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Indonesia's Corruption in Excess
Department
By Tony Sitathan
The mission statement of the Directorate General
of Customs and Excise in Indonesia reads proudly, "To
provide services to industry, trade and society who need
services in customs and excise matters, and the
commitment to provide best services will continuously be
improved in a consistent, fair and transparent manner."
These words are found engraved in Bahasa
Indonesia in the head office of the Customs and Excise
Department. But like many state ideologies and slogans,
they fall on deaf ears. Even the new director general of
customs and excise, Eddy Abdurrahman, who is supposed to
infuse a new spirit of corporate accountability,
believes it will take time to make changes and root out
systemic corruption.
Indonesia has been labeled
one of the worst countries in terms of corruption by
International Corruption Watch (ICW), next to several
Central American countries. It ranks below countries
such as Vietnam and Mexico.
Teddy Subianto, a
lawyer working for Ted and Winahyo Associates, notes
that Indonesia has one of the worst track records when
it comes to combating corruption. "According to several
independent studies by ICW and also NGO
[non-governmental organization] groups, close to US$5.5
billion to $8 billion has been estimated to be
non-taxable commodities and goods coming into Indonesia
alone. Such inflow of contraband goods means that there
are epic proportions of corruption among the customs
officials," he said.
Blatant misrepresentation
and manipulation of figures is common, adds Johannes
Setiawan, an electronics trader and manufacturer of
bottles for mineral water in Bogor. "It's a common ratio
where for every one container that is taxed as imported
electronics goods, at least five are not taxable. So the
importer may pay, say, Rp100 million as tax for goods
worth Rp600 million. But by using under-invoicing and
forged clearance certificates, the importer saves as
much as 30-40 percent of this margin alone," he said.
Setiawan added that before the fall of Suharto
only top officials benefited from the corruption, was
now greasing of the palm is evident in all ranks.
Lim Eng Tong, a private businessman, deals with
brand-new and second-hand refurbished luxury cars
imported from Singapore. The tax for brand-new luxury
cars in Indonesia is close to 200 percent. "But
smuggling brand-new luxury cars into Jakarta by way of
Medan and Surabaya and declaring them to be second-hand
cars has saved me almost 10 percent profits," he said.
Inefficient administration and lack of
accountability have made the Customs and Excise
Department one of the worst-managed and bureaucratic
government agencies in Indonesia. It did not get such a
reputation overnight.
One civil servant earns a
gross salary of about Rp2 million ($225) per month,
barely enough to survive on in a cosmopolitan city such
as Jakarta. Yet he not only lives in a prime residential
district in South Jakarta but has two motorcycles and a
Peugeot convertible.
His neighbor, Edwin
Thamboo, who lectures in the business faculty of the
University of Tri Sakti, says that sometimes it takes
the right opportunity and the right connections to be
placed in a position of influence that dictates how much
side money or extra income is possible from a particular
government civil service. "It's like a social
pyramid-type organization. The more money you make, the
higher the social respect and the more social
responsibility is thrust on to you," he said.
The state audit agency recently discovered that
about Rp6.421 trillion ($720 million) from the state
budget was misused by various government offices in the
first six months of 2002. The State Audit Agency (BPK)
announced the figure at a plenary meeting with
legislators from the House of Representatives. Perhaps
in light of the new spirit of corporate accountability
that has been promoted by the government of President
Megawati Sukarnoputri, eight state agencies were
identified, including the embassies in Singapore and
Beijing, the armed forces, the national police, the army
and the Defense Ministry.
"We have only touched
the tip of the iceberg," says Iwan Juniton, an
investment risk management executive for Trimegah
Securities. "If you dig deeper you may perhaps find an
ocean of corruption instead of a shallow well."
(©2002 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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