Indonesia keeps sliding the wrong way on corruption

Transparency International released its annual Corruption Perceptions Index (CPI). Sadly, for the third time in four years, Indonesia has fallen backwards.

 

This is now clearly a trend, not an aberration. While the actual score remained stable at 34, Indonesia’s position globally slipped a further five positions to 115 out of the 180 countries covered. As someone who has observed and worked on integrity promotion and corruption prevention issues beginning at the start of the Reformasi era, I would like to share some thoughts on what is unfolding.

 

The above chart plots Indonesia’s progress and regress in terms of its global corruption rating since 1998. All countries included in the CPI are represented by a blue dot while Indonesia is shown as a larger red diamond. The countries to the left are those perceived as least corrupt while those at the right end are perceived as most corrupt.

In 2019, Indonesia achieved a truly remarkable milestone. For the first time, the country entered the top half of global rankings. Those results reflected the fruits of a generation of hard work and reform. Sadly, Indonesia is now showing signs of a systemic breakdown in this commitment and capacity to even defend, let alone strengthen, its systems of integrity to suppress corruption.

Indonesia’s transformation from being close to the bottom of the world standings to entering the top half began shakily at the start of the Reformasi era. This is quite common for a country undergoing such a profound political transition as it takes some time to craft an effective counter-corruption strategy and approach to implementation. The example of Georgia in Eastern Europe in the wake of its 2003 Rose Revolution indicates this dynamic. In the three years after the revolution the country’ rating actually went backwards, however, by 2006 a new and positive trajectory was established and indeed sustained.

The chart below offers a comparative view of the evolution of the CPI rating and ranking of Indonesia among its regional neighbours during this same time.

In 2019 Indonesia had risen to the point where it was beginning to close in on Malaysia and already standing above the other members of ASEAN aside Singapore (Brunei is not covered by Transparency International’s CPI).

What supported Indonesia’s rise?

To understand how Indonesia is now confronting its current fall from grace, it may be valuable to learn about the key steps and experiences leading up to that historic result in 2019.

A big step forward was made with the passage of a powerful Corruption Eradication Commission law at the end of 2002. The proposed Commission would be empowered to both investigate and prosecute while dedicated ad hoc anti-corruption courts, including non-career judges, would be established to adjudicate cases. The Corruption Eradication Commission was officially established at the end of 2003. Its five commissioners included people of quality and integrity.

The commission was also tasked with receiving and managing declarations of assets by elected officials and senior civil servants.
On this last task, I can attest some personal experience into the professionalism of the commission two years after it was established.

One of the tasks I held during the four years I worked for the Minister leading the post-Indian Ocean Tsunami Agency for Rehabilitation and Reconstruction (BRR) was to set up and initially lead a dedicated Anti-Corruption Unit within the agency. In that position I saw it as key to show leadership on any matter related to supporting the nation’s anti-corruption work. Despite being a foreign civil servant with the UN system, I decided to submit my own wealth declaration to the KPK.

What was my experience? For a start the staff at the KPK did not laugh or look confused questioning why a silly bule (white fella) was seeking to offer such a document. They received me politely and the official gave a cursory check to see if it was filled in correctly, then indicated they would contact me once they had investigated.

A week later they contacted me to seek clarification on some land and property. Once answered, they later responded and indicated that they had endorsed it and had published it in the State Gazette and then sent me a copy. In all subsequent engagements in our anti-corruption work I found KPK officials to operate with the highest standards of probity and professionalism. They would not even accept a glass of water when we met.

The founding commissioners immediately embraced the well-established global approach to confronting corruption via a combination of enforcement, prevention and education. Enforcement focuses on investigating and prosecuting those deemed to have engaged in corruption.

Prevention focuses on ‘fixing systems’ – essentially to make engagement in corrupt practices much more difficult or simply not worth the risk. Education focuses on ensuring not only those working in government agencies but also their external partners and the wider public are aware of the dangers of corruption and systemic changes to avoid falling foul of them.

However, they did much more than that

Firstly, the commissioners worked to establish strong systems of internal control and integrity. This was especially the case given the law obliged the KPK to recruit investigators from the police and prosecutors from the Office of the Attorney General – both agencies often seen as suffering from cultures of poor integrity. Creating a new esprit de corps grounded in a sense of dedication to high standards of professional conduct was further supported through creating strong and bluntly worded codes of conduct that offer little ambiguity in interpretation.

Secondly, the commissioners set about building close and productive working relationships with civil society. They even invited a civil society organisation to coordinate international donor efforts to support the development of the KPK.

Within a couple of years, the KPK developed a reputation as an agency where there was no ‘wiggle room’ on potential cases and where increasingly senior people were held to account. Not surprisingly, not everyone was happy with such arrangements and the first push back began. The celebrated corruption buster from Nigeria, Nuhu Ribadu, explained the dynamics as “when you fight corruption, corruption fights you”.

In the case of the efforts to push back against the KPK, this was first evident in 2009 with the famous gecko versus crocodile case. These efforts were unsuccessful as the public rallied and literally placed themselves between the office of the KPK and the police officials who were dispatched to apprehend some people from the commission.

The KPK did face a number of internal challenges including the conviction of one of its chairs on a salacious case of murder. Nonetheless its internal systems remained robust enough for it to maintain its work and standards. This included a case where the then Deputy for Investigation (Police General Firli Bahuri), the senior most investigator of the KPK, was investigated internally for breaching the commission’s code of conduct on contacting potential suspects. Having been found in breach he was then promptly dismissed from the KPK and returned to the police.

Then came the changes in 2019

Efforts to “rein in” the KPK did not stop in 2010, but successive governments and parliaments were wary about facing the wrath of the electorate that was still very supportive of the KPK and suspicious that any effort to amend the law would weaken the institution. Amendments to the law were finally endorsed late during the lame duck period after the 2019 elections.

This was the period between the elections of April 2019 and the inauguration of the new parliament in October of that year. During this period the parliament included MPs who had retired at the elections plus those who had lost their seats. In essence they were free to continue legislating without political accountability. Despite major public protests about the proposed changes to the KPK law, the amendments were passed during this time.

The government and the parliament also endorsed the names of the five commissioners to lead the KPK from late 2019. Surprisingly the new chair appointed would be the same police general, Firli Bahuri, who had been dismissed for unethical behaviour the year before.

An early indication of the changes emerged when the new commissioners set about weakening their working links with civil society. They also set about changing and replacing many of their investigators, especially those who had gained a reputation as the “uncorruptibles”. The new leadership said the revisions to the KPK law meant that all staff had to be regularised as civil servants.

Over the next couple of years, data from the KPK itself indicated that there was a significant reduction in the number of cases prosecuted.

Transparency International’s Indonesia Chapter has also observed some of these breaches in integrity standards at the top of the KPK including recording that the controversial chair, General Firli Bahuri now has been declared a suspect by the police in a case of attempting to extort a KPK suspect namely, the former Minister of Agriculture.

President Jokowi has now dismissed General Firli from his position as chair and commissioner of the KPK.

But the damage has been done. And that’s not all.

Ahead of the 2024 elections, the outgoing President has been challenged by political and civil society about what are seen as attempts to retain influence beyond his term. The most notable case relates to a Constitutional Court verdict in which the Chief Justice was accused of a conflict of interest.

The now former Chief Justice is the brother-in-law of the president and at the time was part of a 5 to 4 vote to reduce the age limit for a presidential or vice-presidential candidate. The petitioner made eight separate references naming the President’s son, and thus nephew of the Chief Justice, as a candidate who would be eligible to run for higher office if the age limit was lowered from 40 to 35.

The President’s son is 36. Within a day of the favourable verdict, presidential candidate Prabowo Subianto named the President’s son to be his vice-presidential running mate. To be sure, the furore created by the chief justice’s role in the case forced the creation of a Constitutional Court Honour Council that found the chief justice to be in serious violation. He was stripped of his title and is ineligible to seek or hold the chief justice position.

For his part President Jokowi has said he reserves the right to “meddle” (cawe-cawe) in the elections to ensure the best election outcome.

Another election-related deviation from earlier practice, which was applied by successive administrations up to and including the first Jokowi Administration in the lead up to the 2019 election, was that ministers seeking to be elected to Parliament retired as ministers and were replaced by acting ministers.

This principle has not been applied in the lead up to the 2024 elections with even presidential and vice-presidential candidates remaining in the Presidential Cabinet.

Measuring the CPI to see what is causing the regression

The Corruption Perception Index is an amalgam of several different indices. In the case of Indonesia, the indices consist of eight global metrics. The following chart outlines the progress and regress of each metric.

 

Of some concern for the perspective of the investors and the business community is that the sharpest falls in recent years has been from the metrics focused on political risk, namely PRS International Country Risk, PERC Asia Risk Guide.

It would be convenient to suggest this is just related to elections but in the earlier election years of 2009, 2014 and 2019 Indonesia actually strengthened its position on global standings. This suggests that other factors are being reflected as risk. There has also been a slip in the IMD World Competitiveness Yearbook.

Drilling inside a little further by looking inside the World Justice Project Rule of Law Index there are some revealing findings.

The World Justice Project (WJP) examines eight issues. The table identifies both the global ranking of Indonesia among 142 countries covered by the as well as the country’s rating for each metric calculated by the WJP.

Notably the weakest of all positions is in the absence of corruption.

Beyond the 2024 elections

Given these unfortunate developments, the issue of corruption has unsurprisingly emerged as a theme in the 2024 election campaign.
The presidential debates have included two with a focus on corruption, one hosted by the General Elections Commission and another that engaged the Corruption Eradication Commission.

Transparency International Indonesia provided a summary of the candidates’ stated commitments on corruption during the debates.

A summary of the candidates’ suggestions is below:

Candidate Anies Baswedan

• Improve Indonesia CPI standing from 34 to between 44 and 46 by 2029.
• Strengthen corruption prevention through a National Integrity System that covers strategic areas such as military purchases, infrastructure, state owned enterprises and state revenue services, natural resources, basic foods to illicit activities like gambling and drugs.
• Enhance accountability of the Indonesian National Police including strengthening the supervisory capacity of the Police Commission and the Ombudsman.
• Re-empower the KPK as an independent commission.
• Pass the draft law on seizure of assets.
• Enforce merit in appointment of officials.
• Rewards for ‘whistleblowers’ or those who report or reveal corruption.
• Move to criminalise illicit enrichment and influence peddling.
• Optimise the use of the Wealth Declarations.
• Encourage the passage of a draft law on political financing.
• Facilitate civil society to support corruption eradication and include them as strategic partners of the government.
• Include the culture of anti-corruption in the national education curriculum.

Candidate Prabowo Subianto

• Strike a balance between corruption prevention and enforcement.
• Organise a system for funding and costing of politics.
• Make the KPK a ‘centre of excellence’ for corruption eradication that is preventive through education directly to primary and secondary schools and the tertiary sector.
• Guarantee of no presidential or government intervention into the KPK.
• Strengthen programs of anti-corruption for the young generation.
• Prioritise corruption eradication in sectors that impact most directly on the lives of the public including agriculture and villages, fisheries, education, health, forestry, natural resources and labour issues.
• In the debate he also made frequent references to raising the pay of senior officials such as judges.

Candidate Ganjar Pranowo

• Accelerate support for information technology and strengthen the KPK together with the police and Office of the Attorney General to synergise and harmonise their work.
• Impoverish corruptors and seize their assets through passage of the draft law on the seizure of assets.
• Increase public funding for the parties to Rp 1 trillion (AUD 100 million) to focus the work of political parties including obligations for them to be transparent and accountable and audited by the State Audit Agency, BPK.
• Imprison corruptors at Nusa Kambangan Jail, a maximum security corrections facility at Nusa Kambangan Island, off the south coast of Java.
• Assert the importance of leaders and officials of living modest lifestyles and demonstrating integrity and enforcing codes of ethics.
• Meritocracy within the bureaucracy to prevent the massive prevalence of buying and selling of government jobs.
• Accelerate budget, slash corruption, collusion and nepotism, clean the bureaucracy with digitalisation.
• Implement the recommendations of the Law Reform Acceleration Team with reform of the police.
• Digitalisation of the financial system – cash, budgeting, planning and transparency in the budget.
• Strengthen the Wealth Declaration system.
• Strengthen the whistle blowing system and protection for those who report corruption.
• Minimise officials being appointed to multiple concurrent positions.

Warning signs

The nation will await a response from the successful candidate once he and his vice-presidential running mate are inaugurated on 20 October 2024.

But the warning signs for Indonesia are clear, as are the dangers. Further slippage will add to the costs of doing business, notably the costs of capital given the presumed added risks of operating in an environment perceived to be more corrupt than in the recent past.

The more substantive costs of corruption include the rupturing of the social fabric as distrust and cynicism emerge as people see a widening gap between the way systems and procedures are supposed to operate and how they actually operate.

Under these circumstances people often retreat into primordial networks (ethnic, religious or familial) as these are presumed to be more reliable and trustworthy than the formal systems of the state.

Feature image by Indonesia Corruption Monitor and Instagram