Is Indonesia’s anti-corruption reform slipping?

Simon Butt / No Comments Share:
An Indonesian policeman performs flag attraction ahead of the anniversary of the 72nd Indonesian Independence Day in Jakarta, Indonesia, Aug. 15, 2017. The anniversary of Indonesian Independence Day falls on Aug. 17. (Xinhua/Veri Sanovri)

Until July 2019, Indonesia’s Anti-Corruption Commission (KPK or Komisi Pemberantasan Korupsi) had not, since its establishment in 2003, lost any of the hundreds of cases it brought to full trial. This was a remarkable achievement in a country renowned for entrenched and widespread corruption at the highest levels.

On 11 July 2019, the KPK’s record was broken when a three-judge Supreme Court panel decided to acquit Syafruddin Arsyad Temenggung, former chairperson of the Indonesian Bank Restructuring Agency. He was convicted of corruption and sentenced to 12 years’ imprisonment by the Jakarta Corruption Court for discharging a debt owed by businessman Sjamsul Nursalim, who received Bank Indonesia Liquidity Assistance funds after the Asian Financial Crisis.

The court appears to have accepted that Nursalim surrendered assets to the state to repay the funds but overstated their value, causing state losses of over US$300 million. This decision was appealed to the Jakarta Provincial High Court, which increased his prison sentence to 15 years. Temenggung then appealed to the Supreme Court. The delay by the Supreme Court to release its judgment publicly suggests that it may have announced the result before finalising its written reasons, under pressure because Temenggung’s formal period of detention had almost expired. Yet Supreme Court officials have recounted the essence of the decision to the media. Two out of three judges acquitted Temenggung.

According to media reports, each judge classified Temenggung’s acts differently. The two judges in the majority appeared to issue separate decisions, with one holding that Temenggung’s acts constituted mere administrative errors and another deciding that the case was civil and so should not have been treated as criminal. The dissenting judge held that his acts were criminal and constituted corruption.

Various commentators have suggested that the decision is unusual because of the diverging views of the three judges and the overturning of findings of corruption in the lower courts. These statements indicate some form of impropriety might have taken place in the decision-making process. Of course, without proper substantiation, these suggestions are mere conjecture.

Media reports did not explain whether any of the Supreme Court judges found Temenggung to have personally benefited from his actions. Temenggung has always claimed he performed in line with a decree issued by former president Megawati that allowed fund recipients to be released from full repayment obligations. Temenggung’s lawyers claim that prosecutors were never able to prove that he obtained any benefit (although releasing the debt clearly benefited Nursalim) and maintain that he was simply ‘doing his job’. Temenggung’s culpability might not be as clear cut as the KPK and lower courts have suggested.

His case raises one of the more problematic aspects of Indonesian corruption law: a finding of corruption requires potential loss to the state by means of an illegal act, but does not require that the defendant intended to enrich him or herself, or another person. This definition punishes government officials for making mistakes causing financial loss to the state, rather than for stealing from the state.

The KPK itself and reformists see this case as a major blow to the KPK. This is partly because the case is the KPK’s largest in monetary terms, involving more than twice the alleged state loss than its previous largest case — the electronic ID card scandal which allegedly involved over US$150 million in state losses. Any chance of recovering the US$300 million is now slim, particularly given that the KPK may not be able to appeal the decision.

But the significance of this acquittal is that it may indicate that attempts to undermine the KPK by politicians and police have borne fruit, which implies, rightly or wrongly, that the KPK’s reputation and power might be slipping. This could put the KPK’s very existence in jeopardy if it depletes the KPK’s reserve of public trust, which is the main force protecting it from political interference and attempts to institutionally weaken it.

Institutionally, the KPK is particularly vulnerable at present. A selection panel, members of which are said to be close to the national police, is currently working its way through a long list of nominations to replace the five current commissioners whose terms expire at the end of 2019.

Politicians who fear KPK investigation themselves may use this case to install ‘sympathetic’ commissioners, citing the need to overhaul the commission in light of the failure this acquittal is taken to represent. This is a serious threat given that the KPK’s performance has long been associated with the integrity and determination of its commissioners.

The case also highlights the significance of former Supreme Court judge Artidjo Alkostar’s retirement earlier this year at the mandatory age of 70. For many years he handled the lion’s share of corruption cases appealed to the Supreme Court. He had no sympathy for those appealing their corruption sentences and became notorious for increasing sentences (sometimes by two-fold) and never acquitting. If Temenggung’s appeal had come before Alkostar’s retirement, an acquittal would have been very unlikely.

The Temenggung case may be the first indication that the KPK can no longer rely on the Supreme Court to uphold anti-corruption convictions, as it had previously done almost routinely.

The KPK has become quite accustomed to setbacks and attacks. Politicians have long threatened to disband it or to reduce its powers. Many of its commissioners have been spuriously charged with criminal offences brought by police at the behest of people the KPK was investigating. Some of its personnel have even been attacked — for example, perhaps its best investigator, Novel Basewedan, lost an eye in an acid attack and a commissioner had Molotov cocktails thrown at his house.

In this context, Temenggung’s acquittal, though significant, is relatively minor. The KPK is unlikely to be deterred by it. Presuming that the new commissioners are as dedicated and skilful as those currently serving, the KPK’s resolve to pursue high-level corruption convictions might become even stronger.

Simon Butt is Professor of Indonesian Law and Director of the Centre for Asian and Pacific Law, the University of Sydney. This commentary first appeared in East Asia Forum.

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