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Fighting Korupsi, Kolusi, Nepotisme in Indonesia

Fighting Korupsi, Kolusi, Nepotisme in Indonesia

In the second of a five-part series of articles on Indonesia, Post 

editor-in-chief Michael Hayes looks at how various government and

nongovernment actors in the republic are trying to tackle the problem

of corruption.

Photo by: Michael Hayes

Demonstrators protest outside the offices of the Corruption Eradication Commission in Jakarta, complaining about the lack of action on a case involving liquidity assistance from Bank Indonesia.


Anti-corruption measures, 1998-2004

  • In 1998 and 1999, President Habibie presided over the

    freeing of media. He also signed into law several of the House of

    Representatives and People's Consultative Assembly laws mentioned


  • In

    October 1999 the People's Consultative Assembly passed a decree calling

    for a state apparatus that "functions in providing services to the

    people that are professional, efficient, productive, transparent and

    free from corruption, collusion and nepotism." 

  • The

    Clean Government Law passed in 1999 requires public officials to

    declare their wealth and agree to periodic audits. It also established

    the Commission to Audit the Wealth of State Officials. 

  • The

    Law on the Eradication of Criminal Acts of Corruption passed in 1999

    defines criminal corruption and establishes charges and procedures for

    prosecution. An amendment to the law broadens and clarifies the

    definition of corruption and increases the penalties. 

  • In

    2000, President Wahid issued a decree establishing the National

    Ombudsman's Commission. He also created, under the coordination of the

    Attorney General's Office, the Joint Team for the Eradication of

    Criminal Act of Corruption. 

  • The

    issuance of Presidential Decree in 2000 resulted in some improvements

    in procurement procedures. It was replaced in November 2003 by a new

    decree which establishes a National Procurement Office.

  • In

    April 2002 the House of Representatives passed the Anti-money

    Laundering Law, which established the Center for Financial Transactions

    Reporting and Analysis 

  • In

    December 2002 the House of Representatives passed a law establishing

    the Corruption Eradication Commission (KPK) and the Special Court for


  • In 2004 the House of Representatives passed a law establishing the Judicial Commission.

Source: Curbing Corruption in Indonesia 2004-2006,

by Soren Davidsen, Vishnu Juwono and David Timberman

One of the problems that Cambodia and Indonesia share in common is the scourge of corruption. Both countries are plagued by it at all levels of government and society.

On Transparency International's most recent Corruption Perceptions Index, Cambodia is listed at 162 out of 179 nations surveyed, while Indonesia is pegged at 143, 19 places higher than the Kingdom.  

But on the Indonesian side, in the last ten years since the fall of Suharto, a number of initiatives have been implemented that are designed to take a bite out of corruption, and to date some are bearing significant fruit.

Indonesians refer to the problem as Korupsi, Kolusi Nepotisme (Corruption, Collusion, and Nepotism), or KKN for short.

The problem is not new to Southeast Asia's most populous, Muslim majority nation, but during the 32 years of the Suharto regime, efforts to deal with KKN were deemed half-hearted and ineffective.  In fact, it was in part the issue of corruption - especially accusations that Suharto and his relatives had used their positions of power to amass huge fortunes - that helped force the former president from office in 1998.

The issue of fighting corruption has been high on the agendas of the subsequent administrations of presidents BJ Habibie, Abdurrahman Wahid and Megawati Sukarnoputri.

While a variety of legislative steps were taken during their terms in office, it is also noteworthy one president was impeached on corruption charges and two were not re-elected for their perceived failures to tackle the problem of KKN.

Indonesia's current president, Bambang Susilo Yudhoyono, was elected in 2004 with his stated determination to fight corruption as a major plank in his campaign platform.   Most observers spoken to by the Post said Yudhoyono's promise to tackle corruption was one if not the major reason why he won.

The Yudhoyono administration's efforts, plus substantial steps taken before 2004, mean that the ongoing campaign to stamp out corruption is now one of the key issues on the national agenda. 

As a visible indication of this, the Indonesian press is regularly peppered with news articles about various government-related actions to combat KKN (see box with recent headlines from The Jakarta Post). 

"Compared to what was going on five years ago, it's like night and day," says Sidney Jones, senior adviser at the International Crisis Group, who has been following political developments in Indonesia for more than two decades. "The fact that no department is safe now is a huge change."


Of all the various governmental and nongovernmental actors involved in the anti-corruption drive, the most visible and noteworthy is the government-funded Corruption Eradication Commission (Komisi Pemberantasan Korupsi or KPK).

"The KPK is the only government institution that people trust," said Budhiana Kartawijaya, deputy chief editor of Pikaran Rakyat (the People's Ideas), a Bandung-based daily newspaper with a circulation of about 200,000.

This sentiment was echoed by others, including Rizal Malik, secretary general of Transparency International Indonesia, headquartered in Jakarta.

"The KPK is very strong based on the law and its mandate. It touched Parliament for the first time in the last 11 months," says Malik. "A member of Parliament was caught with his hand in the till, so that's a lot of progress. They are working hard and their achievements are great."

Housed in a modern, eight-storey building in central Jakarta, the KPK was established by a law passed during the Megawati administration in December 2002.

Its mandate includes the following:

  • Work with other state institutions to eradicate corruption;
  • Oversee other government entities authorised to eradicate corruption;
  • Perform investigations, indictments and prosecutions;
  • Prevent corruption by examining reports on assets and gifts, conduct public education and undertake bilateral and multilateral cooperation;
  • Monitor state institutions and recommend ways to make them corruption-resistant.

 To carry out this mandate, the KPK has been given extraordinary powers that include the ability to conduct surveillance of other government entities involved in fighting corruption; to do wiretaps, record conversations, and access bank accounts and tax records; and to take over cases already underway by the police or the Attorney General‘s Office (AGO).

Photo by: Michael Hayes

Rizal Malik, secretary general of Transparency International Indonesia.

Haryono Umar appears to be a mild-mannered bureaucrat without a major ax to grind against anybody. But as one of KPK's five commissioners, he is one of the agency's top officials and intimately involved in the fight against corruption.

"The KPK is only five years old," Umar explains slowly. "The law allows us to do prevention, investigation and prosecution."

And then he says proudly:  "We are the only one in the world that can do like the KPK."

"If we get two pieces of evidence, we can investigate," says Umar.  "We cannot stop after we get a suspect; we cannot stop the investigation."

He adds with a smile:  "Last week we arrested eight corrupt people in one day."

According to Umar, as a result of KPK's successful prosecutions, the government recovered 500 billion rupiah in cash (about US$50 million) in 2008 and another 250 billion rupiah ($25 million) in fixed assets, most of these being properties provided to government officials.

He says that in the last year alone the KPK has successfully prosecuted seven members of Parliament, two ministers, one Central Bank governor, seven mayors, five commissioners from the General Election Commission, two ambassadors, one former chief of National Police, two senior judges and two prosecutors from the AGO.

Since 2005, Umar says that the KPK has initiated investigations that resulted in a total of 49 convictions.

With a staff of about 500, including investigators and prosecutors that are seconded from the National Police and the AGO, Umar says that recruitment of people with integrity is a critical factor in the KPK's success.

In a recent recruitment drive for new employees, Umar said that after reviewing the paperwork of around 25,000 applicants they only came up with 50 people who were even worth interviewing.

On the issue of wealth and gratification reports, the KPK is buttressed by a presidential decree passed in 2004 that instructs all government officials to submit reports declaring their assets.

However, this process has been slow to take effect and as of 2006 only about 55 percent of officials have responded to requests to submit the requisite reports.

But according to Umar, a precedent has been set.  He says of the reports examined so far between 2005 and 2008, that discrepancies have been found in 849 submissions.

"Even a ring (received as a gift), they (government officials) have to report it," he says.  "If they go to the provinces and get gifts, according to the law they have to report it, otherwise the KPK considers it bribery. They have 30 days to file a report and then we will clarify."

Public expectations of the KPK are obviously high. The day this reporter visited the commission there were two sets of demonstrators outside the building demanding the KPK pursue with greater vigor a variety of cases.

"Yes, we know the public expectation is high," says Umar. "They send reports to us. Until now, 2004 till now, we received 30,000 complaints from the public."

He adds that the mandate of the KPK only allows them to investigate cases involving losses of more that one billion rupiah ($100,000).

Umar shrugs off any concerns for his own safety.  "We realise we have enemies," he says  "But we also have friends ... students, the press."

When asked if he sleeps well, he says "OK" with a laugh and then adds, "We are only accountable to the people, not to the president. Anytime we get a telephone call we have to answer it."

Photo by: Michael Hayes

Haryono Umar, vice chairman and commissioner of the Corruption Eradication commission (KPK), says he sleeps well at night and his mission is "to serve the people."

The KPK is not the only institution in Indonesia combating corruption.

There are other government and non-government entities also engaged with varying degrees of success.

On the government side, four other independent players include the National Ombudsman Commission, the Judicial Commission, the Business Competition Supervisory Commission and the Indonesian Financial Transaction Reports and Analysis Centre.

While the issues these entities are addressing are important, the general consensus is that their effectiveness is limited.  

A recent publication titled "Curbing corruption in Indonesia 2004-2006", written by Soren Davidsen, Vishnu Juwono and David Timberman, summarized the problem as follows: "All four share two common characteristics: First, while their mandate might be  broad, their authority tends to be limited. And second, their capacity to carry out their mandate is reduced by serious resource constraints."

On the NGO side there are also a range of activist organizations that have joined the anti-corruption bandwagon.

Indonesia Corruption Watch follows and investigates corruption cases and then exposes them.  

Transparency International Indonesia, according to Rizal Malik, is engaged "in creating good guys".  

Other NGOs active include the Indonesia Transparency Society, the Indonesian Procurement Watch and the Partnership for Governance Reform.  

Photo by: Michael Hayes

A demonstrator outside the Corruption Eradication Commission (KPK) displays his placard, which reads: "A thief of the people's money … makes trouble for the people. Salim the one who cudgels … and the one who hangs."

Political will

The one thing all sources agreed on concerning Indonesia's efforts to combat corruption is that political will from government leaders was critical to making headway.  This was mentioned repeatedly vis-a-vis the current president and other individuals in this government.

An interesting case in point is current Finance Minister Sri Mulyani Indrawati, who was appointed by President Yudhoyono in 2005 and since then has made enormous waves inside the bureaucracy.

The Finance Ministry oversees the Customs Office, which had a notorious reputation for taking bribes from importers and exporters.  

In one swoop, Mulyani decided to transfer all 1,300 customs employees elsewhere in the government bureaucracy and replace them with 800 new officers.

In an attempt to keep the new staff honest she paid them four times the amount  their predecessors had been making.

But even such a bold move as this wasn't enough to stem the festering rot.

According to an August 5, 2008, article in Australia's The Age, "Some months later the KPK raided the Customs Office at the Jakarta port and found envelope after envelope of banknotes stuffed in filing cabinets, office drawers and even down officer's socks.  The KPK netted $60,000."

Mulyani told The Age, "Was I expecting that after six months, everybody would become clean? Certainly not. I have 62,000 people still working for me. Will the judges immediately become good? No, this is going to be a continuous battle, which leaders must wage constantly."

Mulyani is still in her post as finance minister although the Indonesian press has reported various aspects of an ongoing internal struggle by her enemies to replace her.

Transparency International Indonesia's Rizal Malik summarized best the road ahead for those attempting to stem corruption.

"I believe there is no short-cut to anything," he said. "So we will have to find a painful way but we are on the right path.  In the next five years we will keep going. If not, in 25 years our children will  keep going."

Major corruption cases in Indonesia recently prosecuted or being prosecuted

  • Aceh Governor Abdullah Puteh convicted; several other governors and

    mayors have also been prosecuted.

  • Chairman and members of the General Elections Commission have been


  • Former Minister of Religious Affairs convicted for the misuse of Hajj


  • Trial of former Bank Mendiri CEO and two ex-directors for the alleged

    misuse of bank loans.

  • More than 100 Regional Representative Council (DPRD) members have

    been charged with corruption. In West Sumatra, 43 DPRD members were

    convicted of graft in 2005.

  • Former chairman on Investment Coordinating Board convicted of

    misappropriating 30 billion rupiah (about $3 million) of state funds.

  • A former Corruption Eradication Commission (KPK) investigator

    convicted for extortion.

  • Former head of Indonesian National Police's Criminal Investigation

    Unit convicted of receiving bribes.

  • Case against South Jakarta District Court judge for extorting money

    from Employee Social Welfare Insurance SOE.

Source: Curbing Corruption in Indonesia 2004-2006,

by Soren Davidsen, Vishnu Juwono and David Timberman

Recent headlines from The Jakarta Post on

stories related to combating corruption

OCT 13 Manggara official named graft suspect

Prosecuting officers have declared head of Manggara Social Affairs

Agency, Abdul Hafid, a suspect in a corruption case involving a fund

for disaster victims two years ago.

OCT 13 Graft fighter named chief detective

New National

Police chief General Bambang Hendarso Danuri has sent a clear message

he will be tough on corruption by selecting known graft crusader West

Java Police chief Inspector General Susno Duadji as the force's chief

of detectives.

OCT 15 AGO probing graft in justice ministry

The Attorney

General's Office has begun investigations into an alleged graft case

within the Justice and Human Rights Ministry, which is believed to have

resulted in hundreds of billions of rupiah in state losses.

OCT 15 Publicity-hungry legislators shun spotlight after questioning by KPK


any other day, members of the House of Representatives would be on the

prowl for TV and print journalists, in an attempt to publicise what

they claimed to have done for their constituents back home. The

Corruption Eradication Commission has changed all the celebrity style

of many legislators and, for some, struck terror into them. On Monday,

10 legislators from the House's Commission IV, which oversees forestry,

slunk unnoticed into the anti-graft commission's office as they

fulfilled summonses for questioning in connection with a bribery case

in the conversion of a protected forest in Banyuasin, south Sumatra, to

the Tanjung Api-api Port.

OCT 15 KPK grills minister on graft case

The Corruption

Eradication Commission questioned Industry Minister Fahmi Idris on

Tuesday in connection with a graft case centered around the Manpower

Ministry, which he used to lead.

OCT 15 Former consul to Malaysia detained

The Corruption

Eradication Commission has detained former Indonesian Consul General

Arifin Hamzah for allegedly embezzling immigration fees during his

tenure in Kota Kinabulu, Malaysia, from 1999 to 2000.

OCT 16 Ex-education head in graft case.

The Lampung

Prosecutors Office has named former provincial education agency head

Hermansyah and PT Siger Media director Muhammad Andi as suspects in an

embezzlement case that has cost the state 400 million rupiah

(US$41,000) in losses.

OCT 16 Jambi secretary gets three years for embezzlement


Corruption Court sentenced Jambi secretary Chalik Saleh to three years

in prison, fined him 150 million rupiah (US$15,500) and ordered him to

return 950 million rupiah in restitution to the state after he was

found guilty of embezzlement.

OCT 16 KPK detains RI immigration officer

The Corruption

Eradication Commission (KPK) has arrested Ayi Nugraha, formerly

stationed in Kuching, Malaysia, for allegedly manipulating immigration

fees from 1999 to 2005.

OCT 18 KPK, AGO to meet on BLBI takeover

The Corruption

Eradication Commission and the Attorney General's Office will hold a

meeting to discuss the unresolved corruption cases involving Bank

Indonesia liquidity support funds.

OCT 18 ‘Bribes were my own money': Azirwan

Suspended Bintan

administration secretary Azirwan has claimed that the 2.25 billion

rupiah (US$230,000) he distributed to various lawmakers was his own


OCT 18 KPK arrests 8 suspects in separate graft cases

In two separate corruption cases, the Corruption Eradication Commission

has detained six officials at the Manpower and Transmigration Ministry

and two former officials from Indonesian consulates in Malaysia.

OCT 18 Vote counting in Rote Ndao on hold over money politics


Rote Ndao Regional General Elections Commissions and the Election

Supervisory Committee have suspended vote counting for Tuesday's

regency election following reports of alleged money politics.

OCT 20 Zatapi case the 'tip of Pertamina iceberg'

As police

continue investigating state oil firm PT Pertamina over allegations it

imported a sub-standard oil type called Zatapi last year, a lawmaker

and an observer say the case may be one of many.

OCT 22 BPK spots massive abuses in energy sector

The Supreme

Audit Agency said Tuesday it had found some irregularities in

Indonesia's energy sector that might indicate corruption, after

auditing the 2007 financial reports of government agencies and


OCT 23 Lawmaker asked businessman for money, graft court hears


Sarjan Taher of the Democratic Party asked businessman Chandra Antonio

Tan for money to facilitate the approval of the South Sumatran

administration's proposal for a protected forest conversion, a court

heard Wednesday.

OCT 23 Anti-corruption drive goes to school

The Corruption

Eradication Commission launched a series of anti-corruption modules to

be taught in schools, from elementary to high school level.

OCT 23 Ex-health chief detained for graft

The West Nusa

Tenggara prosecutors' office has detained the former head of the

provincial health agency, Baiq Maghdalena, after seven hours of

interrogation at the office, a senior prosecutor said.


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