Integrity pact for defense procurement system<\/p>\n
Andi Widjajanto
\nJakarta<\/p>\n
The international arms market is the main source for
\nIndonesia's acquisition of defense systems. This arms transfer is
\nmostly funded by export credit facilities. The existence of
\nexport credit allocations for the procurement of armaments
\nsystems requires a political regulation, especially to guarantee
\nthat export credit allocations are regarded as a transitional
\nfunding mechanism.<\/p>\n
In 2005, the minister of defense introduced Decree No.
\nSKEP\/01\/M\/I\/2005 on guidelines for the procurement of military
\ngoods\/services using export credit facilities for the Ministry of
\nDefense and Indonesian Military (TNI). This decree described in
\ndetail the purchase process, beginning with the procurement
\nplanning process and ending in the delivery of the armaments
\nsystem, for equipment purchased through export credit schemes.<\/p>\n
The decree annulled Ministry of Finance Regulation No.
\n571\/KMK.06\/2004 on technical guidelines on completing 2005 budget
\nimplementation form, which explicitly prohibited the use of
\nexport credits for the procurement of military equipment systems
\nand agricultural commodities.<\/p>\n
The contradiction of these two regulations should be abolished
\nby stating that export credits are a transitional financial
\nmechanism, and by creating a financial mechanism for procurement
\nof armament systems that gradually reduce the proportion of
\nexport credits used for such procurements.<\/p>\n
The Ministry of Defense decree also regulated an integrity
\npact, defined as a "letter of statement signed by the user of
\ngoods\/services, procurement committee and interdepartmental team
\nand provider of goods\/services declaring resolution to prevent
\nand not to commit collusion, corruption and nepotism in the
\nprocurement of military goods\/services".<\/p>\n
The integrity pact is the rationalization of the
\nanticorruption movement in Indonesia. Its objectives are, among
\nothers, to prevent officials, commission members and secretariat
\nemployees from receiving bribes, to assist in increasing public
\ntrust in the procurement of services and goods, and to ensure the
\nquality implementation of programs with appropriate logistical
\nsupport in aspects of quality, timing and cost.<\/p>\n
At least three parties must sign an integrity pact for the
\nutilization of defense export credit facilities.<\/p>\n
The first is the user of the goods\/services, in this case the
\nMinistry of Defense.<\/p>\n
The second is the supplier of the goods\/services, who may have
\nbe the manufacturer of the military goods\/services, the foreign
\ndistributor, the regional vendor officially appointed by the
\nmanufacturer or those capable of providing military
\ngoods\/services.<\/p>\n
The third is the procurement committee and the inter-
\nministerial team, which is directly chaired by the minister of
\ndefense. It is responsible for all processes in the acquisition
\nof armaments using export credit facilities. This shows the
\nminister of defense has succeeded in creating a mechanism
\nintegrating procurement processes in the Ministry of Defense and
\nTNI Headquarters.<\/p>\n
It also shows that the principle of civilian supremacy is
\nbeing implemented by putting officials from the Ministry of
\nDefense in control of various armament acquisition processes
\nusing export credit facilities.<\/p>\n
However, a major problem arising from armament procurements
\nusing export credits is that the process is handled with an ad
\nhoc project organization.<\/p>\n
A solution to be considered is the creation of a Defense
\nProcurement Agency under the Ministry of Defense, directly
\nresponsible to the minister of defense. The agency should be
\ngiven full authority to implement all processes of armaments
\nacquisition.<\/p>\n
The agency would also be expected to underline the central
\nrole of the ministry in the procurement of armaments systems and
\nstrengthen the application of transparency and accountability
\nprinciples in the procurement of armaments systems.<\/p>\n
It would be more effective if the ministry adopted the
\nOrganization of Economic Cooperation and Development's
\nantibribery mechanism adopted on Feb. 15, 1999, by OECD members
\nand Argentina, Brazil, Chile, Bulgaria, Estonia and Slovenia.<\/p>\n
This instrument evolved from four antibribery guidelines set
\nby the OECD, including the Action Statement on Bribery and
\nOfficially Supported Export Credits (2003), and the Revised
\nSurvey on Measures Taken to Combat Bribery in Officially
\nSupported Export Credits (2004).<\/p>\n
The OECD's antibribery mechanisms related to export credit
\nfacilities could be used by the Ministry of Defense to create
\noperational instruments for use by officials in the military
\ngoods\/services procurement organization to prevent bribery
\nattempts. The operational instruments could also be made into an
\nintegral part of a system containing integrity pacts and
\nantibribery instruments.<\/p>\n
The antibribery instruments could also be strengthened by
\nrequiring the government to provide transparency of procurement
\nof armaments systems. This transparency could be achieved in two
\nways.<\/p>\n
First, the Ministry of Defense could create an e-procurement
\nsystem allowing providers of goods\/services to easily find out
\nhow procurement programs are planned by the ministry based on
\nDefense Strategic Plans.<\/p>\n
Second, the ministry should be required to publish reports of
\ninternational arms transfers from and to Indonesia. An
\ninternational arms transfer report -- an important part of the
\ninternational regime -- is an important step in improving
\nsupervision of defense procurement system.<\/p>\n
The writer is a lecturer at the School of Social and Political
\nScience, the University of Indonesia. He can be reached at
\nandi_widjajanto@yahoo.com.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/integrity-pact-for-defense-procurement-system-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}