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Jakarta Post

KPK cautions Indonesian firms over bringing in Chinese investors

  • News Desk

    The Jakarta Post

Jakarta   /   Sat, May 11, 2019   /   11:47 am
KPK cautions Indonesian firms over bringing in Chinese investors The Corruption Eradication Commission building on Jl. HR Rasuna Said in South Jakarta. (JP/Wienda Parwitasari)

The Corruption Eradication Commission (KPK) has called on state-owned enterprises (SOEs) to be careful when bringing in investments from Chinese companies.

The suggestion was conveyed by KPK deputy chairman Laode M. Syarif during a discussion attended by State-Owned Enterprises Minister Rini Seomarno on Thursday.

"Many of our SOEs partner with Chinese companies. However, good corporate governance is not a well-known concept among them," he said, as quoted by Antara. 

The case was different with companies from Western Europe and the United States, which implemented thorough investment control practices, he added.

"When Chinese companies invest here, you have to be extremely careful. Their [investment] control is not as tight as companies from Western Europe or the US."

He said European countries and the US had laws in place that allowed them to prosecute actors who bribed foreign public officials, such as the United Kingdom Bribery Act in England, while Indonesia and China had yet to enact such laws.

To prevent cases of misconduct, Laode said SOEs must ensure that their Chinese investors follow Indonesia's regulations and implement antibribery measures.

"We have to be open to investors from any country, so long as they don't resort to bribery," he said.

During the discussion, he highlighted that corporations must take responsibility for corruption, saying that countries that were high on the Corruption Perceptions Index not only prosecuted the actors, but also the companies. The higher the ranking, the less corrupt a country is perceived to be.

"The KPK has convinced the Supreme Court to also place the responsibility on corporations. In Hong Kong, more than 70 percent of its graft cases occur in the private sector, while Singapore's antigraft body no longer has public officials as its main target," he said.

The KPK's efforts resulted in a Supreme Court regulation on corporate corruption, Laode said. (ars)