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.