Foreign Ministry adopts e-procurement to ensure transparency

The Jakarta Post , Jakarta | Thu, 06/28/2007 10:21 AM

Abdul Khalik, The Jakarta Post, Jakarta

The Foreign Ministry has become the first ministry in Indonesia to introduce an electronic and online procurement system to avoid markups and the misuse of its Rp 4 trillion budget for material and service purchases.

Foreign Minister Hassan Wirayuda, who officially launched the new system Wednesday, said e-procurement will ensure that public announcements and tender processes and assessments will be conducted publicly and transparently.

""The system will enable all businesses -- small, medium and large -- to have the same opportunities in the foreign ministry's tender processes,"" Hassan told reporters.

As the office first to introduce the system, the Surabaya city administration is helping the Foreign Ministry to establish and run the system.

Hassan said the system will minimize illegal practices, such as offering commissions or bribes to secure procurement rights, because all parties involved will be able to directly monitor the process.

He said he plans to apply the system to all Indonesian embassies throughout the world.

Surabaya Mayor Bambang Dwi Haryanto praised the system, saying it was a good way to eradicate corruption, collusion and nepotism in the procurement process. He also dismissed suggestions that due to the fact the system uses advanced technology, it only benefits large-scale players.

""Beside minimizing cases involving the misuse of funds and markups, Surabaya's experience has proved that over 60 percent of the city's tenders have been won by small and medium-sized firms, including those ran by young businesspeople. So, it really spreads the opportunities around,"" he said.

Although President Susilo Bambang Yudhoyono said the eradication of corruption was his first priority, procurement by government agencies has been notoriously linked to markups and bribery, causing the state to lose trillions of rupiah each year.

Some reports have suggested that unaccounted for state funds have reached 30 percent due to misuse of funds in the procurement process.

Although many officials and businesspeople have been jailed for markups and offering or accepting bribes, many people believe graft is still rampant in government agencies.

In the 2007 Global Corruption Report released by Berlin-based watchdog Transparency International (TI), Indonesia is included on a list of countries in which bribery is common. Five out of 10 respondents in Indonesia said they had resorted to such practices.

According to TI's annual indicator of corruption -- the Corruption Perception Index -- Indonesia was ranked 130 out of 163 countries in 2006, and 137 out of 159 countries in 2005.

The World Bank, which carried out a study in West Sumatra, West Kalimantan, South Sulawesi, East Java and West Nusa Tenggara found that 29 provincial prosecutor's offices around the country handled some 265 corruption cases involving 1,000 local councillors in 2006. In the same year, district prosecutor's offices at the regency and municipality levels handled 46 corruption cases, with 61 local administration officials being put on trial.

""Punishing offenders is very important for deterrence but establishing a system to ensure a clean and transparent process is similarly important,"" Hassan said.

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