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Corrupt police a torment for businesses
Celebrating its 64th anniversary Thursday, the police force has seen many of its efforts to fight its deep-rooted corrupt mentality result in setbacks
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em>Celebrating its 64th anniversary Thursday, the police force has seen many of its efforts to fight its deep-rooted corrupt mentality result in setbacks. Corruption has now reached an alarming level and is seen to disturb the economy. Investors willing to employ a huge number of workers are afraid of setting up new businesses over fears of becoming victims of police case-engineering filed either by their competitors, business partners and workers. The Jakarta Post’s Rendi A. Witular and Bagus BT Saragih explore the root causes of the police’s defiance to change. Here are the stories:
Great place for it: Police officers stop a motorist for violating the rules of the road in this file photo taken on Jan. 7, 2010, in Jakarta. Businesspeople and the public have called for credible reform in the police force, which celebrates its 64th anniversary Thursday, saying corruption in the force is creating uncertainty in the business environment. JP/J. Adiguna
A Japanese manufacturing company in Bekasi, West Java, is said to be bearing a series of extortions by the police after discharging several of its workers for allegedly committing a crime at the company.
The discharged workers fought back by reporting the company’s expatriate management to the police for “unpleasant conduct”.
With the police now meddling in the affairs, the management reportedly has no other option but to comply with the irrational amount of severance pay requested by the workers.
But despite having forged a peaceful deal with the workers, problems remain as the police will not drop the case unless the management pays kickbacks.
Six years into the administration of President Susilo Bambang Yudhoyono, corruption within the police force has increasingly become a grave concern for businesses, especially in the manufacturing sector that employs many workers.
For most foreign investors and several local companies, it is said that extortion by the police is better served and left unspoken publicly than risking future operations.
Business lobby groups, the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Employers’ Association (Apindo), have filed unaccounted complaints with the President over the police’s malevolence.
However, no stern action has been taken to address the problems, which have corroded the police’s success story in counterterrorism measures and drug trafficking crackdowns.
“The attitude of the police and the law enforcers in general has discouraged local and foreign investors from setting up new manufacturing businesses here,” said Kadin vice chairman Hariyadi Sukamdani.
“Only existing manufacturing companies that know the jungle and the risks have the courage to expand. Few new players have the appetite to face legal uncertainties,” said Hariyadi, who oversees the chambers’ public policy, taxation, customs and fiscal and monetary system.
“It’s not the high cost economy that we are concerned about but the way the police can engineer a business dispute into a criminal charge. There’s a very disturbing legal uncertainty here,” said Hariyadi.
Apindo chairman Sofjan Wanandi said there were numerous cases in which the police could easily be used by business competitors, partners and workers to bend the law and engineer criminal charges against a disputed party.
In mid last year, a local unit of US securities house Merrill Lynch fell victim to the police’s malevolence in turning a usual business dispute into criminal charges.
The police declared the company’s management a suspect for embezzlement and libel, filed by a local investment company and Merrill’s former client Renaissance Capital. The dispute revolves around a claim worth US$100 million.
Around six months later, however, the police terminated the case.
Both Hariyadi and Sofjan were not expecting improvement within the police force any time soon, with businesses having to comply with paying kickbacks, or risk being put in jail on baseless accusations.
Aside from creating legal uncertainty, the police have also been known to contribute to a high cost economy, in which they collected illegal fees from truck drivers or logistics companies for securing their travel.
According to Apindo, illegal fees collected by the police and the bureaucracy account for 15 percent of production costs.
“It’s very disturbing for businesses. Corruption at the police has discouraged the economy from growing higher, and companies to employ more workers,” said Sofjan.
Indonesia’s economy may increase by 5.5 percent this year, fueled mostly by public and private consumption than from investment and exports. The economic growth is also driven primarily by sectors related with services and commodities than by those manufacturing, a sector badly needed to absorb around 9 million people in the full-time unemployment category and around 45 million under part-time unemployment.
Indonesia, Southeast Asia’s largest economy, has an average of 3 percent investment growth in the manufacturing sector over the past 10 years, far lower than its neighboring peers Vietnam and Thailand, according to Coordinating Economic Minister Hatta Rajasa.
“Don’t expect the manufacturing sector to grow rapidly unless the police are well fed and reformed,” said Sofjan.
He said the police were becoming more aggressive nowadays in seeking extra income as they could no longer enjoyed proceeds from gambling, which had long been their primary honeypot for financing daily operations.
“Because they can no longer feed from gambling, now [the police] are disturbing businesses,” said Sofjan.
Since 2005, then police chief Gen. Sutanto prohibited his officers from backing gambling operations, a move eventually causing more trouble for most police officers who are already underpaid but have to overcome a small operational budget to uphold the law.
Kadin and Apindo, however, believed problems plaguing the police were not only stemming from low pay, but from more macro policies related with the management system and supervision.
National Police spokesman, Insp. Gen. Edward Aritonang said the police had a commitment to be open to complaints and input to reform the police.
“If there are officers asking for kickbacks or engineering a case, please report them to us, and don’t comply with their request,” said Edward. “Businessmen are smart people, they must know that paying bribes is illegal.”
Edward said two or three bad apples may exist, but they should not be seen as representing the
institution.
“I admit the police still have many weaknesses but we won’t stop reforming ourselves,” he said.
