Fri, 24 Jan 2003

NGOs intensify campaign against R&D policy

A'an Suryana, The Jakarta Post, Jakarta

A coalition of non-governmental organizations (NGOs) said on Thursday that it had collected thousands of signatures supporting calls for the government to annul an earlier decision to drop charges against former bank owners.

Teten Masduki of the Indonesian Corruption Watch (ICW), which is leading the coalition, said they would also pay a visit next week to the Indonesian Bank Restructuring Agency (IBRA), the Attorney General's Office and the Financial Sector Policy Committee (FSPC) to urge these institutions to immediately take legal action against the errant bankers.

"We have collected thousands of signatures," he told a conference, but declined to specify the exact number.

The ICW has launched a campaign to reject the government's controversial "release and discharge" (R&D) policy over the past couple of weeks.

President Megawati Soekarnoputri issued a decree late last year, which would allow former bank owners to walk away from violating banking regulations in the past as long as they remained cooperative in settling their huge amount of debts to the state.

Bankers that were not cooperative would face legal sanctions.

The above institutions are in charge of carrying out the presidential decree.

But the policy is seen as going against the public's sense of justice.

The ex-bank owners have breached the legal lending limit ruling by channeling most of the banks' funds to affiliated business groups. This practice is seen as a major factor in triggering the 1997 financial crisis, which prompted the government to disburse billions of dollars to bail out the banks. The huge bank bailout cost is being shouldered by taxpayers.

Many of the former bank owners have misused most of the Rp 144.5 trillion worth of funds channeled by the government to help their banks stay afloat. And many of the indebted bank owners have been reluctant to pay back the government's money. For four years, IBRA, which is mandated to collect the money, has not been able to fully recover the funds.

In a bid to persuade the debtors to quickly make repayments, the government issued the controversial R&D policy, which releases the ex-bankers from past banking crimes as long as they cooperate in settling their debts.

"The R&D policy is grossly unfair," Teten said.

Abdul Fickar Hajar, a member of the coalition, said that the errant bankers had to be punished for their crimes even if they did repay their debts to the state.