Government to grant impunity to IBRA officials: Source
JAKARTA (JP): The government is planning to issue a decree granting impunity to officials of the Indonesian Bank Restructuring Agency (IBRA), according to a source.
"The governmental decree on the right of impunity of IBRA officials is supposed to allow the officials to work faster in restructuring the country's ailing banking sector," the source told The Jakarta Post on Monday.
The source said the impunity for IBRA officials would be included in the new Letter of Intent to be signed by the Indonesian government and the International Monetary Fund.
Commenting on the issue, lawyer Kitty Kramadibrata of Kramadibrata & Partners said the move could help IBRA officials carry out their tasks, but at the same time it could create moral hazards which might easily lead to corruption.
The impunity granted to IBRA officials could be similar to that possessed by judges, which protects them from being sued for the verdicts they issue, Kitty said.
"The question is who is going to supervise the IBRA officials as far as their judge-like impunity is concerned," she said.
In the case of judges, Kitty said they were answerable to and could be dismissed by the Supreme Court.
"But how about the IBRA officials? Who are they responsible to as far as their impunity is concerned," Kitty asked.
She said if the officials were granted impunity a separate, independent supervisory body would need to be established to serve the same role as the Supreme Court in supervising judges.
"This supervisory body should consist of members of various agencies, including the Supreme Court, lawmakers, the tax authority as well as merchant bankers," she said.
She said disciplinary rules would then have to be established to serve as additional guidelines for IBRA officials.
Meanwhile, IBRA public relations officer Franklin Richard said the proposed impunity was not meant to provide IBRA officials protection to act beyond the law.
"It does not mean that IBRA officials can break the law and avoid punishment like diplomats living in foreign countries," he said.
Franklin said in carrying out their day-to-day work, IBRA officials, who make decisions in good faith and according to the agency's standard decision-making procedures, should be guaranteed of not being sued for their decisions.
The decisions and actions of IBRA officials could harm the interests of certain parties, who may decide to sue the officials in the future, Franklin said.
A foreign lawyer at a prominent local law firm said impunity was out of proportion and not needed to help the agency's officials in carrying out their tasks.
"IBRA officials as individuals are exempted from any legal implication of their actions as long as they comply with governmental decree N0. 17/1998. Thus the impunity right is out of proportion" he said.
Governmental decree No. 17/1998 on the establishment of IBRA gives the agency the power to issue a restraining order, annul and amend contracts between any two parties, install or revoke any party's ownership of any asset and order the confiscation of assets.
But Franklin said the decree was the legal basis for the actions of IBRA as an institution, while the governmental decree on impunity would protect the agency's officials as individuals.
IBRA, established in January 1998, was tasked with restructuring the ailing banking sector. The agency has so far closed 48 banks and taken over 13 others.
The agency has also taken over some Rp 200 trillion in bad debts from problem banks.
The Supreme Court earlier upheld IBRA's extraordinary powers as rendered in decree No. 17/1998.
The Indonesian Advocates' Association (AAI) challenged the decree in August 1999, asking the Supreme Court to revoke the extraordinary powers given to the agency.
The court rejected AAI's proposal early last month, but agreed that the decree should be upgraded to a law to avoid further public controversy. (udi)