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Message from the Board

Message from the Board

June 2005


Dear esteemed members,                                          


The continuing saga of reform efforts in Indonesia has given mixed signals to the international community and observers of Indonesia. It is true that President SBY impressed international community during his recent visits to the US, Japan, and other countries, with his convincing ability to market Indonesia as a friendly place for investors to park their fortune. He honestly acknowledged all the inadequacies in our country, as the result of ineffective administrations for the last 7-years of reform efforts in Indonesia. Corruption and competition indexes for example, or macro economic indicators, showed Indonesia is not the most competitive place for investment in the region. However, SBY convinced many proponents of democracy with the concept of an open society, that Indonesia is moving in that direction. Democracy and a freer economy are factors believed to guarantee clean government and law enforcement. We have proved that we are able to build all infrastructures required for practicing a so-called national integrity system. Indonesia in 2004 ran it’s first direct and free general election, where even the President and Vice-president was directly elected by the public, and this process was very peaceful, which, in a country with more than 200 million mostly moderate Muslims, is seen as a kind of achievement by some observers. These elections also formed a People’s Representative Assembly and Regional Representative Assembly whose members were directly elected by voters. We have established a National Ombudsman Committee. We have a State General Auditor. We have an independent judiciary consisting of common courts as well as special courts including religious, commercial, human rights, taxation, and anti-corruption courts. We have a Constitutional Court that specifically deals with constitutional issues. We have been practicing the freedom of Press, perhaps the globe’s freest press today. We have established the National Law Commission, National Human Rights Commission, General Election Commission, Anti-trust Commission, and National Good Governance Commission. We have also established the Corruption Eradication Commission (Komisi Pemberantasan Korupsi - KPK), Judicial Commission, Police Commission and Prosecutor Commission. We have reformed laws on economic activities, on efforts to stop money laundering, on eradicating corruption, and many areas that will help raise Indonesia’s stature among the most democratic countries in the world in the perspective of traditional Westerners.


It is noteworthy to see how the KPK deals with the hope of the Indonesian people who have been discouraged for generations in dealing with corruption issues. Just established about one year ago, with limitations in funds and institutional support, the KPK has brought 3 government officials, including the incumbent Governor of Aceh, to Court, where they were found guilty by the Anti-corruption Court. The KPK has also shaken Indonesian politics by exposing corruption scandals in the General Election Commission (KPU) and has detained several members and staff of the KPU, including its chairman. Despite claims that these are relatively small cases compared to corrupt acts by the New Order veterans and their comrades, or cases involving the Central Bank Liquidity Support that almost bankrupted Indonesia, the KPK is currently perceived to perhaps be the only organization that will bring Indonesia into a cleaner government. SBY has also established a special anti-corruption team consisting of representatives of inter-government bodies to speed up the resolution of corruption cases. This is a clear signal from SBY that he is not in the honeymooning with the Attorney General and the Chief of National Police who have been considered to be too slow in combating corruption.


One issue that may have silenced critics for now is the fact that despite the fact that terrorism is still a big issue for most governments in the Western hemisphere, Indonesia is able to prove that the growth of Islamic parties has not lead to chaos in the democratization process in Indonesia. The winners of the general election were largely political parties supportive of national and business interests. The Islamic parties are well-suited in the new democratic system, and they prefer to speak up in the benches of the Parliament to defend their interests rather than becoming a radical opposition. The significant growth of the PKS, the Justice and Prosperous Party, which is filled with young people who have declared their platform against corruption and poverty have amazed many political analysts who now predict that a future with PKS in the big picture is a viable future for Indonesia. The verdict is that Islamic parties and people in Indonesia are able to practice democracy too.    


The confusion felt by most observers however relates to recent development of an apparently growing rivalry between SBY and his running mate, Jusuf Kalla, in many important executive decisions. General consensus has acknowledged Kalla, the chairman of Golkar that still dominates bureaucracy, has a different way of running things, and this situation supports speculations that both will compete in the 2009 elections. Despite reform efforts in the judiciary, recently, the Supreme Court has shortened the imprisonment length of Tommy Suharto, the son of former President Suharto, who has been declared guilty of influencing the murder of a Justice at the Supreme Court, from 15 to 10 years on a technicality. An Indonesian court has also freed Nurdin Halid, member of the Parliament from the Golkar fraction, who is a businessman and chairman of a cooperative that was alleged to have committed corrupt acts. An Indonesian court also convicted Adiguna Sutowo for only 7 years for the cold-blooded murder of a young bar tender in Sutowo’s Hilton Hotel Jakarta, a decision that people believe to be related to corrupt practices in the Indonesian judiciary systems. Recently, a lawyer was caught red-handed by the KPK when he was delivering a bribe to the anti-corruption judges in the High Court of Jakarta in connection with the corruption case of Abdullah Puteh, the Governor of Aceh. The next day, the judges abruptly confirmed the verdict of the lower court in convicting the Governor of Aceh for 10 years.


In the business sector, we are still waiting for the willingness of the administration to be consistent with SBY’s marketing deals. There is uncertainty on how the Cemex case is to be resolved. The 3-G telecommunication licenses are to be re-tendered. Confusion exists on which law shall govern the multimedia and pay-television businesses: the Telecommunication Law or the newly-issued Broadcasting Law. Also the recent sale of Pertamina’s Very Large Crude Carriers has created controversy – not only has the matter become a court case involving the Anti-trust Commission (KPPU), but it has now gone to the parliament, which has just formed a special team to investigate if fraud was involved. These are some examples that stress the need for foreign investors to have a better understanding on domestic politics, socio-cultural changes, and how the legal system can be effectively enforced. This is a heavy homework for SBY. He needs to commit to a larger amount of effort and to invite more support from all layers of Indonesian society. And fortunately he is not alone.


Dear members,


LGS Online shall keep creating and updating its database, and is being redirected to answer the most prioritized legal issues for most investors. Soon we will be able to open our database to the general public, so top quality legal services will not only be accessible to the traditional clients, but also investors and other members of the global society.


Warmest regards,

Arief T. Surowidjojo

[Last update: 2011-02-21 17:42:33]

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