THIS WEEK'S HEADLINES

Monday, June 29 2015

Government plans to sanction tax amnesty for corruption offenders and money launderers. Many dreaded such policy will discredit the nation's global reputation.

Head of Police Criminal Investigation Unit (Bareskrim) Budi Waseso was attempting to secure an increase of individual case budget to be in line with the Corruption Eradication Commission's (KPK) budget, ignoring the complex nature of KPK's investigations and their limited workforce.

Tuesday, June 30 2015

Attorney General Office (AGO) would have to face two pre-trial appeals. The first one was related to corruption in PT KAI land transfer in Medan. The second was about corruption of local budget (APBD) in Sarmi Regency.

Bareskrim was working on nine cases of corruption with state losses amounting to trillions of rupiahs. They have also assembled a team of 500 investigators to work on these cases.

Wednesday, July 1 2015

Police charged two Indonesia Corruption Watch (ICW) activists with what is known as hate article or rubber article for its wide interpretation. The indictment uses article 27 paragraph 3 of the Electronic Information and Transaction Law (UU ITE). Allegedly, this article was chosen the police for its repressive nature and maximum punishment.

The Judicial Commission (KY) ruled on a case of ethics against Sarpin Rizaldi, a judge in South Jakarta District Court. Sarpin was found guilty of violating Code of Ethics or Code of Conduct for Judges related to his professional conduct during pre-trial hearing filed by Police General Budi Gunawan. KY recommended a six-month court-ban to be imposed by the Supreme Court (MA).

Denny Indrayana, former Deputy Minister of Law and Human Rights, was named as suspect in the corruption case of electronic payment gateway project. Thus far, Denny had been summoned five times for questioning.

Former Minister of State-Owned Companies (BUMN) Dahlan Iskan was implicated on three separate investigations of corruption. First was the development of electricity relay stations, then the procurement of electric cars, and lastly, a paddy field consultancy and construction project under the Ministry.

RI Police's Bareskrim was stumbled in their investigation of TPPI corruption involving Honggo Wendratmo. The government of Singapore, where Honggo takes his residence, have not responded to Bareskrim's request to question him in the city state.

Thursday, July 2 2015

Again, KPK named former mayor of Makassar, Ilham Arief Sirajuddin, as a corruption suspect in a management cooperation and transfer of installation at Local Water (PDAM) in Makassar between 2006-2012. Ilham’s lawyer complained against KPK’s endeavor to -again- name him as suspect after a May 12 pre-trial ruling had invalidated the KPK’s previous indictment.

Former parliamentarian Sutan Bhatoegana denied ever receiving money from former Minister of Energy and Mineral Resources (ESDM) Jero Wacik and Secretary General of the Ministry Waryono Karyo. Sutan insisted other witnesses had lied about him receiving money.

The Supreme Court will not automatically follow KY's recommendations to impose a six-month court-ban sanction on Sarpin Rizaldi. Instead, MA will take time to study KY's recommendations.

The District Attorney of North Maluku are investigating two alleged cases of corruption involving West Halmahera Regent, Namto Hui Roba. The first involves the regent's official travel budget during the fiscal years 2007-2008 that amounted to Rp 1.8 billion and the second was a 10-percent local budget (APBD) cut from each regional working units (SKPD) during 2007-2011 that is valued at Rp 18 billion.

AGO was urged to improve its transparency, accountability and publication with regards to their case handling and procedures in state's asset recovery.

Friday, July 3 2015

KPK named former Minister of Religion, Suryadharma Ali, as suspect in an alleged corruption of the minister's operational fund during the fiscal years 2011-2014. This is the second case of corruption to implicate the former minister as a suspect.

KPK questioned three witnesses in an alleged corruption of the electronic ID card (E-KTP) project. Previously, KPK had named the Commitment Signing Officer (PPK) Sugiharto as suspect.

DPR asked Polri to recover more state capital that was abused in corruption cases.

The Selection Panel for KPK leadership (Pansel KPK) are confident that the future of KPK will be much brighter. Their confidence stem from the high registration rate for the candidacy with highly qualified candidates coming from a wide variety of backgrounds.

KEY DEVELOPMENTS

June 29

• Gov plans tax amnesty for corruption offenders and money launderers

• Police demand equal case budget as KPK to investigate corruption

• Sessions on additional funds allocation for political parties stopped

June 30

• AGO to face two pre-trial appeals

• Bareskrim assembled team of 500 investigators to work on corruption cases

July 1

• Police indict ICW activists with rubber articles

• KY found Sarpin guilty and recommend six-month court-ban

• Denny Indrayana named as suspect in payment gateway case

• Dahlan Iskan implicated in three cases of corruption

• TPPI case stumbled as Singapore ignore request to question Honggo Wendratmo

July 2

• Former mayor of Makassar, Ilham Sirajuddin, file new pre-trial appeal against KPK

• MA will take time to study KY recommendation against judge Sarpin

• North Maluku District Attorney investigation two cases implicating Regent of West Halmahera

• Denny Indrayana propose witness in his defense

July 3

• Suryadharma Ali named as suspect in corruption of operation fund as Minister of Religion

• Three witnesses examined in E-KTP case

• High Attorney of NTT arrested two suspects in corruption of Special Allocation Fund (DAK) for education

IN-DEPTH ANALYSIS

Tax Amnesty: White Flag of Law Enforcement?

Jokowi's administration this week proposed a policy to grant tax amnesty for criminal perpetrators, with the exception on cases involving terrorism and narcotics. Looking back, this is the fourth time for an Indonesian government to initiate a tax amnesty program (Tax Directorate, 2015). It was practiced twice during the New Order regime and there was the 'Sunset Policy' executed during SBY administration. The government gave their arguments about the purpose of the current initiative, which were to increase repatriation of assessable capital/asset that has been parked abroad, to improve future tax obedience, to boost short-term tax income, and to encourage national reconciliation. The government is confident that this initiative will deliver as they refer to successful implementation in other countries that had employed a similar policy, for example in South Africa (raising 2.2 billion rands), Italy (IDR 50 trillion), India (IDR 25 trillion) and Ireland (IDR 10 trillion).

The initiative immediately provoke controversies with critics that focuses, among others, on its broad target of taxpayers. Instead of limiting its target on tax evasion, tax manipulation or tax arrears, this policy will also provide amnesty for criminals indicted in cases of corruption, money laundering, illegal mining, illegal logging, et cetera. Legal practitioners are worried that this policy will only broaden the gap of discrimination since it essentially violates the principle of equality before the law. Furthermore, tax amnesty for criminal convicts will trigger broader injustice and weaken national law enforcement enterprise. This is especially the case if, after its implementation, the government does not pursuit strong and firm law enforcement targeting these crimes (Rosdiana, 2015).

In principle, implementation of such a policy should be based on the premise that state holds the power to enforce law. Unfortunately, this policy usually provides an opportunity to achieve short-term interests, like patching state budgets that are lacking state income from taxes. If the conditions are reversed, then such policy would be the only remaining option for the government to accumulate capital in short-term because they cannot enforce the law effectively.

The other important note to underline was that, actually, the 'Sunset Policy' that SBY's administration executed in 2007-2008 did not deliver expected returns as would be indicated by increased number of taxpayers, increase of year-by-year tax performance, and reduction of tax evasion practices. Therefore, if the current administration insist on relaunching this policy, then they need to carefully formulate effective tax amnesty procedures and mechanisms, while reassuring the public that actual tax income will increase significantly. Surely the people would not want to see their government pawning their law enforcement authority by providing temporary tax amnesty merely because they have no capital, no time and no capacity in enforcing the rule of law.***

Bhayangkara Day and Police Reforms

On July 1, 2015, the Indonesian Police Force (Polri), commemorated the 69^th Bhayangkara Day, its founding day. After more than half a century since it was founded, Polri continue to draw many criticism and advise, as well as significant public expectation.

Based on media reports around its commemoration day, there were three main points to be underlined with regards to public expectations for the force. The first was about internal reorganizing, particularly eradication of the 'law mafia'. Second was about compliance of Police leaders in submitting wealth reports as an obligation of public officials, with the current crop of police generals advised to learn from former Police Chief Hoegeng Iman Santoso. And third, about Police neutrality in politics.

With regards to internal reorganizing, President Joko Widodo have repeatedly underlined an approach to provide a sense of justice. He ordered Polri to be firm and professional in upholding and enforcing the law. The president also instructed Polri to eradicate law mafia or case brokers within the Police structure.

The Police was also advised to learn about integrity from the legendary Hoegeng Iman Santoso. Several weeks back, the media widely reported about Polri's lack of obedience in providing wealth report. The public observe that Police leaders' discipline and good will in submitting wealth reports are still far from expectation.

The next criticism was directed at Police neutrality in politics. Particularly because, in 2015, the people of Indonesia will synchronously participate in regional elections (Pilkada). Indonesia will be recorded in the history of world democracy because of its endeavor to hold 269 regional elections simultaneously. This undertaking will involve concurrent ballots in 9 provinces, 36 cities, and 224 regencies to elect governors, mayors and regents. This means, about 53 percent out of 537 provinces, cities and regents in Indonesia will participate in the first wave of simultaneous election.

An article written by police observer, Bambang Widodo Umar, pointed out that the involvement of active police officer in practical politics, either directly or indirectly, have become common practice (Kompas June 30, 2015). As an example, he depicted the case about a video recording that showed Police Chief of Banyumas who spoke in front of police pensioners asking them to vote for a presidential candidate from a certain political party.

Bhayangkara Day could provide the momentum for Polri to thoroughly revitalize the organization. The public believes that if those three points are seriously attended for the sake of national progress, the endeavor will provide significant changes on the law enforcement landscape in Indonesia.***