Corruption law and the devil in the details
Are these articles a barrier to meaningful public sector reform?
Corruption has been one of Indonesia’s biggest demons. Since the 1998 Reformasi that toppled President Soeharto and his corrupt New Order regime, public officials have promised to root out the nation’s rampant problem. Yet, in this past year alone, the fight against systemic corruption has remained less about justice and more about who it gets to target.
Perhaps you remember two particular high-profile graft cases involving former trade minister Thomas ‘Tom’ Lembong and former education, culture, research, and technology minister Nadiem Makarim. Both were named under Article 2 Section 1 and Article 3 of the Anti-Corruption Act (Law No. 31/1999, later revised under Law No.20/2001), citing ‘state losses’ caused by a policy made during their tenure–without clear evidence of mens rea or malicious intent.
In August, a group of leading lawyers, experts, and scholars submitted an Amicus Curiae brief to the Constitutional Court (MK) to review and provide legal clarity on how to interpret both articles. They argue that the ‘state losses’ terminology in both articles has to be revisited, if not deleted entirely, as they see the articles to be a great deterrent to initiating reforms or making sound policy decisions for fear of criminalization, and that other provisions within the law are more than sufficient to charge actual malicious corruption cases.
Is it true? In this edition of The Reformist, we question our current standing in the fight against corruption and whether it comes with risks of being weaponized.
Criminalizing policy trade-offs?
Tom Lembong’s scandal is a case in point. Before he was pardoned by President Prabowo Subianto, Tom was sentenced to four and a half years in prison and a Rp 750 million fine for reportedly causing the state Rp 578 billion in losses. (Read: When sugar imports become a crime: Putting trade policy on trial)
When Indonesia was suffering a sugar supply shortage, Tom made the decision to import, which prosecutors later cited as causing state loss, leading to his sentence. But this line of thinking penalizes the very essence of public policy: trade-offs.
Much like Tom, former minister Nadiem is currently being tried by the Attorney General’s Office (AGO) under the same state losses argument. He is accused of causing the state around Rp 1.8 trillion in losses for his Covid-era Chromebook laptop distribution policy.
Even if one were to debate the nature of the procurement, the more pressing issue lies in the fact that his special staffer, Jurist Tan, is among the individuals charged under this trial.
When young officials become the target of prosecution, it sends a worrying message to the youth and future generations of reformists about even thinking of joining the public sector.
Government bureaucracy is already deeply hierarchical in itself. There is a structured chain of command where low-level employees are told what to do and are meant to obey. Even if Jurist was the individual who came up with the idea of choosing Chromebooks, her stakes in the matter are contingent on the approval she receives from her superiors and Nadiem himself.
With Jurist’s prosecution, an alarming message is sent to the future generation: either fall in line or risk spending time in prison.
Catch-all articles and the search for mens rea
Both Tom and Nadiem (as well as Jurist) were charged under the aforementioned Article 2 Section 1 and Article 3 of the Anti-Corruption Act, first introduced in 1999 under then-president B.J. Habibie’s reform government.
Article 2, section 1 states, “Anyone who unlawfully commits an act to enrich themselves, another person, or a corporation that may cause a loss to the state’s finances or the state’s economy…”
While article 3 states “Anyone who, with the intention of benefiting themselves, another person, or a corporation, abuses the authority, opportunity, or means available to them because of their position or office, thereby causing a loss to the state’s finances or the state’s economy…”
While both articles sound straightforward, former Corruption Eradication Committee (KPK) deputy head Chandra Hamzah warned that even street vendors could, in theory, be implicated under the two articles for selling their food on publicly owned sidewalks.
Is it illegal to set up a hawker stall without a proper permit? Yes. Does the vendor enrich himself by selling food? Yes. Can the state incur financial losses for minor damages on the sidewalk caused by the vendor? Also yes. Did the street vendor, however, have malicious intent in causing damage to the state? Well, no.
Through his analogy, Chandra argues that anyone — as stated in both articles — could be charged with corruption if malicious intent is ignored and state losses become the standard for prosecution.
In comparison, take the recent Riau corruption case: Governor Abdul Wahid was arrested last week by the KPK through a sting operation for planning an illicit kickback scheme of up to Rp 7 billion with the region’s Public Works agency to realize an infrastructure project.
Ignoring the glaring concern that he is the fourth Riau Governor to be arrested for corruption (seriously, get a grip, Riau), KPK prosecutors began their investigation after local whistleblowers warned of potential foul play between Governor Abdul and the public works agency. Only then were they able to find evidence of the illicit act.
Here, the sequence of work is clear:
Suspicion of malicious intent → Investigation → Data validation → Arrest
Conversely, the AGO’s approach in handling Tom and Nadiem’s case is hasty at best:
Identify state losses → Cursory investigation → Arrest → Further investigation
Notably, Abdul is currently being tried under Article 12B (gratification), 12E (abuse of power to obtain financial gain), and 12F (illicit request for payment) from the same act. So, there you go: The Anti-Corruption Act contains specific provisions that govern a wide range of corruption schemes. Yet, prosecutors continue to rely on the vague ‘state losses’ term in high-profile trials.
Let’s not fall into the same hole twice
Today, the AGO has effectively taken over as the administration’s main anti-corruption body. Further entrusting this executive institution with graft investigations risks repeating the same mistakes of allowing the president to dictate who and why a person is charged with corruption.
As the institution continues to exploit the vague ‘state losses’, we should ring the alarm to remind ourselves of how the same top-down procedure was used under the notoriously corrupt Soeharto:
In 1967, the ‘smiling general’ launched his own anti-corruption campaigns, creating the Corruption Eradication Team (TPK) with the Attorney General at the helm. The committee only lasted three years after uncovering some corruption rings, but was never able to properly investigate or prosecute high-level officials in state-owned companies who had direct relations to Soeharto.
In 1970, the TPK was dissolved and replaced by Komisi Empat (Fourth Commission) after student demonstrations demanded greater efforts in tackling widespread corruption. It was composed of notable ‘clean’ historic figures such as former prime minister Wilopo and former vice president Mohammad Hatta. Their greatest finding was unearthing the corrupt practices of state-owned oil company Pertamina. Under the leadership of Ibnu Sutowo, a close confidant of Soeharto, Pertamina deliberately withheld billions from the government and its development fund.
Lacking any legal power to act on its findings, Soeharto quietly disbanded the Fourth Commission shortly after. It wasn’t until Pertamina failed to pay its outstanding debt of USD 10,5 billion that Sutowo was fired from his position in 1975. He was never tried nor investigated further.
Fast forward to 2019, presidential overreach reemerged when the KPK was stripped away from its independence and redirected as a part of the executive branch through the controversial KPK revision bill. This controversial move allowed the president to oversee the graft committee and to have full authority to dictate who gets to govern it.
It’s disheartening to say the least, as it doesn’t take long to remember the KPK’s bravery in going after ruling elites, before it was neutered by this 2019 ruling.
In 2008, it went after former Bank Indonesia deputy head Aulia Pohan, the father of Susilo Bambang Yudhyono’s (SBY) daughter-in-law. In 2014, SBY’s confidant Andi Mallarangeng was arrested for his leading role in the Rp 464 billion Hambalang sports complex graft case. Three years later, House of Representatives speaker and then-Golkar party chairman Setya Novanto was sentenced to 15 years in prison for the infamous Rp 2.3 trillion electronic identification card (e-KTP) corruption scandal.
Unless the KPK is reinstated to its former powers, Indonesia risks replicating the mistakes of its corrupt autocrat instead of strengthening a proven anti-graft institution.
Legal clarity and KPK independence critical for genuine anticorruption efforts
In Riau, malicious intent was the precursor to investigation, whereas it was an afterthought in both Tom and Nadiem’s trials. When state losses become the standard for prosecution without taking into account the policy context in which it was made in the first place, Article 2 Section 1 and Article 3 risk being a tool for what it’s currently used for: a catch-all political trap.
Today (Tuesday, 11 November), the MK will decide on the Amicus Curiae through an official judicial review. Providing legal clarification on both articles can ensure that they are not used inappropriately and that tackling corruption means rooting out systemic graft, not acts of reform.
Moreover, what is needed is real independence, and the benevolence of the executive to restore the powers of the KPK as an independent anti-corruption committee, away from the outstretched hand of the executive branch.
The more the government ignores these pressing demands, the less likely it is for meaningful reform and change to occur under a state of legal uncertainty and latent fear of criminalization.
What is your take on the ‘state losses’ terminology? What do you think should be done to address systemic corruption in this country? Leave a comment.