Tue, 22 Jul 2008
From: The Jakarta Post
By The Jakarta Post, Jakarta
Ten years into the reform movement, many businesses in the country are still engaging in corruption to ensure their financial success.

Money for bribes remains a variable in a company's production costs, spent to ensure safe and timely delivery of goods, obtain business permits or win government projects, business players claim.

At a workshop hosted by the Center for Strategic and International Studies (CSIS) on governance problems, noted businessman Noke Kiroyan admitted such practices were considered "business as usual".

"The most common practice is bribing government officials to win bids for projects," Noke said.

Spending capital on bribery, he said, directly affected the company's finances and led to lower production capacity and quality.

"Private companies such as these tend to provide low quality services and goods, because they have already used much of their resources to bribe officials," he said Friday.

However, he added, those accustomed to the practice were now awake to the increasing number of bribery cases uncovered by the Corruption Eradication Commission (KPK) through its ability to tap into phone conversations.

The most recent example was on July 10, when the KPK detained lawmaker Bulyan Royan, a member of the House of Representatives Commission V, which oversees infrastructure and transportation, for allegedly accepting bribes worth Rp 120 billion (US$13 million) in a patrol boat procurement deal for the Transportation Ministry.

The next most common practice, Noke said, was bribing customs officials to ensure safe and timely delivery of goods through national ports.

"I hope all officials accepting bribes are punished like those at the customs office in Tanjung Priok port," he said.

A raid by the KPK on the Tanjung Priok customs office on May 30 reportedly resulted in a 90 percent downturn in activity at the port the following week.

During the crackdown, the KPK found several envelopes, each containing Rp 500 million. The Finance Ministry followed up on the KPK's findings and demoted four custom officials responsible for verifying documents.

John Prasetyo, vice chairman of the Indonesian Chamber of Commerce, told The Jakarta Post Sunday that bribery stemmed largely from the lack of clarity in the country's regulatory system, clearly manifested in the many conflicting central and regional regulations.

"There are indeed some improvements 10 years after the reform agenda started in 1998 following the fall of Soeharto, but some of the systems in place now also produce new corruptors," he said.

Subjecting everyone to the KPK's investigations, he said, was not the solution to combating corruption.

"The culture of corruption is still there, it can vanish only when the rule of law and the regulatory quality reaches a certain level," he said.

Frenky Simanjutak of Transparency International Indonesia said the government should also be on the lookout for corruption between private companies and corruption in the relationships between companies and their shareholders.

"Complications arise if company executives misuse shareholder funds for their own personal benefit," he said.

He added such a case occurred at U.S.-based energy company Enron Inc. in 2001.

"The company made a fictitious financial report to attract more investors to buy its shares. When the executives had already collected a great amount of funds, they used them for their own interests," he said.

He urged the government to begin focusing on eradicating these kinds of practices to protect the public interest. (ewd)



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