The government should be commended for submitting the bill on amendments to the 2003 Anti-Money Laundering Law (AML) that ask for a broader mandate for PPATK, which is currently only authorized to analyze reports of suspicious transactions it receives from banks and finance companies and pass on to the National Police transactions with the strongest  indications of money laundering for further investigation and prosecution.

But of the thousands of suspicious transactions the 8-year old PPATK has analyzed and filed with the police, only 26 have reached court. What a dismal record, given Indonesia’s notorious image as one of the most corrupt countries in the world, where illegal logging and drug trafficking remains pervasive.

This means the National Police, themselves notorious for being one of the most corrupt public institutions in the country, and yet the only law-enforcement agency authorized to investigate money-laundering cases, has miserably failed to do its job.

The police claim most suspicious transactions submitted by PPATK were only “unusual” transactions, but we think it’s the police’s way of thinking that is “unusual”. They simply find it normal when a police officer, whose official income is only US$500 a month, has millions of dollars in his bank accounts, arguing that the police officer’s family members own businesses and is quite smart in investing their money. But the police never give details as to what kind of businesses the officer’s family members are engaged and whether their income payments are commensurate with their huge income. Then what is about the regulation that bans police and armed force members from doing business.

The bill has rightly been designed to vest PPATK, the agency responsible for enforcing the AML law, with broader authority to investigate suspicious financial transactions and block bank accounts implicated in laundering money derived from any of the more than dozens of  predicate crimes, defined in the AML law.

The battle within the next few weeks between the government and the parliament, which currently deliberates the bill, will determine the strength of the national fight against corruption.

If the House grants the PPATK broader authority in enforcing the AML law, it would be a great boost for the Corruption Eradication Commission in fighting graft. But if the bill is turned down or watered down in regards to PPATK’s authority, Indonesia will remain a haven for money laundering and corruption.

 ***  

The State Power Monopoly (PLN) and the government finally removed the confusion over the 10-15 percent increase in basic electricity tariffs, which over the past two weeks, has created an uproar among businesses.

Following a meeting between PLN, the government and industrial associations at the parliament Monday, Energy and Mineral Resources Minister Darwin Zahedy Saleh announced that increases to bottom-line billing after the power tariff rises would range from 10-15 percent for big household users and industrial customers and will be capped at a maximum 18 percent for certain industrial users.

Previously, businesses were shocked to find that the actual impact of the 10-15 percent tariff rises in their monthly power billing ranged from 40 to 80 percent due to steep rises in power surcharges imposed on usage during peak-load hours and on the usage in excess of the maximum volume set for each category of users.

After strong protests and threats of massive worker layoffs from the business community, PLN, seemingly at the order of the government, has decided not to apply the basic tariff increases to the two surcharges which are based on progressive tariffs.

But the debacle encountered by the government in raising power tariffs in a bid to decrease electricity subsidies, which are budgeted at about US$5 billion this year, could discourage the government from pushing ahead with its long-postponed energy reform program, this time in fuel oil pricing.

The government has planned since early this year to restrict subsidized fuel usage by passenger cars in light of reducing fuel subsidies, which are estimated to cost $9 billion this year. But the government has yet to come up with a detailed technical program in how the restriction will be imposed at gasoline stations without being abused.

In a widely expected move, the House of Representatives’ Commission XI overseeing finance and banking on Thursday confirmed Darmin Nasution as the new governor of Bank Indonesia to replace Boediono who resigned in May 2009 after he was picked by Susilo Bambang Yudhoyono as his running mate for the 2009 presidential election.

As acting chief of the central bank over the past year, Darmin had proved his technical competence and leadership in helping the country cruise smoothly through the market turbulence set off by the European debt woes last April.

His macroeconomic knowledge, impeccable integrity and his previous experience as the director general of taxation and the chief of the supervisory agency for the capital market and non-bank financial institutions have rounded up his qualification for the top position at the central bank.   

— Vincent Lingga

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