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Combating Corruption in Indonesia? The
Ombudsman and the Assets Auditing Commission
Stephen Sherlock
To cite this article: Stephen Sherlock (2002) Combating Corruption in Indonesia? The
Ombudsman and the Assets Auditing Commission, Bulletin of Indonesian Economic Studies, 38:3, 367-383, DOI: 10.1080/00074910215532
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ISSN0007-4918print/ISSN1472-7234online/02/030367-17 ©2002IndonesiaProjectANU
INTRODUCTION
The promise to combat corruption has
been a central element in the rhetoric of
Indonesian governments since the end of
the Soeharto regime in May 1998. But like
the hopes for reformasias a whole, early
expectations of change have largely been
disappointed (King 2000). The record of
the three post-Soeharto presidents, B.J.
Habibie, Abdurrahman Wahid and
Megawati Sukarnoputri, in fighting
sources and cases of corruption has been
patchy (Hamilton-Hart 2001). There
have been some initiatives on the legis
-lative front, one or two prominent cases
have been pursued and some anti-cor
-ruption bodies have been established.
Under the Habibie administration,Law
31/99 on corruption created special pro
-visions for investigating corrupt acts by
public officials, and provided for the es
-tablishment of an anti-corruption com
-mission. Law 28/99 created the KPKPN
(Komisi Pemeriksa Kekayaan Penye
-lenggara Negara, Commission to Audit
the Wealth of State Officials, or Assets
Auditing Commission), and a presiden
-tial decree by Abdurrahman Wahid
created a National Ombudsman’s Com
-mission (Komisi Ombudsman Nasional,
KON) in 2000. One of the most promi
-nent individuals with a reputation for
corruption, the former close associate of
Soeharto, Bob Hasan, has been gaoled.
The most high profile case has been that
of ‘Tommy Soeharto’ (the former
president’s son, Hutomo Mandala
Putera), who was convicted of corrupt
land dealings, went into hiding and
then had his conviction overturned by
the Supreme Court. He was later re
-COMBATING
CORRUPTION
IN
INDONESIA?
THE
OMBUDSMAN
AND
THE
ASSETS
AUDITING
COMMISSION
Stephen Sherlock
InformationandResearchServices,ParliamentofAustralia,Canberra
Earlyoptimismthatpost-Soehartogovernmentswouldleadasystematiccampaign againstcorruptionhaslargelybeendisappointed.Thecreationoftheombudsman andtheAssetsAuditingCommission(KPKPN)werehopefulsigns,butbothinitia -tivesaresymptomatic ofthe weaknessesbesetting Indonesia’santi-corruptionef -forts. Despitetheir best endeavours, bothorganisations have weakpowers, are under-resourced,receiveonlytokenpoliticalsupportandexistinisolationfromother investigativeandenforcementagencies.Internationalresearchsuggeststhatofficial effortstoeliminatecorruptionareeffectiveonlyaspartofacoordinatedcampaign toreformadministration,policymaking,legislativeinstitutionsandthejudiciary. Threatenedexposureorpunishmentofcorruptofficialsisnotenough:alltheinstitu -tionalincentivesanddisincentivesforabuseofpublicofficeforprivategainmustbe confronted.InIndonesiatheproblemisthatmostofthoseempoweredtotakesuch initiativeshavenoincentivetodosobecausetheyprofitfromthestatusquo.
arrested and, along with other charges,
was accused of the murder of one of the
judges who convicted him of corruption.
In July 2002 he was gaoled for 15 years.
campaign by members of the legislature
to unseat him. It has not been regained
since Megawati’s accession to power in
July 2001. Megawati has made a num
-ber of statements committing her gov
-ernment to combating corruption, but
they have remained at the level of gen
-eral promises and exhortations to the
nation to abstain from corrupt activities.
There are no indications that she has
developed a comprehensive anti
-corruption strategy or that she has se
-riously thought about how to develop
one. The investigation into the corrupt
Soeharto billions has evaporated and
the ‘Tommy’ case has once again shown
up the dysfunctional nature of the
legal system. The governor of Bank In
-donesia, Syahril Sabirin, was sen
-tenced to three years imprisonment
for his alleged involvement in the
Bank Bali case, but the conviction was
later overturned by a higher court
(Kompas, 30/8/02).Akbar Tanjung, the
speaker of the DPR (People’s Represen
-tative Council, Indonesia’s parliament)
and leader of the Golkar party, was de
-tained as a suspect on charges of using
public funds for private political ends,
but was able to use his influence to be
released. Although later convicted and
sentenced to three years gaol, Akbar was
released pending an appeal and at the
time of writing remains as leader of the
legislature. In the meantime, the bill to
establish the Anti-corruption Commis
-sion, which Law 31/99 required to be cre
-rations to eliminate corruption results
from the interaction between a lack of
political will at the highest levels of
government and a lack of attention to
the wide range of reforms in state in
-stitutions such as the judiciary, the
bureaucracy, the military and the leg
-islature that would be required to at
-tack the systemic nature of corruption
in Indonesia. It contends that the lack
of progress in combating corruption is
fundamentally due to a failure of po
-litical will on the part of successive
post-Soeharto governments but that,
even if the current government were to
launcha serious anti-corruption effort,
the generally simplistic understanding
of the nature and origins of corruption
implicit in most official actions would
hamper this effort. The fitful and un
-coordinated character of government
anti-corruption initiatives both reflects
and is reinforced by the fact that the
legislature, the judiciary and the bu
-reaucracy are permeated with corrup
-tion and are controlled by networks of
individuals who have every interest in
resisting reform. The paper considers
the examples of the KON and the
KPKPN as illustrative of the fate of in
-stitutions that have insufficient politi
-cal backing and scant resources and
ficials. Ombudsmen’s institutions vary
throughout the world (Manning 1999:
1–3; Pope 1999: 46, 83), but generally they
have a responsibility to receive and in
-vestigate reports from the public about
government administration being per
-formed contrary to law, unfairly, or with
excessive delay; to make recommenda
-tions to rectify and eliminate any im
-proper or poor administrative conduct
revealed in the investigations; and to re
-port, usually to the national legislature,
on their activities, including investiga
-tions undertaken on their own initiative.
In a few cases, ombudsmen also have the
power to investigate illegal activity and
to prosecute such cases (International
Ombudsman Institute 2001).
It is generally considered that, to be
effective, an ombudsman must have the
power to compel government agencies
to respond to its inquiries, to obtain all
documents relevant to an investigation
and to question officials. Most ombuds
-men’s institutions do not have the power
to enforce their recommendations, but
in most countries with an active media,
legislature and civil society, the pressure
of public and parliamentary exposure is
a powerful inducement for government
agencies to respond positively to recom
-mendations from an ombudsman. An
ombudsman investigates all types of
maladministration and illegality, not
just cases of corruption, but it may un
-cover evidence of corruption in the
course of investigating complaints. The
ombudsman then needs the power ei
-ther to prosecute cases of corruption or,
as is usually the case, to pass on infor
-mation to anti-corruption agencies and/
or law enforcement agencies.
The creation of the National Om
-budsman’s Commission in Indonesia
followed a commitment made by Ab
-durrahman Wahid in his presidential
inauguration speech of October 1999.
This became embodied in Presidential
Decree (Keppr es) 44/200 0, and the
complaints from the public about
maladministration, and request clari
-fication or information from the gov
-ernment agency concerned; to make
recommendations to the agency and
monitor its compliance with them; and
to report on its activities to the president
of Indonesia.
The institutions covered by the decree
include the judiciary and the courts, the
police, and state-owned corporations,
parliaments and government depart
-ments at the central and regional level.
TheOmbudsman:APaperTiger?
Although the KON has the role that is
usually assigned elsewhere to an om
-budsman, it is critically lacking in the
powers of enforcement.1It cannot com
-pel agencies or individual government
servants to respond to its inquiries, to
release documents or other information,
or to allow it access to their premises. It
also cannot enforce its recommendations
or compel agencies to act on its advice.
Any recommendation for legal action or
prosecution must be passed on to the
police or the prosecutor’s office for
action. In the words of one of the com
-mission members, the ombudsman is ‘a
Magistrate of Influence not a Magistrate
of Sanctions … the recommendationsof
the Commission are not legally but mor
-ally binding’ (Surachman 2000: 2).
What this means in practice is that
government agencies are not bound to
give any substantive response to the
sponses. Both simple acknowledgments
and obstructionist responses are in
-cluded along with the rest. The figures
issues of systematic and regular failure
in administration, or do not involve the
possibility of high level corruption. But
if no responses are being received in the
major cases of discrimination, abuse of
power, corruption or other maladmin
-istration, then the ombudsman is argu
-ably ineffective. Getting a full measure
of government agencies’ responses to
the KON is difficult in the absence of
meaningful data.
Perhaps not unexpectedly,members
of the commission have developed gen
-erally optimistic interpretations of their
experience with the state apparatus.
Some members have expressed sur
-prise at the quality of the cooperation
they have received, especially from the
courts, and have suggested that the lim
-reaucrats to improve their services,
rather than as a ‘big brother’ relating
to government employees in a hostile
and inquisitorial manner (interview,
February 2001). Commission member
Masdar Mas’udi said that officials were
generally quite open to discussing cases
and general issues, but he was less em
-phatic that this always led to the resolu
-tion of complaints (interview, February
2001). Another commission member,
Sri Urip, a former business executive,
was of the opinion that agencies pre
-ferred not to be seen to be at logger
-heads with the ombudsman over low
level matters, but she expressed reser
-vations about the ombudsman’s capac
-ity to resolve major cases (interview,
February 2001).
Standard international practice is to
provide an ombudsman with the power
to obtain information, documents or
other records from an agency, or an in
-dividual within an agency, within a
specified period of time (International
Ombudsman Institute 2001). Without
such power, the ombudsman’s inquiry
can simply be ignored or delayed for so
long as to render it ineffectual. The ex
-perience of the Indonesian ombudsman
is also that agencies will sometimes sim
-ply deny that any cause for complaint
exists, leaving the ombudsman with no
power to persist with an investigation
other than to send another letter to the
agency (interview with chief ombuds
-man, January 2001). An ombudsman
should also have the authority to call
witnesses and to examine them under
oath. This power may be necessary to
allow the full version of events in a case
to be obtained from individuals who
might otherwise choose to obstruct an
investigation. In addition, an ombuds
-man should have the power to enter the
premises of an agency whose actions are
the subject of a complaint, if it judges
that this is necessary to ensure that all
documents and other relevant informa
-tion are being supplied. In the case of
Sweden, where the concept originated,
the ombudsman even has the power to
initiate prosecution if it finds evidence
of illegal behaviour.
TheNeedforanActofParliament
At the heart of the KON’s problem of
an institution with powers in accordance
with international practice. The KON
fulfilled its commitment to present a bill
to the Ministry of Justice, but it was met
with non-interest and obstruction from
within the ministry. The bill was sub
-sequently submitted directly to the
DPR, whose Legislation Office (Badan
Legislasi) agreed to consider it for ac
-ceptance as a DPR Initiative Bill (as dis
-tinct from a government bill). At the
time of writing the Legislation Council
and the KON were still negotiating over
its content.
As an interim measure before the pas
-sage of the bill, the chief ombudsman
raised with then President Abdurrah
-man Wahid the possibility of extending
the powers of the commission under the
authority of the Keppres. Although the
latter is reported to have given in
-principle agreement, there was no
progress on the proposal before his dis
-missal as president. There have been no
reports of President Megawati propos
-ing to issue a stronger decree.
Not only does the Keppres not allow
the KON to force government instru
-mentalitiesto cooperate, it also requires
that the ombudsman report not to par
-liament but to the president. Internation
-ally, an ombudsman’s obligation to
report to parliament is seen as an im
-portant part of the accountability of ex
-ecutive government to the legislature,
and as a useful tool for parliament to
scrutinise the activities of the executive.
It also makes the ombudsman itself ac
-countable to the people’s representatives
and to the public.
Parliamentary accountability is an
internationally recognised principle for
an ombudsman, but the performanceof
the Indonesian legislature since its re
-constitutionas a democratically elected
body after Soeharto’s demise gives
cause for doubt about how effective the
DPR would be as a support for the om
-budsman. First, the widespread reputa
-tion for corruption among legislators
themselves suggests that many may be
hostile to a body that might reveal cases
of corruption and the practices that en
-courage it. Second, there have been
proliferatingreports about the low level
of participation in the regular work of
the DPR by many of its members (JP,
10/12/01;11/12/01; 15/12/01;1/2/02;
4/6/02; 12/6/02; 28/9/02), suggesting
that output from the ombudsman,
whether in the form of an annual report
or of individual investigations, would
be ignored by many legislators. At best
it might be used selectively for short
-term political advantage.
TheProblemofFunding
The lack of real political backing for the
ombudsman is also clear from the
government’s unwillingness to provide
adequate funding. For about the first six
months of its operation, the KON did not
receiveanyfunds from the state budget!
Members of the commission performed
their duties without any payment at all.
During that time the ombudsman was
almost entirely funded by the Asia
Foundation, together with assistance in
kind from sympathetic individuals.The
commission was housed in what was de
-scribed as a ‘storage space’ in a cosmet
-ics company (interview with KON
members Sri Urip and R.M. Surachman,
and commission staff, January 2001).All
office facilities, down to desks and
chairs, had to be borrowed. The commis
-sion did not move into permanent ac
-commodation until December 2001, and
even this was possible only because of
the personal connections of one of the
commission members.2The only regu
-lar source of support from the state bud
-get is for the salaries of staff, who are
paid according to their functional clas
-sification in the civil service.
Underfunding sends negative signals
to the public and government agencies
about the government’s commitment to
combating corruption and improving
accountability and government services.
It also limits the ombudsman’s capacity
to set itself up to do its job—to obtain
appropriate facilities and equipment and
to hire sufficient staff and train them to a
professional level. The ombudsman’s
staff need training in face-to-face public
service; in interviewing techniques; in
analysis of complex cases; in report writ
-ing and provision of advice; in under
-standing the machinery of government;
and in knowledge of laws, regulations
and procedures and of legal and judicial
institutions. Members of the commission
are of a common view that they need high
quality, well paid and well trained staff,
and admit freely they have yet to reach
the standard they would like. They are
also acutely aware that part of the back
-ground to official corruption in Indonesia
is low salaries, and that the commission
will not be immune from pressures to
accept unofficial payments.
The ombudsman’s main response to
the problem of inadequate resources has
been to seek foreign donor funding. The
Asia Foundation provided around
Rp 400 million during the KON’s first
year of operation, and continues to fund
both routine and developmentalexpen
-diture. An international donor consor
-tium, the Partnership for Governance
Reform in Indonesia, will provide $1
million for a program of institutional
development over three years.3
One way in which donor funding has
been used is to provide a salary supple
-ment so that staff of the KON are paid
at a level appropriate to their skills and
duties, to help eliminate the incentives
to corruption. Staff are therefore paid
at a higher level than their civil service
counterparts,with the supplement paid
in the form of an honorarium, since civil
service regulations do not allow em
-ployees to receive an official salary
higher than their designated level. In
the opinion of the deputy ombudsman,
the honorarium is still insufficient to
make up a salary that can attract high
quality staff and reduce the temptation
to ‘take gifts’ for providing services.4
an effective and non-corrupt institution,
but dependence on outside support
could also come at the cost of channel
-ling the activities of the ombudsman into
paths that it might not otherwise have
followed. At the very least, the docu
-mentation required by international
agencies can divert a lot of intellectual
and administrative resources. Aid al
-ways comes with conditionality, but the
advice of foreign development‘experts’
has not always proved the most appro
-priate to local circumstances. A reputa
-tion for heavy foreign funding might
also leave the ombudsman vulnerable
to political attack if its investigative
work creates enemies inside the bureau
-cracy or beyond.
MembershipoftheCommission: InterimorPermanent?
The problem of insufficient funds is criti
-cal to the all-important issue of who will
lead the institution as members of the
commission.The members received no
remuneration for the first six months,
and have since received a salary of just
Rp 2 million (about $200) per month.
Even this has been paid on an irregular
basis. It is clearly far below the level that
people with comparable qualifications
could earn in the private sector, and
completely inadequate to attract candi
-dates with the requisite experience and
standing. The problem has been dealt
with by recruiting retired people with
independent means, or people with in
-come from other positions, with the ex
-pectation that they will work on a
part-time basis for the KON.
Employing commission members on
a part-time basis was a reasonable strat
-egy in the circumstances, but it is not
an approach that should be used in the
long term. Being a member of the KON
is not like working on a board or for a
commission that requires only periodic
attendance at meetings and other occa
-sional commitments. The function is
not one of oversight or monitoring, but
demands regular and sustained hours
of duty in the commission’s office in
order to handle a constant flow of case
-work. Since they decide on recommen
-dations to government agencies about
every case in their area (these decisions
then being ratified by the chief ombuds
-man), members need to be in almost
daily contact with commission staff,
and must keep up a regular output of
Corruption Watch, probably Indonesia’s
foremost anti-corruption NGO (non
-government organisation), and a well
known public figure deeply involved in
many activities. Masdar Mas’udi is a
prominent figure in the traditionalist
Islamic organisation Nahdlatul Ulama
(NU). Sri Urip has become fully in
-volved with work in overseas donor
support for governance reform.
Since its establishment in March 2000
compensation, but commission mem
-bers have listed this as a key factor
(interview with Sunaryati Hartono,
February 2001). In any case, the current
members were intended only to be in
-terim office holders who would relin
-quish their positions when a new
commission was constituted after the
ombudsman was provided with legis
-lative backing. As we have seen, the bill
is still in transit at the DPR, with no
clear date for its passage. The current
members may have been appropriate
for an interim body that was soon to be
superseded, but the delay has meant
that the commission as it is currently
composed is unviable.
Operation andManagementofthe Ombudsman’sCommission
Despite the unpromising circumstances
described above, it should be said that
the members of the commission and
their staff appear to have made an hero
-ic effort to create a viable, functioning
institution—something that should not
be dismissed lightly when so much of
the Indonesian state apparatus is dys
-functional and corrupt. The chief om
-budsman and the other members seem
to have given considerable attention to
ensuring that the commission is a well
managed organisation, with clear pro
-cedures, staffed with qualified people
who are committed to good service de
-livery. International experts and aid
organisations have generally been
impressed with its commitment to
organisational development and inter
-nal good governance.
Despite the almost complete absence
of official financial support, the KON
has managed to establish the physical
and institutional infrastructure for a
working commission. With some for
-eign assistance it was able to set up per
-manent office premises and hire suitable
personnel. The experience and talents of
the commissioners themselves have en
-abled the commission to develop clear
administrativeprocedures,particularly
in the critical area of case management.
They have also invested considerable
effort in developing a corporate identity
among the staff and a sense of the im
-portance of internal good governance.
The achievements of the commission
so far are a good indication of the limi
-tations and possibilities of a commission
operating within current constraints,
and of the importance of providing it
with proper powers and funding. KON
reports show that government agencies
have answered most of its correspon
-dence even though they are under no
compulsion to do so. A small study of
the ombudsman’s case files has shown
that its requests for clarification and rec
-ommendationsto government agencies
have sometimes been very helpful to
people dealing with state institutions.
The interventionof the ombudsman has
sometimes cleared obstacles for com
-plainants or restarted stalled processes
of the civil service or the judiciary. This
is not to say that all the complainants’
cases would eventually have been re
-solved in an entirely satisfactory way,
but the ombudsman has, at the very
least, started processes moving.
However, the instances where the
KON has had some effect have been in
aggrieved employee and, in particular,
having judges who have made suspect
wonderful innovation. One complainant
wrote to the ombudsman, ‘Thanks be to
God that our Republic has an ombuds
-man …’.5 At a time when progress in
governance reform appears to have
stalled, even the modest achievements
of the ombudsman should not be under
-rated. Apart from the individuals in
-volved in particular cases, the work of
the ombudsman can contribute to en
-couraging public demand for something
that is very basic but has been denied to
Indonesiansfor decades: efficient, clean
and accountable government services.
There is little sign, however, that
KON members are giving thought to
non-conventional or indirect ways of
using the limited powers they have
available. There is, for example, wide
scope for the KON to use data gathered
from complaints to build public support
for change in the processes of govern
-ment. As the number of cases continues
to accumulate they will provide a pri
-mary source for research on trends in
corruption and maladministration, for
publicising key cases, and for launching
public information campaigns about
ways to overcome corruption and bad
governance practices. In the early
months of the commission’s existence it
received good media coverage, but it has
long since slipped from the public eye.
The ombudsman needs to highlight
major cases of maladministration or cor
-ruption and prominent individuals who
might be implicated, such as heads of
government agencies and state-owned
corporations, judges or politicians, and
to work for constant media attention.
Internationally it is also common for
an ombudsman to launch inquiries or
investigations on its own initiative. Such
investigations may be motivated by a
particular individual’s complaint or by
the ombudsman’s view that an issue that
has come to its attention (e.g. through
the media) warrants investigation. They
are generally directed at instances of
systematic misuse of power by a gov
-ernment agency, or at its failure to deal
effectively or fairly with a particular
administrative problem.6For the Indo
-tion and widely publicising the results.
THEASSETSAUDITING
COMMISSION
The KPKPN was an initiative of the Ha
-bibie administration in the first flush of
enthusiasm for reformasi. Under the
mandate of Law 28/99 and Presidential
Decree 81/99, the commissionwas es
-tablished in January 2001 with the au
-thority (1) to carry out audits of the
wealth of state officials in the legislature,
executive, judiciary and state enterprises
and regional business bodies; and (2) to
receive reports of official corruption
from the public and to initiate the gath
-ering of evidence.
Internationally,a function such as this
is generally the responsibility of an anti
-corruption commission. The recently
establishedCounter-corruption Commis
-sion in Thailand regards the collection of
asset declarations by public officials as
one of its major activities.The legislatures
of many countries have laws or internal
regulations for the declaration of assets
or financial interests by members of par
-liament. Indonesia appears to be alone in
establishing a separate agency for regis
-tering information about the assets of of
-ficials in all three arms of government
and state enterprises.
PowersandFinancialResources
The powers and financial resources of
argue, however, that certain provisions
of the criminal code making it an offence
to disregard a government request or to
supply false information could be used
to prosecute officials. The commission
also does not have the power to seize
documents, to question officials or to
check bank accounts or other financial
records. The KPKPN can request clari
-fication about information provided to
it, and officials are expected to permit it
ceives the official’s explicit permission.
The chief commissioner of the
Significantly, Megawati herself has not
made any statement on the matter. In
any case, the passage of such legislation
through the DPR—let alone effective
legislation—is extremely unlikely. Inde
-pendent executive action to empower
the KPKPN would be a more believable
indication of Megawati’s intentions than
second-hand expressions of support for
changed laws.
The budget of Rp 24 billion (about
$2.5 million) for the KPKPN’s first year
of operation was insufficient for the
physical and human infrastructure nec
-essary to process the huge volume of
information received and to analyse the
data for the purposes of uncovering cor
-ruption. The commission is housed in
cramped accommodation packed with
completed and incomplete declaration
forms. Most of the commission’s staff are
occupied with routine work such as data
entry. The KPKPN does not have the
funds to hire the specialised legal, finan
-cial and investigative expertise that is
essential to making sense of the mass of
questions will arise as were suggested
above in the case of the ombudsman’s
commission.
TheOperationoftheKPKPN
The main activity of the KPKPN has
been to send out forms requesting offi
-cials to make a complete listing of their
property. It distributed25,000 forms, of
which less than half had been com
-pleted and returned more than a year
after the commission was established.7
The main use made of the information
from the forms so far is to pass it to the
press. In the case of leading political
figures, this has generated considerable
publicity. The commission has also
been able to win some media attention
for members of the government, the
DPR and regional assemblies (DPRD)
who have failed to make declarations.
17/5/01; 9/10/01; 16/11/01).
On the other hand, the KPKPN has
been to some extent a victim of the rela
-tively high profile it has achieved. Sto
-ries about officials and politicians not
filing declarations, and the fact that even
some of the most senior members of cen
-tral and local governments have not
bothered to respond to its approaches,
vestigations into the declarations of 30.
The chief commissioner announced that
he would pass on the details to the po
-lice, the attorney general’s office and the
military police if the commission’s in
-vestigations proved that the officials’
assets had been illegally obtained (JP,
1/3/02). He did not clarify how the com
-question officials or to check financial
records other than those nominated by
each official, it means very little to say
that the declarations have been verified.
A key criticism has been that the com
-mission itself, with 35 members, is too
large to make efficient use of the re
-sources available. Many anti-corruption
organisationshave claimed that its size
makes the KPKPN unwieldy in practi
-cal terms and vulnerable to political di
-vision and differences in strategic
approach. It has even been suggested
that the decision on its size was a delib
-erate ploy by interested parties to ren
-der the commission ineffective.
In theory the KPKPN could make an
important contribution to accountabil
-ity of state officials by increasing the risk
that corrupt activities might be exposed.
Public disclosure of assets and expen
-diture far beyond their stated incomes
could seriously embarrass officials, es
-pecially elected ones. The discomfort felt
by many judges over the KPKPN’s rev
-elations about under-declaration of as
-sets by members of the judiciary was
underlined when the Indonesian Judges
Association (IKAHI) complained that
such disclosures could affect judges’
morale and ‘ability to pass independent
decisions’ (StraitsTimes, 1/8/02). Other
reports revealed that the attorney gen
-eral himself had significantly under
-stated his assets to the KPKPN, failing
to mention his recent construction of a
Rp 5 billion (about $550,000) house in
Jakarta (JP, 3/10/02).
More importantly, the information
contained in declarations could, by in
-clusion or omission, provide evidence
for the investigation and prosecution of
corruption by an anti-corruption com
-mission or law enforcement agencies. If
the supply of false or incomplete infor
-mation were subject to prosecution, cor
-rupt officials could be punished without
the actual corrupt transactions having
to be proved.
MAKINGANTI-CORRUPTION
AGENCIESWORK
attracting suitable personnel to lead the
institutions themselves. But even if
these bodies were to have better pow
-ers of enforcement, increased financial
resources and improved leadership,
how would they fare in the current in
-stitutional environment? Would their
individual or combined activities be
sufficient to have any significant effect
on the pervasive presence of corruption
in Indonesia today?
For many years the study of corrup
-tion by scholars and public policy prac
-titioners was dominated by the idea
that corruption by its very nature was
not amenable either to measurement or
to systematic analysis. There were (and
continue to be) arguments that the no
-tion of corruption is a Western con
-struct and of no value in understanding
traditional societies, particularly those
with what came to be called ‘Asian val
-ues’. It was even said that corruption
could be desirable for ‘greasing the
wheels’ of government and commerce.
It was often implied or suggested that
combating corruption, particularly in
non-Western societies, was not only al
-most impossible but also unnecessary.
In more recent years a body of litera
-ture has grown up that attempts system
-atically to understand the nature and
functioning of corruption and to provide
advice to authorities in their efforts to
eliminate it. In addition to the more
scholarly material, some of this work is
a product of the attention being given
to ‘good governance’ by international
aid agencies and institutions such as the
World Bank, the Asian Development
Bank and the IMF (Lindsey and Dick
2002), a fact that has made it suspect in
some eyes (Theobald 1999). There have
been attempts to quantify international
relativities in corruption, most notably
by the international anti-corruption
NGO Transparency International (TI),
whose Corruption Perception Index re
-ceives considerable attention. The qual
-ity of data used to compile this index is
variable, and its findings are often used
crudely (especially by the media), but
TI has produced a useful tool for com
-paring countries and monitoring change
over time.
Particularly within the more policy
-oriented literature on anti-corruption
initiatives, there has been debate about
the effectiveness of institutions such as
ombudsmen and anti-corruption agen
-cies like KPKPN. Doig (1995: 151–65)
argues that anti-corruption agencies
‘may provide an effective means of pro
-moting probity in government and
protection of state income and expen
-diture’, but TI states bluntly that such
bodies ‘are more often failures than suc
-cesses’ (Pope 1999: 87).
Furthermore, it has been suggested
that anti-corruption agencies can them
-selves add to corruption, particularly
if they are, or threaten to become, ef
-fective in exposing those involved in it.
If they get close to uncovering power
-ful centres of corruption their activities
can be subverted by political interfer
-ence, and officials from the anti-corrup
-tion bodies themselves may be bribed.
Agencies can also be misused for po
-litical ends by government leaders
wishing to sully the reputationsof their
opponents, corruption by government
figures meanwhile being ignored.
Huther and Shah (2000: 12) have de
-veloped a framework for the evaluation
of anti-corruption initiatives,and argue
that ombudsmen and anti-corruption
agencies must be assessed in the con
-text of the wider political and gover
-nance environment of a particular
country. They conclude that the likeli
-hood of such institutions succeeding is
dependent on the level and pervasive
-ness of corruption in the country and
the overall quality of governance.There
is a degree of circularity in this argu
-ment, because it makes the almost self
-evident observation that if the quality
of governance in a given country was
high there would be little corruption.
But the key point is that an an ti
-corruption body will be effective only
to the extent that it operates within a
framework of accountable and trans
-parent judicial, bureaucratic and legis
-lative institutions.
Manning (1999) stresses the impor
-tance of strong political backing from all
arms of government,combined with in
-dependence from executive government
intervention, and adequate financial and
human resources. The effectiveness of
any particular anti-corruption agency
cannot be assessed in isolation from
other institutions of accountability and
law enforcement, and from the politi
-cal environmentin which it was created
and within which it operates. Anti
-corruption bodies create disincentives
to corrupt behaviour by increasing the
risks attaching to corrupt transactions,
but they cannot themselves reduce the
potential rewards of corruption (such
as those created by unaccountable mo
-nopoly control over state corporations
or bureaucratic mechanisms), and are
powerless if they are not backed by ef
-fective judicial and law enforcement
agencies.
Klitgaard (1988) argues that corrup
-tion can be understood through the for
-mula C = M + D –A (corruption equals
monopoly plus discretion minus ac
-countability): corruption is more likely
to occur when officials have monopo
-listic control over state resources
(whether physical resources like those
owned by the state oil company, Perta
-mina, and the food distributionagency,
Bulog, or administrative powers such
as those controlled by taxation, customs
and industrial licensing agencies) and
a high level of discretion over who can
gain access to those resources, while at
the same time the mechanisms for hold
-ing these officials accountable for their
actions are weak or non-existen t.
Klitgaard’s point is that there are a
number of elements to the incentives
and disincentives that lead public offi
-cials and political leaders into corrupt
behaviour, and that these elements can
be understood in largely institutional
terms, that is, not in terms of individual
morality. Thus while many officials will
resist the temptations created by sole
and unaccountable control over re
-sources, some will not. In such circum
-stances, the corrupt usually ensure that
they force out, coopt or silence the non
-corrupt, because the incentives to do this
are so great.
Conversely, anti-corruption initia
-tives are likely to be effective to the ex
-tent that they attack the institutional
incentives to corruption and maximise
the disincentives. According to Klit
-gaard (1988), a way to measure the likely
success of an anti-corruption strategy is
to ask if it will reduce monopoly and/
or reduce discretion and/or increase ac
-countability. In Soeharto’s Indonesia,
monopolies were deliberately created,
and accountabilitywas eliminated with
the conscious intention of perpetuating
monopoly and discretion (Crouch 1978;
Robison 1986; Elson 2001). Eliminating
these arrangements today clearly re
-quires a multi-faceted strategy encom
-passing reform of the practices and
institutionsthat put unaccountablemo
-nopoly power into the hands of a privi
-leged few. Such a strategy will have to
overcome subversion and open opposi
-tion from those with a vested interest in
maintaining the status quo.
Most popular and media discussion
of corruption in Indonesia does not,
however, centre on institutionalreform
and the structural underpinnings of
corruption, but on the morality of those
who indulge in corruption, collusion
and nepotism. The elimination of cor
-moral failings of individuals, and thus
can be eliminated if moral rectitude can
be fostered among public officials and
business people. This allows leaders
such as Megawati to posture on the is
-sue of fighting corruption by making
speeches imploring the country’s lead
-ers to ‘jointly uphold the rule of law, po
-litical ethics and better social behaviour’,
as she did at a meeting of her party,
PDI-P (the People’s Democratic Party
of Struggle), in January 2002 (JP,
14/01/02).
The few concrete measures taken
since May 1998 have focused on dis
-incentives, on accountability as a
mechanism to deter corrupt behaviour
through punishment. Thus the KON,
the KPKPN and indeed, if it is ever es
tablished, the Anti-corruption Commis
-sion are all designed to reduce corrup
-tion by increasing accountability, that is,
increasing the risk of exposure and pun
-ishment. Such disincentives are, of
course, an important part of an anti-cor
-ruption strategy, and a necessary tool
for preventing corruption and dealing
with its effects when it occurs. They do
not deal with the other factors in
Klitgaard’s equation, however: mo
-nopoly power and discretion. Corrup
-tion has so often been a highly
rewarding activity in Indonesia be
-cause particular people—from Soe
-harto himself to individuals such as
military officers who use their positions
to enrich themselves—have had mo
-nopoly power over state resources and
great discretion over who was able to
receive benefits from those resources.
If the institutions and procedures that
facilitate monopoly power and discre
-tion remain in place, the incentives for
corruption are likely to overwhelm the
disincentives created by anti-corruption
agencies focused on punishment. The
rewards from corruption allow corrupt
individuals to buy themselves immunity
from investigation or prosecution,or to
evade sanctions through inadequate
regulation of financial institutions or
ambiguously worded legislation. In
these circumstances, the few individu
-als who are exposed or prosecuted tend
to be ‘small fish’ without political pro
-tection, or the occasional ‘big fish’ who
falls out of favour with the ruling power
or loses out in passing political configu
-rations. Punishing the corrupt does not,
of itself, alter the conditions that make
corruption a low risk and high reward
activity. As Rose-Ackerman (1999: 162)
concludes:
An anti-corruptionpolicywillnotbe veryusefulifitleavesinplacethere -strictive lawsand cumbersomepro -cesses that producedincentives for bribery in the first place. An anti -corruptionagencyoughttobeonlyone part ofalargerstrategy thatincludes morefundamentalreformsthatsupple -mentlawenforcementprograms.
In concrete terms, this means that
many elements of an effective anti
-corruption strategy are not necessarily
directly related to corruption at all, but
to the efficiency, effectiveness and ac
-countability (in financial, procedural
and policy terms) of the full range of
state institutions. The most obvious of
these is a properly functioning judicial
system, something that is absent in In
-used to prosecute corrupt officials. That
will only happen if law enforcement
agencies are effective, non-corrupt and
willing to take on powerful figures.
This in turn is unlikely to eventuate
unless members of the political elite are
preparedto act and are supported by a
vigorous civil society.
But beyond reform of the legal sys
-tem and the police, anti-corruption ef
-forts must also embrace reform of the
institutions where incentives for corrup
-tion exist and where entrenched prac
-tices and power relations make corrupt
behaviour endemic and systemic. The
first of these is the civil service, at both
administrative and policy level. The cur
-rent civil service is process based, not
results based, and performance is mea
-sured by obedience to one’s superiors.
Recruitment, promotion and pay are
structured around control of the service
by its senior echelons. Interactionswith
the public are regarded not as occasions
to deliver services but as opportunities
to levy informal taxes. Because account
-ability is entirely internal and is hierar
-chical, individual civil servants find it
either desirable to participate in corrupt
practices or impossible to combat such
practices because promotion, pay and
position are at stake. In addition, civil
service reform concerns not just the gov
-ernment administration itself, but also
state-owned corporations (which con
-trol a significant part of the Indonesian
In these circumstances,key elements in
controlling corruption in Indonesia in
-clude enforcing the accountability of
parliamentarians and the parliament as
an institution (including the parliamen
-tary bureaucracy), and issues such as
electoral laws and laws related to the
funding of political parties and election
campaigns.
The ar gument that corruption
greases the wheels of government and
commerce is, in a sense, correct—the
functional mechanism of the New Or
-der was patrimonialism, nepotism and
corruption (Crouch 1979; Elson 2001).
McLeod (2000) likens the system to a
business franchise: Soeharto distrib
-uted privileges to selected firms and
government officials, who repaid their
superiors both financially and politi
-cally. To dismantle such pervasive net
-works and practices (assuming indeed
that the majority of Indonesians do
want to end this system) requires the
often unglamorous work of institu
-tional reform of government and the
corporate sector.
The establishmentof agencies explic
-itly designed to combat corruption is a
necessary part of such reform, because
bodies like the KON and KPKPN are
mechanisms of accountability that pro
-vide one of the disincentivesto corrup
-tion. But anti-corruption agencies not
only fail to tackle the issues of incentives
and supports for corruption:as bureau
-cratic institutions they are themselves
subject to the same problems that beset
the state apparatus as a whole, includ
-ing weak management, chronic under
-funding and an absence of systems of
recruitment, training, promotion and
accountability that can produce quali
-fied professional staff as distinct from
rent seekers.
The essence of the problem confront
-ing the KON and the KPKPN is that
they are isolated institutionswhose for
-mation has not been part of a compre
-hensive anti-corruption strategy. Their
activities have received only fitful pub
-lic, media and government attention,
because their limited powers and re
-sources make it impossible for them to
mount a serious challenge to the
sources and perpetratorsof corruption.
Yet any efforts to strengthen these agen
-genuinely committed to making their
agencies work, but as long as they re
-main isolated and irrelevant to wider
government programs, their efforts will
largely be frustrated.
NOTES
1 Thisassessmentoftheombudsmanisin -fluencedby Manning (1999), wholists fiveconditionsforaneffectiveombuds -man: politicalsupport fromthe three arms ofgovernment, includingthebu
-reaucracy; adequate resources; good
public perception;functional compe -tence; andanappropriate placewithin existingarrangementsforadministrative regulation.
2 TheofficehadbeenleasedbyUnilever,
thecompanyforwhomKONmemberSri
Uripwas anexecutiveformanyyears. Because ofthese personal connections, the landlordagreed toletthepremises totheombudsmanataconcessionalrent. 3 ThePartnershipforGovernanceReform inIndonesiaisaconsortiumofinterna -tional donors, initiated bythe United
Nations Development Programme
(UNDP),theWorldBankandtheAsian
Development Bank (ADB), and sup
-portedbymajorbilateraldonorssuchas theUK,theNetherlands,Australiaand theUS,whoseobjectiveistoassistIndo -nesian effortsto bringabout political reform.ItisoverseenbyalargelyIndo -nesiangoverningboardco-chairedbya former minister inthe Wahid govern -ment, Erna Witoelar, and the Islamic
scholar Nurcholish Madji d (www.
partnership.or.id).
4 Interview withSunaryatiHartono.This viewisconsistentwiththeideathatlow salariesareamajorincentivetocorrup -tionin Indonesia, andwasbehindthe
grantingoflargesalaryincreasestohigh levelcivilservantsandjudgesduringthe Wahidadministration.Thereis,however, littleornoevidencethatthismeasurehas hadany effecton corruptioninthe bu -reaucracyorthejudiciary.Inthecaseof theombudsman,itwouldseemthatits verylimitedpowers wouldmakeitan unattractive target forthoseseeking to purchaseinfluence.Nevertheless,theau -thorwastoldthatKONstaffhad been offered‘gifts’,perhapsanindicationofthe entrenchedpublic expectation that the provisionofanygovernmentservicemust beaccompaniedbyextrapayments. 5 LettertotheKON,thankingitforitsin
-terventioninacomplainant’scase.
6 The Australian ombudsman, for ex
-ample,publishedareportinMarch2001 onpracticesatadetentioncentreforille -galimmigrantsinAustralia,followinga publiccontroversy about alleged mis -treatmentofdetainees.InFebruary2001 italsopublishedareportintotheappli -cationofaparticulartaxregulation by theAustralianTaxationOfficefollowing acomplaintbroughttotheombudsman onbehalfof3,000peopleaffectedbythe regulation.
7 InaninterviewwiththeauthorinJuly 2001,membersoftheKPKPNsaidthat 25%offormshadbeenreturned,andby June2002 it wasreported that 31%of formshadbeen returned(‘Audit com -missionseekshelpfromdefiantmasters’, JP,14/6/02).
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