public sector: a framework to address opportunities and challenges.” Berlin: Springer Nature, 2021, 211.

Zuiderwijk, Anneke, Yu-Che Chen, and Fadi Salem. “Implications of the use of artificial intelligence in public governance: A systematic literature review and a research agenda.” Government Information Quarterly 38, no. 3 (2021): 101577-101592.