Govt drafts law on public sector procurement
Govt drafts law on public sector procurement
The Jakarta Post, Jakarta
The government is currently drafting a law on public sector
procurement as part of efforts to help curb rampant corruption in
the country.
The law, which someday will replace Presidential Decree No.
18/2000 on public sector procurement, will ensure severe
punishment for corruption in the process.
State Minister of National Development Planning Kwik Kian Gie
said on Thursday that the presidential decree was deemed not
effective enough to ensure that corruptors got heavy punishment.
He was speaking in a speech at a gathering of government and
business officials discussing trade liberalization issues.
A government special team has completed a revised version of
the above presidential decree to help boost transparency in
public sector procurement, but the revision has yet to be
approved by President Megawati Soekarnoputri.
Kwik said that, so far, procurement had often been carried out
in an inefficient way and sometimes the process was not
transparent.
Both the revised decree and the bill are aimed at gradually
turning Indonesia into an efficient economy rather than the high-
cost economy it is today, in response to widespread leakage at
almost every stage of the procurement process.
Various international institutions -- including the World Bank
and the Asian Development Bank -- have frequently stated that
corruption in equipment procurement in government institutions is
one of the areas most tainted by corruption in Indonesia.
The World Bank even suggested that leakage in the procurement
process could account for up to 50 percent of all funds allocated
for procurement.
"The procurement process should be monitored tightly," Kwik
said. "And to promote efficiency and transparency in the
procurement of goods and services, reward and punishment should
be implemented. Therefore, a law that has more severe penalties
is needed."
The revised decree has sparked some protest from business
associations, as under the decree, contractors will be allowed to
win procurement projects without having to be accredited with
either the Indonesian Chamber of Commerce and Industry (Kadin) or
its affiliated associations.
Previously, a source at the National Development Planning
Board (Bappenas), where the revised decree was deliberated, said
that the certification process was prone to abuse and bribery.
Similar to the revised decree, the bill also aims to support
small enterprises entering bids for procurement projects.
In the revised decree it is stated that medium- to large-scale
enterprises are prohibited from participating in tenders for
projects reserved for small businesses, that is, projects worth
less than Rp 50 billion.