Experts doubt RI's good corporate governance drive<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
The drive to implement good corporate governance in this country
\ncould stumble due to the lack of government political will and a
\nmalfunctioning legal system, according to an expert.<\/p>\n
\"There is no punishment for those practicing bad corporate
\ngovernance here,\" said Centre for Strategic and International
\nStudies (CSIS) economist Tubagus Feridhanusetyawan during a
\nworkshop on good corporate governance.<\/p>\n
He said that the government had a tendency to bail out failed
\ncompanies and banks that had been poorly managed and corrupted by
\ntheir managers or owners, but declined to punish those
\nresponsible. He said this was creating a bad precedent.<\/p>\n
He said this was very different from the situation in the U.S.
\nwhere the government moved swiftly to investigate and punish
\ncorporate cheaters as exemplified by the high profile Enron
\naccounting fraud.<\/p>\n
\"Unlike in the United States, the necessary adjustments have
\nnot taken place in Indonesia, even after the 1997 crisis,\"
\nTubagus said.<\/p>\n
Implementing good corporate governance was an essential part
\nof the effort to improve investor confidence, a crucial
\ningredient for helping the country to fully recover from the
\ndevastating impact of the 1997 economic crisis.<\/p>\n
\"Good corporate governance can send good signals and shore up
\nconfidence for investors in the financial markets,\" said another
\nCSIS economist, Mari Pangestu.<\/p>\n
She said that was important to implement good corporate
\ngovernance particularly in the weak banking sector, which has
\nbeen seen as one of the main causes of the late 1990s crisis.<\/p>\n
The move by the government to free from prosecution the former
\nbank owners who had violated banking regulations in the past and
\nmisused state funds has been seen by many as a bad example for
\nthe creation of a healthy banking system in the future.<\/p>\n
The courts have also been criticized for freeing former bank
\nowners who have accused of misusing state funds.<\/p>\n
Meanwhile, analyst Sofyan Djalil said that a malfunctioning
\nlegal system could even provide incentives for bad companies to
\ncontinue their corrupt practices.<\/p>\n
\"If the legal system is not effective, there's no punishment
\nsystem which could deter bad companies from committing wrongdoing
\nin the operation of the company,\" he said.<\/p>\n
He added that such a situation could even force good companies
\nto violate good business ethics.<\/p>\n
He pointed out as an example that one good manufacturing firm
\nwas forced to bribe customs officials in order to be able to pick
\nup imported raw materials or equipment from the port as
\nscheduled.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/experts-doubt-ris-good-corporate-governance-drive-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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