This online service provides much better services for public notaries long disgusted by the terrible public services at the Justice Ministry, full of corruption — just like any public institution. Although public notaries have to pay more, they are now delighted as they can process the registration of their customers’ companies much more easily and expect a positive outcome. The system, however, has a big downside. It is tainted with corruption.

Many times, corruption and good services become mixed, blurring people’s eyes including maverick economist Kwik Kian Gie. After a long hiatus, Kwik made headlines once again by giving his tacit support to his ex-minister colleague Yusril Ihza Mahendra, saying that the state did not suffer any losses from the Sisminbakum.

Kwik argued that the money invested to build the Sisminbakum came from the private sector, not from the state budget, and therefore there was no state loss. He also said the money collected from public notaries for registering their companies could not be categorized as non-tax revenues.

If Kwik’s logic is followed, then every ministry or state agency with public services (car registration, issuance of passports, land certificates, you name it) could create a system like the Sisminbakum and assign a company belonging to the minister’s friends or family members to run a similar system and then collect money from the public for the services.

According to the Attorney General’s Office, Sisminbakum was simply blatant corruption. Until it was taken over by the Justice and Human Rights Ministry, the Sisminbakum service generated Rp 420 billion (US$47 million), of which Rp 379 billion went to the system’s developer, PT Sarana Rekatama Dinamika, Rp 18 billion to the ministry’s employee cooperative, another 18 billion to the directorate general of public legal administration and only Rp 5 billion to the government as tax.

The problem is that there is no law or regulation governing contracting out public services. Thus, there is no parameter in establishing fees or commissions or anything that the state or public has to pay, for public services contracted out to private companies.

We need a law like that on toll roads, which allows private companies to participate in the development of toll roads, but the state (through the government and the House of Representatives) still controls the tariffs that private investors can impose on the public, by considering all costs rendered by the investors.

Contracting out is not a bad idea at all. Contracting out could be a good choice done properly, especially for our country, which has a reputation for notoriously lousy public services. For example, those who like traveling abroad will notice a big difference in services between the US and Chinese visa services in Jakarta.

For the public, processing a visa at the US Embassy is a torturous process, with a long waiting period even for interviews, as well as long-security checks upon entering the embassy compound. Processing a Chinese visa, in comparison, is smooth with not much protocol because the service is contracted out to a private company, which naturally pays more attention to the comfort of its customers — the visa applicants. This company even provides additional services to those who want a faster service, of course, at a bit more cost. Travelers have choices of one-, two- or three-day visa services.

Not only China, the British and Australian embassies here have also contracted out their visa services.

The result is a better service for customers. But the US is not alone. Most other embassies, including European embassies, handle their visa services by themselves, and naturally, it takes longer for them to process and travelers have to go through tough security checks to enter their compounds.

Contracting out public services is common in developed countries. Public services that are contracted out to the private sector range widely from the issuance of passports to jail services. The Sisminbakum is actually one of them, and it proves to be providing a much better service.

If only we can follow this step and contract out more of our public services, the state would eventually provide better services to its citizens. But, we have to establish clear-cut rules and regulations to prevent similar corruption as found in the Sisminbakum.

---------------------------------

Letter to The Editor: PT Sarana Rekatama Dinamika clarifies

On behalf of our client, PT Sarana Rekatama Dinamika, and in relation to The Jakarta Post's Aug. 5 titled "Corruption, good services need separation in contracting out", we would like to answer and correct your editorial.

ln the first paragraph, it is stated that: "Corruption and good services seem unlikely to go hand-in-hand but it does with the Sisminbakum."

In the fifth paragraph, it is stated that: "[Every ministry could create a] system like Sisminbakum and assign a company belonging to the minister's friend or family members to run a similar system and then collect money from the public for the services."

In the sixth paragraph, it is stated that: "According to Attorney General's Office, Sisminbakum was simply blatant corruption. Rp 379 billion [of the funds generated by the service] went to the system's developer PT Sarana Rekatama Dinamika."

In the thirteenth paragraph, it is stated that: "[We] have to establish clear-cut rules and regulations to prevent similar corruption as found in Sisminbakun."

The statements in the editorial are incorrect, unfounded and misleading.

Sisminbakum was established to answer the frustration of businesses in dealing with administration and bureaucracy of limited liability companies with the Department of Justice and Human Rights (now the Ministry of Law and Human Rights, or MOLHR).

Sisminbakum was not born out of any state budget, but from of a willingness of a private company to assist the administration system within the MOLHR as an answer to the long-existing frustration, which eventually businesses will greatly appreciate.

As such, our client, with its own budget, technology, and manpower established Sisminbakum. As the party who had to (provide the initial budget) at the beginning both to establish and to maintain (the endeavor), a 90-10 sharing arrangement was normal because all the overhead and maintenance costs were solely paid by our client.

The numbers that have been lately and widely (circulated) in the media, Rp 420 billion and/or Rp 379 billion, have been erroneously exaggerated. In fact, after all the costs and taxes have been deducted, the amount received will become much more modest. As any BOT system contemplates, after 10 years, the system will eventually be transferred back to the MOLHR, including the entire income stream.

Furthermore, former government officials and also former law and human rights minister Yusril Ihza Mahendra stated that Sisminbakum is the policy of the government. Sisminbakum was established at a Cabinet meeting in 2000.

A Sisminbakum cooperation agreement was signed by former law and human rights minister Yusril and inaugurated by Megawati Soekarnoputri, then vice president. The government has also collected VAT and income tax from Sisminbakum with the total amount exceeding Rp 100 billion. As such, there can be no inference that the existence of Sisminbakum in any way caused a loss to the state. Rather, it is a source of income.

It will be a tremendous setback if the cooperation between government and private like this considered as corruption, since this will affect the investment atmosphere in Indonesia.

There is no corruption within Sisminbakum. There were no state losses during Sisminbakum and the process of the appointment of our client was not contrary to the law. Therefore, Sisminbakum is not corrupt.

Andi Simangunsong
Attorney of PT Sarana Rekatama Dinamika
Jakarta

The Jakarta Post, August 9, 2010, page 7

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