Danger of Research in Opaque Contexts

Fascinating article from the New York Times on the difficulties and dangers of acquiring information for corporate due diligence in a country with opaque corporate and credit institutions. I especially liked this comment on when crack-downs occur against investigators who do this work:

An arrest like Mr. Humphrey’s is “never about the legal issues. It’s always about who has an interest in suppressing information,” a Western consultant in Beijing said.

That is, who did he piss off.

The article also discusses how these investigators are particularly vulnerable at the moment because of changes to the formal and informal rules governing access to personal and corporate information that would allow one to detect fraud. This probably also needs to be seen in the broader context of a government crack-down on corruption.

This resonates with dangers of conducting research on other opaque institutions—for example, it’s generally well known amongst those who research mafias and organised crime that one should avoid conducting field research in locations where inter-group territorial conflict is underway.

Article link here: In China, The Danger of Due Diligence

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MK: Praperadilan Petitions Open to NGOs

The Constitutional Court ruled last week that the phrase “interested third parties” in the Criminal Procedure Code relating to praperadilan requests should be interpreted broadly and that NGOs must to be allowed bring praperadilan petitions.  Here’s Suara Merdeka coverage:

Mahkamah Konstitusi mengabulkan permohonan Masyarakat Anti Korupsi (MAKI) dalam uji materi Kitab Undang-Undang Hukum Acara Pidana tentang gugatan praperadilan.

“Mengabulkan permohonan pemohon untuk seluruhnya,” papar keputusan Mahkamah Konstitusi dalam sidang yang dibacakan Ketua Mahkamah Konstitusi Akil Mochtar di Gedung Mahkamah Konstitusi  Jakarta, Selasa (21/5).

Pasal yang diujikan materi adalah Pasal 80 Kitab Undang-undang Hukum Acara Pidana (KUHAP) yang berbunyi permintaan untuk memeriksa sah atau tidaknya suatu penghentian penyidikan atau penuntutan dapat diajukan oleh penyidik atau penuntut umum atau pihak ketiga yang berkepentingan kepada ketua pengadilan negeri dengan menyebutkan alasannya.

Frasa pihak ketiga yang berkepentingan dalam Pasal 80 KUHAP adalah bertentangan dengan UUD 1945 dan tidak mempunyai kekuatan hukum yang mengikat sepanjang tidak dimaknai, “Termasuk saksi korban atau pelapor, lembaga swadaya masyarakat (LSM) atau organisasi kemasyarakatan,” kata Akil.

Putusan ini dijatuhkan Mahkamah Konstitusi dengan pertimbangan pihak ketiga bukan hanya saksi korban tindak pidana, melainkan juga masyarakat luas. Hal Ini karena pada dasarnya KUHAP dibuat untuk kepentingan umum.

This strengthens court oversight of the investigation and prosecution process.  More recently, however, judges have generally accepted praperadilan requests from NGOs but have found in favour of the Kejaksaan, often on the basis of dubious arguments–see, for example, in the case of former Semarang Mayor Sukawi Sutarip: Again, Court Rejects Praperadilan Petition in Sukawi Investigation Termination.  Generally, however, it’s a step forward for law enforcement accountability.  There now needs to be a concerted effort to socialise the decision and provide local NGOs with the technical capacity to prepare praperadilan requests.

What’s next, private prosecution?

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Corruption Law Enforcement in Indonesia (1993-2012)

Indonesia has had corruption laws on its books from at least the 1960s and even earlier if one includes acts of corruption included in the Dutch colonial criminal code. However, the enforcement of these laws has been problematic. It is very difficult to find reliable legal statistics on corruption law enforcement, even those aggregated at the national-level. The figure below is my best effort (thus far) to track-down the total number of corruption cases prosecuted each year in the past two decades. The main source is the website of the Supreme Prosecutor for the years 2005-2012 (see here) but for earlier years I’ve had to rely on Indonesian publications and newspaper quotations of officials from the Supreme Prosecutor. Although there are numerous data gaps in the first decade, I think the general trend is clear.

Corruption Law Enforcement in Indonesia (1993-2012)

If anyone can help fill those gaps, please please please do get in touch.

P.S. I’ve taken a hiatus from the blog over the past few months in order to focus on the thesis but I hope to be back soon(ish).

Supreme Court to Judicial Commission: “Not All Controversial Decisions Involve Bribery” …

… and therefore you shouldn’t say anything negative about judicial decision-making!

Koran Sindo, the Indonesian evening newspaper, has been reporting on the feuding (perseteruan) between the Judicial Commission and the Supreme Court. In today’s paper they have a nice graphic highlighting the main points of tension between the two institutions, which I’ve inserted below.  On Saturday the newspaper reported that Supreme Court spokesperson, Djoko Sarwoko, reminded the Judicial Commission not to interfere in judicial authority.  He suggested the Commissions efforts to publicise its views about unusual decisions was undermining judicial independence.  It seems pre-mautre to claim that the Commission is undermining judicial independence; indeed, it’s quite funny when this is the argument:

“Komisioner boleh curiga, tetapi jangan menggiring publik agar berpikiran sama dengan komisioner. Tidak semua putusan kontroversi berlatar belakang suap. KY jangan bertindak seperti KPK. Kasihan hakim yang memiliki integritas, namanya digulirkan dan diadili di media,” ujarnya di Jakarta kemarin.

I can’t help thinking that the Court is hiding behind an important, but by no means absolute, principal of judicial independence (judicial independence needs to be balanced with some form of judicial accountability); interestingly, in the same way that the press in the UK (and Prime Minister David Cameron) are, in my view, hiding behind the principal of press freedom to avoid attempts to strengthen press regulation.  Indeed, if the Judicial Commission was unable to make any public statements about complaints its received it would seriously undermine its effectiveness because, as I’ve noted before (here), the Judicial Commission has little power besides its ability to generate public pressure on the Supreme Court to account for its decisions.

The graphic from Koran Sindo:

Judicial Commission-Supreme Court Feuding

Judicial Commission-Supreme Court Feuding

Links to the articles: MA Nilai KY Campuri Kewenangan Hakim and MA-KY Jangan Saling Tuding-Hasil Sidang MKH Hakim Agung Achmad Yamanie Jadi Bukti.

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ISS Case Study of KPK: Part 1

The Innovations for Successful Societies program at Princeton University recently published an excellent case study, by Gabrial Kuris, on Indonesia’s Corruption Eradication Commission (KPK).  It’s a quick and easy read, divided in two chronological parts: 2002-2007, covering the commission’s establishment and initial investigations; and 2007-2011, covering a period of consolidation and, more recently, political attacks.  I particularly like the way he tells the story in the voices of those interviewed, which includes an impressive array of (mostly positive) commissioners, judges, and civil society actors.  The abstract and some quotes from the first part follow (a link to report is at the bottom of the page):

“INVITING A TIGER INTO YOUR HOME”: INDONESIA CREATES AN ANTI-CORRUPTION COMMISSION WITH TEETH, 2002 – 2007

In 2002, under domestic and international pressure to confront corruption after the economic and political collapse of the 32-year Suharto regime, Indonesia established the Corruption Eradication Commission (the Komisi Pemberantasan Korupsi, or KPK). The new commission had powers so strong that one anti- corruption activist said Indonesian politicians were “inviting a tiger into [their] home” by creating it. Still, the public reacted warily, mindful of past failures and distrustful of the commissioners approved by Parliament. After creating an effective operating structure, the commissioners spent more than a year building capacity by introducing innovative human resources policies, cutting- edge technologies, strong ethical codes and savvy investigative tactics. The commission then launched a series of investigations that netted dozens of high- level officials and politicians, with a 100% conviction rate. By the end of 2007, the KPK was standing on a stable foundation, buttressed by solid public support.

 

A study of newspaper records from the 1950s through the early 1990s led Sunaryadi to conclude that public interest in corruption was “not significant” during that period of economic growth, insurrection and autocracy. (p. 3)

Gregory Churchill, an American legal adviser involved in Indonesian judicial reforms, described the commission as a reform long desired by Indonesians but ultimately enabled by foreign pressure. Describing the IMF loans’ letters of intent, Churchill said, “If you dig deep, you find that the ideas in those letters come from Indonesian reformers. These were ideas that had been in the works, in their desk drawers, waiting for reform. The KPK was one of them.” (p. 4)

Danang Widoyoko, chairman of the nonprofit Indonesia Corruption Watch, said, “Indonesia has had anti- corruption agencies in the past, but most of them failed because of a lack of resources, a lack of authority. (p. 4)

The committee settled on Hong Kong’s Independent Commission Against Corruption (ICAC) as the primary model for the planned KPK and hired as a consultant Bertrand de Speville, a retired ICAC commissioner. “The KPK is styled quite closely after Hong Kong,” Sunaryadi said. (p. 5)

The draft law gave the KPK stronger powers than the ICAC and most peer agencies worldwide. (p. 5)

The law created an organizational hierarchy that was unusually flat and simple for an Indonesian agency. (p. 6)

KPK agents could make arrests, conduct searches and seizures, investigate and freeze assets, ban suspects from foreign travel, and compel cooperation from any other government agency . Most controversially , they could intercept telecommunications without prior judicial approval. “In the law, it’s only one sentence,” said Sunaryadi. “Nobody knew one sentence would be so powerful.” (p.7)

As an institutional check on the KPK’s power, the law required the commission to report annually to the president, Parliament and the state auditor … Parliament also controlled the KPK’s budget. Parliament confirmed KPK commissioners from a pool of 10 nominated by the president based on the work of a selection committee under the justice ministry … Once confirmed, commissioners served four-year terms without any possibility of impeachment or removal unless subject to a criminal charge.  (pp. 7-8)

The commissioners unanimously adopted a strategy to focus on building internal capacity before taking on cases. “The first step was capacity building,” Ruki said, “to prepare the infrastructure, the systems and the supporting facility . ” The downside to this strategy was that to the expectant public it looked like the KPK was dragging its feet. (p. 8)

The KPK received “very high international support,” according to KPK adviser Nugroho, who managed foreign assistance to the commission. (p. 9)

As a test case, Sunaryadi asked a judge of the South Jakarta regional district court to let him record a trial in early 2004. Sunaryadi said the court “used to be called ‘the Cemetery of the Attorney General’ because [prosecutors] lost every big corruption case.” Surprising the prosecutors, the judge not only agreed but also told Sunaryadi to start his recording with a trial only five days away. (p. 9)

“The most difficult thing was to convince the Ministry of Administrative Reform,” recalled Sunaryadi. “Unfortunately, most people inside that ministry were not reform minded…” (p. 10)

He said he visited the head of MenPAN at home and told him, “You have to choose. You become our supporter or our enemy. … I know you have fictitious expenditures. … Unless you agree to this government regulation, I will investigate.” (p. 10)

Kemala said she tried to weed out applicants who appeared to be motivated mainly by financial considerations … The process was highly selective. In the system’s first year, KPK received 12,000 applications for 100 positions. By 2010, the applicant pool neared 45,000. (p. 11)

Kemala said one accepted applicant said to her, “Thank you ma’am. Now I have moved to an institution where I don’t have to be corrupt.” (p. 11)

[T]he KPK compensated staff for work expenses “at cost,” meaning that necessary expenses were reimbursable. Other agencies used a lump-sum system that disbursed fixed amounts per case, a policy that encouraged staff to minimize travel, dispose of cases quickly and pocket the unused cash. (p. 12)

The KPK developed rigorous codes of ethics for commissioners as well as staff, relying heavily on staff input. (p. 13)

Sunaryadi examined Indonesian corruption prosecutions and found that about 85% were based on the nebulous crime of “creating financial loss to the state.” (p. 14)

“The hardest thing was to meet public expectations [that were] increasing every day,” Ruki said. “When I caught a governor, they said, ‘You have never caught a general.’ When I caught a general, they said, ‘You never caught a minister.’ When I caught a minister: ‘What about the president?’” (p. 16)

“Before the KPK, we were feeding 60 corruption cases to the attorney general’s office, and no cases were followed up,” said Danang Widoyoko of Indonesia Corruption Watch. “We send a report to the KPK, and the KPK will follow up.” (p. 16)

As a former legislator and senior police officer, Ruki was a key mediator. “I had good relations with the legislators personally , ” he said. “I also knew personally the heads of each of the political parties, so I could communicate with them in a good way, more or less. … I had a close connection with the chief of police, attorney general and Supreme Court chief. I could approach them personally. This is the Indonesian way.” (p. 18)

According to Hardjapemekas, the commissioners had hoped to “trigger police and prosecutors to do a better job, and the executive branch of state as a whole to reform themselves to be more productive.” Hardjapemekas conceded that the strategy had failed to produce immediate change. (p. 19)

Commissioner Amien Sunaryadi said he learned at least six lessons from his experience in building the Corruption Eradication Commission. … study international best practices … [set] strong administrative policies in the areas of human resources management, financial management, information technology and operations … combating and preventing corruption must proceed in tandem … “stick to the mission” … importance of third- party assistance … identify when momentum emerges” in order to take advantage of unexpected opportunities. (p. 19)

As the KPK’s first commissioners stepped down in December 2007, they had shown the benefits of their strong powers and careful strategy of capacity building. (p. 20)

The report is available from ISS’s website here: “Inviting a Tiger into Your Home”: Indonesia Creates an Anti-Corruption Commission with Teeth: 2002-2007.

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PDIP endorses Teten Masduki for West Java Vice-Governor

Today PDIP endorsed Rieke Diah Pitaloka and Teten Masduki as Governor and Vice-Governor, respectively, in West Java’s gubernatorial elections.  Teten Masduki is one of the founders of Indonesia Corruption Watch and was, until very recently, the Secretary-General of Transparency International Indonesia.  Rieke, a former “artis”, became a national parliamentarian with PDIP in 2009.  They are both from West Java.  It’ll be very interesting to see how they perform in the elections, which are scheduled for next February.

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KP2KKN Requests Police Investigate Rembang Bupati

After months of no mention in the media, KP2KKN and Lespem requested the Regional Police investigate Moch Salim in relation to the PT. RBSJ corruption case–for background see here, here, here, here and here.

“Dengan putusan MK itu Polda sudah tidak memiliki alasan lagi untuk menuda pemeriksaan kepala daerah, termasuk pemeriksaan terhadap Bupati Salim,” tandas Ketua Divisi Monitoring Kinerja Penegak Hukum KP2KKN, Eko Haryanto, Minggu (7/10).

Suara Merdeka article here: Polda Jateng Didesak Periksa Bupati Salim.

Media Indonesia article here: Polda Jateng sudah Bisa Sidik Bupati Rembang.

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Can the Rembang and Karanganyar Cases Continue?

KP2KKN notes some of the cases that have been delayed in Central Java because of the lack of presidential permission:

Kepala Daerah yang saat ini belum dilakukan pemeriksaan tersangka pada Bupati Rembang M Salim. Kasusnya saat ini masih ditangani Polda Jateng dalam kasus Korupsi PT RBSJ senilai Rp 5,2 miliar.

Dikatakan pula oleh Eko mengatakan di Jawa Tengah sendiri masih ada kepala daerah yang sudah menjadi tersangka, tapi belum dilakukan pemeriksaan karena terhambat ijin Presiden.

Serta pemeriksaan sebagai saksi pada Bupati Karanganyar Rina Iriani dalamkasus dugaan korupsi pembangunan perumahaan bersubsidi GLA di Gondangrejo Kabupaten Karanganyar. Kasus Rp 21,9 miliar ini ditangani oleh Kejaksaan Tinggi Jawa Tengah. Menurut Eko bahwa dengan adanya putusan MK ini. Kejaksaan dan Kepolisian jangan segan-segan untuk langsung memeriksa para kepala daerah yang bermasalah.

On the KP2KKN blog: Periksa Kepala Daerah Tanpa Ijin Presiden.

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Presidential Permission to Investigate Regional Heads Unconstitutional

In a landmark decision, the Constitutional Court announced on 26 September 2012 that Article 36 (1) and (2) are unconstitutional.  These articles required police and prosecutors to obtain presidential permission to investigate Governors and District Heads in corruption investigations–see here and here.  Article 36 (3), which requires presidential permission to arrest regional heads, was spared.  But the court clarified that police and prosecutors could proceed with arrests if the president did not respond within 30 days.

There are two relevant decisions, which I have yet to read, are here in PDF format:

The latter is cited more often in the press, and was brought by Feri Amsari, lecturer at Andalas University; Tetan Masduki, Transparency International Indonesia; Zainal Arifin Mochtar, lecturer at Gadjah Mada University; and ICW.

Donal Fariz, a researcher at ICW, explained that we should not see police and prosecutors delaying their investigations because of delays in seeking presidential permission:

“Ke depan, dengan adanya putusan MK ini, kami tidak ingin lagi mendengar jaksa-jaksa tidak memeriksa seorang tersangka ataupun saksi kepala daerah karena masih menunggu izin dari presiden,” kata Donal.

Merdeka.com article here: ICW apresiasi penyidikan kepala daerah tanpa izin presiden.

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Money Politics in Cilacap Bupati Election

Suara Merdeka reports of “money politics” in the Cilacap bupati election campaign.  In total Rp. 214 juta ($21,000) in Rp. 10,000 (~$1) notes were discovered in a car belonging to a campaign member of Novita Wijayanti-Mochamod Muslich.  Novita, who is only 32 years old, is a member of the provincial representative council.  She is backed by PDIP and is the daughter of Fran Lukman (see here), who has been the Head of Cilacap local council for over 10 years.

Sebelumnya diberitakan, warga Dusun Medeng, Desa Bulaksari, Kecamatan Bantarsari menangkap anggota tim sukses pasangan Novita Wijayanti-Mochamad Muslich pada malam menjelang pemungutan suara, Sabtu (8/9).  Mereka ditangkap warga karena diduga hendak menyebar uang. Di dalam mobil Toyota Avanza R-9306-AH yang mereka kendarai terdapat uang pecahan Rp 10.000 dengan total Rp 214,98 juta. Juga ditemukan 340 lembar kertas bergambar Novita-Muslich, 13.710 lembar stiker bertuliskan angka satu, 2.000 lembar gambar Tatto Suwarto Pamuji bersama seorang perempuan, serta 9 bungkus lem dan 4 buah kuas. Warga melaporkan kejadian tersebut kepada Panwas.

Article here: Dipanggil Panwaslu, Penyebar Uang Mangkir.

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