Questionable verdict

Questionable verdict

Less than four days after President Abdurrahman Wahid made
another pledge to embark on establishing the primacy of the rule
of law by replacing corrupt judges with honest ones in Jakarta's
five district courts, judges at the South Jakarta District Court
snubbed the government by dropping all corruption charges against
Djoko Tjandra, a key suspect in last year's high-profile Bank
Bali corruption case. Presiding judge R. Sunarto said in a
summary judgment on Monday that the lawsuit against Djoko had
been filed at the wrong court, arguing it was a commercial case,
not a criminal one.

The decision obviously stunned not only the government and
most lawyers but also the international community, including the
World Bank and the International Monetary Fund, which last
September abruptly canceled their loan disbursement to Indonesia
due to the scandal.

The controversial court ruling once again highlighted
Indonesia's flawed legal system, reinforcing fears that the
chances of legal redress in the country remain as uncertain as
during more than 30 years of the authoritarian rule of former
president Soeharto. While substantial progress has been made in
the reform of the executive and legislative branches of the
government, the judicial system has been relatively untouched by
the reform movement.

Surely the government must also be seen to occasionally lose
in court to demonstrate to the public that the ruler is also
subject and subservient to the rule of law and because, in
practice, the government also can do wrong.

However, the South Jakarta District Court's decision is beyond
anyone's legal sense of justice because it was taken even before
the judges investigated all the facts of the case. Focusing their
judgment on the cessie agreement between Bank Bali and PT Era
Giat Prima and seeing the case simply as a debt transaction
between two private parties outside government interest imply two
worrisome possibilities: The judges could have been bribed or
were technically incompetent to judge the case involving a
complex financial deal; or the prosecutors at the Attorney
General's Office were not able to prepare an airtight case or
deliberately put the case together with so many loopholes in
return for personal rewards from the defendant.

A special audit by PricewaterhouseCoopers and another special
investigation by a House of Representatives team on the Bank Bali
scandal last year have concluded that without a doubt the case
clearly smacks of corruption and merits a hearing in court. The
case is the parody of how politically well-connected
businesspeople colluded with senior officials to plunder the
government, using a cessie agreement as the vehicle of
transaction.

The audit showed how the cessie agreement was actually legally
defective from the outset and seemed to have been made in bad
faith because Era Giat Prima had not paid anything to acquire the
debts owed to Bank Bali. Such an up-front payment is one of the
legal conditions of a cessie agreement whereby a party takes over
the debts of another party at a discount.

Moreover, as the debtor is the government in the form of the
Indonesian Bank Restructuring Agency (IBRA), Bank Bali did not
require the service of any other parties to collect its money. If
Bank Bali itself was not able to collect the money under the
government guarantee scheme for bank deposits and claims it
simply meant the loans did not meet the requirements for
reimbursement, and no other parties would have been able to make
the loans viable for payment least they colluded with IBRA or
Bank Indonesia, which was in charge of verifying the validity of
such claims.

The flow of funds -- from the Rp 546 billion fee paid by Bank
Bali to Era Giat Prima, as uncovered by PricewaterhouseCoopers --
and the testimonies of a large number of senior officials to the
House investigative team further strengthened the suspicion that
the case was full of elements of malfeasance.

Whatever the real reason behind the verdict and even though
IBRA or the Attorney General's Office can still appeal the
judgment, one thing is crystal clear. It once again shows how
urgent it is for the government to act quickly and speedily to
reform the judicial system because legal certainty is essential
to rebuilding Indonesia's shattered economy and maintaining the
nation's political integrity.