1.Criminal Code Offences
Law No. 31 of 1999 on the Eradication of the Criminal Act of Corruption (“Law No. 31/1999”) as amended by Law No. 20/2001, expands upon and adds to these criminal offences and, not surprisingly, increases significantly the penalties for breach of the Criminal Code provisions (which, to a large extent are now fully incorporated into Law No. 31/1999).
2.Management Responsibility for Corporate Actions
Law No. 31/1999 has important implications for the Board of Directors of all Indonesian companies as Article 20 states that “In the event that the criminal act of corruption is committed by or on behalf of a corporation, the lawsuit and the sentence may be instituted against and imposed on the corporation or the board”. Judges can order that the board of directors to be brought to the court. Directors of companies under investigation should also be aware of further provisions of Law No. 31/1999 which impose heavy custodial sentences and fines on those who prevent, hinder or foil, investigations and lawsuits, or who provide false information to the authorities or to the court. 3.Investigation and Prosecution of Corruption
The government acknowledges that investigating corruption is not easy and bringing successful prosecutions is extremely hard. With this in mind, the drafters of Law No. 31/1999 and Law No. 20/2001 tried to ease the burden on prosecutors and the courts by introducing a number of (in some cases, somewhat controversial) measures : Investigators are authorised to use wire-tapping. The Government are presently preparing a draft regulation regarding wire-tapping. The prosecuting authorities and the court may request financial information on the suspect or the accused from banks and request that deposit accounts be blocked (both requests to be made through Bank Indonesia). Suspects can be required to provide information on their and their family’s assets. Investigators are given authority to open, examine, confiscate and use nearly all types of information, records, correspondence and other evidence which may be relevant to the suspected criminal act. An acquittal verdict in a criminal prosecution does not abolish the right to reclaim the loss inflicted on the state. If a suspect dies during an inquiry or prosecution, the lawsuit may, in some circumstances, be continued against the suspect’s heir(s). If an accused chooses to but cannot prove that his wealth or assets was not obtained unlawfully then this can be used against him by the prosecution and the assets may be confiscated by the state. The Government are presently discussing a draft bill on civil forfeiture. 4.Public Participation in Eradication of Corruption
In order to implement this, the government issued Government Regulation No. 71/2000 on Procedures for Implementation of Public Participation and Provision of Appreciation in the Prevention and Eradication of the Criminal Act of Corruption. This regulation gives certain rights to the public to obtain responses from the authorities in respect of complaints or information provided to the authorities. It also tries to provide protection to members of the public who offer information. Finally, those individuals or corporations who assist in the fight against corruption may be given tokens of appreciation, either in the form of certificates or cash.
5.Eradication of Corruption by State Organizers
In November 1998, the People’s Consultative Assembly or MPR made a Stipulation (No. XI/MPR/1998) that state organizers (loosely, senior government officials) should perform their functions and tasks honestly, fairly, transparently and reliably, and free from practices of corruption, collusion and nepotism. State organizers should also be willing to disclose their wealth and to have their wealth investigated before and after assuming office.
This Stipulation was followed up in 1998 by Law No. 28/1999 on The State Organizer Who is Free from Corruption, Collusion and Nepotism. This law, among other matters, prescribes penalties for offences of “collusion” and “nepotism” by state organizers and provides for an independent Investigating Commission to prevent corruption, collusion and nepotism by state organizers.
A National Ombudsman Commission was established pursuant to Presidential
Decree No. 44 of 2000 with the aim of supervising and monitoring the services of the executive and the judiciary. The powers of the Ombudsman are limited and the body primarily fulfils a supervisory role. On 7 September 2008, Law No. 37 of 2008 on the Ombudsman of the Republic of Indonesia (“Law No. 37 of 2008”) was enacted and the National Ombudsman Commission was declared to be the Ombudsman of the Republic of Indonesia (“Ombudsman”). Law No. 37 of 2008 defines a Report as a complaint or fact submission to be settled or followed up by the Ombudsman submitted in writing or orally by anyone who falls victim to an act of maladministration (maladministrasi). Maladministration is defined as a certain action in relation to the performance of public services by the State Administrator and Government which causes a material and/or immaterial loss to the public and an individual. The Ombudsman’s function is to supervise the public services provided by the State Administrator and the Government to the public (including by state-owned enterprises (Badan Usaha Milik Negara), regional government-owned enterprises (Badan Usaha Milik Daerah), state-owned legal entities (Badan Hukum Milik Negara), private enterprises (Badan Swasta) or individuals (perseorangan) 7.Corruption Eradication Commission (the “KPK”)
The KPK was established by Law No. 30 of 2002 on the Corruption Eradication Commission (“Law No. 30/2002”) and is intended to implement Article 43 of Law No. 31/1999 (as amended). The role of the KPK is to:
coordinate with the agencies having the authority to eradicate corruption; supervise the agencies having the authority to eradicate corruption; conduct investigations, interrogations and prosecutions with respect to corruption; take steps to prevent corruption; and
Monitor the management of government.