T

he arrest of Siti Hartati Murdaya earlier this month has made investors less confident in backing businesses in the nation, according to several members of the Indonesian Chamber of Commerce and Industry (Kadin).

Despite strong connections to President Susilo Bambang Yudhoyono personally and to his Democratic Party, Hartati was detained by investigators from the Corruption Eradication Commission (KPK) on Sept. 12.

The tycoon, one of Asia’s richest women, allegedly paid Rp 3 billion (US$318,000) to Buol Regent Amran Batalipu to issue permits to her companies PT Hardaya Inti Plantations (HIP) and PT Cipta Cakra Murdaya (CCM) in Bukal subdistrict in the Central Sulawesi regency.

Following her detention, Hartati resigned from the Democratic Party’s patron board and from the prestigious National Economic Committee.

Biben Akbar, Kadin’s head of inter-committee relations, told attendees at a Kadin conference on Monday that Hartati’s case was a clear example of the business challenges that must be dealt with by investors in corrupt regions.

“We are concerned about rampant bribery cases dragging down entrepreneurs,” Biben said.

Meanwhile, an executive with the East Java chapter of Kadin, Ma’ruf Syah, acknowledged that many investors were involved in fraud, which he attributed to pervasive official corruption.

“Existing conditions will only cost businesses more while it does not simultaneously guarantee that their projects will proceed as planned,” Ma’ruf said. “There is a need for the law enforcers to work harder.”

An executive with Kadin’s West Sumatra’s chapter, Rahim Mardanis, said that the law enforcement agencies, including the National Police and the KPK, had to protect executives who were solicited by regional officials to pay bribes for businesses permits.

The Regional Autonomy Watch (KPPOD) executive director, Robert Endi Jaweng, who also presented at the discussion, said the accountability of the local administrations in the country remained in question even after regional autonomy was introduced 10 years ago.

Robert said although most local administrations have introduced one-stop integrated license service centers (PSTP) to improve the business climate in Indonesia, their implementation has not been fully effective, despite a push from the central government.

“Of the 524 existing local administrations in the country, around 420 of them, or 80 percent, comprising regencies and municipalities, have established PSTPs. Yes, the quantity is fantastic, but whether they have done their job well is another story,” Robert said.