[Kabar-indonesia] 5 JP Graft Reports: Editorial: Corrupt Procurement [+Op-Ed; Villages; KPU]

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5 JP reports: 

- Editorial: Corrupt Procurement 

- Corruption watchdog urges Justice and Human 
  Rights Minister Hamid Awaluddin arrest 

- Op-Ed: UN convention boosts RI antigraft drive 
  [by Sofie A. Schotte, anticorruption advisor at the 
  Partnership for Governance Reform in Indonesia.]

- Corruption pervasive in villages 

- Jakarta Deputy Governor Fauzi denies
  budget misuse

The Jakarta Post
Thursday, August 10, 2006

Editorial
   
Corrupt Procurement 

A former director general at the Finance Ministry once disclosed that most 
corruption within the public sector was related directly or indirectly to the 
procurement of goods and services. The senior official knew exactly what he was 
talking about because he was in charge of supervising state companies in the 
1990s and the first major program he executed was thoroughly checking on 
procurement practices and the suppliers of state companies.

Even now most graft cases within the public sector that are uncovered by 
police and prosecutors and brought to court have been tied to procurement, even 
though the regulations on the procurement system have been amended several times 
since 1999, most recently by two presidential decrees last year. In fact, the 
corruption investigations that have jailed several senior officials of the 
National Elections Commission are all related to procurement. 

Hence, the plan by the Supreme Audit Agency to conduct an investigative audit 
on government procurement could go a long way in seeking the best way to 
reform the procurement system. 

The agency's chief, Anwar Nasution, said early this week that the 
investigative audits would initially focus on the procurements by three ministries -- 
education, health and public works -- because they are among the major recipients 
of budget appropriations this year. 

The government procurement system has indeed been subject to systemic abuse, 
vulnerable to corruption and collusion, and often lacks transparency, as the 
World Bank pointed out in a report in 2001. 

It is reassuring to note, the stepped up drive against corruption rightly 
includes a much more stringent supervision of procurement. Officials are no 
longer clamoring to be appointed as project managers, whereas, under the 
authoritarian, centralized government of Soeharto a project manager was a greatly 
lucrative position keenly sought after by officials and often informally tendered to 
the highest bidders. 

The government spends more than US$10 billion annually for the procurement of 
goods and services, not including the purchases by state companies. Any 
improvement in this sector will therefore significantly increase the efficiency of 
public spending. 

But besides causing state losses, corruption within the procurement system 
also causes higher costs for public facilities and services, thereby imposing 
punitively high taxes on the intended beneficiaries. 

Even though the government has yet to establish an independent national 
public procurement office, as many countries have done, public sector procurement 
is already one of the most heavily regulated components of the fiscal 
management system by way of presidential decrees, ministerial directives and other 
instructions by provincial governors, regents and mayors. Yet corruption remains 
rampant within the procurement system. 

One of the reasons is the low cost of corruption in this sector, meaning that 
the chance of being caught is quite low due to several factors, including the 
corrupt mentality of auditors and officials and the inadequate technical 
competence of procurement managers. 

Therefore, conducting ex-post and independent procurement audits at all 
levels of government and full investigations of credible complaints, fraud and 
corruption would help protect the system from abuse. Strengthening the procedures 
for the selection of tender committees and project managers and the 
development of an adequate pool of career purchase managers would help improve 
institutional capacity within the procurement system. 

Regulations on government procurement have been amended annually since 1999, 
yet many basic policy and procedural requirements, which are essential for 
building a highly transparent, efficient and enforceable procurement system are 
not clearly defined in the regulations or ministerial decrees. 

In fact, the multiplicity of regulations, decrees and directives on 
procurement has become a source of confusion and caused overlapping jurisdiction and 
policies. Ideally, all procurement regulations, procedures and policies should 
be based on a higher juridical level of law (special legislation). 

The reform of the procurement system should not wait for a special law, which 
certainly will take a long time, while the "bleeding" within the system has 
been profuse. The establishment of a single national agency or a central 
authority such as an independent public procurement office is therefore most 
imperative in helping lay down uniform and consistent policies and procedures and 
ensuring their consistent enforcement. 

-----------------------------------

The Jakarta Post
Thursday, August 10, 2006

Corruption watchdog urges minister's arrest 

The Jakarta Post, Jakarta

The Corruption Eradication Commission (KPK) is under fire for refusing to 
name Justice and Human Rights Minister Hamid Awaluddin as a suspect in the 
General Elections Commission (KPU) graft case.

Indonesia Corruption Watch (ICW) said the commission was risking its 
credibility by failing to pursue justice against all KPU members accused of graft in 
connection with the procurement of ballot seals for the 2004 general elections. 

"Hamid should have been one of suspects in the case," ICW coordinator Teten 
Masduki was quoted by the Detickom news portal as saying Wednesday. 

He accused the KPK of lacking the courage to charge the justice minister, who 
is widely believed to get political backing from the government. Hamid, a 
former KPU member, is a close ally of Vice President Jusuf Kalla. 

Daan Dimara, a former KPU member currently on trial in the graft case, has 
accused Kalla of protecting Hamid. The suspect walked out of his court hearing 
Wednesday in protest, demanding that Hamid be named as a perjury suspect for 
allegedly giving false testimony in the case. 

"The slow development of the KPU graft case and the fact that some members 
allegedly involved in the case have not been legally processed could tarnish the 
image of the KPK," Teten said. 

"The public will think that the KPK is not serious enough in handling the 
case and that it has acted discriminatorily in enforcing the law." 

Teten warned that the investigation could affect the selection process of the 
KPK chief in 2007 because Hamid, as the justice minister, had the authority 
to choose the selection team. 

"Slow progress in the case means that the KPK is planting a time bomb for its 
own destruction," he said. 

Daan reported Hamid to the KPK for alleged perjury after Hamid testified July 
25 that he did not attend a meeting to discuss the procurement of the ballot 
seals. 

Hamid's claim contradicted the testimony of five witnesses who said that the 
former KPU member not only attended, but led the meeting. 

Hamid insisted Wednesday that he had not perjured himself. 

"We're talking about a legal process that is highly related to physical 
evidence. And in this case, there is no evidence that I attended the meeting on 
June 14, 2004," he said at a news conference. 

Hamid questioned how Daan could be so sure he attended the meeting, when Daan 
himself was not in attendance. 

"I've told investigators and the court what I saw and heard. It's all 
included in the dossier," Hamid said when asked whether he was ready to give further 
testimony. 

Hamid also denied intimidating Daan's lawyer, Erick S. Paat, prior to the 
trial session. 

Hamid said he had spoken to Daan, but did not believe there was anything 
inappropriate in what he said. 

"I only said something normative to Daan, no threat or any intimidation at 
all," said Hamid. 

According to Erick, Daan told him that Hamid had approached Daan before the 
July 25 trial and ordered him to tell Erick not to pose pressing questions. 
Otherwise, his action would be considered a personal affront to Hamid. 

Erick delivered a letter to National Police headquarters last week, seeking 
legal protection due to the alleged intimidation. 

----------------------------------------

The Jakarta Post
Thursday, August 10, 2006

Op-Ed

UN convention boosts RI antigraft drive 

by Sofie A. Schotte, Jakarta

Corruption is neither a modern nor solely Indonesian phenomenon. Just as with 
other crimes, corruption can be traced back to the very beginning of human 
history. What has changed, though, are the added dimensions caused by 
globalization and information technology.

Money can be transferred between countries with the click of a mouse. Along 
with various other movements, Transparency International's (TI) comparison of 
the perceived level of corruption among countries since the mid 1990s has 
brought international public attention to the issue of corruption. 

The international community, as represented in the United Nations, reacted to 
concerns on corruption with the Convention against Transnational Organized 
Crime (Palermo Convention) in November 2000, and then the Convention against 
Corruption (Merida Convention) in October 2003. The latter entered into force in 
December 2005, within 24 months after it was opened for signatures. 

The Indonesian government signed the Convention against Corruption in 
December 2003, and the Indonesian legislature agreed to its ratification in March 
this year with Law 7/2006. In December this year the first conference of the 
states parties of the convention will take place to agree on follow-up procedures. 
A system to review the progress of compliance to the provisions of the 
convention has yet to be established. 

Despite there being no sanctions for non-compliance yet, the Indonesian House 
of Representatives made an important commitment to fighting corruption when 
it ratified the law. Some experts believe that in the future the progress 
monitoring of the implementation of the convention may become an alternative to the 
TI perception index when measuring the seriousness of a government's 
commitment to fighting corruption. 

So what is it that Indonesia has committed to? The convention covers four 
main areas in regards to corruption: prevention, criminalization, international 
cooperation and asset recovery. Even though not all provisions are mandatory, 
they provide a useful guideline for what could be done. 

Most importantly an independent body to oversee and coordinate the 
implementation of preventive anticorruption policies is already in place -- The 
Corruption Eradication Commission (KPK). Even though this may not yet have caught the 
public's attention, the KPK has the mandate the convention requires. 

While the KPK already has shown progress in its repressive mandate, i.e. to 
investigate corruption cases and prosecute suspects, there is still a lot to do 
on the prevention side. 

The most urgent reform to prevent corruption is civil service reform, i.e. to 
reform the way public institutions are organized and staffed as well as the 
way civil servants are recruited, promoted, trained and retrenched to improve 
performance and to increase transparency, accountability and efficiency. 

Codes of conduct for public officials are recommended in the convention to 
ensure that public services are appropriately carried out. Concerning public 
procurement standards, Indonesia already has the legal framework in place, but 
this as yet needs to be enforced. 

Moreover, the Indonesian Financial Transaction and Analysis Center (PPATK) 
has made some internationally recognized improvements in Indonesia's anti-money 
laundering regime. 

Something that is still in its infancy and needs to be continuously fostered 
is public participation in the prevention of corruption. Public access to 
information on the decision-making processes of the public administration is 
crucial, as is protection of the right to seek, receive, publish and disseminate 
information concerning corruption. 

In this regard, witness protection is a mandatory provision of the convention 
that recently experienced a boost when the long-awaited Witness and Victim 
Protection Law was passed by. However, whistle-blowers still lack comprehensive 
legal protection, with the only realistic option for avoiding defamation suits 
and retaliation being the anonymity of reports as guaranteed by the KPK. 

The real novelty of the convention, making it particularly interesting for 
developing countries whose assets have been purloined by corrupt officials and 
their accomplices, are the provisions for asset recovery. States that have 
ratified the convention, are required to return assets generated through 
corruption to the country of their origin. Unfortunately Singapore and Switzerland have 
not yet ratified the convention. 

Despite the certainty of many assets still being hidden abroad, there are 
also many that could be retrieved from within Indonesian borders. In this regard 
the convention recommends the introduction of the offense of "illicit 
enrichment", meaning that when public officials are found to possess assets or 
maintain a lifestyle that is clearly in excess of their lawful income, and are unable 
or refuse to reasonably explain the origin of such assets, they can be found 
guilty (Art. 20). An alternative would be a non-conviction based confiscation 
of inexplicable wealth (Art. 31, 8). 

This might be a very effective deterrent where corruption occurs out of 
greed, not need: Confiscate the luxurious house, take away the car! 

This convention could indeed mean a lot for Indonesia. The lawmakers have 
taken the first step by ratifying it; the Department of Justice and Human Rights, 
the Department of Foreign Affairs, the KPK and other related parties have now 
to follow up and ensure that the full range of opportunities presented by the 
convention are explored. 

The writer is an anticorruption advisor at the Partnership for Governance 
Reform 
in Indonesia. 

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The Jakarta Post
Thursday, August 10, 2006

Corruption pervasive in villages 

Agus Maryono, The Jakarta Post, Purwokerto

Corruption is a deep-seated and pervasive problem that affects all levels of 
governance, from neighborhood level up.

The efforts of President Susilo Bambang Yudhoyono and other high-ranking 
officials, as well as police and prosecutors, to eradicate corruption within the 
government appear to have had little impact at neighborhood or village level. 

In Banyumas regency, irregularities have been reported in the issuance of 
household cards, identity cards and the disbursement of cash assistance for the 
poor. 

The government implemented a quarterly cash compensation package last October 
to offset the effects of last year's fuel price increases. 

Under the scheme, low-income families are entitled to Rp 300,000 (US$31.57). 

Applying for a household card or a picture ID in Banyumas is a complicated 
process. The application, which must go through the neighborhood and community 
units, then the district and regency administration offices, can take weeks to 
complete. 

"The official fee is Rp 8,000, but it could take two months. I eventually 
asked them to 'accelerate' the process. The clerk at the district administration 
office charged me Rp 30,000 and said it would take a week, which turned out to 
be true," Yono, 36, a resident of Kembaran village, said. 

Instead of Rp 300,000, many recipients of the unconditional cash assistance 
received only Rp 250,000, or even Rp 200,000. 

"We only got Rp 250,000. They said the Rp 50,000 was for administrative fees 
and contributed to the village coffers," Warsim, 30, from Kemetug village, 
Baturaden district, told The Jakarta Post. 

He said residents had been warned that reporting the matter to their 
neighborhood chiefs could boomerang on them, because their names might be dropped from 
the list of recipients. 

"Besides which, the cash assistance has not been fairly distributed. Many 
poor people don't receive it, but those who are better off -- who have nice homes 
with tiled floors -- receive it because they are close to their neighborhood 
chief," Warsim said. 

Supeno, 50, from Sumbang village reported similar treatment. "Well, everyone 
knows the neighborhood chief distributes the money as he likes. I, who live in 
a house like this, get nothing, but many people who have houses with tiled 
floors and own motorcycles appear to be eligible," said Supeno, when met by the 
Post at his dirt-floor home. 

In Wlahar village, Kalibagor district, residents said village officials had 
deducted Rp 100,000 from their payments. "They demanded Rp 100,000 from me, 
saying the money would be divided among their superiors. They told me not to tell 
anyone. If I did, they were going to drop my name from the recipient list," 
said villager Mad Kasim, 45. 

Irregularities in the distribution of cash assistance are believed to be rife 
partly because residents are afraid to stand up for themselves. 

However, hundreds of Wlahar Wetan residents staged a protest at the local 
village hall demanding that the village treasurer, who allegedly deducted Rp 
100,000 from the payments, be dismissed. 

Banyumas Regent Aris Setiono said Saturday, "I will take stern action against 
my subordinates if they are proven guilty. It is not appropriate behavior." 

-------------------------------------------

The Jakarta Post
August 8, 2006

Fauzi denies budget misuse 

The Jakarta Post, Jakarta

Jakarta Deputy Governor Fauzi Bowo denied Monday claims he had used publicly 
funded anti-drug billboards to further his political career.

"I have nothing to do with those posters," he said. 

Billboards featuring a photograph of Fauzi, who is also the head of the 
Jakarta Narcotics Body, have been placed around the city. They have drawn criticism 
from non-governmental organization Gemma, which says Fauzi used the 
provincial budget to finance the billboards in an attempt to start campaigning early 
for 2007's gubernatorial election. 

Gemma coordinator Nurcholis has said that instead of featuring a photograph 
of the institution's head, the billboards should have featured images that 
communicated the dangers of drug abuse. Nurcholis' organization has demanded that 
the narcotics body's budget be audited. 

"The billboards were put up by a non-governmental organization that used its 
own budget. I had no direct relationship to it," Fauzi said. 

He said the narcotics body had an agreement with the group, Perhimpunan 
Peduli Jakarta (PPJ), to erect the billboards, but added that the idea for the 
boards, including their design, came from PPJ. 

"However, the money came from PPJ, not from the narcotics body," Fauzi said. 

PPJ head Herudjito told The Jakarta Post that his organization had erected 
about 500 billboards in all five city municipalities, at a cost of Rp 200 
million. 

He said the organization had received donations from the public to fund the 
campaign. 

The deputy governor filed a defamation suit against Gemma last week. 

"If my reputation is abused through such accusations, of course I will have 
to make a move," he said. 

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Joyo Indonesia News Service
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