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New Indonesian Website Imposes Social Sanction on Corruptors




by:
Sam Eastwood
Norton Rose Canada LLP - Montreal Office

 
August 8, 2012

Previously published on July 2012

Korupedia.org is a new Indonesian encyclopaedia that lists individuals who have been convicted of corruption. The website was launched by Transparency International Indonesia on 12 June 2012 along with a number of news editors and social media activists in an attempt to introduce an unprecedented form of social sanction to name and shame criminals found guilty of corruption.

Korupedia.org publicises the names of those found guilty, gives a brief description of the case and provides access to court documents. The website also provides a list of unresolved corruption cases and monitors legal proceedings, warning the public about potential convictions.

Transparency International’s Corruption Perception Index regularly ranks Indonesia as one of the world’s most corrupt countries. Cases brought by enforcement agencies, such as the U.S. Securities and Exchange Commission and the Corruption Eradication Commission (KPK), Indonesia’s principal anti-corruption agency, have given insight into the level of corruption that occurs within public institutions.

According to Maplecroft, a leading firm of global risk analysis, the risk to business from corruption is highest when engaging with public officials, compounded by protracted bureaucratic processes. Companies can face delays when doing business in Indonesia, including when seeking operating licenses and government contracts. This can encourage the exchange of bribes and facilitation payments.

Many foreign and domestic companies avoid the justice system in Indonesia given its complex regulatory and legal environment. The judicial system operates irregularly and opaquely, leading companies to resolve disputes through arbitration outside Indonesia.

Although Indonesia is a signatory to the United Nations Convention Against Corruption, there is currently no implementing legislation for the Convention with regard to foreign bribery laws, rendering the provisions of the Convention unenforceable. A proposed bill to enact such a law has been submitted to Parliament but has yet to be passed.

The impact of extraterritorial anti-corruption legislation aiming to prevent bribery in international business transactions, such as the Foreign Corrupt Practices Act in the United States and the UK Bribery Act, has, however, increased awareness dramatically, making anti-corruption compliance a topic now under much debate in Indonesia.

A number of multinationals (including Innospec Inc., Monsanto Company and Daimler AG) were recently found to have made irregular payments to Indonesia officials, resulting in settlements with US authorities. The KPK has also achieved some high-profile convictions. Oil and gas, car manufacturing, agriculture and construction tend to be among the particularly high-risk industries. In addition, dependence on intermediaries is perceived as a major challenge to doing business in the country.

The launch of korupedia.org is a move towards greater transparency and was welcomed by the KPK, which committed to providing information from its database. Over a hundred people convicted of corruption have so far been exposed online (the list is expected to grow) and there have been more than one million hits on the website since it went live.

Whether this development will facilitate investigations and prosecution of acts of corruption remains to be seen. However, greater transparency and scrutiny of corrupt dealings are a key step in the drive to deter potential offenders.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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