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Indonesia - Corruption

Corruption in the Indonesian military points toward a larger national problem. Transparency International in its Corruption Perception Index listed Indonesia as one of the most corrupt countries in the world, indicating a problem deeply rooted in the permissiveness of Indonesian culture. Despite the fact that the Indonesian Armed Forces has one of the lowest budgets in the region both in terms of its total and its percentage of the national budget, it is important to note that there still is plenty of money in military coffers to be misappropriated and stolen. The facts have proven that the theft of public funds is rampant in nearly every sector of government.

In 2013 Indonesia’s ranking in Transparency International’s Corruption Perceptions Index was 114 out of 183 countries. Corruption remains pervasive despite laws to combat corruption and a strong, independent Corruption Eradication Commission (KPK). The KPK’s purview in corruption cases is typically limited to law enforcement and other public officials, cases that exceed $105,000 in value and/or that represent significant loss to the state. Corruption cases are also handled by the Indonesian National Police and Attorney General’s Office, neither of which have the same organizational capacity to investigate or prosecute corruption cases.

Many factors, such as a decentralized decision-making process, legal uncertainty, economic nationalism, and powerful domestic vested interests create a complicated and difficult investment climate. The Indonesian government’s requirements, both formal and informal, to partner with Indonesian companies and purchase goods and services locally, restrictions on some imports and exports, and pressure to make substantial, long-term investment commitments, also factor into foreign investors’ plans. While the Indonesian the Corruption Eradication Commission continues to investigate and prosecute high-profile corruption cases, some investors cite corruption as an obstacle to investment in Indonesia.

The law provides criminal penalties for official corruption, and the government generally implemented these laws effectively. Despite the arrest and conviction of many high-profile and high-powered officials, there was a widespread domestic and international perception that corruption was a part of daily life. Both the KPK and the AGO under the deputy attorney general for special crimes have jurisdiction over investigation and prosecution of corruption cases.

President Yudhoyono campaigned and was re-elected in 2009 on a strong anti-corruption platform. But corruption remains a serious problem, preventing increased foreign investment, according to some US companies. Although the government has issued detailed directions on combating corruption in targeted ministries and agencies, there has not been a concerted government-led effort to encourage or require companies to establish internal codes of conduct, or effective internal controls, ethics, and compliance programs to detect and prevent bribery of public officials.

During 2010 the KPK conducted 62 inquiries, 55 investigations, and 55 prosecutions. As a result of the KPK's prevention and prosecutorial activities, it recovered a total of approximately 170 billion rupiah (approximately $18.8 million) in state assets. In addition, it prevented the loss of more than 500 billion rupiah ($55.5 million) in state assets, according to the KPK's annual report. Between January and November, the AGO reported recovering 354.6 billion rupiah ($34.9 million).

Widespread corruption throughout the legal system continued. Bribes and extortion influenced prosecution, conviction, and sentencing in civil and criminal cases. During the year the National Ombudsman Commission reported receiving 160 complaints of judicial corruption involving judges, clerks, and lawyers. Key individuals in the justice system were accused of accepting bribes and of turning a blind eye to other government offices suspected of corruption. Legal aid organizations reported cases often moved very slowly unless a bribe was paid.

As a result of an independent fact-finding team's investigation, President Yudhoyono formed a Task Force to Eradicate Judicial Mafia to investigate the network of case brokers and influence peddlers who act as intermediaries in judicial cases. As of December 9, the task force had received 3,483 complaints, with 667 cases related to land rights issues; 397 cases related to corruption, collusion, and nepotism; 262 cases of fraud and embezzlement; and 135 cases of extortion, bribery, abuse of authority, and document forgery.

Police commonly extracted bribes ranging from minor payoffs in traffic cases to large bribes in criminal investigations. Corrupt officials sometimes subjected migrants returning from abroad, particularly women, to arbitrary strip searches, theft, and extortion.

On 01 September 2010, the KPK named 25 suspects, primarily former and current members of parliament, as suspects in a bribery case related to vote buying during the 2004 selection of the Bank of Indonesia's senior deputy governor. At the end of the year, however, they had not questioned Nunun Nurbaeti, who allegedly distributed billions of rupiah in traveler's checks to buy votes to help elect Miranda Goeltom.

On 31 March 2010, Gayus Tambunan, a tax directorate official, was arrested in Singapore on corruption charges. Gayus allegedly bribed police, prosecutors, and a judge during an investigation of his case in tax court. Following his arrest, police investigated and arrested several persons in the police Criminal Investigations Division (CID). Following this arrest, Gayus allegedly bribed prison officials to obtain temporary release from prison on a number of occasions and reportedly led an active social life including international travel.

On 10 May 2010, police arrested Susno Duadji, fomer head of the CID, on suspicion of involvement in several corruption cases. On August 4, the Supreme Court found As'ad Syam, regent of Muarojambi during the 1999-2004 period, guilty of corruption in the misuse of the regional government budget and sentenced him to four years' imprisonment.

Anticorruption reform appeared to have become a tool in a political power struggle with legislators and others criticizing members of President Yudhoyono's administration over the 2008 bailout of Bank Century. At year's end neither the KPK nor other investigators had found any evidence of fraud on the part of the government in the bailout. KPK leadership continued to come under attack during the year, in particular deputy commissioners Bibit Samad Rianto and Chandra M. Hamzah.

By law, senior government officials, as well as other officials working in certain agencies, are required to file financial disclosure reports. On 30 April 2010, the 2008 Freedom of Information Act, which grants citizens access to governmental information and provides mechanisms through which citizens can obtain such information, came into effect. The law allows for a protected class of "secret" information, including information on: state defense and security; law enforcement investigation and activities; public officials; and business interests of state-owned enterprises. At year's end many government entities were unprepared to implement the law. The Alliance of Independent Journalists reported no problems for the media in obtaining unclassified public documents from the government.

Dr. Susilo Bambang Yudhoyono is the sixth President of the Republic of Indonesia, and also the country’s first directly elected President. President Yudhoyono has assumed a number of self-transformation: from student to soldier, soldier to reformist general, four-star general to Cabinet Minister, Minister to Politician, and politician to President. President Yudhoyono has an extensive academic background. While joining the US Army Command and General Staff College, Fort Leavenworth, he completed his Master Degree in Management from Webster University in St. Louis, US in 1991. He completed his Doctorate Degree in Agricultural Economics from Bogor lnstitute of Agriculture in 2004. President Yudhoyono is also a recipient of several international awards. ln 2011, the United Nations named him as the "Global Champion for Disaster Risk Reduction"; in 2010, he received the Gold Standard Award and was named Asia's Top Political Communicator by Public Affairs Asia, based in Hong Kong; and in the same year, he received the "Global Home Tree Award". He was also the recipient of the UNEP Award. Promoted to General (Four Stars) of the Indonesian Armed Forces (TNI), 25 September 2000. Retired from the military service on 10 November 2000. General TNI (Ret) Susilo Bambang Yudhoyono, popularly known as SBY, was born in Pacitan, East Java, on 9 September 1949. He graduated from the Military Academy in 1973-top in his class. He received his fourth star in 2000. In the first-ever direct presidential election in Indonesia in 2004, Susilo Bambang Yudhoyono, running on a platform for "more just, more peaceful, more prosperous, and more democratic Indonesia", was elected as the 6th President of the Republic of Indonesia, gaining a landslide 60% of the popular vote over the incumbent President Megawati Soekarnoputri. President Yudhoyono is also an accomplished scholar. He was educated in the United States, where he received his Masters degree in Management from Webster University in 1991. He continued his study and earned a Doctorate Degree in Agricultural Economics from Bogor Institute of Agriculture, West Java, Indonesia, in 2004. President Yudhoyono was awarded with two honorary doctorates in 2005, respectively in the field of law from his alma mater, Webster University, and in political science from Thammasat University in Thailand. During his 27-year distinguished military service, President Yudhoyono took an extensive range of training, education and courses, both in Indonesia and overseas. President Yudhoyono also held numerous important posts and positions as troop and territorial commander, staff officer, trainer and lecturer. He served both in the field and at headquarters, as well as missions overseas. He was the Commander of the United Nations Military Observers and Commander of the Indonesian Military Contingent in Bosnia-Herzegovina from 1995-1996. For his outstanding service, President Yudhoyono was decorated with 24 medals and awards, including the UNPKF Medal, the Bintang Dharma, the Bintang Mahaputera Adipurna and the Bintang Republik Indonesia Adipurna, the highest national medal for excellent service beyond the calls of duty. Prior to being elected, President Yudhoyono held various important government positions, including Minister of Mining and Energy and Co-ordinating Minister for Political, Social, and Security Affairs in the National Unity Cabinet under President Abdurrahman Wahid. He again served as Co-ordinating Minister for Political, Social, and Security Affairs in the Gotong Royong Cabinet under President Megawati Soekarnoputri. It was in his capacity as Coordinating Minister that he became internationally recognized for leading Indonesia's counter-terrorism efforts. President Yudhoyono is also known for his activities in various civil society organizations. He served as Co-Chairman of the Governing Board of the Partnership for the Governance Reform, a joint Indonesian-international organization focused on the improvement of governance in Indonesia. He also served as Chairman of the Advisory Board of the Brighten Institute, an institution devoted to studying the theory and practice of national development policy. President Yudhoyono is a keen reader and has authored a number of books and articles including: Transforming Indonesia: Selected International Speeches (2005), Peace deal with Aceh is just a beginning (2005), The Making of a Hero (2005), Revitalization of the Indonesian Economy: Business, Politics and Good Governance (2002), and Coping with the Crisis - Securing the Reform (1999). Taman Kehidupan (Garden of Life) is his anthology published in 2004. President Yudhoyono speaks English fluently. President Yudhoyono is a devoted Moslem. He is married to Madam Ani Herrawati. The first couple is blessed with two sons. The oldest is First Lieutenant Agus Harimurti Yudhoyono, who graduated top in his class from the Military Academy in 2000 and is now serving at the elite 305th Airborne Battalion of the Army Strategic Reserves Command (KOSTRAD). The youngest, Edhie Baskoro Yudhoyono, earned his degree in Economics from Curtin University, Australia. Previously-held positions at national and international institutions: Coordinating Minister for Political and Security Affairs, Cooperation Cabinet, 10/8/2001-12/3/2004 (resigned) Coordinating Minister for Political, Social, and Security Affairs, National Unity Cabinet, 26/10/2000-1/6/2001 (discharged) Minister of Mining and Energy, Abdurrahman Wahid's Cabinet, 20/10/1999-26/8/2000 Chief of the Social and Political Staff of the Indonesian Armed Forces, 16/2/1998- November 1998 Commander of the Sriwijaya II Military Regional Command, 23/8/1996-26/8/1997 Chief of Staff of the Greater Jakarta Military Regional Command, March 1996-August 1996 Chief of the UN Military Watch in Bosnia from the United Nations Peacekeeping Force (UNPF), November 1995-November 1996 Commander of Pamungkas 072 Military Resort Command, Yogyakarta, 1994-1995 Operational Assistant of the Greater Jakarta Military Regional Command, 1994 Commander of 17th Infantry Brigade, Kujang I of the Army Strategic Reserves Command, 1993 Education: 1.Indonesian Armed Forces Academy (Akabri), 1973 2.American Language Course, Lackland, Texas, USA, 1976 3.Airborne and Ranger Course, Fort Benning, USA, 1976 4.Infantry Officer Advanced Course, Fort Benning, USA, 1982-1983 5.On the job training at the 82nd Airborne Division, Fort Bragg, USA, 1983 6.Jungle Warfare School, Panama, 1983 7.Antitank Weapon Course di Belgia dan Jerman 1984 8.Battalion Command Course, 1985 9.Indonesian Army Command School, 1988-1989 10.Command and General Staff College, Fort Leavenworth, Kansas, USA 11.Master of Arts (MA) from Management Webster University, Missouri, USA 12.Doctorate (Dr.), Bogor Institute of Agriculture, Indonesia, 2004

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Page last modified: 06-07-2014 20:20:07 ZULU