Some lessons learned from Indonesia

By
Ishaq Rahman
(Hasanuddin University, Indonesia – Doshisha University, Japan

Executive Training for the Tunisian High Officials, held by JICA, in Kobe,
17 January 2013
 Population: 238 million
(#4th)
 58% of population lives in
Java island
 Area: 1,904,569 km2 (#15th )
 Islands: 17,508
 5 largest islands are: Java,
Sumatera, Kalimantan,
Sulawesi, and Papua)
 GDP (PPP):
 Total US$ 1.124 trillion
(#15th)
 Per capita US$ 4,666 (#122nd)
 Ethnics: 300 groups and 742
local languages;
 Unitary states, presidential
system
 Highest representative body
at national level is People’s
Consultative Assembly,
comprises two houses
(elected every 5 years):
 People’s Representatives
Council, 560 members
 Regional Representatives
Council, 132 members
 Local Governments:
 34 provinces
 About 400 regencies/cities
 Adopted local autonomy since
1999.
 Indonesia was under Suharto rule for 32 years
(1966 – 1998), implementing authoritarian regime
backed up by military force, bureaucracy loyalty, and
single party domination;
 In 1995:
 Economic growth 7,2%, ( and reach 7,8% in the
following year)
 The first Corruption Perception Index (CPI) launched by
Transparency International  New Zealand in the top
best, Indonesia in the bottom of the worst.
 Under authoritarian regime, high economic growth
could become an opportunity for corruption, and
only benefited a few people (oligarchy).
 In 1998, President Soeharto resigned following mass
demonstration nationwide;
 Transition to democracy requires three components:
 The end of authoritarian regime;
 Installation of new democratic regime (mostly through
election);
 Consolidating of this new regime;
 Curbing corruption: ensure public trust that
democracy will benefit to all;
 In 1999, two Laws related to curb corruption was
enacted; some others law enacted in the following
years;
 Three laws enacted during the democracy transition:
 Law Number 28 year 1999 on Promoting the State Officials
free from Corruption, Collusion, and Nepotism;
 Law Number 31 year 1999 on Eradication of Corruption
Crime (amended in 2001);
 Law Number 30 year 2002 on the establishment of
Corruption Eradication Commission;
 Law Number 6 year 2006 on the Ratification of the 2003
United Nations Convention Against Corruption;
 Compare to previous laws, these new laws cover wider
issues of corruption, including gratification, public
officer personal assets disclosure, money laundering,
procurement.
 Public expectation to democracy was very high. At the
same time, corruption was very common in every level
and kind of public institutions;
 The two main law enforcement agencies (police and
public attorney) were listed among the top corrupt
institutions.
 In early years of reformation:
 Political freedom euphoria,
 Tremendous increasing of public openness, but un-
controlled;
 Rising of public voices, mostly trough mass media;
 How can we fulfill the public expectation and maintain
the trust to democracy?  curbing corruption;
 Indonesia decided to apply single institution as main
approach, and also promoting institutional
empowerment at every level and kind of public
agencies as secondary approach.
 The main burden is how to define corruption
actually. Many people sometimes can’t distinguish
corrupt and non corrupt activities anymore.
 There are stereotyping in every institutions
internally, lead to protect each others.
 “To clean a dirty room, start it from the ceiling. To
sweep a dirty floor, use a clean sweeper”.
 Indonesian anti-corruption agency named Corruption
Eradication Corruption (or Komisi Pemberantasan Korupsi, KPK)
was established in December, 29th 2003.
 Main duties of KPK are:
 To coordinate with other institutions authorized to eradicate
corruption;
 To supervise institutions authorized to eradicate corruption;
 To perform pre-investigations, investigation, and prosecutions
against corrupt acts;
 To perform preventive actions against corruption; and
 To monitor state governance;
 With such authorities, KPK sometimes named a “super body”. At
early stages, KPK focused on “big and mega corruption” while
the small and pity corruption were handled by police and public
attorney office.
 Procurement (about 60% of corruption cases):
 Prices mark up;
 Abuse of power by public authority;
 Illegal charges;
 The issuance of permit and licensing;
 Misused of state annual budget, not as planned;
 Bribery (private to public officers, and
politicians in parliament to executive agencies
officers)
 Some challenges in combating corruption in
Indonesia:
 Corruptor fight back
 Deal with public policy which was indicated to
contain corruption;
 Investigating high ranking officials who are still
in duty;
 These three cases explain to such
phenomenon;
 Antasari Azhar, former public attorney, selected as new leader of
KPK on December, 18th, 2007. Several months later, Mr. Azhar
showed his high intention to fight corruption. He even also
arrested father in law of President SBY’s son.
 He tried to take over the very big corruption case called
“liquidity assistance program of Central Bank” occurred in 1998.
A lot of high ranking businessman and banker involved in the
case, some of them have political connection.
 Suddenly he was accused in a murder case. Prosecutor
mentioned that his role in the case was: “advocated murder”,
judge agree and sentenced him 18 years in prison. Public found
bears many anomalies in the case.
 Many analysts agree that the conviction of this KPK leader was a
kind of “corruptor fight back” phenomenon.
 In December 2008, a tiny bank in Indonesia named Century
Bank had a liquidity crisis. Governor of Central Bank, Mr.
Budiono, agree to provide 1,3 billion USD bail out, even the
Century did not fulfill minimum requirement to receive the fund.
 In the process, the amount of money distributed to Century
reach 6,7 billion USD. When the bail out reveal to public, many
politicians and analysts suspected that the bail out had been a
cover to take state’s money for the financing of presidential
campaign in 2009, where Mr. Budiono run as Vice President
candidate.
 Massive investigation held by police, KPK, and even national
parliament. But, the process was stuck, due to the fact that one
of the suspect is the current Vice President of Republic of
Indonesia, and he believes that his policy to save the Century
was correct, and has significant influence to avoid wider
economic crisis at that time.
 KPK investigated a graft case in police HQ, occurred in 2011, and
found that the chief of Traffic Division, a two star general Djoko
Susilo, and some others high and middle rank police officers
involved. KPK stated them as suspect and arrest them.
 At the same time, Police HQ also investigated the case, and
stated several police officers as suspect, but not Gen. Susilo. The
two agencies (KPK and Police) seems like compete each other to
handle the case, but seems like police wants to protect its
general.
 Most of KPK investigators are police officers, seconded to KPK
temporarily. Police HQ than decided to call back their officers
from KPK, especially after KPK arrested Gen. Susilo.
 President of Indonesia, as the highest chief of police agency,
instruct policy to stop their investigation and switch all of this
case to KPK. It is a very rare decision of president.
 Fighting against corruption is not only arrested
the corruptor. The most important part is
cutting the root, avoid the causes.
 In order to create such enabling environment,
the synergy relations between: states agencies,
private sectors, and civil society played
important role.
 Others tools:
 National action plan
 Asset recovery
 In 2012, President of Indonesia announced
Presidential Regulation on the National Strategy for
Corruption Prevention and Eradication, long term
2012-2025 and medium term 2012-2014;
 Strategies provided:
 Prevention
 Law enforcement
 Harmonizing the laws and regulations
 International Cooperation and Confiscating the Assets
Gained through Corruption
 Anti-corruption education and culture
 Mechanism of reporting corruption eradication actions
 The recovery of assets gained through
corruption is recognized in international
standards as well as national mechanism. But,
this approach still not implemented properly.
 The main challenges:
 Most of assets gained through corruption are saved
abroad.  Require bilateral agreement on
extradition;
 In the context of Indonesian former president, Mr.
Soeharto, there are no enough evidence to prove his
ownership of assets which gained through
corruption.
 From the experience of Indonesia, combating corruption
in a transitional countries require a systemic integration
of all entities and stake-holders. It should become a
nation concerns, not only an individual institutions;
 Establishing a strong and independent anti corruption
agency is important, but not the only strategies.
 Some other enabling environment also need to be
provided, including: rising integrity in public sector,
information disclosure to promote transparency,
channeling civil society and media as watch dog, and
engaging in international standard.
 Corruption pattern, activities, and activities
tends to enhance, in order to avoid the
coverage of laws;
 Due to decentralization and direct election
in local level, political corruption is
increasing. But there are no enough
regulations to cover such issue.