Introduction
The root of corruption in Indonesia can be traced back to the era of Soeharto—Indonesia’s second president— when his centralist and monopolist system rule all the legislature, the judiciary and the bureaucracy (McLeod 2010). Thus, in 2001, the decentralization system was introduced to overcome the corruption since it enables the citizens to closely monitor the government (Khan 2002). The implementation of the decentralization system also followed by the establishment of Corruption Eradication Commission (KPK) as an independent body to combat the corruption in Indonesia. However, based on the Corruption Perception Index, Indonesia still ranked as one of the most corrupt countries in the world, 107 out of 175 countries. The corruption rate in regional level also seemed to be pervasive (Martini 2012) and showed an increasing trend (Patunru and Rahman 2014). This fact could be a reflection of the extent to which KPK can play a role in eradicating the corruption in Indonesia.
This paper aims to examine the effectiveness of KPK as a centralized agency in Indonesia in eradicating the corruption that had been shifted to local level after the implementation of regional autonomy. A related goal is to review the performance and identify the key challenges faced by KPK in conducting prevention and repression as well as handling the public complaint and civil society participation. It will conclude with the recommendations to overcome all those identified challenges through the reforms in legislation, strategy, and procedure, and also strengthening the political will.
Case Description
In 2001, Indonesia shifted its system from the centralized to the decentralized ones. The delegation of power from central government to local level aims to enhance the accountability and ensure the provision of public service as the government would be closer to the people (Kirana 2014). This system encourages the local authorities to deliver the services more effectively and enables people to directly monitor the provision of those services, which eventually improve the governance and lower the corruption level (Khan 2002). It is in accordance with the studies conducted by Gurgur and Shah (2000) and Arikan (2004) found that decentralization plays a role in reducing the level of corruption.
However, the decentralization potentially leads to high corruption rate in regional level in case of extreme discretionary power held by local government and lack of monitoring system (Fjeldstad 2004). This is what happened in Indonesia, when implementing the regional autonomy has changed the corruption modus in Indonesia by giving more discretionary powers –shifting of responsible in providing the basic infrastructure and public services- and resources to the local level, that eventually create the opportunities for local officials to commit corruption (Martini 2012). Thus, the expected results of decentralization have turned in the opposite direction with the increasing number of corruption cases in regional level and lack of socio-economic development (Kirana 2014).
Moreover, the magnitude of tax authorities in local level has opened the opportunities for corruption. The local government can create artificial regulation to generate taxes, levies, licenses fees, and other fees that used by local bureaucrats to attract rents from firms (Kuncoro, cited in Kirana 2014). Rent-seeking or bribery has been rampant in many regions due to the proliferation of local political elites and the local heads who started to act like ‘little kings’ in their regions (Hofman and Kaiser 2002).
After the decentralization, the national government has established anti-corruption agency, well known as KPK, which is undoubtedly as a milestone in the fight against corruption in Indonesia. KPK adopts the centralized anti-corruption strategy, which tends to be established when the crisis of legitimacy and high corruption has occurred within the country (MacMillan 2011). KPK has a role in conducting the prevention, investigation, and prosecution of corruption cases, including to supervise and coordinate with other law enforcement agencies such as police and attorney and also to take over the corruption cases were not handled effectively by those agencies (Jasin 2010).
According to Art. 11 Law No. 30/2002, KPK is authorized to handle the corruption cases with certain characteristics such as involve public officials, attract public attention, and involve state losses at least 1 billion rupiahs. This could be a trigger to KPK to investigate ‘big fish’ cases involving high-profile corruptors, which ultimately raise the public confidence (Bolongaita 2010). However, it also indicates that the corruption less than 1 billion rupiahs would not gain attention from KPK. Whereas, as argued by (Wagner & Jacobs 2008), many corruption acts in local levels involves the petty corruption which directly affects the community. Moreover, KPK Law limits the range of corruption cases which could be dealt by KPK only that involves public officials. In contrast, two successful anti-corruption agencies such as CPIB Singapore and ICAC Hong Kong have broader power to investigate both ‘big and small’ cases and within the public or private sector (Bolongaita 2010, Quah 2010).
Ironically, the success efforts of KPK in handling major cases also made enemies instead of political supports (Kuris 2012). He argued that the battle not only comes from the police who charge the leaders of KPK with criminal sentences but also from the parliament who tried to revise KPK law. The revision should be wary, given the fact that under this law, KPK has been prohibited to issue the Warrant for the Termination of Investigation (SP3). This clause distinguishes KPK with others law enforcement agencies such as police and judiciary who have the authority to issue the SP3 that allowed them to drop the investigation and being judicial mafia (Butt 2011).
Moreover, due to its resources problems, KPK only able to handle 12-30% of all corruption cases (Buehler as cited in Kirana 2014). Most of those cases are at the national level -the ‘big fish’ cases- and less at the regional level, which is delegated to other law enforcement agencies (Kirana 2014). Whereas, the corruption cases at the regional level has shown an upward trend (Patunru and Rahman 2014). The current data from Minister of Home Affairs have shown that 309 of regional heads in Indonesia had broken the law, usually by behave corruptly (Patunru and Rahman 2014). Both legislative and executive in the local level have become the actors in many corruption cases. The common corruption modus they used such as manipulation in the procurement of goods or services, misappropriation of budget, fictitious official travel, and violation of disbursement process (Rinaldi et al 2007). He argued that the high campaign cost or money politics during the election has triggered the local officials commit those kind of corruption practices to seek the fund and to be repaid after being elected.
Regarding the KPK’s main task relies on prevention, repression, and management of public complaints on corruption, the next section will examine the performance of KPK during decentralization era and the key challenges in achieving optimal results in eradicating corruption acts. The best practices in other countries or international groups will be used as the comparison and lesson learnt in evaluating the performance and key challenges faced by KPK.
Case Analysis
a. Prevention
One of the critical factors in creating an effective anti-corruption commission is on the prevention capabilities (Pope 1999, Meagher 2005). Regarding the prevention actions, KPK has been authorized under Law No. 30/2002 to conduct some tasks consisting of checking the wealth report and gratification received by public officials, implementing education and socialization about anti-corruption, and also cooperating with other agencies in eradicating corruption.
However, study by KPK (2006) stated that the prevention actions still lag behind the repression area. The critical point in here is the ineffectiveness of the use of wealth reports as a part of prevention and basis for investigation in Indonesia. This is unfortunate, since the wealth reporting is an important tool to prevent individual enrichment from corruption by ensuring the consistency between known earnings and asset ownership (Pope 1999). Further study by Mukherjee and Gokcekus (2006) also found that the asset declaration system had great impacts in lowering corruption level.
Several problems have been identified regarding the wealth reporting system. First, there is no strict punishment to the public officials who do not submit their wealth report (KPK 2006). The absence of strict sanction led to the number of asset declaration that was not optimal, which is only 68.08% from a total number of public officials who obligated to report their assets (KPK 2015). Thus, the existence of sanction is necessary as a tool to discipline and enhance the compliance of wealth reporting, especially in the countries with a large number of government officials (OECD 2011). The sanctions can vary from criminal, civil, and administrative, and should be imposed for non-submission, late, incomplete, and false statements (OECD 2011). Either in OECD or G20 countries, some good practices in implementing the sanctions involve from monetary penalties, temporary or permanent dismissal, to imprisonment (OECD 2011, G20 Australia 2014).
Secondly, there is no clear procedure and criminal offence whenever found a significant increase of assets in relation to individual income that can not reasonably be explained (KPK 2006). Therefore, the findings in the wealth report never been used as a basis for initial investigation (Kuris 2012). As argued by Burdescu et al (2009) that the effective asset declaration systems involve reviewing the content of wealth disclosure by coordinating with other agencies such as bank and tax authority, to verify the accuracy and detect the irregularities. They further argued that the irregularities should be investigated to prove the illicit enrichment from prohibited behaviour, then to be processed under the criminal code.
b. Repression
The critical indicator of repression can be measured through the successfulness of anti-corruption agency in conducting the investigation, prosecution, and conviction of corruption cases (Choi 2011). In this area, KPK has gained public attention by carrying out high-ranking officials to the jail, such as ministers, the member of parliaments, and regional heads (Bolongaita 2010, Jasin 2010). It was also accomplishing 100% conviction rate and successful in recovering stolen assets (Bolongaita 2010, Kuris 2012).
However, Choi (2011) argues that the number of corruption cases handled by KPK is quite small compared to the rampant corruption, due to the limited human resources in doing investigation and prosecution. With 240 million populations in Indonesia, KPK is only supported by 1,102 personnel (KPK 2015) which is resulted in imbalance staff-population ratio. Compared with the ICAC in Hong Kong that has 1,300 personnel for 7 million populations (Soebagjo 2013). The right composition of personnel is the critical element to implement the mandate and duties of the agency (OECD 2013).
Moreover, Speville (2012) argued that KPK not only needs sufficient human resources but also supported by more financial resources to expand its operation. He found that the budget for KPK was very limited with only 0.05% of total national budget. Quah (2015) has compared the budget of seven Asian anti-corruption commissions and their population to assess wether the agencies have been supported by adequate financial resources to performs their tasks. Unsurprisingly, he found that KPK with US$35.72 million budget and 242 million populations resulted in per capita expenditure US$0.15 while ICAC Hong Kong has US$15.91 per capita expenditure. As Kuris (2015) argued that typical guard dog anti-corruption commission such as KPK Indonesia and ICAC Hong Kong need the higher amount of resources compared with the watch-dog agencies such as CPC Slovenia or ACA Serbia, due to its broader roles.
Another critical point is associated with KPK’s single office in Jakarta that potentially reduce the operational range of KPK throughout Indonesia (Speville 2012). He suggests that KPK should be established in province level. This as a response the corruption practices that have been decentralized (Jacobs & Wagner 2007, Soebagjo 2013). The establishment of KPK in regional level also to align with the existence of corruption court (TIPIKOR) that had earlier existed at every province (Bolongaita 2010). Further, Heilbrunn (2004) argued that the centralized corruption agency is only well-suited in a country where the population concentrated in the small geographic area. Thus, the centralized agency does not fit with Indonesia’s geographic (MacMillan 2011) and would fail to combat the roots of the corruption in every region (Jacobs and Wagner 2007). They further argued that investigation process from the capital would not be effective since it needs the local officer who has immediate access to witness and evidence and comprehensive recognition of the local condition.
Besides the resources problems, KPK has to struggle with some attempts from parliament and other law enforcement agencies that erode its law enforcement capacity (Bolongaita 2010, Jasin 2010, Speville 2012, Kuris 2015). For instance, the attempts from police to arrest the chairman and commissioners of KPK (Butt 2011) and the parliament attempts to revise KPK’s law (Jasin 2010). The serious problem in the cooperation between KPK and other agencies would hinder KPK from obtaining long term success (MacMillan 2011). As argued by MacMillan (2011) and Kuris (2015) that to achieve substantial and lasting results, the anti-corruption agency needs to be invulnerable to political intervention, have a good coordination with other agencies, and obtain the political will. The political will or commitment from political leaders ensure the allocation of sufficient financial and human resources and strong law enforcement to support anti-corruption efforts (Quah 2010). He believed that the political will was the key success factor of CPIB Singapore and ICAC Hong Kong in eradicating the corruption in their country.
c. Handling Public Complaints and Civil Society Participation
Appropriate handling of public complaints is necessary as a basis for start an investigation and also as a preventive action by increasing the public awareness (Choi 2011). He found that the number of public complaints that received by KPK was higher compared with other agencies, which reflects the public trust (Choi 2011). According to Annual Report of KPK in 2014, there are 9.000 public complaints coming to KPK, which is impossible to be handled solely (KPK 2015). Thus, KPK can confer it to the police or attorney (KPK 2015) based on corruption scale (Choi 2011). In this point, KPK has to coordinate to ensure the continuity of legal process, given the fact that both of them were perceived as the most corrupt agencies in Indonesia (Martini 2012). Moreover, based on data of KPK (2015), most of the public complaints originated from Jakarta and other nearby regions. This could be an effect of the centralized office in Jakarta that can only be reached easily by the surrounding community.
Another challenge came from the lack of whistleblower protection in Indonesia which create fear of retaliations after reporting the corruption acts (KPK 2006). As argued by MacMillan (2011) that the effective legislation and procedure of whistleblower protection are essential to encourage more public reports; thus, the government will obtain more information to effectively curb the corruption. In 2011, OECD provided the guiding principles based on the best practices among G20 countries with several mechanisms for protection: (i) provide comprehensive and robust protection against discrimination, workplace retaliation, and physical threat, (ii) protection against criminal and civil liability, and (iii) protection of whistleblower’s identity. In addition, some best practices such as clear whistleblower procedure, easily accessible channels, and the rewarding system can enhance the effectiveness of whistleblower system (OECD 2011).
Furthermore, KPK needs the strong support from civil society including the NGOs and the media (Nugroho as cited in Kuris 2012). The support is important to defend KPK from various attempts and to support when such help is required (Bolongaita 2010, Kuris 2012). The civil participation also provides the constructive feedback on KPK’s performance to improve its investigations (Kuris 2012). Study conducted by Forbis (2013) in 79 countries found that the civil society had a great impact in reducing the corruption rate. This is similar to previous studies by Sung (2002) that civil society and freedom of the press, especially an active investigative journalism, significantly reduce the corruption level.
Conclusion
As the implementation of decentralization, the corruption cases have been rampant at the regional level. In reducing the corruption level, KPK has demonstrated many good achievements and gained public trust. However, it is still not significant compared with the massive corruption acts and the investigation of corruption cases that mostly concentrated at the central level. Some critical challenges have been identified based on the three main areas of KPK works. In prevention area, the lack of compliance of wealth reports mainly caused by the absence of punishment and the vagueness procedure of reversal burden proof based on asset declaration. Moreover, several factors such as the limitation in resources, centralized position, lack of political will, and poor cross-agency cooperation has hindered the repression efforts of KPK. It is also exacerbated by the poor legislation and procedure in encouraging and handling public complaint and civil society participation.
In this regard, the government has to find out the solution to overcome all those critical challenges that hinder KPK in achieving substantial results. First, the strict regulation and clear procedure of wealth report are needed to achieve high submission compliance and to effectively use it as an initial basis of investigation through reversal burden of proof. The establishment of electronic wealth reporting also could be used. Secondly, KPK should be established at the province level regarding the large geographic area. However, the headquarter has to supervise its regional branches to ensure the compliance with the central standard and anticipate the weakening of KPK by abusing the opportunity of direct interaction with KPK (Speville 2012). Moreover, Indonesia needs to strengthen its political will in order to support KPK in achieving its long-term success. The strong political will is a key factor to overcome the problem of financial and human resources within KPK. The political will could be boosted by the strong public action (MacMillan 2011) by using the significant mass of citizens and robust media (Bolongaita 2010). Furthermore, the clear legislation and procedure of whistleblower system are also required. It has to protect the whistleblower from physical threat, administrative, civil, or criminal charges and encourage more tip by creating incentive either in cash or immunity from prosecution (KPK 2006).