New Law Hamstrings Indonesia’s Graft Watchdog

Indonesia's powerful anti-graft agency, the Corruption Eradication Commission, has already begun to feel the impact of a revised law that went into effect on October 17, with at least three major cases involving powerful politicians expected to go into the waste bin, leaving many lawmakers and their allies unindicted.

The three alone total losses to the Indonesian treasury of the equivalent of US$1.032 billion. They are a long-running case over corruption in the issuance of new smart identification cards with losses of Rp2.7 trillion (US$192.3 million), the Bank Indonesia Liquidity Assistance (BLBI) scandal over money paid to 48 banks at the height of the 1998 Asian Financial Crisis, Rp4.8 trillion (US$341.8 million) and the long-running Bank Century bailout scandal, Rp7 trillion (US$498.7 million).

Other cases relate to the so-called “oil mafia” as well as mining and plantation corruption, forestry and others causing large financial losses.

The biggest roadblock to reform is a provision that requires an “investigation termination warrant (SP3)” if the KPK fails to handle cases within a period of two years of opening them. The provision complicates the handling of complex and cross-border corruption cases, which often take years.

Students took to the streets in several cities on October 28 to demand that President Joko Widodo issue a Perppu or letter in lieu of legislation reversing the revised law. However, Constitutional Law Expert Bivitri Susanti said she sees little chance given the fact that 10 days have passed since Jokowi, as the president is known, was inaugurated for his second term.

"The possibility is small,” Bivitri said. “But legally it is still possible because issuing a Perppu has no time limit."

The government and parliament, with the acquiescence of the president, hustled the new law through the legislature in just 13 days. According to the Center for Indonesian Law and Policy Studies (PSHK), an independent research institution, the revision of the law violated procedure because it wasn’t included in the legislative calendar (prolegas), didn’t involve the KPK and was rushed through record time largely without debate. The law contains points that are almost certain to weaken the KPK's function.

The head of the KPK Employee Organization, Yudi Purnomo, said the agency is now full of doubt over its ability to perform its functions, partly because of the absence of implementing regulations, for instance over the formation of a new Supervisory Board with jurisdiction over the agency.

"The ratification of the new law is very influential on the performance of the KPK because it causes uncertainty," said Purnomo. "In this situation, the beneficiaries are the corruptors, not the KPK."

The agency officially set out 26 points of problems that could weaken it, including opaque language that creates the risk of lawsuits against employees regarding wiretapping. The KPK, it says, must coordinate with “related parties” but it is unclear who the related parties are.

Other uncertainties have made the agency unsure whether it can act before the Supervisory Board is formed, because it raises the potential that employees and the agency itself could be sued back.

"The function of the supervisory board is very essential. They will become a very strong party because they can control the KPK," Purnomo said.

The Judicial and Legal Monitoring Division of Indonesian Corruption Watch (ICW), Kurnia Ramadhana, agreed that the SP3 time limit could make it difficult to handle complicated cases, making the agency vulnerable to pressure.

"There are more than 10 major cases that were implemented by the KPK before 2017 and it must be understood that it is not appropriate to provide deadlines because each case has a different level of complexity," Kurnia said.

The new law, Kurnia added, is expected to make it harder to conduct sting operations because wiretapping to search must go through the Supervisory Board's permission. "The process is too bureaucratic and not fast."

Although various efforts continue to be made to weaken the KPK, no employees have left as yet, Purnomo said, and continue committed to carrying out their duties. Other sources, however, have told Asia Sentinel some investigators are already searching for positions elsewhere.

"Basically the KPK is not against revisions to the law, but we asked to be involved in its drafting," he said. He held out hope that “the president will immediately issue a Perppu to save the KPK and meet public expectations for fighting corruption" despite the lack of action from the palace.

Presidential expert staff member Ali Mochtar Ngabalin called the topic “finished. (Ask) about another topic," he said. He told local media that the president believes the new law will actually strengthen the agency and advised parties who did not accept the enactment of the act to sue in the notoriously corrupt Constitutional Court.

The KPK is the country’s most respected public institution. It has gone after political party leaders, ministers, members of parliament, regional heads, businessmen and entertainment figures. Therefore, the pressure for the president to strengthen the institution continues from various parties including academics, activists, and students.

"If the Perppu is issued, this could raise three possibilities,” said the PSHK’s Bivitri. “The Perppu returns the KPK to its original position, the delay of the enactment of a new law for two years, and the last is there is a revision, but the articles guarantee the KPK remains independent," said Bivitri, who also co-founded the PSHK.

Bivitri argued that the chances of saving the KPK through judicial review in the Constitutional Court are small because of the many uncertainties including the difficulty of material evidence and the possibility of the impartiality of judges – which she said isn’t favorable to the KPK.

"If the Perppu is not issued and the new law remains in force, it can be predicted that the KPK will be very weak, so it will only focus on prevention," she said.

While since its inception the KPK has been equipped potent tools both in the investigation and prosecution processes in court so that its functions are effective, "now the authority of that action has been removed,” Bivitri said. “For example in the case of confiscation, search and wiretapping, all must obtain permission from the supervisory board. That alone has greatly weakened the KPK because it is very likely that the permit won’t be granted."

Bivitri said she suspected the House of Representatives’ efforts to weaken the agency succeeded because “Now the parties are very solid in supporting the revision of the law, including the PDI-P, headed by Megawati Sukarnoputri, and Jokowi himself. This is partly because all political parties have members that have been arrested by the KPK."

Bivitri said she suspects Jokowi was told the KPK is hampering investment and economic growth, even though the reason is baseless. "Many economists have stated that this is wrong. In fact, the economy will collapse if corruption eradication decreases,"

In addition, Jokowi is basically powerless to determine the policy direction of the PDIP, which supported the revision of the law.

"Many PDIP members have been arrested by the KPK, and there are several cases that have the potential to ensnare their elites," Bivitri said. For example, the imprisoned former Speaker of the House Setya Novanto in his trial over the smart ID card case named Puan Maharani, the daughter of PDIP chairman Megawati, and Pramono Anung, now Cabinet Secretary, had received US$500,000 respectively in the case.

Puan and Pramono have denied the allegations.