Corruption threatens Indonesia's defense system

Corruption threatens Indonesia's defense system

Munir, Executive Director, Indonesian Human Rights Monitor,
Jakarta

The legislature announced on Tuesday it has planned to set up a
working committee of inquiry into alleged irregularities in the
Military's procurement of Mi-17 helicopters from Russia. The case
emerged following a report on the disappearance of US$3.2 million
as a down payment to Russia for the purchase of four Mi-17
helicopters for the Army.

Members of Commission I of the legislature (DPR) said they had
received reports the helicopters should have been valued at only
$17.6 million, a price 25 percent lower than the $21.6 million
the Army had agreed to pay. The helicopters were due at the end
of February but as Tempo magazine reported, a Russian firm
stopped assembling them as it had not received the down payment
of $3.2 million.

On Wednesday, the Commission met with military chief Gen.
Endriartono Sutarto who rebuked the defense ministry for what it
saw as irregularities in the purchase of the Mi17s.

Shopping for military equipment seems to have become a major
past-time in military circles -- while the civilian political
authorities' control over the defense system seems to be getting
weaker.

The incident appears to illustrate the wastage brought on by
an abuse of power while the Indonesian Military (TNI) continues
to complain about its lack of equipment and low military budget.
It is worthwhile if we examine the case more thoroughly.

The government, represented by President Megawati
Soekarnoputri and Endriartono bought four Sukhoi jet fighters
from Russia last year. Through an export credit exchange system,
the purchase was to be paid for in several years of installments.
It was, however, conducted without the DPR's approval.

The defense ministry even went so far as to deny all knowledge
of the aircraft purchase plan in August. The DPR also questioned
the deal for not being included in last year's draft budget.

Suspicion of a dodgy markup and other corruption behind the
Sukhoi purchase became a subject of hot debate in the House. But
then there were indications of a political compromise -- this
year's defense budget was drawn up to legitimize the aircraft
purchase. Too little, too late, it failed to reflect any
awareness of the importance of a transparent and accountable
policy on the procurement of military equipment.

Then several regional administrations and the TNI initiated
the purchase of patrol boats through regional funding. Seven
provinces allocated $1.5 million (Rp 13 billion) each to buy KAL-
35 vessels from a business partner of the Navy. Papua allotted no
less than $9 million to buy naval boats from a European country.
This means the imposition of operational costs by the TNI on the
routine budget of the regions.

The government, the DPR and the TNI should have observed Law
No.3/2002 on state defense -- which says that the budget for
state defense is to be derived only from central government,
while regional administrations have no authority to allocate
funds for this purpose.

Yet despite the statement of a defense ministry official that
regional purchases were illegal, the ministry, the Navy and
regional administrations proceeded with the plan. The purchase of
the vessels was even contained in memorandums of understanding
(MOU) between the regions concerned and the Navy, in which the
latter served as a party with the authority to act in the
interests of state defense. Further, the Navy acted like it was
an organization selling security services to the regions.

In mid-January, the Navy Chief of Staff, Vice Adm. Bernard
Kent Sondakh, signed the purchase of two Corvette ships from the
Netherlands. Again, the transaction was conducted by the Navy on
behalf of the defense ministry. The purchase was carried out amid
procedural irregularities and questionable government financing.

The Corvette procurement plan followed the Navy chief's visit
to the Netherlands mid last year. The Navy requested the
government allocate funds for four Corvettes. But a few days
before the signing of an MOU, the government announced that the
available funds were inadequate.

Last month, Minister of Finance Budiono asked the Navy to
revise the purchase deal of two Corvettes but Bernard strongly
objected. Suspicions brewed the Navy had managed to present the
civilian political authorities with a fait accompli.

These developments reflect the fundamental weakness of the
President and the DPR as civilian political authorities to manage
the diverse aspects of defense and military affairs.

This weakness concerns all stages, from planning, purchase and
use -- a lack of control over the entire process. Worse, we lack
a national legal system to fund the regional needs of the TNI.

The defense budget for the fiscal year of 2004, worth Rp 13.2
trillion, fails to reflect the nation's defense policy. Military
funds are now mainly derived from regional administrations and
reserve funds are used in the name of military operations or
unplanned equipment purchases.

The problem is no longer only the loss of civilian control
over the military through the budget policy, but also the high
likelihood of collusion and corruption in the purchase of
military equipment.

With such chaotic public administration there will likely be
more irregularities in the purchase of military equipment related
to the TNI's internal power struggles. We would also see the
return of the involvement of civilian politicians, who will fight
over the spoils of corrupt purchases.

These developments are intolerable. The military budget system
must be restructured and civilian political authorities should
take over all armament purchases from the military. There should
also be the consistent policing of any military involvement in
politics.

Without significant reforms, Indonesia's military and
political authorities will face bankruptcy before long.