Ridwan Max Sijabat, Jakarta – Almost six years after the devastating 2004 tsunami, which killed more than 130,000 people in Aceh province, most victims have recovered from physical and psychological issues to resume their daily routines in a new environment.

In the worst-hit coastal Banda Aceh and Aceh Besar regencies, survivors live in houses and facilities built by the international community. They said they don't want terrible memories to haunt their lives and hope to build a better future.

Hasnanda Putra, a 36-year-old resident of the devastated Blang Oi hamlet in Meuraxa district, which lost its population in the disaster, said people have been able to accept the loss of their loved ones.

"We are the offspring of people who were killed in the tsunami. We were away from the hamlet when the disaster struck," he told The Jakarta Post here on Wednesday.

Hasnanda and his wife were in Malaysia visiting his uncle when the 9.8 magnitude earthquake that triggered the monstrous tsunami that hit Aceh and nearby Nias Islands on Dec. 26, 2004. The disaster killed at least 210,000 people in the region including Sri Lanka and India, displaced hundreds of thousands more and wiped out buildings and infrastructure in Aceh and Nias.

A civil servant at the Banda Aceh municipality administration, Hasnanda's wife lost nine members of her family.

With Rp 53 million (US$5,800) in financial assistance from the Multi Donor Funds (MDF), they built a new house on a 125 square- meter plot of land in the hamlet.

"We built this house with an additional Rp 60 million loaned from the bank in the hope our lost loved ones would be pleased," he said.

Amiruddin Asyik, a resident of a new housing areas in Kahju, which was constructed with the help of the MDF, said his family was happy to stay in the new place and would move only when he retires in 2015.

"Kahju was levelled, but now we have a completely new community with smooth roads and a better mosque," said.

Amiruddin, a government employee, lost his wife and four teenage children in the disaster.

Thousands of quake-proof houses, schools, mosques and government offices have been built with new designs in the city.

Supervised by the Aceh and Nias Reconstruction and Rehabilitation Agency (BRR), more than 150,000 modest houses, dozens of hospitals, ports, bridges and roads were built. Many others have also been repaired over the past five-and-a-half years.

Balukiyah Ruddin, head of Lamdingin village, praised the MDF- funded reconstruction projects, which involved local communities from the planning to the construction stages.

"Unlike BRR's projects, the MDF have allowed residents to build their houses according to their needs.

Construction standards were set by donor countries and the entire process has been closely supervised to ensure the aid's goals," he said.

MDF has been entrusted to manage $685 million from 15 donor countries and institutions, including the EU, the US, the Word Bank and the Asian Development Bank to support reconstruction and rehabilitation projects in 14 regencies and 41 districts in the province.

The World Bank through the Community-based Reconstruction and Rehabilitation Program (Rekompak) managed $85 million and Rp 25.6 billion from the state budget to build more than 7,900 new houses, rehabilitate more than 6,900 others and construct 133 kilometers of roads, 142 kilometers of drains and 158 wells.

The World Bank-funded reconstruction and rehabilitation projects will be handed over to the Indonesian government here on Thursday.

West Papua

West Papua locals demand probe of mining graft

Jakarta Globe - May 6, 2010

Markus Junianto Sihaloho – Residents of Raja Ampat district in West Papua have demanded that police investigate their claims of judicial corruption centering on a mining company continuing its operations in a protected forest despite having its permit revoked.

At a meeting on Thursday with West Papua lawmaker Yorrys Raweyai of the Golkar Party, at the House of Representatives in Jakarta, the residents claimed nickel miner PT Kawei Sejahtera Mining had evaded illegal-mining charges by rigging a case with the help of local police and officials.

The issue goes back to 2004, when KSM was granted a mining concession in a protected forest in Raja Ampat. In 2008, then Governor Abraham Atururi revoked the permit after it the company had failed to meet several prerequisites, including an environmental-impact analysis (Amdal).

The company and the official who issued the permit, Maran Gultom, were brought up on charges. A year later, Maran was convicted and imprisoned, but the court acquitted the miner.

"I've urged the Judicial Mafia Eradication Task Force, the National Police, the Attorney General's Office and the Corruption Eradication Commission [KPK] to look into this case," Yorrys said. "We must stop all judicial graft, particularly in relation to illegal mining that destroys our forests."

Yorrys pointed out several irregularities in the trial, including that it was held in Jayapura, Pa-pua, and not in the relevant jurisdiction of Sorong in West Papua, as well as the fact that all the evidence seized from KSM, including heavy equipment, had since gone missing.

"It's strange because all the evidence was previously presented at the trial," he said.

Home Affairs Ministry official Syafrizal said a special task force set up by the ministry to probe the case had ruled KSM's permit was invalid.

Denny Indrayana of the Judicial Mafia Eradication Task Force said he had received the complaint from the Raja Ampat residents. "We need time to investigate it," he said.

Local elder Elli Dimalau said KSM was still mining in the area, using dynamite in the protected forest. He said the residents would next week take their case to the House of Representatives' Commission III, which oversees legal affairs.

The chain of islands that make up Raja Ampat is home to perhaps the highest marine-life diversity in the word, according to environmental group Conservation International.

Vanuatu foreign minister urged to snub Indonesia over Papua issue

Radio New Zealand International - May 5, 2010

The Vanuatu Free West Papua Association and the leader of the opposition have asked the Foreign Minister, Joe Natuman, not to meet the Indonesian government.

Both the Association and the opposition's Ham Lini say if Mr Natuman accepts Jakarta's invitation to meet for talks, it would be a slap in the face for the people of Vanuatu.

Mr Natuman received a petition pushing support of West Papua self-determination after a march in Port Vila two months ago.

While he promised to take the petition to the Council of Ministers, there has been no response from the government.

Mr Natuman had been due in Indonesia at the weekend but the trip has been put back because it clashed with visits to China and Britain.

But the Ministry of Foreign Affairs confirms he will go to Indonesia though a new departure date has not yet been set.

In Papua, 18 prisoners escape as guards riot

Jakarta Globe - May 4, 2010

Camelia Pasandaran & Nivell Rayda – A day after 18 inmates escaped while guards and their chief ran amok at a Jayapura prison on Monday, Justice and Human Rights Minister Patrialis Akbar pledged to conduct a full-scale inquiry into the facility's management.

The staff at Abepura Prison in the Papua capital erupted into violent protest early on Monday, smashing windows and computers in the prison office after news arrived that the warden, Antonius Ayorbaba, would be transferred to Bengkulu.

As they raged, 18 prisoners broke down the doors of the monitoring post and vaulted over the prison walls, the state-run Antara news agency reported.

"I demand an official explanation. It is inappropriate for a public official to stage a protest like that," Patrialis said on Tuesday. "A team from the ministry's inspectorate general was sent to Papua this morning to investigate."

Police in Papua are searching for the escaped convicts, while Antonius remains on the job at the prison, Patrialis said.

The minister said there was an indication that the prison officials deliberately allowed the convicts to escape. "That's not the only thing. I have received numerous reports of problems ever since Antonius became warden," he said.

He added, however, that Antonius's transfer to Bengkulu was a routine matter and was not related to job performance. A call to the prison went unanswered on Tuesday.

Amnesty International and Human Rights Watch have submitted a complaint to Patrialis, alleging that Antonius had denied medical treatment to Filep Karma, whom the groups described as a political prisoner, for a bladder infection.

Human Rights Watch also alleged that Antonius had overseen the abuse of another prisoner, Ferdinand Pakage, who it claimed was blinded in one eye when a guard hit him with a set of keys.

In another case cited by the rights group, a prison guard allegedly used a wrench to attack a prisoner who was found in possession of a mobile phone.

In total, the group reported two dozen cases of alleged torture, violence and abuse at the prison last year.

Untung Sugiono, director general of penitentiary affairs, said last year that the group's allegations were "inaccurate," and that "the matters had been cleared with the Papua correctional office."

500 elementary school teachers needed in remote Mimika

Jakarta Post - May 4, 2010

Markus Makur, Timika – More than 500 elementary school teachers are needed in Mimika, Papua province, to prevent remote areas of the regency from lagging behind in education, Mimika Education Agency chief Ausilius You says.

A lack of qualified teachers had prompted many schools in the region to employ unqualified teachers, who have only graduated from senior high school, he said. Schools have had to resort to whatever resources were at hand to continue running educational activities, he added.

"To deal with problems of elementary education in Mimika, we need hard work from all parts of the community," Ausilius said at an event held in conjunction with National Education Day at Timika Indah Square in Papua on Monday.

The problems needing to be addressed urgently include a lack of housing and transportation for teachers assigned to the regency's mountainous, coastal and remote regions, he said.

The majority of the regency's 76 elementary schools are situated in distant and mountainous parts of Mimika. A lack of housing facilities, Ausilius said, had made life in these remote areas uncomfortable for teachers.

The situation was madeworse by limited transportation facilities, which often forced teachers assigned to Timika, the capital of Mimika, to remain there for months or even years.

Teachers assigned to the mountainous regions of Arwanop, Geselema, Jagamin, Alama, Jila and Tsinga, for example, had to be flown in by helicopter to their posts.

"We have worked with the Amungme and Kamoro Community Development Institution and PT Freeport Indonesia to provide a helicopter to transport the teachers," Ausilius said. "However, once they arrive, they face another problem: they have no place to live."

Ausilius also said a program of incentives for the far flung teachers had not been met because of the budget shortages.

Separately, Mimika Education Council chairman, Kantius Mameyauw, cited the need for school committees to help tackle the issue of poor teaching conditions.

"There is a lot of ineffectiveness in the development of school buildings in Mimika, including an education center that has not yet been used," Kantius said.

"Many problems have not received serious attention from the education agency – mostly related to housing and transportation facilities for the teachers."

Kantius added that the council, school committees, related private institutions and the education agency in Mimika all needed to sit down together to discuss the best solutions for the problems.

Human rights/law

When it comes to court trials, the finish line is a moving target

Jakarta Globe - May 6, 2010

Heru Andriyanto – It appears that no one knows for sure when a criminal trial should end.

When the Supreme Court upholds a conviction, the story does not end there. The convict can still appeal. But several legal questions remain unanswered in regard to that legal avenue, creating technical loopholes often used, for instance, by death row inmates to delay their executions.

The first question is: How many appeals are allowed in the case of a Supreme Court verdict? The Supreme Court is allowed to hear just one appeal of a decision it has issued.

Appealing a Supreme Court decision is the final level of appeal and generally requires that new evidence be submitted. But multiple appeals have been known to be filed at the Supreme Court for any number of cases.

The Constitutional Court is currently hearing a judicial review of articles in three separate laws stating that the Supreme Court is allowed to hear just one appeal of a verdict it has issued. During Thursday's hearing at the Constitutional Court, the Attorney General's Office argued that multiple appeals should not be allowed.

"If multiple appeals are allowed, we will have a protracted and prolonged criminal justice system incapable of bringing about justice and legal certainty," it offered in a statement read out at the hearing.

Lawyer Farhat Abbas in late March filed for a judicial review of articles in three laws on behalf of his client, businessman Herry Wijaya, director of private company PT Harang Ganjang.

Farhat said that for 18 years the company had been involved in a legal dispute over a piece of land on Jalan Jend Sudirman in South Jakarta with PT Graha Metropolitan Nuansa, owned by businesswoman Artalyta Suryani, who is currently serving a jail sentence for bribery in an unrelated case.

Herry's company filed an appeal with the Supreme Court and won, but Farhat claimed Graha Metropolitan somehow managed to file a separate review to strike down the decision, with the court ruling in its favor. When Harang Ganjang again sought redress, the appeal was rejected.

Farhat earlier said his client was requesting a review of Article 24 of the 2009 Law on Judicial Authority; Article 66 of the 1985 Law on the Supreme Court; and Article 268 of the Criminal Code Procedures. Farhat said the Supreme Court had several times accepted more than one appeal.

"The law is not consistently implemented because there are previous cases in which appeals have been filed more than once, even four times. Besides, limiting a review to once is unfair," the lawyer said.

Two years ago, three militants on death row for the 2002 Bali bombings lodged appeals at least three times after the AGO announced plans to execute them. The move delayed their executions for several months until the three militants – Imam Samudra, Amrozi and Ali Ghufron – were presented to the firing squad in November 2008 after the Supreme Court had rejected their last request.

Time frame

The next loophole is the absence of a regulation on any specific time frame within which a convict may request a review. Death row inmates often use the loophole to delay their execution by consistently delaying the registration of their appeal. Prosecutors cannot order an immediate execution until they are sure the inmates have exhausted all legal avenues, including appealing to the top court or requesting presidential clemency.

Gunawan Santosa, for instance, has been sentenced to death for murdering his father-in-law and an officer. When the AGO announced preparations for his execution last year, he immediately stated he was seeking an appeal, but has still not registered the necessary documentation. "Why be in a hurry? There's no law that limits our time," said his lawyer, Alamsjah Hanafiah.

The AGO has asked the Supreme Court to issue a ruling that specifies time limits for a convict to register an appeal. The court returned the request back to prosecutors for a decision – with a suggestion of 180 days for the inmate to register or he or she would lose the right for a review. No decision has been made to date.

Injured party

The third and most contentious debate concerns the injured party, and whether they are eligible to request an appeal. Legal experts have argued that since the philosophy of the appeal is the presumption that a citizen has been wrongly sentenced for a crime he or she did not commit, the right must be given exclusively to convicts or their families, but not prosecutors, who represent the state.

But prosecutors last year successfully lodged an appeal against the acquittal of former Bank Indonesia Governor Sjahril Sabirin and businessman Joko Tjandra over a scandal involving Bank Bali. As a result, both were convicted and sentenced to two years in jail.

"The unresolved debate over judicial review procedures offers no consistency in our justice system and further makes our law unpredictable," legal expert Eddy Hiariej said. "A convict today may wake up in the morning as a free man, but an acquitted defendant may someday end up in jail. We never know the end of a trial, not even after the Supreme Court delivers the final verdict."

FPI radicals remain free after assault

Jakarta Post - May 4, 2010

Jakarta – Three days after the unruly Islam Defenders Front (FPI) stormed a human rights training workshop for transgender individuals in Depok, West Java, police seem reluctant to pursue the case further, with no arrests made to date.

Despite massive media reports covering the Friday attack and the presence of several police officers at the crime scene, police investigations have made little progress, despite apparent evidence of the perpetrators.

"We were planning to question several witnesses today, but no one showed up," Depok Police detectives chief Comr. Ade Rahmat Idnal said Monday. The witnesses Ade was referring to were the workshop organizers and members of FPI.

The workshop, jointly organized by the National Commission for Human Rights (Komnas HAM) and the Indonesian Transgender Communication Forum (FKWI), had just begun when dozens of FPI activists forced their way into the room past several police officers, banging on the door and repeatedly shouting the name of God. They also accused the organizers of holding a transsexual beauty pageant at the hotel.

As well as destroying some of the hotel's property, the extremists also reportedly assaulted one participant from the Indonesian Legal Aid Foundation who was due to speak at the event.

A number of police officers were already on site when the group entered the hotel to protest the event, but failed to stop them from entering the room since the officers were outnumbered.

Both FKWI and Komnas HAM condemned the way police handled the case. "A number of police officers witnessed the attack. How come they needed us to come and explain what had happened," FKWI western region chief Merlyn Sopjan told The Jakarta Post on Monday.

Workshop organizer Hesti Armiwulan from Komnas HAM also doubted that police would be serious in handling the case.

"It should be [the FPI members] who are first brought to face legal proceedings," Hesti said, adding that the commission would submit a detailed report on the attack to the police on Tuesday.

Separately, FPI Depok chapter head Habib Idrus Al Gadhri invited police to summon his members should the police want to question them about the incident. "Of course we are ready," he said.

The FPI has a long, mostly unpunished criminal record of often violent raids, including on nightspots in Jakarta, often conducted during the fasting month of Ramadan.

The group has also often been involved in unconstitutional assaults to force the closure of houses of worship belonging to religious minorities in many areas across Indonesia.

Veteran human rights activist Hendardi, who currently chairs the Setara Institute for Democracy and Peace, criticized the police, which he said seemed powerless against the unlawful assaults committed by the hard-line group.

Criminal Code rulings possibly violated by FPI

Article 160: "Any person who orally or in writing incites in public to commit a punishable act, a violent action against the public authority or any other disobedience, either to a statutory provision or to an official order issued under a statutory provision, shall be punished by a maximum imprisonment of six years or a maximum fine of three hundreds Rupiahs."

Article 170 clause (1): Person who with united forces openly commit violence against persons of property, shall be punished by a maximum imprisonment of five years and six months.

Article 310 clause (1): The person who intentionally harms someone's honor or reputation by charging him with certain fact, with the obvious intent to give publicity thereof, shall, being guilty of slander, be punished by a maximum imprisonment of nine months or a maximum fine of three hundred Rupiahs.

Article 351 clause (1): Maltreatment shall be punishable with a maximum prison term of two years and eight months or a maximum fine of Rp 300,000.

[Source: Criminal Code, Legal Aid Institute Jakarta, and Setara Institute.]

Raided transsexuals vent anger over satpol's 'unfair' treatment

Jakarta Globe - May 3, 2010

Dessy Sagita – An Indonesian transsexual organization has criticized the Depok public order agency for failing to prevent dozens of hard-line Islamic activists from charging into a civil rights training session organized by the National Commission for Human Rights on Friday.

"Human rights have been violated here, but instead we were accused of violating the law by conducting an event without permit," Widodo Budidarmo, of the Indonesian Transsexuals' Communication Forum (FKWI), said on Sunday.

Widodo said the public order agency, or Satpol PP, treated the organization unfairly by disputing the permit issue.

"I believe that the permit became such a problem because the event involved transsexuals. They never question other events held in this hotel," he said. Widodo said the event had been approved by the rights commission, known as Komnas HAM.

Depok public order agency head Sariyo Sabani said Komnas HAM only issued a permit for the training but the FKWI also held a transsexual beauty contest.

On Friday morning, the Islamic Defenders Front (FPI) burst into a room at the Bumi Wijaya Hotel in Depok where the civil rights training was being held, panicking about 25 participants.

FPI's Depok chapter head Idrus Al-Ghodri said the training should be halted because it recognized the transsexual community. Idrus said his organization also believed the organizers had not asked permission from local community leaders, the Depok city authority and the police.

On Friday night another event was held in the hotel which Sariyo believed was a beauty contest. He regretted the FKWI's decision to go ahead with the contest despite that morning's unrest.

"We came to secure the event because we were afraid there would be another attack, but the event committee decided to finish the contest," Sariyo said. "It was obviously a contest. I saw some transsexuals sashaying down the catwalk."

Widodo denied there had been a beauty contest, saying that it was only for the selection of a human rights ambassador. "I don't think Satpol PP would make the permit such an issue if the event didn't involve transsexuals," Widodo said.

Sariyo insisted it was only a permit issue. "We would not have made it a big deal if they asked for the proper permit before holding the event," he said.

Teenager faces 10 years in jail for tree theft

Antara News - May 3, 2010

Purwokerto – In a country were illegal logging and forest conversion is rife, a central Java teenager is facing the prospects of 10 years behind bars after he was arrested for allegedly stealing two pine tress from a state-owned plantation company.

Rahardiyan Prasetyo, a lawyer acting for the accused, identified by his initials as WT, said his client from Cilongok subdistrict in Banyumas district had been charged with stealing the trees from Perum Perhutani in East Banyumas and was being tried in the Navan District Court.

During WT's first appearance last month, prosecutor Ninik Rahma said WT had violated articles 50 and 78 of the 1999 Forestry Law, which carry maximum penalties of 10 years in jail.

Rahardiyan said he would argue that his client was just a minor who had admitted his actions.

The decision to charge the boy will likely bring derision from many quarters, including environmentalists angered by elements of the government and military in rampant illegal logging throughout the country.

Few people involved in the destructive practice have ever been charged, and those who are convicted received laughably light sentences.

Victims to be summoned over violence

Jakarta Post - May 2, 2010

Irawaty Wardany, Jakarta – Police have not arrested any members of a hardline Islamic group who stormed a human rights training session for transgender individuals, but instead plan to summon the victims.

"We are handling this matter carefully to avoid social tension," Depok Police detective chief Comr. Ade Rahmat said Saturday, adding that police had questioned six of the organizers of the training program.

"We plan to summon the program leader on Monday," Ade said. "We know the Muslim fundamentalist movement in Depok is strong. [Friday's] incident was instigated by the Islam Defenders Front [FPI]," he said.

The National Commission of Human Rights (Komnas HAM) was conducting a three-day program to train transgender groups on human rights at a Depok hotel when dozens of FPI members broke into the training room after a coffee break, destroyed some property and assaulted participants.

The FPI members attacked a participant from the Indonesian Legal Aid Foundation who was to speak at the event, while other participants suffered injuries from broken glass, according to participating organization Arus Pelangi.

The FPI has a long, mostly unpunished criminal record of usually violent raids, including raids on nightspots in Jakarta, usually conducted during the fasting month of Ramadhan.

The hardliners were also involved in unconstitutional assaults to force the closure of houses of worships belonging to religious minorities in some areas across the country.

The FPI was also involved in an incident with a group from the National Alliance for the Freedom of Religion and Faith (AKKBB) in June 2008 in the National Monument (Monas) Park.

"We were also threatened by public order officers who came to the hotel at 9:30 p.m. and told us to stop the training," organizer Hesty Armiwulan from Komnas HAM said.

Hesty added the public order commander, Sariyo had said organizers did not have permission from Depok authorities to hold the meeting. "But I insisted on continuing since we did not commit any crime or create public disturbances during the event," she said.

However, Hesty continued, at 10 p.m. electricity in the room was suddenly switched off, but participants continued even with dimmed lights and without a microphone.

"The police officers who were guarding the premises following the [illegal] FPI incident in the morning did not seem to bother to stop them," Hesty said.

May day 2010

May Day demo in Bali rejects mass dismissals, outsourcing

Tempo Interactive - May 1, 2010

Rofiqi Hasan, Denpasar – Scores of workers and non-government organisation (NGO) activists commemorated May Day with a protest action at the Badjra Sandhi Monument in the Balinese provincial capital of Denpasar on Saturday May 1.

The protesters, calling themselves the Solidarity Challenge Alliance (SBM), brought banners and posters with demands rejecting mass dismissals and outsourcing. They also demanded social welfare and that employers side with workers. "Up until now there has been no real commitment from employers to protect workers", said action coordinator Saiful.

Saiful said that based on official Department of Labor data for 2009, 100,000 were laid off and that this year is expected to be even more savage after the ASEAN-China Free Trade Area (ACFTA) agreement came into effect, which will flood domestic markets with cheap Chinese products and threaten small- and medium-scale enterprises that are unable to complete.

He added that many workers are still not paid the minimum wage and that wages are further cut by deductions for insurance, the workers insurance scheme (Jamsostek) and pension funds. "The Draft law on Jamsostek will also rob workers of their wages," asserted Saiful.

[Abridged translation by James Balowski.]

Bandung workers say Yudhoyono regime has failed the people

Tempo Interactive - May 1, 2010

Ahmad Fikri, Bandung – A number of labour and peasant organisations in the West Java provincial capital of Bandung commemorated May Day by holding a protest action in front of the governor's office.

"Today is the commemoration of May Day, commemorating the workers' struggle to obtain the right to an eight hour working day, eight hours rest, and eight hours with the family", said Sudaryanto, the West Java regional coordinator of Indonesian Trade Union Congress Alliance (KASBI) during a break in the action on Saturday May 1.

More than 1000 people spilled over into Jl. Diponegoro in front of the Gedung Sate building. In addition to banners and billboards, the protesters also brought a replica of a giant rat painted blue with the writing "The SBY-BDY [President Susilo Bambang Yudhoyono-Vice President Boediono] regime has failed to bring prosperity to the people" in read letters.

Sudaryanto said they intentionally brought the replica rat because of the prohibition by police on bringing animals to protests. He added that protesters from KASBI throughout Indonesia had also been instructed to bring giant rats to the May Day demonstrations. The rat, symbolising the current administration, was then placed on the ground and smashed to pieces.

According to Sudaryanto workers are treated as if they have no value and the state is responsible for this due to the many anti-worker government policies such as the planned revisions to Law Number 13/2003 on Labour that will reduce severance pay levels.

A group of women workers at the demonstration also demanded equal treatment as their male colleagues. "Women workers are oppressed from two sides, by the patriarchal system as well as the capitalist system", said Diah Septi Tresnati from the Indonesian Labour Movement Union Preparatory Committee (KP-PPBI).

Tresnati said that employers prefer to employ female workers by taking advantage of the patriarchal system that tends to position women as weak and docile creatures that are more easily exploited. Women workers tend to mostly be employed as casual or contract workers and do not receive the same benefits as male workers.

Prior to the KASBI action, group of around 20 journalists also commemorated May Day. "Journalists are also workers," said Agus Rakasiwi, the chairperson of the Bandung City Alliance of Independent Journalists (AJI).

During the action, in which representatives of different journalist organisation took turns in giving speeches, they focused on union busing practices within media companies. Rakasiwi said that according to AJI's records, only 100 media workers were dismissed last year, but already this year there have been mass dismissals and suspension of labour activists with 217 workers being sackings by Indosiar TV, 144 by Berita Kota (City News) in Jakarta and 50 workers by the newspaper Suara Pembaruan. Rakasiwi added that many journalists are paid low wages and work without employment contracts or are paid according to the number of reports carried.

[Abridged translation by James Balowski.]

May Day in Bogor commemorated with dangdut music

Kompas - May 1, 2010

Ratih P Sudarsono, Bogor – Around 400 workers in the city of Bogor commemorated May Day by spending Saturday afternoon enjoying popular dangdut music at the Bogor Botanical Gardens.

Before this however they held a parade at the city hall where they issued a statement rejecting Law Number 13/2003 on Labour, which was presented to Bogor Mayor Diani Budiarto and other officials from the Bogor Regional Consultative Council (Muspida).

In the statement the workers outlined how the labour law impacted badly on the lives of workers and their families and called on the Bogor government and the Bogor Regional House of Representatives to reject the law, particularly the articles related to outsourcing and contract labour. Budiarto responded by promising to convey their wishes to the central government.

The workers were members of the National Workers Union (SPN) from the companies PT Unitex, Muara Krakatau, PT Coats Indonesia, PT Sahabat Unggul, PT Citra Abadi Sejati and PT Akur Pratama. Also joining the action were workers from the Good Year Indonesia Trade Union (SPGYI), the Good Year Indonesia Indonesia Workers Union (PBIGYI) and the Olympic Trade Union (SPO).

[Abridged translation by James Balowski.]

Giant rat joints May Day protests at State Palace

Detik.com - May 1, 2010

Ayu Fritriana, Jakarta – During a break in the labour demonstrations in Jakarta, a rat joined the protest action. Of course it wasn't a real rat.

The giant effigy of a rat was brought by the Indonesian People's Opposition Front (FOR Indonesia) to commemorate May Day at the Hotel Indonesia traffic circle in Central Jakarta on Saturday May 1.

The rat, which symbolised a government that is dirty and has no concern for the fate of workers, will be taken to the nearby State Palace.

The protesters demanded that President Yudhoyono and Vice President Boediono resign. "There will be no prosperity for the Indonesian working class as long as the SBY-Boediono neoliberal regime is still in power", said FOR Indonesia action coordinator Anwar Maaruf.

At 1pm the demonstrators moved off towards the State Palace via Jl. MH Thamrin. The main streets of the capital were already filled with workers resulting in traffic, including the Trans Jakarta busway having to be diverted. (ken/ndr)

[Translated by James Balowski.]

Commemorating May Day, thousands of workers besiege State Palace

Berdikari Online - May 2, 2010

Jakarta – Thousands of workers from various different labour organisations and alliances arrived in waves at the State Palace on Jl. Merdeka Utara to commemorate May Day on Saturday May 1.

Since early morning, thousands of workers from the Indonesian Metal Trade Workers Federation (FSPMI), the National Workers Union (SPN) and the Indonesian Association of Trade Unions (Aspek) had been gathering in front of the State Palace. In addition to demanding healthcare guarantees and social welfare, the workers also called for the formation of a trustee's commission to replace the Social Insurance Management Agency (BPJS).

As afternoon approached, another wave of demonstrators began arriving from groups such as the Confederation of Prosperity Labor Unions (KSBSI), the Anti-Corruption Youth Action Committee (KAPAK) and the People's Struggle Front (FPR). During their action, the FPR brought a number of demands such wage increases in line with the cost of living, the abolition of contract labour and outsourcing systems, the cancellation of the ASEAN China Free Trade Area Agreement (ACFTA) and the repeal of the draft BPJS law.

At around 1pm, thousands of workers from the Workers Challenge Alliance (ABM) also arrived at the State Palace. In addition to listening to speeches being given from the 'command vehicle', the protesters also sung songs and shouted slogans of struggle.

Despite the heavy downpour, the majority of workers continued the demonstration in front of the Palace. "We prepared ourselves physically and mentally to come and fight here," a worker named Prakoso told Berdikari Online.

A short interval after the arrival of the ABM, thousands of demonstrators from the May One Movement (GSM) 2010, an alliance of some 36 trade unions and organisations under the Indonesian People's Opposition Front (FOR Indonesia), also turned up.

In a statement, the GSM took up a number of issues including an end to the liberalisation of labour policies, arbitrary dismissals and outsourcing, the cancellation of free trade agreements and the privatisation of strategic state assets. They also called for the nationalisation of all mining, oil and gas companies, plantations and other strategic assets for the welfare of the people.

The group also brought a huge replica rat and set fire to it in front of the Palace. "Replace the regime, replace the system. Workers take power for the people's prosperity", shouted the workers during a long-march from the Hotel Indonesia traffic circle to the State Palace. (Ulf)

[Slightly abridged translation by James Balowski.]

May Day commemorations in Jakarta marred by clashes, arrests

Detik.com - May 1, 2010

Muhammad Taufiqqurahman, Jakarta – A clash between hundreds of workers and police broke out during the commemoration of May Day in front of the State Palace in Central Jakarta on Saturday when demonstrators became angry after police arrested a protester who they alleged was a provocateur.

At 2pm, a person was suddenly arrested by police. Upon seeing this, protesters tried to free their colleague. They took pieces of wood and clubs and attacked the police, who tried to hold their position with riot shields.

The situation became even more heated after a second worker was arrested, with demonstrators throwing bottle of mineral water and pieces of wood at police.

Another clash broke out when workers approach the barricade in front of the State Palace, but were stopped by police equipped with riot shields. Police then responded by spraying them with a water cannon. The drenched workers however continued to fight by throwing bottles, wood and other items found lying on the street.

Emotions began running high after police arrested a third person, with workers again pelting police and attacking the police barricade with lengths of wood. "Three demonstrators were arrested, it's not yet clear why", said a protester from the Jakarta Legal Aid Foundation (LBH).

In order to prevent the clash worsening, in the end police retreated back to the National Monument gardens and closed the gate behind them. "Oi, have the guts to come out, don't stay inside", shouted one of the workers in the direction of police. The police however remained on guard inside the garden.

In order to drive the protesters away, the water cannon was again used. The demonstrators however remain fearless and continued to attack the police line. The situation was diffused slightly after field coordinators attempted to calm demonstrators down.

At around 3.30 the workers began leaving the State Place in waves, leaving behind used mineral water bottles, food containers and pieces of wood scattered along Jl. Medan Merdeka Utara. Gathering at the entrance to the National Monument, they then marched to the Indosat building on Jl. Medan Merdeka Timur.

Around 150 workers meanwhile continued holding an action at the Palace while police remained on guard.

[Abridged translation by James Balowski compiled from four Detik.com reports.]

Koja container terminal paralyzed by strike on May Day

Tempo Interactive - May 1, 2010

Sofian, Jakarta – Loading and unloading activities at the Koja Container Terminal (TPK Koja) in North Jakarta were paralyzed by a strike that began at midnight on May 1 and will continue for two days.

"No loading or unloading will be done until May 3. We are sorry," said Tedy Herdian, the general secretary of the Koja Container Terminal Employees Trade Union, noting that all 485 employee had joined the strike action.

Herdian added that efforts to shift the loading and unloading activities to the Jakarta International Container Terminal (JICT) would be impossible because the JICT Trade Union has refused as an act of solidarity with the striking workers.

According to Herdian, they were forced to go on strike because they have been unable to reach an agreement with the management. The workers said that they are concerned that when an operation cooperation agreement ends in 2018 that there will be no employment security. They are also demanding the replacement of old and aging equipment and an end to discrimination between JICT and TPK Koja employees.

Herdian added that the employees' demands were not just concerned with workers' welfare. "We want the TPK Koja to continue to exist because it is a national asset", he said.

[Abridged translation by James Balowski.]

Students in Makassar commemorate May Day with protest at mall

Tempo Interactive - May 1, 2010

Abd Azis, Makassar – Scores of students from the United Anti- Global Neoliberalism People's Movement for a Makassar Revolution (Makassar Revolutionary Gate, GRM) commemorated May Day with a demonstration at the Panakkukang Mall in the South Sulawesi provincial capital of Makassar on Saturday May 1.

According to Tempo's observations, the student gave speeches under the access bridge to the Panakkukang Mall and Makassar Carrefour supermarket. "This mall is a representation of neoliberalism and the oppression of workers", said an activist from the Muslim Students Association for Reform (HMI-MPO) in a speech.

After representatives from the different groups finished giving speeches, the protesters forced their way into the mall to give speeches inside. The entrance however was closely guarded and a minor scuffle broke out between the demonstrators and mall security personnel and police. The flow of traffic in the vicinity of the mall was disrupted slightly by the action.

[Slightly abridged translation by James Balowski.]

Thousands of workers take to the streets in Medan and Makassar

Detik.com - May 1, 2010

Khairul Ikhwan, Medan – Commemorating May Day today, thousands of students, workers and social organisations held a long-march through the main streets of the North Sumatra provincial capital of Medan on Saturday May 1.

Prior to the march, during which they held speeches and handed out leaflets and statements, the protesters gathered at the Jl. Jamin Ginting and Jl. Iskandar Muda Medan intersection. They then moved off to the Jl. Juanda and Jl. Monginsidi traffic circle where they held a sit-down action in the middle of the road. The resulting traffic jam forced police to redirect traffic.

In speeches, the demonstrators urged the government to designate May 1 as a national holiday and opposed the use of contract labour. Protester Johan Pahlawan said that outsourcing, which is being practiced by almost all companies in Indonesia, is evidence that the government does not side with the ordinary people. "To this day, labour regulations have yet to side with the people" said Pahlawan.

Makassar workers

May day was also commemorated in the South Sulawesi provincial capital of Makassar where at least a thousand workers from the Indonesian Trade Union Congress Alliance (KASBI) and several other organisations including the Makassar Alliance of Independent Journalists (AJI) and the Committee to Protect the Poor (KPRM) gathered at the Urip Sumoharjo flyover.

Throughout the action, the KASBI protesters shouted "Replace the Regime-Replace the System". According to KASBI South Sulawesi action coordinator Muchtar, the administration of President Susilo Bambang Yudhoyono and Vice President Boediono (SBY- Boediono) is a neoliberal lackey and has failed to bring prosperity to the people.

"The SBY-Boediono regime is a government that bends over in submission to the interests of capitalism, the evidence being low wages implemented through the joint ministerial decree and the country's natural resources that are sold off to foreigners," said Muchtar.

AJI Makassar chairperson Mardiana Rusli meanwhile said that May Day should be used to promote the standardisation of a decent wage and social security for journalists. "Many media industries are still allergic to having trade unions in their companies, they apply outsourcing systems and arbitrarily sack their contributors", said Rusli. (djo/djo)

[Abridged translation by James Balowski.]

Workers in Mojokerto and Jombang demand fair treatment

Tempo Interactive - May 1, 2010

Muhammad Taufik, Mojokerto – The commemoration of May Day in the East Java city of Mojokerto on Saturday May 1 was joined by around 5,000 workers from various parts of the regency who held a protest action in front of the Regional House of Representatives (DPRD) and the regional government offices.

One of the action coordinators, Heri Subagyo said that they were demanding that the government resolve a number of labour issues such as completing the draft law on the Social Insurance Management Agency (BPJS) and revisions to Law Number 3/1992 on the Workers Insurance Scheme (Jamsostek). "In healthcare service matters, workers are still put in second place at hospitals", he said.

Subagyo added another important issue was arbitrary dismissals by companies and that the government act fairly and not side with employers.

In Jombang regency meanwhile, thousands of workers took to the streets in the centre of the city. "Up until now workers are still oppressed by regulations that don't side with workers," said action coordinator Agus Mulya Abadi. The protesters also called on the government to abolish contract labour systems and outsourcing.

The workers, who came from various different organisations such as the Workers Challenge Alliance (ABM), gathered at the Darul Ulum University campus then moved off towards the DPRD building.

[Slightly abridged translation by James Balowski.]

Palembang journalists reject union busing, contract labour

Tempo Interactive - May 1, 2010

Arif Ardiansyah, Jakarta – Journalists from the print and electronic media in the South Sumatra city of Palembang commemorated May Day on Saturday May 1 expressing concerns about union busting and low wages in the media industry.

"There are still many journalists being paid less than the minimum wage, the phenomena and trend of mass dismissal of mass media workers is increasing and becoming a concern in and of itself," said action coordinator Retno Palupi from the South Sumatra Reporters Forum (FPSS).

The FPSS is therefore calling for journalist's wages to be increased in line with the cost of living, an end to dismissals in any shape or form, the abolition of contract labour systems and outsourcing and the provision of social welfare and healthcare.

The action was supported by a number of media organisations including the Palembang Alliance of Independent Journalists (AJI), the Indonesian Journalists Association (PWI), the Association of Indonesian Television Journalists (IJTI), the Indonesian Multimedia Journalists Union (Perwami) and the South Jakarta Journalists.

[Abridged translation by James Balowski.]

Workers in Samarinda demand wage increases, welfare improvements

Kompas - May 1, 2010

Ambrosius Harto, Samarinda – Around 100 worker and student activists commemorated May Day with a demonstration at the East Kalimantan governor's office in Samarinda on Saturday May 1.

The demonstrators demanded improvements to workers welfare through wage increases and the cancellation of anti-worker regulations. Prior to arriving at the governor's office, the protesters held a long-march through the city causing considerable traffic congestion.

The protest action was joined by a number of different organisations including the Indonesian Trade Union Congress Alliance (KASBI), the Indonesian National Students Movement (GMNI) and the Mining Trade Union Workers Challenge (SPTM).

The protesters accused the government of President Susilo Bambang Yudhoyono and Vice President Boediono of failing to side with workers. They said that this is reflected in a number of regulations and policy agreements that benefit employers such as the ASEAN-China free trade agreement, the designation of special economic zones, and the proposed revisions to the workers insurance scheme and industrial disputes law.

[Abridged translation by James Balowski.]

May Day actions in Semarang call for better working conditions

Detik.com - May 1, 2010

Triono Wahyu Sudibyo, Semarang – Hundreds of workers and activists in the Central Java provincial capital of Semarang commemorated May Day by calling for improved welfare and labour conditions. The protesters, who came from the National Trade Union (SPN), started the action in the Simpang Lima intersection then held a long-march to the water fountain traffic circle on Jl. Pahlawan.

Also at the same time, a similar action was held by around 200 people from the People's Struggle Front (FPR), which involved demonstrators from the Indonesian Youth Student Front (FPPI), the National Student League for Democracy (LMND), the Islamic Students Association (HMI), the Legal Aid Foundation (LBH), Jarikebu and others. (djo/djo)

[Abridged translation by James Balowski.]

May Day demo in Solo rejects ACFTA, electricity rate hikes

Detik.com - May 1, 2010

Muchus Budi R., Solo – Hundreds of workers in the Central Java city of Solo commemorated May Day by holding a cultural action and free speech forum, in which they rejected the ASEAN-China Free Trade Area (ACFTA) agreement and planned electricity rate hikes.

The protests on Saturday May 1, which were concentrated in front of Sriwedari Park, were joined by hundreds of workers from the various labour organisations that exist in Solo.

During the action, the workers made a number of demands including better social welfare, decent wages, freedom of association, the development of national industry and the abolition of contract labour and outsourcing.

A demonstration by around 1,500 workers was also held in the Boyolali area where workers also expressed their opposition to the ACFTA agreement and planned electricity rate hikes. (djo/djo)

[Abridged translation by James Balowski.]

Students in Surabaya enliven May Day worker demonstration

Tempo Interactive - May 1, 2010

Rohman Taufiq, Surabaya – Students in the Central Java provincial capital of Surabaya enlivened a protest action when they joined workers commemorating May Day on Saturday May 1 in front of the State Grahadi building.

The students came from a number of different organisations including the 10 November Institute of Technology Student Executive Council (BEM), the Surabaya Indonesian National Student Movement (GMNI) Surabaya and the Surabaya National Student Front (FMN).

In addition to bringing flags, banners and posters, the student also took turns in giving speeches. "All of the complexities of labour problems are because the administration of President Susilo Bambang Yudhoyono and Vice President Boediono has never sided with workers", said action coordinator Muh Affan. Because of this therefore, they should both resign.

Workers also gave speeches. The coordinator of the East Java Workers Challenge Alliance (ABM-JT), Jamaluddin, called on the government to immediately implement the mandate of Law Number 40/2004 on Social Security Systems. "Without social security, the very low wages will make workers suffer more," he said.

Jamaluddin also called on the government to immediately abolish contract labour systems, which violate the law, and for the government to strengthen labour supervision.

[Slightly abridged translation by James Balowski.]

Protesters in Yogyakarta say workers are not 'cash cows'

Detik.com - May 1, 2010

Bagus Kurniawan, Yogyakarta – May Day was also commemorated by hundreds of workers in the Central Java city of Yogyakarta with demands for the abolition of contract labour, wage increases and for May 1 to be designated as a national holiday.

The protest action, which was organised by workers from the Yogyakarta Labour Alliance (ABY), an alliance of labour movement and trade union organisations, was concentrated in the vicinity of the Yogyakarta Monument, the Malioboro business district and the Yogyakarta central post office.

May Day in Yogyakarta was also commemorated by the Yogyakarta National Student Front (FMN), the Yogyakarta Indonesian Youth Student Front (FPPI), the People's Struggle Front (FPR) and farmers from the Kulonprogo Beach Land Farmers Association (PPLP). Although organised separately, the different groups took turns in holding actions in the Malioboro area.

A number of posters and banners were also unfurled during the actions with messages such as "Reject and abolish contract systems", "Workers on not cash cows", "Increase workers' wages", "Reject ACFTA" and "Social welfare for Workers".

ABY chairperson Tigan Solin said that during an earlier demonstration at the Sleman regent's office in Beran, they had reminded the government and employers to pay attention to workers' rights such as the right to leave, social welfare, healthcare and the abolition of contract systems.

He also said that workers throughout Indonesia have declared their opposition to the ASEAN-China Free Trade Area (ACFTA) agreement because it will result in mass dismissals, noting that many workers are already being dismissed without receiving severance pay. He added that they also rejected any legislation that oppress workers or that are pro-employer. (djo/djo)

[Abridged translation by James Balowski.]

Workers burn giant mouse outside Palace

Jakarta Post - May 1, 2010

Jakarta – A number of labor union activists burned down a giant mouse effigy during a rally to commemorate the International Labor Day outside the State Palace in Central Jakarta on Saturday.

The protesters said they set fire to the 2.5-meter tall effigy, made of hard paper, to express their anger with corrupt officials and people. Dozens of the workers danced around the burning effigy under the eyes of police officers, kompas.com reported.

In less than five minutes, the fire razed the effigy. "Don't extinguish it officers," a rally participant told the police.

President Susilo Bambang Yudhoyono celebrated the International Labor Day with workers of an automotive company in Karawang, West Java when thousands of labor union members thronged the road outside the palace.

May Day merrier in Bintan than in anywhere else

Jakarta Post - May 1, 2010

Jakarta – Hundreds of workers in Bintan in Riau Islands literally celebrated the International Labor Day on Saturday.

The labor union activists played a fun soccer match against the local police officers in a field inside the Bintan police precinct office to mark the May Day, while their counterparts in the rest of the country took to streets to articulate their demands.

It looked more as a characteristic Independence Day celebration, as the labor unions' team had to wear sarongs and the police team were clad in dress during the game, which was filled with laughter, Antara reported. For a few minutes the players took a break for a dance as a dangdut singer entertained the audience.

Bintan legislative council speaker Lamen Sarihi and head of the local manpower agency Makfur Zurahman started for the police squad, but they could not match the speed and power of the workers, who won 3-1 for Rp 2 million in the winner's prize.

"We invited them to celebrate May Day with us as it would keep them from street rallies which would only cause traffic congestion," Bintan police chief Adj. Sr. Comr. YS Widodo said.

After the match the workers read out their aspirations before the regional legislative council speaker and other officials attending the celebration. The workers demanded that the government increase monthly wage, revoke the outsourcing scheme and declare the labor day a national holiday.

Police use water cannons to disperse labor day protesters

Jakarta Globe - May 1, 2010

Violence erupted in Central Jakarta on Saturday as thousands of workers marched on the Presidential Palace to mark Labor Day.

Reports said that police responded with water cannons as elements of the demonstrators – marching to demand better pay and social security for workers – pushed against barricades and threw rocks and other objects.

Protesters from the Allied Congress for Indonesian Workers' Union and Confederation for Indonesian Prosperous Workers' Union allegedly threw wooden planks and shoes at the police barricade, despite the attentions of the water cannon.

Detik.com reported that the riot began when police arrested two protesters for allegedly provoking the demonstrators to creep closer to the palace.

It is understood that three protesters were arrested. The demonstrations then continued peacefully and protesters have since began to leave the scene, leaving piles of rubbish.

The protests played havoc with traffic and the busway was forced to temporarily halt operations along the Kota to Blok M line.

Earlier, police said about 15,000 security personnel had been deployed as protestors gathered in the capital's main roundabout before marching to the State Palace, shouting "Today we unite" and "Stop oppression now".

"The social security system in Indonesia is still weak," Indonesian Workers Association head Saepul Tavip told AFP. "The system here only covers about 25 percent of the workers. The social security has to cover all workers and even small people," he said.

Muhammad Shihabudin, 26, who works in a car factory, said the marchers demanded health insurance and a pension fund throughout their lives.

"Many workers at private companies now only receive health insurance while they are still employed. But there is no health insurance after we are out of employment," Shihabudin said.

Indonesian Metal Workers Federation member Didik Suryanto, 31, called for May Day to be made a holiday. "We contribute a lot to the country's economy and industry. The government should declare May 1 as a public holiday to honor us better," Suryanto said near the palace.

Protesters in front of the State Palace sang the national anthem; some marched while carrying a banner that read "Realize social justice for all Indonesians". President Susilo Bambang Yudhoyono is expected to visit a factory on the outskirts of the capital and have lunch with the workers, reports said.

State news agency Antara had predicted that tens of thousands of workers would march to demand better pay and improved welfare.

The Jakarta Regional Police said about 10,000 workers would stage rallies on Saturday while the Confederation of All Indonesian Workers' Unions (KSPSI) claimed that it would hold rallies on Monday with about 40,000 demonstrators. (JG/AFP/Antara)

'If working people want prosperity they must take power'

Mahardhika News - May 1, 2010

Vivi W – Commemorating May Day, 5,000 workers from the Workers Challenge Alliance (ABM) held a protest action in Jakarta today against the pro-capitalist administration of President Susilo Bambang Yudhoyono and Vice President Boediono (SBY-Boediono), which have consistently brought suffering to the Indonesian working class.

Carrying a huge billboard reading "The solution for Indonesia: Build national industry, nationalise vital national assets under the people's control, repudiate the foreign debt and fight corruption", the ABM protesters rallied enthusiastically from the Hotel Indonesia traffic circle in Central Jakarta in preparation for a march to the nearby State Palace.

The demonstrators had been gathering in front of the Niko Hotel since 10am. One by one protesters from labour as well as non- labour organisations affiliated with the ABM arrived from other parts of Jakarta and the satellite cities of Bekasi and Tangerang. At 12noon precisely, the demonstrators led by action coordinator Kamal from the Indonesian Transportation Trade Union of Struggle (SBTPI) moved off towards the Hotel Indonesia traffic circle and then on to the State Palace in Central Jakarta.

Throughout the march the thousands of protesters wearing red shirts sung songs of people's struggle and liberation and shouted slogans condemning capitalism and the pro-capitalist administration of SBY-Boediono such as "SBY-Boediono are capitalist lackeys, overthrow them, overthrow the political elite, power to the people, women workers unit and fight for equality and prosperity". The intense heat of sun failed to dampen the demonstrators' enthusiasm.

At intervals during the march speeches were given by the respective organisations, including the Perempuan Mahardhika (Free Women) National Network (JNPM). In a speech, JNPM spokesperson Sharina declared full support for the working class struggle and their readiness to join with the ABM to fight for the liberation of women and the Indonesian people as a whole. Sharina also emphasised the importance of women struggling and organising to fight against capitalism.

Upon arriving at the State Palace, the ABM joined up with the 1992 All Indonesia Trade Union (SBSI 92) and setup a platform to give joint speeches. Speeches were also given by representatives from the Indonesian Student Secretariat (SMI), the SBTPI, the Solidarity Alliance for Labour Struggle (GSPB), the Greater Jakarta Workers Federation of Struggle (FPBJ), the Indonesian Struggle Union (PPI) and the Union for the Politics of the Poor (PPRM).

Although the speeches took up different themes, the common thread of all the presentations was that the roots of the Indonesian working classes' problems at the moment are first and foremost the capitalist system. It is this system that exploits labour and results in the working class living in poverty for their entire life. The second problem is the pro-capitalist administration of SBY-Boediono, all of who's political and economic policies side with the capitalist class. And third, the problem of the political parties that currently sit in the parliament. That if working people want prosperity they must take power, was explicitly conveyed in a speech by Comrade Budi Wardoyo from the PPRM. The action ended at 5pm with a cultural performance at the nearby Horse statue traffic circle.

In addition to the ABM, several other groups also commemorated May Day including around 10,000 protesters from the Social Welfare Action Committee (KAJS), around 2,500 people from the May 1 Movement and 1,000 activists from the People's Struggle Front (FPR).

Unfortunately at this year's May Day there was little unity between the different movements, and even at the State Palace the groups could be seen organising separately. According to Eli Salomo from the ABM, efforts at building unity between other organisations outside of the ABM were attempted well before May Day but the endeavour was largely unsuccessful. "We will continue to try and find a way for the different elements of the movement to unit for a better struggle in the future," said Ilhamsyah, also from the ABM.

Organisations affiliated with the ABM

Indonesian Trade Union (Serikat Buruh Indonesia, SBI), Solidarity Alliance for Labour Struggle (Gabungan Solidaritas Perjuangan Buruh, GSPB), Indonesian Automotive Trade Union (Serikat Pekerja Otomotif Indonesia, SPOI), Indonesian Harbour Transportation Trade Union (Serikat Buruh Transpotasi Pelabuhan Indonesia, SBTPI), Greater Jakarta Workers Federation of Struggle (Federasi Perjuangan Buruh Jabotabek, FPBJ), Greater Jakarta Railway Workers Trade Union (Serikat Pekerja Kereta Api Jabodetabek, SPKAJ), Jakarta International Container Terminal Outsourcing Workers Alliance, (Aliansi Pekerja Outsourcing JITC), Cross- Factory Labour Forum (Forum Buruh Lintas Pabrik, FBLP), 1992 All Indonesia Trade Union (Serikat Buruh Seluruh Indonesia 1992, SBSI 92), Highway Transportation Trade Union (Serikat Pekerja Transpotasi Jalan Raya, SPTJR), Indonesian Trade Union Movement (Gerakan Serikat Buruh Indonesia, GSBI), Jakarta Independent Trade Union Federation (Federasi Serikat Pekerja Mandiri Jakarta, FSPMJ), SBTBG, Greater Jakarta Trade Union for Struggle (Serikat Buruh Jabotabek Perjuangan, SBJ-P), Indonesian Struggle Union (Persatuan Perjuangan Indonesia, SPI), Union for the Politics of the Poor (Persatuan Politik Rakyat Miskin, PPRM), Free Women (Perempuan Mahardhika), Pemebebasan (Liberation), Indonesian Student Union (Serikat Mahasiswa Indonesia, SMI), Youth Organisations Union of Struggle (Kesatuan Perjuangan Organisasi Pemuda, KPOP), Indonesian Cultural Society Union (Serikat Kebudayaan Masyarakat Indonesia, SeBUMI), Indonesian Youth Front for Struggle (Front Perjuangan Pemuda Indonesia, FPPI), Indonesian Legal Aid Association (Perhimpunan Bantuan Hukum Indonesia, PBHI).

[Translated by James Balowski.]

Labour/migrant workers

12 years of reformasi sees little improvement in workers' lives

Kompas - May 3, 2010

Anung Wendyartaka – To this day there has yet to be any visible sign of a breakthrough in the improvement of workers' standard of living. On the one hand, the basic rights possessed by the working class are still felt to be inadequate and on the other, workers themselves appear to fail to appreciate their existence.

These conclusions were revealed in a Kompas survey conducted on April 27-29, 2010, which showed the low level of public appreciation for the government with regard to the lives of the millions of workers in this country. More than two-thirds (66.5 percent) of respondents believe that the government's role in proving social security, as demanded by workers in this years May Day commemorations, are still inadequate.

If asked to elaborate, all of this dissatisfaction reflected in this assessment is linked to workers' basic rights. On the issue of minimum wage policy determination, there is a persistent debate between workers and those who employ them, with more than two-thirds (69.7 percent) of respondents for example, believing that the government's performance in determining the minimum wage is still lacking.

The determination of the minimum wage has been a consistent tug of war between the interests of employers and workers. Companies continuously endeavour to drive wages down for various reasons, such as keeping down the cost component, so their products are more competitive in the market or so employers can continue to run their businesses profitably. Workers meanwhile are and will continue to demand a decent wage in accordance with their expectations. It is here that the government needs to play a role in acting as a bridge between these two interests, a role that is still seen as lacking.

Reformasi has not born fruit

It is not just in the determination of the minimum wage and the provision of social security that the public sees the government's role as inadequate, but also in the issue of providing legal protection to workers. A high proportion of respondents (79.9 percent) believe that the government does not provide enough protection to Indonesia migrant workers overseas. The many cases of fraud, extortion, violence and even death that often and repeatedly befall migrant workers are evidence of the low level of protection provided by the government.

This assessment appears to be little different from the situation recorded three years ago, with the public's level of dissatisfaction with the government's role almost the same as in May 2007. At that time, a survey conducted by this newspaper showed that around two-thirds of respondents believe that the government's efforts in improving workers' lives or providing protection to workers were inadequate. Given this situation it can be said that the public believes that there has been no perceptible improvements for the working class in this country.

This becomes is even more ironic when see that this dissatisfaction is occurring during the era of reformasi or political reform. This May is the 12th year that International Labour Day has been commemorated following the fall of former President Suharto's New Order regime, which was viewed as being hostile towards the labour movement.

After the old regime's control ended, an important milestone was strengthened for the labour movement in Indonesia. In 1998 the administration of President B.J. Habibie finally ratified a number of pro-labour movement international Labor Organisation (ILO) conventions. One of these was ILO Convention Number 87 on the Freedom of Association that was ratified through Presidential Decree Number 83/1998 on the Freedom of Association and Protecting the Right to Organise for Workers and Employees.

But although workers have now enjoyed this freedom of association for 12 years, there are still many cases of repression against trade unions and their leaders by employers or the government siding with employers' interests in labour cases. Because of this therefore, it is not surprising that more than half of the respondents believe the government is still failing to guarantee workers' right to organise (55.2 percent).

On the other hand, the shackling of industrial relations problems that are generally believed to harm workers also still springs up. The imposition of contract labour systems or outsourcing for example, which is legalised under Article 64 of Law Number 13/2003 on Labour, is becoming increasingly commonplace. This system, on the one hand, benefits employers because companies can be more efficient and are able to reduce production costs by not having to pay for employees' expenses.

On the other hand however, workers suffer financial losses because of the lack of job security. This is what was written about by Karl Marx who said that under capitalism from the aspect of the division of returns from industrial productions, wages are on one side and profit is on the other. Material objects produced are equated as being on the same level as workers themselves. Workers are alienated from produce of their own labour (Giddens, 1985).

Identity fears

If the external aspect of workers is seen as lacking support, a similar tendency is also apparent in the internal aspect of workers themselves. Currently, one of the problems that hinder the development of the labour movement in Indonesia is the still low level of consciousness and solidarity among workers themselves.

This was also revealed by the Kompas survey results. Of the respondents that were employed, almost 70 percent stated that there is no trade union or labour organisation in their workplace. Only around 23 percent of all employed respondents stated that they were members of a trade union or other labour organisation. Ironically, when asked whether there is a need for a labour organisation in the work place, the majority of (56.9 percent) of working respondents answered there was such a need because labour organisations benefit workers.

This situation is indeed a paradox. On the one hand workers believe there is a need for labour organisations, but on the other hand the majority of working respondents appear reluctant to be involved or become members or labour organisers, let alone form a trade union in their workplace. Yet with the ratification of Law Number 21/2000 on Trade Unions, workers are free to establish a trade union even if there are only 10 employees.

This criticism against workers' consciousness can also been seen from the reluctance of working respondents in defining their states. The survey revealed that the majority (45.2 percent) of working respondents prefer to identify themselves as employees rather than workers or labourers. (Anung Wendyartaka/Kompas Research and Development)

[Translated by James Balowski.]

Workers prepare for more protests after May Day rallies

Jakarta Globe - May 2, 2010

Aidi Yursal & Dessy Sagita – The May Day banners have been put away but protesters in Jakarta plan to hit the streets again this week because the president did not show up on Saturday to hear their grievances.

The Indonesian Workers Association (OPSI) is hoping members turn out today to fight for a higher minimum wage. And the Indonesian Migrant Workers Union (SBMI) will be pushing its own issues in the streets.

On Saturday, thousands marched from Jakarta's Hotel Indonesia traffic circle to the Presidential Palace under the eye of 15,000 security personnel.

"The social security system is still weak," OPSI head Saepul Tavip said on Saturday. "It covers only 25 percent of workers. It must cover all workers and low-income people."

Car factory worker Muhammad Shihabudin said they were demanding lifelong health insurance and a pension fund.

"Many workers at private companies only receive health insurance while employed," he said. "There is no health insurance after that." Indonesian Metal Workers Federation member Didik Suryanto called for May Day to be made a holiday. "We contribute a lot to the country's economy and industry," he said. "The government should declare May 1 a public holiday to honor us better."

Protesters in front of the palace sang the national anthem and some marched while carrying a banner that read "Realize social justice for all Indonesians."

Scuffles broke out and police responded with water cannons.

"There are many provocateurs," Jakarta Police spokesman Boy Rafli Amar said. "Some of them threw water bottles at our water cannon so we had to hose them down."

Two activists from the Anti-Corruption Youth Action Committee (Kapak) were arrested for attempting to provoke a riot. Similar rallies were held in Bandung, Medan, Yogyakarta and Makassar.

President Susilo Bambang Yudhoyono marked the day by visiting a Toyota factory in Karawang, West Java, and having lunch with the 340 workers. He said labor issues should be solved peacefully.

"If there are any problems, then management, unions and workers should get together to resolve them," he said. "That's much better than acts of burning, destroying and rioting."

Thousands of factory workers set fire to cars and dockyard buildings last month in Batam after an Indian company executive made an insulting remark.

At another factory in Karawang, the president called on PT Jamsostek, the state-owned workers' insurance company, to increase its assistance, saying this would help businesses develop. "I hope Jamsostek can continue assisting workers in an effort to alleviate their burden and improve their living standards," he said.

In Yogyakarta, Sri Sultan Hamengkubuwono X, who is also the governor, said workers had the same rights as bosses when it came to demanding holidays.

He said the government needed to recognize workers' contributions to domestic industries and national economic growth and help them lift living standards and improve skills.

Hamengkubuwono said the prickly issue of outsourcing could be resolved through negotiations between all parties involved.

In Medan, demonstrators demanded the government reconsider the China-Asean Free Trade Agreement, which they said threatened domestic jobs.

Back in Jakarta, unions are planning more rallies this week.

Timbul Siregar, from OPSI, said the focus of this year's May Day was welfare, an end to outsourcing and an increase in the provincial monthly minimum wage, which at Rp 1.18 million ($130) was not enough for a reasonable living. A recent survey suggested it should be at least Rp 1.3 million.

[Additional reporting by AFP, Antara.]

Companies failing to address basic employee welfare issues

Jakarta Globe - May 2, 2010

Ulma Haryanto – As workers around the world marked May Day, they once again drew public attention to the shoddy way in which many companies treat their staff.

"I lost my baby during my pregnancy, but I didn't know at the time," said Pipit, 30, a garment factory worker whose first child was stillborn.

She told the Jakarta Globe she could only afford to go to a midwife to monitor her pregnancy every two months. She makes the minimum monthly wage of Rp 1.1 million ($122), but takes home only Rp 850,000 to Rp 900,000.

"I took a loan from a co-op for my wedding, which they cut from my pay each month," she said.

She also used to put aside Rp 250,000 a month to cover the costs of giving birth because her company did not cover her medical expenses.

"One of my colleagues fell ill once and couldn't come in, but instead of paying for his treatment, they cut his salary," she said. "That's how it works if you're out more than two days."

Workers like her, she said, had to pay their own medical bills. "I'm recovering, but I hope to go back to work soon," she said.

Pipit's company gave her two weeks' unpaid maternity leave. "If my baby had lived, I wouldn't mind unpaid leave," she said. "But I lost her and also part of my salary, and it's sad."

Pipit's plight epitomizes the disenfranchised working class still struggling for basic social security.

Hermawanto, of the Indonesian Workers Union Association (Aspek), said that although companies were paying more heed to improving their workers' welfare compared to previous years, there was still a long way to go.

"When we talk about minimum wage and health care, more companies are including these things in their employment policy," he said.

He said this was part of their compliance with the 2004 National Social Security Law. "But, of course, it's not enough, because the workers also need pension funds, social security, health coverage and unemployment benefits," he said.

The social security law is meant to overhaul existing social protection programs and usher in universal coverage to protect workers against risks associated with old age, illness, work- related injuries and death. Since its passage in 2004, the law has not been enforced.

"A lot of informal workers could lose their jobs at any moment, and if they do, they won't have any social security net," Hermawanto said.

"Companies often cling to the old view that social security is a burden. They refuse to believe modern management theory that happy employees contribute more to the company's productivity and profitability."

Disenfranchised workers have for the most part taken their cases to pro bono institutes like the Jakarta Legal Aid Foundation. In 2009, a record 163,165 workers filed complaints with the foundation, saying their rights had been breached.

The reported violations included employers failing to pay the minimum wage, breach of contract and denial of workers' rights to receive allowance.

Litigation on this front, however, often backfires on the workers. "Union heads or activists usually end up being fired or even sued for libel by the companies," Hermawanto said.

Environment/natural disasters

Indonesia, Malaysia palm oil makers join forces against critics

Agence France Presse - May 5, 2010

Kuala Lumpur – Palm oil producers from Malaysia said on Wednesday they had formed a coalition with their counterparts in Indonesia to counter intensified campaigns that blame the industry for rapid deforestation.

The Indonesia-Malaysia Palm Oil Group brings together six organizations from the two nations, which account for 85 percent of global production.

They said they had joined forces after being attacked by nongovernment organizations that have accused them of causing deforestation and threatening the survival of endangered species.

"The group will enable us to get together to defend some allegations that were made by the NGOs," said Mamat Salleh, chief executive of the Malaysian Palm Oil Association, a member of the group.

The NGO had influenced some large corporations to boycott the use of palm oil. Mamat said. "It's getting serious, we are not as bad as portrayed by those people."

Palm oil, which is used extensively across the globe for biofuels, processed food and toiletries, is a key export for the two nations, earning them more than $25 billion last year.

As well as the MPOA, the coalition includes the Indonesian Palm Oil Association, the Association of Plantation Investors of Malaysia in Indonesia and the Indonesia Oil Palm Smallholders Association.

It also includes the Sarawak Oil Palm Plantation Owners Association and Federal Land Development Authority.

The announcement comes after Indonesian producer Sinar Mas Group was dropped by high-profile clients following allegations it was not following environmentally sound practices.

In a statement, the coalition said it agreed "to engage with the existing Roundtable on Sustainable Palm Oil for a more practical scheme".

The RSPO was formed in 2004 to establish stringent social and environmental criteria including a ban on clearing forests in order to plant the crop. Mamat did not elaborate on the "practical scheme" or whether the group will shun the RSPO, but said "we will decide what we want to do."

Sinar Mas has been hit hard by campaigners after Anglo-Dutch multinational Unilever and Switzerland's Nestle this year dropped it as a supplier in response to protests by Greenpeace. In March, US food company Cargill asked Sinar Mas to respond to Greenpeace's allegations and sought an investigation by the RSPO.

The environmental group accused the producer of wiping out rainforests and destroying endangered orangutan habitats. Sinar Mas has rejected the claims.

Mudflow may contaminate groundwater in East Java

Jakarta Post - May 3, 2010

Wahyoe Boediwardhana, Pasuruan – The quality of groundwater flowing to Surabaya and Gresik in East Java is likely to drop and will be contaminated with heavy metals from the mudflow in Sidoarjo in the next decades, an expert says.

Groundwater for the two cities originates from springs located on the slopes 3,339-meter high Mount Arjuna and the 3,156-meter high Mount Welirang, located in Pasuruan and Mojokerto regencies.

Hydrologist Heru Hendrayana of Yogyakarta's Gadjah Mada University said that from the mountains, the groundwater flows to the north through Pasuruan, Surabaya, and Gresik before it empties into the Java Sea.

"Although flowing slowly, the groundwater passes through the cities because it flows to the north," Heru told The Jakarta Post in Pasuruan.

He said that groundwater contamination occurred because water, which moves through the aquifer or layers containing saturated water, meets the aquifer layers in Porong mudflow site in Sidoarjo. The aquifer layers in Porong are polluted with heavy metals due to subsidence.

"Satellite images and research also found many fractures in the soil that can raise the contaminants," said the former expert member of an independent team monitoring the mudflow.

He said that one factor that could affect groundwater quality was geological-based.

"Theoretically, groundwater quality is considered high if water, which contains natural minerals that are good for health, passes through volcanic rocks far away from human activity, is not contaminated and goes through an effective filtering process," said Heru.

The groundwater that flows to Surabaya and Gresik is high quality and has a high quantity because it comes from a volcanic area, whose aquifer layers is relatively free of contaminants; contains naturally balanced minerals such as calcium, sodium, magnesium and potassium, as well as has an abundant amount of moisture.

Groundwater in this area, he said, can be found at two depths – a depth of between 30 and 50 meters, and between 80 and 100 meters.

Currently, most residents in Surabaya and Gresik still use groundwater sources at a depth of between 30-50 meters.

One of the world's largest bottled water factories, Danone Aqua in Pasuruan, make use of the groundwater at depths between 80-100 meters for its raw material supply at a capacity of up to 50 liters per second.

"We guarantee that the quality of artesian water source used by Aqua is not affected by the Porong geological activities since the location of our springs is higher than Porong," said Danone Aqua's water resource manager Wahyu Triraharja.

In the event of a subsidence, the filtration process that takes place naturally, through layers of volcanic rocks since millions of years ago, will also be altered.

Subsidence also affects the porosity – the total volume of air space between particles in mass – and permeability or the ability of rocks to pass groundwater through aquifer layers.

"In principle, the quality of groundwater varies in each place, depending on the types of rock aquifer and the contact time between water and rock minerals, and the types of human activity undertaken," Heru said.

Health & education

Calls for abolition of national exam continue

Jakarta Post - May 3, 2010

Dina Indrasafitri, Jakarta – As the country celebrated National Education Day, which falls every May 2, critics are lamenting what they call an "authoritarian standardization" of education, which they say has brought students more harm than good.

Bambang Wisudo from Sekolah Tanpa Batas (Borderless Schools) supporting "alternative education" methods, blasted the country's education system as being "authoritarian". "Teachers tend to cram student's with knowledge. but the students ended up learning little," he said.

He argued that the national standardization of education should not be implemented in Indonesia, which is culturally, geographically and economically diverse. Children are not "commodities," he added.

Bambang criticized the much-decried national exams. "Schools are now like testing factories. the test regime should end and teachers should determine the material, methods and evaluation of the learning process."

Several parties have opposed the national exams mainly because it is said to have caused students severe stress. In Jambi, for example, a student allegedly committed suicide after failing the mathematics subject.

In 2006, a group of teachers filed a lawsuit to the Central Jakarta District Court demanding the abolition of the national exams. The court granted the request and the government appealed the verdict. Last year, the Supreme Court rejected the government's appeal, saying that the examinations could be held this year only if its implementation was improved.

"It's amazing that the government carried out the national exams (despite the verdict)," Bambang said.

The government said it needed to conduct a national examination to measure and improve the overall quality of education in the country. Organizations indicate Indonesia has a long way to go to achieve educational quality.

A 2010 UNESCO report revealed that Indonesia in 2007 was ranked at 65 of 128 countries in terms of its Education Development Index, which stood at 0.947, putting the country into the "medium" category along with Malaysia and the Philippines.

The Asian South Pacific Bureau of Adult Education in 2008 termed Indonesia as a "C minus" and ranked the country 21st from 44 countries in the Asia Pacific region.

Eny Setyaningsih, the national coordinator for the E-Net for Justice Indonesia, said that the 2007 research carried out by the National Education Ministry revealed that more than 44 percent of its respondents did not complete the basic nine-year long education system.

"Most informants said that children's teachers were often absent, and the learning methods tend not to be dialogic," she said during a talk show held last week in Jakarta.

Eny added that the students' parents were rarely involved in determining schools' programs. "The community does not have sufficient knowledge on the standards required to ensure quality education."

Bank Century inquiry

Century papers not delivered to KPK due to house rule: Lawmaker

Jakarta Globe - May 7, 2010

Nivell Rayda & Markus Junianto Sihaloho – As red-faced lawmakers demanded to know why the antigraft commission had not received copies of detailed findings from the House of Representatives inquiry into the Bank Century bailout, a lawmaker acknowledged on Thursday that administrative rules were to blame.

"The recommendations and findings were never forwarded to the KPK [Corruption Eradication Commission] because according to House regulations, we only hand out one copy, which goes to the president," said House Secretary General Nining Indra Saleh, as legislators continued to call the incident a deliberate attempt at sabotage.

Nining's statement comes a day after the KPK's meeting with the House committee overseeing the criminal investigation of the Rp 6.7 trillion ($743.7 million) bailout. House members said the KPK should have been given copies of all dossiers and inquiry records connected to the House probe. Some legislators claimed the final recommendation contained instructions to the House Secretariat General to forward all documents to law-enforcement agencies.

"What we gave the KPK was only the final recommendation, but the files and documents related to the probe weren't included. We were only following House rules," Nining said.

House Deputy Speaker Pramono Anung from the Indonesian Democratic Party of Struggle (PDI-P) said on Thursday that he believed the documentation had been "deliberately concealed from the KPK by those with a vested interest in seeing the investigation stopped."

Fellow Deputy Speaker Priyo Budi Santoso from Golkar said the House had promptly convened a meeting on Wednesday between party leaders to discuss the matter.

"We'll ensure the KPK will get everything it needs," he said. "The House probe resulted in many findings. We'll instruct the secretariat specifically to provide copies to the KPK."

PDI-P legislator Sidharto Dhanusubroto said everything should have been delivered to the commission a month ago. "For us, this reeks of carelessness," he said. "We demand an immediate meeting with the House leadership on the matter."

Legislator Achsanul Kosasih from the Democratic Party agreed, calling it strange that the results of the House inquiry had not been sent off to the KPK. "It must be investigated," he said. "We don't want people thinking the Democratic Party is behind this negligence."

The PDIP's Hendrawan Supratikno said: "Now we know why the KPK's investigation has been so slow. It never received our detailed findings. We thought that the KPK would not really need to conduct any preliminary investigations, since they would use our findings instead."

Separately, Chandra M Hamzah, KPK deputy chairman for enforcement, said the commission was not as dependent on the House's recommendations as lawmakers had made out.

"We conducted our own inquiries and collected documents of our own," Chandra said. "Even without the paperwork from the House, our investigation's proceeding fine."

Critics of the November 2008 bailout are seeking criminal investigations into Finance Minister Sri Mulyani Indrawati and Vice President Boediono, the central bank governor at the time, for authorizing the bailout.

On Wednesday, Sri Mulyani announced her resignation as she accepted her appointment as managing director of the World Bank. She will be inaugurated in her new post on June 1.

KPK Deputy Chairman Bibit Samad Rianto said her departure from the country and diplomatic immunity would not stop the commission from investigating the outgoing minister.

Sri Mulyani's immunity "only applies to offenses committed after she is appointed [as a World Bank director]," he said. "The bailout occurred during her tenure as finance minister and chairwoman of the KSSK [Financial System Stability Committee].

"It all depends on the outcome of our investigation," Bibit added. "If it leads to [Sri Mulyani], we'll question her, even if we have to go to Washington ourselves."

He said his office was poring over the testimony she gave to KPK investigators at a six-hour questioning session on Tuesday, before deciding whether further questioning was required.

Sri Mulyani undergoes marathon questioning

Jakarta Post - May 5, 2010

Aditya Suharmoko and Hans David Tampubolon, Jakarta – The Corruption Eradication Commission (KPK) questioned Finance Minister Sri Mulyani Indrawati for six hours on Tuesday, her second questioning session on the contraversial Bank Century bailout, which she authorized in November 2008.

Mulyani said the KPK had not asked her any new questions during the session – a follow up to a previous grilling last Thursday – because she had provided all relevant documents to the commission, including video and audio files, on Nov. 30 and Dec. 11 last year.

"There was nothing new, but they wanted to make this interactive to verify and clarify statements, figures and other happenstances," Mulyani told a press conference after the session.

Mulyani said she had supplied the KPK with the same statements that she had given the House of Representatives' inquiry committee and the Supreme Audit Agency. "All can be compared objectively and comprehensively," she said.

Mulyani said the investigation should be concluded immediately to show to the public and the state that the bailout was responsible and accountable.

At the time of the bailout, Mulyani chaired the Financial System Stability Committee (KSSK), which approved a bailout of Rp 6.76 trillion (US$716 million) for the ailing Bank Century, arguing it was needed to protect the country from adverse impacts of the global crisis.

The House declared the bailout flawed and recommended legal action be taken against those responsible for it, in particular Mulyani and fellow KSSK member Boediono, then Bank Indonesia governor.

The House of Representatives' monitoring team has summoned Corruption Eradication Commission (KPK) officials for a hearing Wednesday to update the House on its investigation into the Bank Century bailout.

Deputy House speaker Priyo Budi Santoso said Tuesday he would preside over the hearing, which was slated to start at 10 a.m. "We want them to explain the latest developments in their investigation into state officials, such as Boediono [Vice President] and Sri Mulyani [finance minister]," Priyo added.

The House declared in a recent vote that Boediono and Mulyani were responsible for the controversial bailout of Bank Century worth Rp 6.76 trillion (US$716 million).

The bailout was authorized in November 2008 by Mulyani and Boediono, who was then Bank Indonesia governor.

The KPK questioned Boediono and Mulyani last week, but at their respective offices rather than at the KPK headquarters, which is the normal venue. Numerous antigraft activists have said this special treatment implied privilege and defied equality under the law.

House fails to send complete documents on Century case to KPK

Jakarta Post - May 5, 2010

Hans David Tampubolon, Jakarta – The Corruption Eradication Commission (KPK) says that it has not yet received complete documents on the Bank Century bailout from the House of Representatives.

KPK deputy chairman Chandra M. Hamzah told the House's Bank Century case monitoring team on Wednesday that the only document the anti-graft body received was a five-page letter signed by the legislative body speaker. "There is no other data," Chandra told the hearing.

Chandra's statement sparked a heated debate among legislators that attended the team's meeting with the KPK.

Fahri Hamzah from the Prosperous Justice Party (PKS) said that the meeting had to be stopped because the KPK had yet to receive sufficient data from the House, which otherwise would help the anti-graft body investigated into alleged fraud in the bailout.

Separately, Gayus Lumbuun from the Indonesian Democratic Party of Struggle (PDI-P) said that the House leaders had to explain what really happened on the documents which should have been completely sent to the KPK.

Deputy House speaker Priyo Budi Santoso from the Golkar Party said he too was surprised by the fact that the KPK had yet to receive all the necessary documents and that the House leaders would investigate into the issue.

Lawmakers storm out of budget deliberations, bill still passes

Antara News - May 3, 2010

The House of Representatives on Monday officially adopted the revised 2010 state budget, despite opposition lawmakers walking out of proceedings to protest the appearance of Finance Minister Sri Mulyani.

Members of the opposition Indonesian Democratic Party Struggle (PDI-P) and People's Conscience Party (Hanura) factions left the meeting while it was still underway, causing proceedings to be adjourned temporarily.

When House Deputy Speaker Anis Matta of the government-aligned Prosperous Justice Party (PKS) was making the meeting's opening remarks, a number of House members interrupted him and asked why Sri Mulyani was present.

Before the walkout, a number of House members had proposed the meeting be adjourned temporarily to discuss matters related to Sri Mulyani's presence.

But Anis said the finance minister was attending the meeting at the invitation of the DPR and based on the decision of the House Consultative Body (Bamus). "The House invited Sri Mulyani on the basis of a Bamus decision," Anis Matta said.

House member from the PDI-P faction, Bambang Wuryanto, said the House's Budgetary Body had decided that the end result of the House's discussions on the revised 2010 state budget with the government was to be co-signed by the Coordinating Minister for Economic Affairs Hatta Rajasa (istead of by the finance minister-ed).

"This means there is a difference of views, and therefore it is better for the PDI-P faction to leave this plenary session," Bambang said before leaving the meeting.

After that, the other members of the PDI-P also left the meeting room, followed by members of Hanura. In response to the walkout, the speaker decided to adjourn the meeting to give House members an opportunity to hold inter-faction consultations or lobbying.

Indonesian opposition's threats to block budget bill fizzle

Jakarta Globe - May 3, 2010

Markus Junianto Sihaloho, Irvan Tisnabudi & Dion Bisara – Threats by opposition lawmakers to block passage of the government's 2010 budget revision bill proved hollow as the measure sailed through the House of Representatives' budgetary committee, paving the way for final approval in a plenary meeting today.

In the charged atmosphere in the House following its lengthy Bank Century investigation, revisions to the budget encountered a number of obstacles brought on by political opponents of Finance Minister Sri Mulyani Indrawati. At one point a handful of lawmakers even threatened to have her barred from the House chamber.

The last attempt to stall the crucial budget revision, which allows the government to adjust the budget to changes in economic indicators that affect spending and revenue, was by the Indonesian Democratic Party of Struggle (PDI-P), which said it would reject the measure but denied the move was aimed at Sri Mulyani.

But on Saturday, the smoke cleared. Harry Azhar Azis, a Golkar Party lawmaker and chairman of the budget committee, said: "The draft of the revised budget has been approved and will be brought to a plenary session on Monday." Despite the possibility of isolated objections, "I am optimistic the revised budget will pass."

Saturday's hearing, which was attended by 56 members of the committee out of the total 85 members, was relaxed, with occasional bursts of laughter coloring the atmosphere.

The smooth passage of the revision bill marks another triumph for Sri Mulyani who, along with Vice President Boediono, was targeted by political parties, including Golkar and PDI-P, during nearly three months of bitter hearings that began late last year on the 2008 Bank Century bailout. Not only did the parties fail to have her removed from office, as many had called for, she has emerged from the process seemingly secure and guiding a robust economy.

Among the changes in the budget structure was a government aim to increase state spending 1.7 percent to Rp 1,123 trillion ($124 billion) this year, partly to accommodate higher subsidies and infrastructure spending.

Energy subsidies, including on oil and electricity, which make up the bulk of the subsidies, are projected to rise nearly 90 percent from the original budget to Rp 201.8 trillion as the government lifts the Indonesian crude oil price to $80 a barrel from $65 a barrel.

The committee approved a state budget deficit that is 2.1 percent of gross domestic product, equivalent to Rp 129.8 trillion in the revised version, up from Rp 98 trillion in the original budget approved last year. Meanwhile, the state revenue target is Rp 989.6 trillion, up from Rp 974.8 trillion.

Other indicator targets approved on Saturday included 5.8 percent economic growth for 2010, up from 5.5 percent previously; an inflation target of 5.7 percent, up from 5 percent previously; and an average exchange rate of Rp 9,200 per dollar.

The House also agreed to increase electricity tariffs by 10 percent for most commercial and residential consumers after offering a Rp 2 trillion increase in the subsidy in exchange for a lower rate hike.

Court ruling fails to kill impeachment petition

Jakarta Globe - May 3, 2010

Markus Junianto Sihaloho – Despite a recent setback in the Constitutional Court, lawmakers are moving forward with their initiative to use the House of Representatives' right to express an opinion, seen as the first step in an attempt to impeach Vice President Boediono for his role in the 2008 Bank Century bailout.

The Golkar Party's Bambang Soesatyo said on Sunday that 119 lawmakers had signed a petition to that end, up from 106 last week. Though only 25 signatures are required for the matter to be taken up in the House's plenary session, lawmakers behind the movement are targeting 150.

Bambang acknowledged that it was not easy to persuade lawmakers to sign the petition, blaming "political threats" by the government. He said the recent legal case against Prosperous Justice Party (PKS) lawmaker Mukha-mad Misbakhun, one of the initiators of the House's probe into the controversial Bank Century bailout, had made other lawmakers think twice before signing the petition. Misbakhun has been arrested over his alleged use of a fake letter to get $22.5 million in credit from Bank Century.

"But for us, it [the threat] is a consequence of the principle to reveal the truth to the public," Bambang said.

Other lawmakers, however, including House Deputy Speaker Priyo Budi Santoso, also from Golkar, have said the legislators should first give the recently formed House monitoring body time to do its work in ensuring the recommendations on the Bank Century issue are properly implemented by the government and law- enforcement agencies.

Priyo said if these agencies failed to consider or act on the recommendations, "the House will decide whether to pursue the right to express an opinion."

The division in the House, and even within Golkar, stems largely from the fact that under current law, invoking the right requires the approval of three-quarters of legislators.

President Susilo Bambang Yudhoyono's Democratic Party controls 26 percent of House seats, in addition to those held by coalition partners the National Awakening Party (PKB) and the National Mandate Party (PAN).

Golkar's chairman in the House, Ade Komaruddin, has said his party would only support the right if the Constitutional Court lowered the requirement stated in the 2009 Legislative Bodies Law to two-thirds, in line with the Constitution.

But last Wednesday, the court rejected a request for a judicial review. Judge Akil Mochtar said that since the right in question was that of the House as a whole, it should be the House speaker filing the request for a review, and not individual legislators.

Speaker Marzukie Alie, however, is from the ruling Democrats, a staunch supporter of the government bailout. Bambang did not reply when asked how the lawmakers would move forward despite the rejection of the judicial review.

Sri Mulyani resignation

Indonesia reels from corruption fighter's departure for World Bank

Sydney Morning Herald - May 6, 2010

Tom Allard, Jakarta – Indonesia's fight against corruption has been thrown into doubt after its finance minister and reform stalwart resigned and accepted a senior job at the World Bank.

Sri Mulyani Indrawati, a former Euromoney magazine finance minister of the year and a darling of foreign investors, has been pursued relentlessly in the past six months by powerful business, bureaucratic and political interests that stand to lose from her reformist agenda.

Jakarta's currency and sharemarkets, already under pressure yesterday, fell further on the news.

"It will be a huge loss to Indonesia and a victory for those bastards targeting her," said Peter Fanning of the Indonesia Australia Business Council. "It comes at a critical juncture."

The Indonesian President, Susilo Bambang Yudhoyono, confirmed that Dr Indrawati would be leaving, hailing her as "one of our best ministers".

But there was speculation that her departure might be part of a political deal to placate her enemies, some of whom are members of the ruling coalition.

Dr Indrawati has earned plaudits for expanding the country's tax base, easing the regulatory burden on private enterprise and running a conservative fiscal policy that helped Indonesia weather the global financial crisis.

She has also been the most visible face of President Yudhoyono's anti-corruption drive. But, despite some successes, graft remains widespread in Indonesia, including in agencies overseen by Dr Indrawati. Whether Indonesia has the political will and personnel to carry on the task is in doubt.

"It's created uncertainty," said Roland Haas of the Jakarta financial advisory firm HB Capital. "One doesn't yet know if the next person coming in is going to be a reformer and have a backbone like her. The markets will want the announcement of a replacement soon."

Dr Indrawati will start as a managing director at the World Bank next month, one of three senior advisers to its president, Robert Zoellick.

A US-trained economist who worked at the International Monetary Fund, Dr Indrawati has no political affiliations. In the parlance popular in Indonesia, she is a "technocrat". She has been most admired for her courage in taking on vested interests.

During the height of the financial crisis and as sharemarkets fell in 2008, she resisted pressure from Aburizal Bakrie to halt trading and prop up his coal interests with government funds. Mr Bakrie was not only one of Indonesia's richest men but also a member of President Yudhoyono's cabinet at the time.

Dr Indrawati won that battle after reportedly threatening to resign and her actions did much to instil confidence in Indonesian financial markets. Since then, shares and the rupiah have soared in value.

But, as Mr Haas puts it, "the bullshit has just got worse" for Dr Indrawati as legislators from Mr Bakrie's Golkar Party, among others, pursued the finance minister over her approval of the bailout of a small financial institution, Bank Century.

Dr Indrawati responded by threatening to chase down alleged tax debts owed by Mr Bakrie's companies.

Golkar is part of President Yudhoyono's coalition government. Other parties in the ruling coalition have also aggressively pursued Dr Indrawati.

SBY political deal may be behind Mulyani's exit

Jakarta Post - May 6, 2010

Rendi A. Witular and Arghea Desafti Hapsari, Jakarta – A breakfast meeting on Wednesday between Finance Minister Sri Mulyani Indrawati and her top echelon officials may reveal a different story behind the exit of the reform-minded minister from the Cabinet.

During the meeting, Mulyani said her acceptance of a prestigious job at the World Bank was not negotiable and was ordered by President Susilo Bambang Yudhoyono, according to officials attending the meeting.

Officials were puzzled upon seeing the World Bank letter confirming Mulyani's appointment as a World Bank managing director effective June 1.

"She showed the letter to us and said she had been tasked by the President to serve with the World Bank," said one of the officials.

"We understood later in the evening the minister had never applied for the job, and actually had no prior plan to resign. But she was told by the President on Monday to take it."

Another official said Yudhoyono called World Bank president Robert Zoellick on Friday, offering him to take aboard Mulyani, but without consulting her prior. Mulyani refused to comment on the issue.

But as her departure is deemed sudden, speculation is rife that Yudhoyono may have intentionally forced Mulyani to resign over seemingly endless political bickering stemming from vested interests.

Yudhoyono announced Wednesday he had approved Mulyani's request for the job upon receiving her resignation the same day.

Mulyani's departure seems to verify The Jakarta Post's report published earlier this year that Yudhyono planned to replace Mulyani following pressure from Golkar Party chairman Aburizal Bakrie.

Aburizal, who is the patron of the influential Bakrie Group, is known to have personal issues with Mulyani and her aggressive reform programs.

Legislators, spearheaded by Golkar, have for the last eight months vied to oust Mulyani and Vice President Boediono over their role in bailing out Bank Century during the height of the global financial meltdown in 2008.

Politicians have accused Mulyani and Boediono of recklessness in the ballooning bailout worth Rp 6.76 trillion (US$716 million).

The Bank Century debacle has become a protracted political hassle within Yudhoyono's coalition, with politicians demanding the dismissal of Boediono and Mulyani.

"Mulyani's exit from the Cabinet may suggest a compromise between Yudhoyono and Aburizal," said political analyst Yudi Latief of the Reform Institute.

He said the political deal might not be limited to the Bank Century case but to the wider interest of keeping the Bakrie business group free from any obstructions.

Senior Golkar politician Ade Komaruddin dismissed allegations that Aburizal and Golkar had played a role in Mulyani's departure.

Political analyst Arbi Sanit believed Yudhoyono might have actually engineered Mulyani's exit to ensure political stability.

"It's an exit strategy that makes everyone happy. Mulyani will not lose face as she will get a prestigious job, Yudhoyono can now fix the battered coalition, and investors can do business peacefully without being confronted by political bickering," he said.

Aside from keeping the coalition intact, analysts have also suggested Mulyani ousting's may be related with her stiff reform program in rooting out graft at the tax and customs offices, and keeping the state budget's management free from vested interests.

Mulyani's measures faced strong opposition, especially from corrupt bureaucrats, businessmen and politicians, many of whom are close to Yudhoyono.

Mulyani once tendered her resignation in late 2008 after Yudhoyono over-ruled her decision not to shut the stock market to prevent shares of Bakrie-related companies from plunging in value. Yudhoyono, however, denied the resignation.

Who will benefit from Mulyani's departure?

1. Golkar Party chairman Aburizal Bakrie. Mulyani said in an interview with The Wall Street Journal in mid January, she believed her past actions had offended Aburizal.

2. Former tax chief Hadi Purnomo (now chairman of the Supreme Audit Agency). Hadi remains an influential figure at the tax office with numerous disciples despite being sacked by Mulyani in mid 2006. Hadi was reportedly furious over his dismissal.

3. Smugglers. A business group close with the police and military may have financed street rallies against Mulyani after its illicit businesses were interrupted by Mulyani's reform program.

4. Islamic parties (PKS, PAN, PPP). Several lawmakers were reportedly resented Mulyani's refusal to contribute to the recent general election.

5. Mining companies: because of tax problems related to unpaid value-added tax.

6. Companies linked to SBY's inner-circle: Several companies have been netted by Mulyani in tax dodging cases.

[Source: The Jakarta Post.]

Indonesia's reformers remain under fire as Indrawati quits

Reuters - May 6, 2010

Olivia Rondonuwu & Telly Nathalia – Indonesian opposition politicians welcomed on Thursday Finance Minister Sri Mulyani Indrawati's decision to quit, a sign the country faces a prolonged fight over reform seen as crucial to luring investment and spurring growth.

While investors and reformers now face uncertainty over the pace of reform, some opposition politicians stepped up criticism of Indrawati, adding they hoped her fellow reformer, Vice President Boediono, was next in line to quit.

President Susilo Bambang Yudhoyono won a second five-year term last year on promises to continue the fight against corruption and drive economic growth.

With the presence of reformers such as Indrawati in his cabinet, investors have poured money into Indonesian assets on expectations of strong economic growth and improved prospects of an investment grade credit rating for this G-20 member.

Stocks tumbled nearly 4 percent on Wednesday and continued to drop on Thursday, while the rupiah weakened to 9,225 per dollar on Thursday, from 9,030 on Wednesday following the announcement Indrawati would join the World Bank as a managing director.

But economists said the sell-off was mainly a reflection of investor jitters over euro zone woes, rather than a reaction to Indrawati's departure from the financial driving seat in Southeast Asia's biggest economy.

Indrawati, a respected economist and former IMF director who has pushed civil service reform and taken a tough stance on corruption, has made many enemies among Indonesia's political and business elite during her time as finance minister.

Her clean-up of the notoriously corrupt tax and customs offices has hit powerful vested interests ranging from the businessmen and law-enforcement officials who benefited from smuggling goods to tycoons who routinely evaded paying millions of dollars in taxes and duties.

Over the past 18 months, Indrawati and fellow reformer Vice President Boediono have come under attack from political opponents eager to unseat two of the most powerful drivers of change in Indonesia, in particular for their role in approving a bank bailout.

Indrawati and Boediono, the former central bank governor, agreed to the bailout of a small lender, Bank Century, at the height of the 2008-2009 global financial crisis to stave off the risk of widespread panic in Indonesia's financial markets.

Both faced months of questioning and highly politicized criticism and grandstanding by parliamentarians.

The investigation failed to find any evidence of corruption by either, and President Yudhoyono publicly backed Indrawati and Boediono, but parliamentarians continue to attack both.

Fuad Bawazier, a senior member of the opposition Hanura Party, told local media he believed Indrawati's departure is in line with the recommendations made by the Bank Century inquiry committee. "I hope Boediono is next," he told Republika.

Akbar Faizal, another member of Hanura critical of Indrawati, told Reuters both Indrawati and Boediono had been "a big problem" for Indonesia because of the bailout.

Separately, he told local media Indrawati should be banned from travelling overseas to take up her post at the World Bank because she still has a pending criminal case in the country.

After the bombshell, the questions abound for Indonesia

Jakarta Globe - May 6, 2010

It is both "devastating" and a "pleasant surprise" for Indonesia. It is a political compromise that will ease a beleaguered official out of town or a well-deserved triumph for a woman who has served her country with distinction. She wins. Her enemies win. Indonesia wins and loses.

Finance Minister Sri Mulyani Indrawati's sudden and dramatic move to the upper reaches of the World Bank hierarchy as a managing director is all of those things and more. As the architect of sweeping – but still incomplete – bureaucratic and financial reforms in recent years, the surprise announcement on Wednesday that she was leaving for Washington stunned business and political circles, sent markets reeling and left lawmakers, analysts and pundits scrambling to explain what happened and why.

"I think this is a very positive thing," said John Prasetio, a deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin). "We as Indonesians have to be proud and welcome this move. I think she will also continue to help develop our economy."

"I am devastated," Clifford D. Rees, head of the European Chamber of Commerce, said upon hearing the news. He fears that the loss of Sri Mulyani could harm the economy and give comfort to opponents of reform.

"It's a pleasant surprise," long-time business consultant James Castle said. "I think it's great for her and good for Indonesia to have someone in that position."

The whirlwind of reactions underscores the remarkable impact Sri Mulyani has had in recent years. Credited with guiding the country through the global economic meltdown and helping forge its current push into the elite ranks of top-tier emerging economies, she also stared down domestic political opponents who in recent months tried to use a House of Representatives inquiry into the 2008 Bank Century bailout to force her out of government.

That bruising ordeal seemingly left her stronger than ever and the reform agenda largely intact. But Reuters quoted an anonymous friend of Sri Mulyani's as saying that the departure for the World Bank happened because she was "fed up with the political pressures."

President Susilo Bambang Yudhoyono on Wednesday accepted the loss with aplomb. "We are losing one of our best ministers," he said. "I think it is a strategic position, an important position, an honorable position."

Despite her credentials as one of the world's most highly regarded finance professionals, Sri Mulyani's day of triumph on the international stage could not help but be dogged by political controversy.

A People's Conscience Party (Hanura) lawmaker suggested she be barred from leaving the country because of the Bank Century case, and Indonesian Democratic Party of Struggle (PDI-P) lawmaker Hendrawan Supratikno, a fierce opponent of the finance minister, called her departure a demotion brought on by "deep political pressure" brought to bear on the president due to the Century controversy.

"She is just a victim," Hendrawan said, sacrificed to "decrease political tension between the government and the House."

Democratic Party lawmaker Didi Irawadi Syamsuddin scoffed at the suggestion. "We should all be proud of her," he said.

Even the Golkar Party, which led the charge against her in the House, wished her well. House Deputy Speaker Priyo Budi Santoso said Golkar appreciated the move because it was a "prestigious position" that would allow her to pursue policies that would favor Indonesia.

Castle called the appointment "a slap in the face" for the House's bailout probe. "Obviously the World Bank gives no credibility to the House report" on Bank Century, he said.

The World Bank's director for Indonesia, Joachim von Amsberg, said Sri Mulyani was ready for new challenges. The reforms she helped lead "are embedded in government and in the overall leadership of the country, I think they are no longer dependent on a single person, that's why we are quite confident that Indonesia will continue to do well."

Still, there are many anxious moments to come. Will she be replaced by someone as sound and courageous as she has proven to be? Will Wednesday's 3.8 percent drop in the stock market prove to be a blip caused by external factors or will her departure rattle investors? Will her exit embolden opponents of reform and leave the country without a champion for change?

Finally, it is too early to tell with any certainty if the "iron lady" of Indonesian finance is leaving completely on her own terms or if she was nudged out. One thing, though, seems certain: the world – and Indonesia – will be hearing more from Sri Mulyani for years to come.

Golkar confirms SBY, Bakrie meetings but denies Sri Mulyani link

Jakarta Globe - May 6, 2010

President Susilo Bambang Yudhoyono and Golkar Party chairman Aburizal Bakrie had held a number of meetings recently, House Deputy Speaker Priyo Budi Santoso of Golkar said on Thursday, though he denied suggestions the meetings were in any way related to Sri Mulyani Indrawati being ousted as finance minister.

"I admit that Pak SBY and Pak Ical have often met to discuss national problems," Priyo told Detik.com.

He said the two men would visit each other at their respective residences. "It's just a normal thing to do because we are the two biggest parties in Indonesia," he said referring to Golkar and Yudhoyono's Democratic Party.

Priyo denied the meetings related to Sri Mulyani, who has been targeted by Golkar – and coalition partner – and opposition parties over her role in the Bank Century bailout.

There are also claims that Bakrie, a controversial businessman and former cabinet minister, has had repeated run-ins with Sri Mulyani, a respected technocrat and reformer.

Priyo said Sri Mulyani had accepted the World Bank's offer to serve as its managing director of her own free will.

"It as only rumor and I officially deny it," he said of the talks that Sri Mulyani was pushed from her job. "We won't put our party's credibility at stake for personal political deals that will only degrade the party," he claimed.

Priyo, however, hinted that Golkar would end its pursuit of the Century bailout investigation. "If Sri Mulyani is out of the political and legal loop after she resigns, Golkar will respect it. Even if the case is closed, Golkar will have no problem with it," Priyo said.

Sri Mulyani's departure may threaten anti-graft drive

Jakarta Globe - May 5, 2010

Sara Webb – In what could be a setback to a crackdown on graft and tax evasion, it was announced on Wednesday that key reformer Sri Mulyani Indrawati was quitting her job as finance minister to work at the World Bank.

Sri Mulyani's move raises several concerns, the first of which is that prospects for reform are probably weaker. Sri Mulyani was arguably the country's top reformer, pushing for the overhaul of the bloated and corrupt civil service, and taking a tough line on corruption.

She made many enemies as a result and for months has come under attack from powerful politicians, officials and businessmen who have much to lose from her reform drive. Her leaving office could be seen as a short-term victory for this group.

It remains unclear whether she willingly left her cabinet post or whether the move was engineered as part of a deal to placate powerful coalition politicians, such as Golkar Party leader Aburizal Bakrie, who made no secret of his disdain for her.

A close friend of Sri Mulyani's, who spoke on condition of anonymity, said she had not been pushed out but was "fed up with the political pressures." While still a setback for reform, this would not cause major market jitters.

But if her departure turns out to have been a concession to opponents of reform in the coalition, this would rattle markets and hurt prospects for a credit rating upgrade with the country now rated just one notch below the coveted investment grade by Fitch.

A second concern is the market's reaction. Financial markets fell, but analysts said the weakening in the rupiah to 9,065 per dollar from 9,030 before the news was announced, and a 3 percent drop in the stock market, reflected broader investor concerns about emerging markets and risk related to the euro zone.

Investors have been big buyers of Indonesian assets in the past 18 months, driving a surge in local stocks, bonds and the rupiah.

They have been largely attracted by the pace of reform and liberalization in the region's largest economy, and the prospect of a surge in demand for its resources including timber, palm oil and coal.

Foreign investors have bought a net Rp 40 trillion ($4.4 billion) in government bonds this year, double the purchases all of last year. That took their net holdings to a record Rp 148 trillion, representing 24.6 percent of all outstanding government debt.

Another concern is policy continuity, which will depend on a successor. President Susilo Bambang Yudhoyono has lost one of his most trusted reformers and will need to find a suitable replacement if he is to retain the confidence of investors.

In the past, Anggito Abimanyu – head of the Fiscal Policy Agency, which comes under the Ministry of Finance – was widely regarded as a strong contender for the post of finance minister. He is known to foreign investors and policymakers, and while he has a lower profile internationally, he is considered likely to continue with many of the same policies as Sri Mulyani.

Coordinating Minister for the Economy Hatta Rajasa – who is not a technocrat but a politician with a reputation for following a more nationalist agenda – is the acting finance minister before the president appoints a permanent replacement.

The appointment will be watched carefully by foreign investors for a signal on whether Yudhoyono remains committed to reform and liberalization. Macroeconomic policy will likely be unaffected by Sri Mulyani's move.

Indonesia took years to recover from the 1997-98 Asian financial crisis and shake off its reputation as an economic basket case. But its resilience throughout the 2008-2009 global financial crisis has shown that macroeconomic and fiscal policy is on a firm footing thanks to the sound policies of technocrats including Sri Mulyani and Vice President Boediono, the former central bank governor.

Inflation remains tame and interest rates are at a record low of 6.5 percent. Economic growth was also expected to be 5.7 percent this year and as much as 6.3 percent in 2011, Sri Mulyani said last month.

Prospects for an investment grade rating are probably unchanged. Indonesia is expected to achieve an investment grade credit rating within the next three years, top policymakers say. That would leave it rubbing shoulders with the so-called BRIC nations – the top emerging market investment destinations of Brazil, Russia, India and China. Prospects for that upgrade should not be affected by Sri Mulyani's move, although there may be concerns about prospects for civil service and other reforms.

Finally, with Sri Mulyani in such a high-profile position, Indonesia could benefit further from rising international recognition of its potential, particularly as a G-20 member and a country that is widely expected to join the emerging market elite.

[Sara Webb is bureau chief for Reuters in Indonesia.]

Graft & corruption

Prosecutors still off hook in corruption case

Jakarta Globe - May 6, 2010

Heru Andriyanto – Prosecutors who handled the case of tax official Gayus Tambunan at the Tangerang District Court still have not been implicated in wrongdoing, even as a judge was declared a bribery suspect.

Police found a suspicious Rp 28 billion ($3 million) in the mid- level official's bank accounts, but he was acquitted of embezzlement charges by the court on March 12.

Police apparently have no immediate plan to arrest prosecutors involved despite the testimony of police Comr. Arafat Enanie. At a disciplinary tribunal on Wednesday, Arafat said he had met with lead prosecutor Cirus Sinaga and his colleague Fadil Regan to "coordinate efforts" in the case.

After the meeting, "the prosecutors dropped the money-laundering and corruption charges," Arafat said. "They only used the embezzlement charge. Gayus's lawyer set up the meeting."

Gayus was eventually acquitted by Judge Muhtadi Asnun, who was declared a suspect on Thursday for allegedly taking Rp 50 million ($5,500) from the tax man.

"Arafat's testimony should serve as the door to find the missing link in the thorough post-trial measures by police. The missing link is the prosecution team, who deserve more than the internal disciplinary sanctions by the Attorney General's Office," said Andri Gunawan, secretary general of the nongovernmental Indonesian Judicial Watch Society (Mappi).

"Police have implicated people starting from the rear end, namely lawyers who arranged payment to law enforcers who handled the case, to policemen in the middle who brought the case against Gayus, and to the front end, namely the presiding judge," he told the Jakarta Globe on Thursday. "Even Gayus has been renamed as suspect. So how come they missed the prosecution members?"

He said the public could not rely on the AGO to take action against its own, especially after the office repeatedly said it had done enough by imposing sanctions ranging from written reprimands to demotions to as many as 12 prosecutors who handled the case.

When notified about Arafat's testimony on Wednesday, Attorney General Hendarman Supandji said he would let police decide further action. "It depends on police whether a crime was committed," Hendarman said.

According to the law, police need approval from the attorney general to summon prosecutors as suspects, unless they are caught red-handed committing a crime.

KPK finds 48 'weaknesses' in haj management prone to graft

Jakarta Post - May 7, 2010

Jakarta – The Corruption Eradication Commission (KPK) said Thursday it had identified 48 "weaknesses" in the Religious Affairs Ministry's management of the Muslim haj, which could lead to corruption.

"We urge the Religious Affairs Ministry to improve its haj management," commission deputy chairman M. Jasin said. He said the loopholes could be found in virtually all aspects of haj management, which has long been criticized for lacking transparency.

Action was taken previously by the Finance Ministry to shift the management of deposited haj funds away from the Religious Affairs Ministry.

Fom January to March, the anti-graft body investigated the management of the 2009 haj pilgrimage, focusing mainly on its procedures starting from the registration of prospective haj pilgrims, the coaching for potential pilgrims, their departure to Saudi Arabia, their logistics and accommodation in Saudi Arabia and their return to Indonesia.

Among the weaknesses were the lack of required implementing regulations for the 2008 law on pilgrimage management, the questionable channeling of interest from pilgrim haj installment deposits and the lack of transparency concerning the DAU or Public Trust Fund, which holds any excess interest not disbursed for pilgrimage services.

"If there were 700,000 potential haj pilgrims on the waiting list, they would deposit almost Rp 16 trillion [US$1.74 billion] in total. The interest on this amount alone would be massive," Jasin said.

Religious Affairs Minister Suryadharma Ali said that the ministry kept the money from the deposits for haj costs in several banks and used the interest on haj purposes.

The ministry used the interest for improving passport and visa services, haj accommodation and transportation, as well as embarkation services and food services, he added. "These improvements are initiated for the pilgrims' comfort," the minister said.

However, the process of channeling funds and the use of the interest-based service improvement fund is not well monitored, Jasin said, adding these services did not account for all of the interest accrued.

The KPK also found gaps between the number of seats used for haj pilgrims and the capacity of the aircraft used. Jasin said that the ministry had allocated only 325 seats from the potential total of 400 seats for each flight.

"We use a per seat price mechanism instead of a charter price," Suryadharma said, adding that this was to ensure pilgrims' comfort.

Each year, the Haj Management Body (BPIH) and the State Budget allocated Rp 6 trillion for managing the pilgrimage. Last year, Indonesia Corruption Watch (ICW) reported several possible corruption cases in relation to pilgrimage management.

In particular, ICW cited discrepancies between allocated and actual expenses, mostly relating to pilgrimage accommodation in 2009.

"We will follow up on this issue in two months," Suryadharma said, adding that the ministry would then need two years to formulate an action plan to rectify the faults and weaknesses identified. (ipa)

Susno evades questioning while police reveal new case

Jakarta Post - May 7, 2010

Bagus BT Saragih, Jakarta – As Susno's fear over the possibility to be named suspect reportedly led him to evade questioning, the police have prepared a new crime investigation on the former police chief detective.

Henry Yosodiningrat, a lawyer for Comr. Gen. Susno Duadji, said he did not want to see his client named suspect and detained at the end of a questioning session Thursday.

"We, the team of lawyers for Pak Susno, met with National Police chief detective Comr. Gen. Ito Sumardi," Henry said. "We asked him to guarantee that the questioning was not a trap. A 'trap' means our client begins the questioning as a witness but ends as a suspect."

Susno was due to undergo a questioning session at the National Police starting at 10 a.m. One of his lawyers, M. Assegaf, said Susno decided not to attend due to a number of considerations, including unclear statements in the warrant.

"Clarity of information is crucial. For example, in the previous summon, it was clearly stated that Pak Susno would be questioned as a witness in the case brokerage involving Gayus Tambunan," Assegaf said.

National Police spokesman Insp. Gen. Edward Aritonang said the absence of status in the warrant was normal. The next questioning session for Susno will be next Monday, Edward said.

Susno was the first to reveal alleged case brokering practices involving low-ranking tax officer Gayus Tambunan. Gayus was initially charged with money laundering and embezzling Rp 380 million (US$41,420) of taxpayers' money, but the Tangerang District Court declared him innocent on March 12.

Following the revelations, the police formed an independent team to investigate perpetrators allegedly taking part in the brokerages, from police officers, prosecutors and judges.

Speculation is rife that the police are also targeting Susno as the revelations have caused significant damage to the image of the police institution and a number of high-ranking police officers.

A former Foreign Ministry civil servant, Sjahril Djohan, also implicated in the case, told police detectives he had previously handed over Rp 500 million in cash to Susno, according to a recently leaked police document.

The money was said to be a bribe for Susno in connection with an investigation involving a Riau-based arowana fish farming company. The warrant for Thursday's questioning session also states that Susno would be quizzed in connection with the case, rising speculation that it would end with Susno's detention.

After Thursday's postponed questioning, Edward hinted the police independent detective team had kicked off another investigation on a new case brokerage. "It involves a man named Johnny Situwanda," Edward said without elaborating further.

According to reports and documents in a report from the Indonesian Financial Transaction Reports and Analysis Centre (PPATK), Johnny is a lawyer who several times transferred money totaling Rp 6 billion to Susno's bank accounts in 2008.

The transactions took place when Susno was chief detective. Susno has denied the accusation. PPATK chairman Yunus Hussein denied that the report was from the institution. The police may have another case to prove Susno is guilty of bribery.

SBY warns politicians not to meddle in legal matters

Jakarta Post - May 5, 2010

Erwida Maulia, Jakarta – President Susilo Bambang Yudhoyono on Tuesday called on politicians to stop interfering in law enforcement matters as the resulting conflict of interest could further complicate cases.

"I appeal to all politicians in the executive or legislative bodies, at the central or regional level, to respect the authority of law enforcement officials so that they can do their jobs independently," Yudhoyono said at the Presidential Palace.

"Let me make it clear: politicians must not interfere in legal matters and law enforcers must not play politics. This is important to prevent conflicts of interest," he added.

The President was speaking during the opening ceremony of a joint meeting between the National Police, the Attorney General's Office, the Supreme Court and the Justice and Human Rights Ministry.

The meeting was attended by regional heads of police and prosecutors' offices, high courts and provincial offices of the Justice and Human Rights Ministry across the country.

Yudhoyono's statement comes amid bitter rivalry between politicians, law enforcement officials and government bureaucrats over corruption issues.

Since the Bank Century bailout case grabbed headlines late last year, legislators have been busy summoning and questioning senior government officials and top law enforcement officers over mounting legal cases.

At a hearing with the National Police last week, legislator Sarifudin Suding from the People's Conscience Party (Hanura) asked senior police officer Insp. Gen. Herman Effendi to leave the room because Herman was also a member of the Judicial Mafia Taskforce and "should not be there".

Although Sarifudin's request was rejected by the chair of the meeting, legislator Benny K. Harman from Yudhoyono's Democratic Party, the gesture was generally seen as an indication of some legislators' growing dislike for the presidentially appointed taskforce, which was set up by Yudhoyono earlier this year to fight "legal mafia" in the country's law enforcement institutions.

Within its first four months of operation, the taskforce has brought into the spotlight several high-profile cases, such as preferential treatment for wealthy inmates in penitentiaries and an alleged case broker syndicate involving a tax officer and law enforcement officers in the National Police, the AGO, lawyers and businesspeople.

A video footage circulating recently on the Internet has also sparked criticism and doubt over the integrity of the taskforce in handling the case of Gayus Tambunan, the low-ranking tax officer accused of bribing police officers, prosecutors and judges to help clear him of graft charges.

The footage showed taskforce members Denny Indrayana and Mas Achmad Santosa chatting in a cafe in Singapore with then fugitive Gayus, whom they were after.

Denny acknowledged the scene in the footage but insisted that it was the way the taskforce successfully persuaded Gayus to return home to face legal proceedings. However, some politicians said the images added to doubts about the taskforce's integrity.

Responding to the President's call, Prosperous Justice Party (PKS) legislator Fachry Hamzah defended his fellow legislators' actions, saying it was part of the House of Representatives' duty to control the government and law enforcers.

"Intervention is when you obstruct a legal process. We will keep criticizing when something isn't right and we must do our best to uncover scandals," Fachry said.

SBY fires at fresh targets in graft war

Jakarta Globe - May 5, 2010

Camelia Pasandaran – Politicians should quit interfering with police and prosecutors, and regional governments must stop charging businesses and investors "illegal fees," President Susilo Bambang Yudhoyono warned on Tuesday as he broadened the scope of antigraft offensive.

Saying he had received more than three million text messages and letters from people demanding action on graft, he said he felt called upon to act personally. "They've met a dead end and then can only report it to the president and the first lady," he said.

Speaking at the start of a cabinet meeting on law enforcement, he dwelt first on politics. "We need to prevent political intervention in law enforcement. I call on politicians in this country, both in the executive and legislative branches, to respect the authority and independence of law enforcement."

Interference undermined the rule of law through conflicts of interest that led to criminal behavior and corruption, he said.

He then took aim at fees that regional governments charge through bylaws and other means aimed at extracting money from investors. "I have received complaints from investors, both foreign and local," Yudhoyono said.

"Because of illegal fees, overhead costs are too high. Later, these fees are counted as operational costs and that makes products and services more expensive. The people suffer from this."

Investors have long complained that decentralization has seen regional governments charging hefty administrative fees and other levies on businesses counter to central government policies.

The president cited Home Affairs Ministry data showing that over 1,000 regional bylaws related to fees have been annulled in recent years. Home Affairs Minister Gamawan Fauzi promised to force district heads and governors to comply. "One-stop shop" issuing of permits and licenses by provincial governments would help end bogus fees, he said.

In his comments on political meddling in law enforcement, Yudhoyono said "money politics" was at the root of wrong doing. "The key is for politicians to stay away from the legal field and law enforcers from politics," he said.

While he named no names, his remarks evoked recent Prosperous Justice Party (PKS) statements that it would defend North Sumatra Governor Syamsul Arifin, who refused to step down last month despite being charged with embezzlement.

In addition, Democratic Party lawmaker Daday Hudaya last month called on investigators to suspend a probe into a Papua district head who has been linked to a Rp 49 billion ($54 million) graft case, leading to charges that the president's own party was acting on behalf of corporate interests.

PKS lawmaker Fachry Hamzah insisted the House never intervened in law enforcement. "[But] criticizing the government and law enforcement is part of a lawmaker's duties. We're being paid to speak out," Fachry said, adding that intervening in a legal process is the sole prerogative of the executive branch.

Asked if there was clear evidence of politicians meddling in legal matters, Minister of Justice and Human Rights Patrialis Akbar declined comment. "These remarks were only to remind us," he said. "Whether there is evidence, you journalists know better."

NGO calls for probe into fishery mafia

Jakarta Post - May 4, 2010

Jakarta – An NGO calls for the Judicial Mafia Taskforce and the Corruption Eradication Commission (KPK) to start looking into widespread corruption in the fisheries sector.

Kiara (People's Coalition for Fishery Justice) secretary general M. Riza Damanik said time is high for law enforcers to bust corrupt practices at the Maritime Affairs and Fisheries Ministry.

He added that rife corruption at the ministry had been publicly reported by the Supreme Audit Agency (BPK) and the KPK, which conducted an integrity survey in various ministries.

Riza said corruption occurred in the form of budget inefficiencies, abuse of permits and illegal levies at ports. In a case of abuse of permits, many local companies employ more foreign workers than the maximum 30 percent of total staff.

"The audit agency found that of the 1, 947 fishing vessel crew members it audited, 1,619, or 82 percent, were foreigners. How could that happen?" Riza said.

Minister reveals mammoth graft at tax office

Jakarta Post - May 4, 2010

In a recent drive to quell tax crimes, Finance Minister Sri Mulyani Indrawati unveiled Monday an all-out investigation into three cases that have caused state losses of more than Rp 600 billion (US$66 million).

The cases revolved around fictitious claims for tax refunds involving a North Sumatra business group known by the initial PHS. The leader of the group, under the initial of R, is believed to have fled the country after plundering Rp 300 billion.

Another case involved an unofficial tax consultant identified by the initials Sol, and a service company identified by the initial W with its leader, identified by the initials TKB. They are reported to have caused losses worth Rp 247 billion and Rp 60 billion respectively.

Investigation is also underway on around 100 taxpayers suspected of engineering fictitious claims for tax refunds on value-added tax (VAT), and falsifying tax invoices. The taxpayers are based in Jakarta, Medan in North Sumatra, Bandung in West Java, and Surabaya.

According to the Finance Ministry, the tax crime method was to make a fictitious transaction between firms to produce a VAT bill. Through loopholes in the tax system, the companies then filed a claim in the form of a tax refund.

"As the method is very systematic, the ministry has expanded its investigation to detect the involvement of tax officials by deploying a joint team consisting of the internal investigation division and the tax office's internal supervision unit. The investigation will reach the highest level," she said.

The ministry will also investigate retired tax officials working as tax consultants.

There are 32,000 tax officials throughout the archipelago, supervised by only eight investigators and supervisors at the directorate of internal compliance of the Directorate General of Taxation in Jakarta, according to the chairman of the Committee for Tax Supervision Anwar Suprijadi.

Public puts trust in KPK to fight systemic graft

Jakarta Globe - May 3, 2010

Heru Andriyanto – Recent scandals involving law-enforcement officials are further eroding public trust in the police force and judiciary in a trend that has become apparent over the past few years.

Regular people such as Ignatius Istanto, 31, now see the Corruption Eradication Commission (KPK) as the new champion in the country's battle against graft, picking up where other authorities have failed.

"Police and prosecutors are themselves reeling from internal scandals, such as these so-called case brokers," the Jakarta resident said. "For me, the KPK is still on track in the country's campaign to root out corruption, and it looks to be the only agency committed to that."

These days, when news breaks of failed corruption cases by police or prosecutors, antigraft campaigners immediately turn to the KPK, which was established in 2002 but only came into full operation in 2004. And rifts between the new and the old only serve to polarize public opinion away from the more established agencies.

Public shift

The growing public distrust in the police and prosecutors was most evident when two KPK deputies, Chandra M Hamzah and Bibit Samad Rianto, were accused of abuse of power and extortion of a graft suspect last year.

With nowhere else to turn, Chandra and Bibit took recourse with the fledgling Constitutional Court, established just six years earlier, where it soon became clear that the case against them had been fabricated. In one memorable hearing, the court played back wiretapped phone conversations in which suspected case brokers and officials from the National Police and the AGO allegedly plotted to bring down the pair.

Prosecutors later halfheartedly dropped the charges, insisting they had a case but had been forced to abandon it in the interests of preserving social harmony.

In another case, having secured information about suspected ticketing price scam at the Ministry of Foreign Affairs, Indonesia Corruption Watch opted to report it to the KPK instead of the AGO, which had earlier indicated it would drop an ongoing graft probe into the ministry's Bangkok Embassy.

"It's been long time since we reported a case to the AGO," said Danang Widoyoko, ICW's chairman. "We don't anymore because the last time we did, we got no response. Now we always go to the KPK to report allegations of graft, and although they're sometimes very slow to take action, they still appreciate our reports and work professionally."

Alarm bells

The switch in public trust from traditional law-enforcement agencies to the KPK has be so complete that the government needs to carry out sweeping reforms in the police and the AGO, one legal activist says.

"The KPK by nature is an ad hoc agency established in response to police and prosecutor's inability in crack down on rampant corruption," said Boyamin Saiman, chairman of the Indonesian Anti-Corruption Society (MAKI). "The idea was to strengthen the existing agencies, and once those were in shape to handle all corruption cases, the KPK could be phased out.

"But the commission's remarkable achievement in a very short time has changed everything. Now Indonesians want the KPK to become a permanent antigraft agency with powerful branches at district level, just like police and prosecutors."

Boyamin said he personally supported calls for the KPK to have sole authority in corruption cases, while police and prosecutors could focus on general crimes like murder or drug trafficking.

The shift in public preference, he said, should furthermore prompt the government into reforming the ailing law enforcers. "That's the only choice, because we can't disband the police or prosecutors' offices. No country could function without either," he added.

Taking on the mantle

In addition to the KPK and the Constitutional Court, other agencies taking on the mantle of law enforcers include the Judicial Commission, Judicial Mafia Eradication Task Force and Financial Transaction Reports and Analysis Center (PPATK), which all provide information on major crimes involving state officials.

But with the exception of the KPK, these have no authority to take direct measures against crime. The most they can do is pass on information to the "traditional" agencies, which often turn a blind eye to their tip-offs or even misuse them.

The PPATK, for example, cannot freeze suspect accounts without approval from the police or prosecutors, while the Judicial Commission cannot sanction errant judges.

Red-faced

Had police and prosecutors properly handled the initial PPATK report on the suspicious bank accounts of rogue tax official Gayus Tambunan, they would likely not be as embarrassed as they are today.

Last year, the PPATK reported Gayus had bank accounts containing up to Rp 28 billion ($3.1 million), indicating possible graft or money-laundering. But in a subsequent low-profile trial in the Tangerang District Court, prosecutors omitted those charges and tried him on a lesser charge of embezzling Rp 370 million from a South Korean businessman.

Since his acquittal in March, on grounds of insufficient evidence, police, prosecutors and even judges involved in the case have been implicated in alleged bribery to influence the outcome of the trial. While the Supreme Court gave the judges in the Gayus trial a preliminary all-clear, the Judicial Commission, by contrast, said that presiding Judge Muhtadi Asnun had admitted to taking a Rp 50 million bribe from Gayus.

Another area where the traditional judiciary fares poorly is in trying graft cases. The Anti-Corruption Court, which was set up to exclusively try graft cases prosecuted by the KPK, has a 100 percent conviction rate – so far, only two suspects have avoided conviction, one after being declared insane and another who died mid-trial.

District courts, meanwhile, are far more lenient. An ICW study revealed that of the 378 graft suspects tried in public courts from district level to the Supreme Court last year, 59 percent were acquitted, while 40 percent received the minimum sentence of a year in prison.

Is the House seriously against corruption?

Jakarta Post - May 3, 2010

Bagus BT Saragih, Jakarta – The lawmakers' recent move to criticize the antigraft body's decision to name key local government officials as suspects has raised the question as to whether the parliament is serious about fighting corruption.

In a recent hearing between the members of the House of Representatives' Commission III on law and human rights and the leaders of the Corruption Eradication Commission (KPK), lawmakers questioned the investigation of several alleged corruption cases against politicians. Lawmakers criticized the KPK in naming the North Sumatra Governor Syamsul Arifin as a suspect in alleged misappropriation leading to state losses of up to Rp 31 billion (US$3.4 million) in Langkat regency. The case took place in 2007 when Syamsul the Langkat regent.

Lawmakers also questioned the arrest of Boven Digul regent, Yusak Yaluwo, suspected in a graft case involving Rp 49 billion in state losses.

The commission criticized KPK investigation procedures and suggested an inquiry team to monitor the work of the KPK. Daday Hudaya from the Democratic Party rejected the idea was likely to undermine the KPK. "It is important instead to support the anticorruption movement," he said.

Indonesia Corruption Watch (ICW) deputy coordinator Emerson Yuntho said on Saturday the lawmakers' criticism went too far. "Lawmakers are supposed to support the KPK to eradicate corruption, not the other way around," he said. Emerson said he suspected the lawmakers' move were driven by political motives.

Emerson said the line taken by the lawmakers did not make sense. "They are trying hard to find KPK's faults instead of finding solutions," he said.

ICW researcher Ibrahim Fahmi Badoh said the KPK had recently named many lawmakers as graft suspects, which could be the reason for the current House's opposition to the body. "Many current lawmakers are possibly targeted by the KPK," he added.

A number of House's Commission III members also questioned the investigation of a vote buying case involving former lawmakers in the 2004 election of Bank Indonesia Senior Deputy Governor Miranda Swaray Gultom.

The KPK has named four then lawmakers suspects for allegedly receiving bribes while no briber has yet been identified by the commission's investigators.

Ahmad Yani of the United Development Party (PPP) demand to know why Miranda remained only a witness in the case while legislators had been named suspects.

KPK deputy chairman Chandra M. Hamzah defended his work, saying the investigation process was still ongoing and that the KPK might possibly name more suspects.

Piter Zulkifli Simabuea of Democratic Party instead criticized his fellow legislators. "A number of members of Commission III have, by their actions, made it look like they are supporting the corruptors," he said.

Piter suggested that lawmakers should not repeat such actions in the future.

KPK deputy chairman Bibit Samad Rianto has said that the commission would remain consistent in fighting corruption regardless of pressures from the House. "We work based on the law, not on the parliament," Bibit said.

Land/rural issues

Farmers demand their coffee back from liquidated bank

Jakarta Post - May 4, 2010

Oyos Saroso H.N., Bandarlampung – Farmers and exporters in Lampung who had secured loans with coffee from Bank Tripanca are now demanding the return of their collateral after the bank's liquidation.

Bank Tripanca was owned by Sugiharto Wiharjo, also known as the "King of Coffee" in Lampung. Independent reporters had suggested that Sugiharto's ability to buy coffee created a dependency among large-scale farmers and exporters.

Bank Tripanca was also known to have been used as the main source of loans for the campaign funds of local political candidates.

Following the closure of Bank Tripanca in October 2008 and the detention of Sugiharto by police, a number of the bank's creditors seized the assets of both the bank and Sugiharto, including several warehouses storing thousands of tons of coffee.

Bank Mega promptly sealed several warehouses and brought a case against Bank Tripanca. The court later ruled Bank Mega was entitled to 25,939 tons of coffee stored in the warehouses. In June 2009, the Tanjungkarang District Court ruled in favor of another creditor, Bank BRI, and ordered the handover of 17,600 tons of coffee.

The courts ruled that the coffee belonged to Sugiharto, not the farmers or exporters.

The chairman of the youth section of the Indonesian Farmers Association in Lampung, Juanto Muhajirin, said Bank Mega had seized coffee placed in Tripanca's warehouses for storage, not as collateral for loans.

"We demand the PT Tripanca Group compensate us for our losses. We also urge them to return the commodities. As part of the seizure of Sugiharto's assets, 3,348 tons of coffee belonging to farmers was taken by Bank Mega. We demand this coffee be returned to the farmers," Juanto said.

"We demand the PT Tripanca Group compensate us for our losses. We also urge them to return the commodities," farmers' lawyer Bambang Hartono said previously.

Farmers cry against halt in tobacco kerosene subsidy

Jakarta Post - May 4, 2010

Mataram – At least 500 tobacco farmers in East Lombok staged a rally at the West Nusa Tenggara administration office Monday demanding continuity in kerosene subsidy and price hikes in tobacco leaves.

The farmers, members of the Indonesian Farmers Association, were accompanied by hundreds of workers from the Coalition for Workers' Movement.

The protest was triggered by the government's move to stop the supply of subsidized kerosene to the farmers this year. The government is encouraging farmers to switch from kerosene to coal in the tobacco-leaf drying process.

"The policy has disadvantaged us. Now the kerosene subsidy has ceased, the operational costs have sharply increased while the price of tobacco leaves has not," rally coordinator Ahmad Syarif Husein said.

War on terror

Bashir links to Aceh terror group emerge

Jakarta Globe - May 7, 2010

Candra Malik & Farouk Arnaz – Tightening the net on wanted members of an armed group in Aceh, the National Police have revealed that they arrested 12 suspects late on Thursday – and seven were members of a group headed by hard-line Muslim cleric Abu Bakar Bashir.

Police said on Friday that the building in Jataipadang, South Jakarta, that the seven were seized in was a base for Jemaah Anshorut Tawhid (JAT), founded by Bashir.

National Police spokesman Insp. Gen. Edward Aritonang added that of the other arrests, three were in Setu, Bekasi, east of Jakarta, and two in Central Jakarta.

He said the suspects were believed to have had roles including providing logistical support and financing to the armed group that clashed with security forces at their military training ground in rural Aceh in February.

"So they are not involved directly," Edward said, adding that their names had come up during the questioning of captured members of the Aceh armed group. He declined to say whether JAT or Bashir were linked to the Aceh group, or to identify those arrested.

But a police source told the Jakarta Globe that police had been hunting for Mustafa, alias Abu Tholut, whom they believed acted as a bridge between Bashir and the Aceh terror group. Tholut is a former regional commander of terrorist network Jemaah Islamiyah, of which Bashir is believed to be the spiritual leader. He was also a military trainer at the Hudaibiyah camp in Mindanao, southern Philippines.

Bashir, in an exclusive interview with the Globe on Friday at the JAT headquarters near his Al Mukmin Islamic boarding school in Ngruki, Central Java, said he shared "an emotional closeness" with Tholut, whom he said he met while in prison in Jakarta. Tholut, he said, had also taught at the school, on the science of war.

Bashir founded JAT in 2008 after resigning from the Indonesian Mujahideen Council, an umbrella group pushing for Shariah law in Indonesia. The cleric denied he had anything to do with the group in Aceh. JAT administrator Abdurrahman said Tholut was a "non- active" JAT member.

Bashir condemned the arrests, which he said were made without warrants, and the sealing of the building. "We give the police 48 hours to release the arrested people and unseal the office so we can go about our business as usual," Bashir said in a press release.

He said he only knew five of the seven men seized at the JAT premises and believed the others were guests. "We do not know for what reason the police did this rash action, let alone accusing us of dealing with terrorist networks."

Bashir later told the Globe: "The real target is actually me." He claimed the United States and its allies had ordered the Indonesian government "not to let me live peacefully in the community."

He identified the five JAT members as Andriansyah,Yanto Fadhilah, Agus, Sholeh and Mahali.

Exclusive: Terror arrests linked to Abu Bakar Bashir organization

Jakarta Globe - May 7, 2010

Farouk Arnaz & Zaky Pawas – The premises raided by antiterror police in South Jakarta on Thursday night was the Jakarta headquarters of Jamaah Anshoru Tauhid, a conservative organization led by hard-line cleric Abu Bakar Bashir.

The news comes as police launch what appears to be a major antiterror operation in the greater Jakarta region, hitting at least three locations in the capital – Pasar Minggu and Jati Padang in South Jakarta and a hotel in Menteng in Central Jakarta – and one in Bekasi.

At least 12 arrests have been made. Those arrested are alleged to be involved in "logistics" operations – including financing – involving the military-style training of alleged terrorists in Aceh. No names have been released officially.

The National Police's Densus 88 antiterror forces reportedly arrested seven of the men during a raid in South Jakarta on Thursday evening, though a JAT administrator, Abdurrahman, told the Jakarta Globe that five people had been taken away for questioning.

Abdurrahman, an ustad (Muslim teacher), identified the five as: Sholeh, a security guard; Yanto Fadilah and Agus (guests); ustad Mahali who was residing at the premises while he undertook further studies in the capital; and Adriansyah, a JAT administrator.

He said the antiterror raid had come as a surprise to JAT, an organization formed after Bashir – the alleged former spiritual head of terrorist group Jemaah Islamiyah – split from the Indonesian Mujahideen Council (MMI), which is looking to impose Shariah in Indonesia.

A police source has told the Jakarta Globe that they were hunting for Mustafa, alias Abu Tholut, who was allegedly linked to the Aceh terrorists.

Police have killed or captured dozens of members linked to the group, including Dulmatin, an alleged terrorist mastermind who was gunned down during a raid in Pamulang, Tangerang, in March.

Abu Tholut is a former regional commander of regional terror network Jemaah Islamiyah and a military trainer in the Hudaibiyah Camp in Mindanao, southern Philippines.

Abu Tholut was thought to have been the target of a 2003 raid in Semarang, Central Java, that supposedly pointed to Bashir's alleged JI connections. Police told the Globe that they believed Abu Tholut had acted as a bridge between Bashir and the Aceh terror group.

Abdurrahman denied that Bashir was associated with the Aceh group, but said that though Abu Tholut was a member of JAT, he was "non-active." Bashir is expected to hold a news conference this afternoon.

Pornography & morality

Porn star Miyabi's movie premieres in Jakarta

Jakarta Globe - May 6, 2010

Ulma Haryanto – It had all the elements of a remarkable story – a Japanese porn star, the film industry, an allegedly outraged nation and Islamic extremists promising revenge – but in the end was a flop.

The screening of the controversial movie "Menculik Miyabi" ("Kidnapping Miyabi") premiered on Thursday at FX Mall in South Jakarta without any protests by the Islamic Defenders Front (FPI), the nation's self-appointed 'moral guardians' who had expressed concerns at the appearance of porn actress Maria Ozawa a.k.a. Miyabi.

Though the audience comprised mainly local celebrities, university students and reporters, members of the notorious group had been expected to attempt to infiltrate the premier.

Just a day earlier, Habib Salim, the head of the Jakarta-branch of the FPI, told the Jakarta Globe that he had urged members of the group to view the film – already passed by Indonesian censors – wearing civilian clothing.

"If we show up in FPI clothing, people might get a negative impression. Our intentions are good, but not everybody likes us."

The extremists had planned on watching the film first before determining whether or not it constituted pornography.

The comedy, which centers around three college students who plan to kidnap the porn star to exploit her fame, began with Miyabi – who only appears in brief cameos – taking a bubble bath, though only her bare shoulders are shown. There are no other scenes that could be considered racy.

Director Ody Mulya Hidayat said he was not scared that the FPI would crash the screening.

He said he "just wanted to prove that everybody was wrong" believing the film had pornographic scenes. He added that Miyabi was a professional actress.

A Jakarta Globe journalist who viewed the film said it appeared to be aimed at teenagers and had little positive to say about the movie.

'Porn' film comedy under FPI chief's scrutiny

Jakarta Globe - May 5, 2010

Ulma Haryanto & Nurfika Osman – The chief of the Jakarta branch of the Islamic Defenders Front said on Wednesday that he would urge members of the hard line group to watch "Menculik Miyabi" ("Kidnapping Miyabi") before declaring the local movie pornographic and raiding theaters.

The local comedy about Japanese porn star Maria "Miyabi" Ozawa will premiere today. Miyabi herself does not appear in the film because protests by Islamic groups forced the popular actress to cancel a planned trip to Indonesia last year to take a cameo role in the movie.

The producers have said the comedy about two college students who plan to kidnap the porn star to exploit her fame contains nothing pornographic.

"Miyabi is an international porn star. We still need to scrutinize the film," Habib Salim said. "They say it's a comedy. We have to see if this is true. It is not that we are being undermined, but if it's true then we will do nothing." He said he planned to watch the movie today or on Friday with his wife and 17-year-old son.

He also urged members of the group known by the acronym FPI to view it wearing civilian clothing. "If we show up in FPI garb, people might get a negative impression. Our intentions are good, but not everybody likes us."

Habib said he defined pornography as revealing the aurat, or parts of the body that should not be shown, "such as thighs, breasts, and other parts forbidden in Islam."

The movie's director, Ody Mulya Hidayat, told the Jakarta Globe he was not afraid if hard-liners from the FPI showed up at the screening. "Of course they can come, they can also watch the movie if they want to," Ody said, adding that students were also welcome to watch the movie.

Commenting on last week's FPI raid on a civil-rights training session for transsexuals in Depok, Habib said transsexuals "are all sick people and as Muslims, we have to bring them to the right path. FPI was correct to dissolve that training session."

FPI hard-liners on Friday burst into a room at the Bumi Wijaya Hotel in Depok, where the training session was being held, panicking about 25 transsexuals. The training session was held by the National Commission for Human Rights.

"We needed to dissolve the workshop, as they [transsexuals] are like a disease," Habib said. "There is no place for those who intentionally change their gender. They need to be treated."

Transsexual community leader Widodo Budidarmo said FPI had violated human rights.

Politics/political parties

Race to lead Democratic Party turns ugly

Jakarta Post - May 3, 2010

Erwida Maulia, Jakarta – The race to chair President Susilo Bambang Yudhoyono's Democratic Party has become more heated as negative campaigning enters the picture and candidates hurl accusations against each other.

Ahmad Mubarok, a member of the campaign team for Anas Urbaningrum, claimed on Sunday that there had been a systematic attempt to degrade Anas through a text message sent to all of the party's regional branches and by other figures badmouthing Anas.

"These messages say that Anas is being supported by Yudhoyono's rival, that he will turn the Democratic Party into an Islamic party and that he will distance the party from Yudhoyono," Ahmad told The Jakarta Post.

"The messages are sent every day. They've even reached Cikeas," he added, referring to the West Java town where Yudhoyono's private residence is situated.

Ahmad added that both the President and First Lady Ani Yudhoyono had questioned Anas regarding the statements in the message. Ahmad said that Anas denied all allegations in the text message.

Ahmad declined to speculate on who might be behind the text messages, saying only that they came from people who didn't want Anas, the head of Democratic Party at the House of Representatives, to win.

Ahmad also accused one of Anas' rivals, former presidential spokesman and current Youth and Sports Minister Andi Alfian Mallarangeng, of receiving support from figures in the Golkar Party.

He said it would be Golkar stood to gain if Andi was elected, saying that Anas had stronger ties to leaders of the regional branches of the party, thus allowing him to better solidify the party.

"I learnt about this from regional party leaders who in turn know of this from friends in Golkar. I have a friends there as well, so I know that they dislike Anas," he said.

Both Golkar and Andi's supporters have, however, denied the claims. Andi's campaign team secretary Ramadhan Pohan dismissed the accusation, saying it was clearly a "smear campaign" against Andi.

"We consider the race an internal party event that does not involve outsiders," Ramadhan said. "We're trying to win by prioritizing having dialogue and campaigning before hundreds of party executives in 520 regency and municipal branches and 33 provincial branches," he added.

Ramadhan also denied the text messages were spread by Andi's supporters, saying the accusation was "misdirected" and that Andi's campaign team would not go against the President's calls to have a fair and respectful competition.

Apart from Andi and Anas, who are both Democratic Party deputy chairmen, party secretary-general and House Speaker Marzuki Alie has also declared his bid for the party chairmanship. The post will be decided during the party's upcoming national congress from May 21-23.

Marzuki earlier claimed that an event to launch his bid in late March had been boycotted, with some regional party leaders not allowed to come to Jakarta to attend the event by their supervisors.

Regional elections

Public must judge morality: Chiefs

Jakarta Post - May 7, 2010

Jakarta – The chiefs of the six highest state institutions disagree with Home Minister Gamawan Fauzi's proposal to reinstate a clause in the Regional Autonomy Law that would demand candidates in regional elections meet certain moral standards.

Irman Gusman of the Regional Representatives Council (DPD), Taufik Kiemas of the People's Consultative Assembly (MPR), Marzuki Alie of the House of Representatives (DPR), Mahfud M.D. of the Constitutional Court (MK), Busyro Muqoddas of the Judicial Commission (KY) and Hadi Purnomo of the Supreme Audit Agency (BPK) gathered in an informal meeting at Graha Bimasena in Jakarta on Thursday.

They issued a joint statement that said moral requirements should not be included in the law because it was difficult to define what was moral and what wasn't.

"What does 'morally tainted' mean? Does that refer to people who commit adultery, or only to those whose adultery scandals are uncovered?" it said.

The statement said the government should let the public decide if a regional leader candidate had a good moral standing or not. "Let the people choose. They would never choose a candidate with a bad moral standing," it said.

The six chiefs acknowledged that the home minister would want to ensure that the regional elections produced good governors. "Sometimes, if something good is formally regulated, it will have a bad ending," they said.

The proposal has sparked controversy, with critics saying the home minister was singling out certain high-profile candidates, including celebrities Julia Perez and Maria Eva, while failing to address other issues such as corruption.

The 2004 Regional Autonomy Law stipulated regional leaders meet certain moral requirements, but the 2008 amendment to the law removed this article. New amendments are scheduled to be deliberated by the House of Representatives this year.

Mahfud M.D. said that this year's regional elections should demand regional leaders meet moral standards. The country will stage 246 regional elections this year. "Constitutionally, no such regulation exists currently," he said.

He said it would take a long time to amend the Regional Autonomy Law to reinstate the clause on morality. He said that the legal procedure obligated the DPR and the DPD to make an academic draft and then inform the public.

"I predict that the amendment will take longer than three years [to be passed]," Mahfud said. The DPD hosted the meeting to increase communication between the highest state institutions.

The chairman of the DPD, Irman Gusman, said the meeting was held to discuss the country's current issues, but not to make formal conclusions. "We will let each institution follow up the results of the meeting according to its own policy," he told reporters.

He said that communication between the highest state institutions was poor and that he expected the meeting to improve mutual understanding among so that they could better tackle the country's problems.

"Communication among the institutions must be strengthened because the country is facing many serious problems at the moment," he said.

The meeting discussed six other issues: Finance Minister Sri Mulyani's resignation, the judicial mafia, corruption and bribery at the tax office, the national exam, bureaucratic reform and this year's regional elections.

Another meeting scheduled at the MPR office will invite President Susilo Bambang Yudhoyono, who is expected to improve the check and balance system used by executives, the legislature and judicial institutions.

Jupe nomination causing rift within Islamic PAN

Antara News - May 3, 2010

The leaders of the National Mandate Party have rejected a bid by the party's East Java branch to nominate actress and singer Julia "Jupe" Perez as a candidate for district office, leading to a rebuke by the jilted branch, which has promised to stand by its choice.

"We won't withdraw our support for her," Imam Bajuri, a local official with the party known as PAN, said on Saturday.

But in spite of party's internal dispute, Imam said the local branch would stay on as a member of the growing coalition of parties known as the People's Struggles Mandate (Ampera), on whose ticket Julia is running for Pacitan deputy district head.

"Besides, the PAN central executive council hasn't officially sent us a letter on the issue, so we're still in the coalition," he said.

Julia's nomination has polarized the electorate and officials alike, with the Ministry of Home Affairs even suggesting so- called morality prerequisites for district head candidates.

Imam said the regional election was a local issue, and should be left up to residents. He added that PAN needed to stick with the coalition because it only had one seat in the municipal legislative council.

"If we split from the coalition, we won't be able to nominate our own candidates for district head and deputy head," Imam said.

He brushed off the threat of sanctions from the Islamic-based PAN, claiming no party regulations had been breached.

Ampera coordinator Sutikno, from the People's Conscience Party (Hanura), said the PAN had brought little to the table.

He pointed out that support for Jupe's bid had strengthened significantly with the backing of the Indonesian National Party of Marhaenisme (PNI Marhaenisme).

The Ampera coalition includes the PNI Marhaenisme, PAN, Hanura, Great Indonesia Movement Party (Gerindra), Crescent Star Party (PBB), Concern for the National Functional Party (PKPB), Indonesian Justice and Unity Party (PKPI), Patriot Party and Democratic Renewal Party (PDP). Jupe, a risque singer-actress, is better known for her bikini shots than political pursuits.

Legislation & parliament

Parliament building only needs 'minor repairs'

Jakarta Post - May 4, 2010

Jakarta – The Public Works Ministry denied a main building at the House of Representatives is leaning 7 degrees, which had compelled the House to seek Rp 1.8 trillion in funds to demolish and replace the 23-story building.

Anita Firmanti, chairperson of the ministry's research and development section, said a recent structural audit found the Nusantara I building requires only minor repairs and no significant structural flaws were found.

The structural check was conducted following an earthquake that jolted West Java and Jakarta, where no building management had reported any significant damage beyond cracks on the wall – as the ministry also found at Nusantara I.

Anita said the ministry only recommends routine renovations focusing on the cracks found on various floors. News about the Nusantara I Building 7-degree list was reported by deputy House speaker Priyo Budi Santoso.

Critics pan DPR plan for shiny new digs

Jakarta Globe - May 2, 2010

Markus Junianto Sihaloho – The House of Representatives' proposal to build a new office building at the cost of Rp 1.8 trillion ($200 million) was met with criticism on Sunday, with two experts saying the price tag was excessive.

Last week, the House, also known as the DPR, announced it was planning to build a 36-story edifice with 700 rooms serving mainly as lawmakers' offices within the DPR complex in Senayan, Central Jakarta.

Indonesian Survey Institute (LSI) political analyst Burhanuddin Muhtadi said legislators did need a new office building because of the growing number of cracks at Nusantara I, their current home, but the proposed price tag was "far too much."

"The new building will be in the same office complex, so the government won't need to acquire more land," Burhanuddin said. "As such, spending Rp 1.8 trillion is far too much just for one new building."

He added the House and the government should find ways to reduce the cost of the proposed building without having to bypass safety regulations. "The current amount being proposed would simply be a waste of taxpayers' money," Burhanuddin said. "Ideally, it should be less than Rp 1 trillion."

Patra M Zen of the Indonesian Legal Aid Foundation (YLBHI) agreed, saying the government should use the state budget for the welfare of the citizens. He added that the proposed cost was unreasonable, considering the lawmakers' performance.

"For example, the House will not likely meet its legislative target this year," Patra said on Sunday. "So it doesn't make sense that they're now demanding expensive facilities."

Harry Azhar Azis, chairman of the House committee on budget, said the legislature and the government had agreed to start construction of the new building this year, with initial funding of Rp 250 billion already allocated for construction.

"We only approved this much as a start, because we're prioritizing other government programs," he said. "The new building should be finished in three years."

Harry said the Rp 250 billion initial budget was less than one- tenth of the average budget of Rp 5.65 trillion allocated this year to each ministry or governmental institution.

He added that the budget for the new building was also far less than the Rp 5.5 trillion set aside this year for the Acceleration of Regional Infrastructure Program. "So the cost of putting up the new office building is not excessive," Harry said.

Harry previously said the new building would be inside the House complex, next to Nusantara I.

Two years ago, an architectural survey of Nusantara I, completed under President Suharto in 1968, revealed the building had structural cracks and was tilting by as much as 7 degrees.

Freedom of expression & press

Threat of defamation keeps muzzle on the press, activists say

Jakarta Globe - May 6, 2010

Ismira Lutfia – The threat of going to jail or under-going a lengthy prosecution under the country's criminal-defamation laws may be pushing journalists to censor themselves.

Margiyono, an advocacy coordinator for the Alliance of Independent Journalists, told the Jakarta Globe on Thursday that the possibility of facing charges often led journalists to withhold "sensitive information."

"This kind of self-censorship normally is caused by the chilling effect of being prone to prosecution on defamation charges."

He said this failure to report information had nothing to do with journalists' conformity to general ethics, public or professional interests or company policies. "Self-censorship usually has a negative connotation," he said.

A recently released report on the consequences of the country's criminal defamation laws from US-based Human Rights Watch said media reports that are "politically sensitive or that offend the subject of the report" could result in charges.

The HRW report cited three such cases, including that of Jakarta Globe reporter Camelia Pasandaran, who briefly faced charges in April 2009 when she reported allegations of vote-buying against President Susilo Bambang Yudhoyono's son, Edhie Baskoro Yudhoyono, when he was running for a seat at the House of Representatives.

Agus Sudibyo, head of public complaints and ethics enforcement at the Press Council, said that adherence to the code of ethics should be sufficient to safeguard journalists from threats of defamation charges.

But the 91-page HRW report said the 1999 Press Law, aimed at protecting journalists from libel charges, "is insufficient to protect them. As a result, despite parliament's intention to encourage media freedom, journalists and editors remain exposed to the risks of criminalization for doing their work."

Margiyono said this was because the burden of facing libel charges lay on "the journalist as an individual, not the media organization where he or she is employed."

HRW has urged lawmakers to repeal the criminal-defamation laws and "replace them with civil defamation provisions that contain adequate safeguards to protect freedom of expression from unnecessary limitations."

Andreas Harsono, Indonesian coordinator for Human Rights Watch and a former journalist, told the Globe that instead of using criminal-defamation provisions, most countries used civil procedures to handle slander or libel cases. Under civil regulations, the defamed parties, he said, could seek compensation for any damage to their reputations.

Besides, Margiyono said criminal-defamation cases were difficult to prove because they stemmed from "judgments of words instead of facts."

Margiyono also alleged that authorities were often biased in handling libel cases, especially if the plaintiffs were journalists or a marginalized group. "The police only follow up on powerful people's cases," he said.

Andreas said verification of either civil or criminal libel charges was difficult and time-consuming. For instance, Jupriadi Asmaradhana, a freelance journalist in Makassar, South Sulawesi, who was acquitted in September of a defamation charge filed by a former South Sulawesi Police chief, Insp. Gen. Sisno Adiwinoto, told the Globe that he had to go through 23 trials over about two years.

Andreas said that even if civil charges were filed, it would still be lengthy and divert the focus of police from handling real criminal cases.

But there may be hope. According to Andreas, Harkristuti Harkrisnowo, the director general for human rights at the Ministry of Justice and Human Rights, welcomed the HRW's report and its recommendations to repeal current defamation provisions and place them in a civil regime.

Law turns 'critics into criminals'

Jakarta Post - May 5, 2010

Jakarta – Prita Mulyasari, Khoe Seng Seng and Tukijo are ordinary people who have been branded criminals under the defamation law simply because they complained, a human rights report says.

Prita was arrested and tried on criminal defamation charges for an email she sent to her friends criticizing her treatment by doctors at an international hospital in Tangerang.

Jakarta resident Khoe Seng Seng was found guilty of criminal defamation in 2009 for reporting a developer to police for fraud and for making the same charges in letters to newspapers.

Tukijo, a farmer in Kulon Progo regency, Yogyakarta, was convicted of criminal defamation in January this year for asking a subdistrict head for information about the result of a land appraisal.

There are at least 14 more people critics say are being victimized by the criminal defamation law.

"The plaintiffs are mostly powerful people such as government officials, businessmen and politicians, while the accused are mostly workers, activists and journalists," Margiyono from the Alliance of Independent Journalists (AJI) said Tuesday.

AJI said that in 2009, the number of defamation cases related to posts on social networking sites Facebook and Twitter doubled.

"Indonesia's defamation regulation is a cancer in our democracy," Illian Deta Arta Sari of Indonesia Corruption Watch said. "Democracy means citizens can question the government, it means that they are exercising public control of the state," she added.

Activists attending a discussion hosted by Human Rights Watch (HRW) into a report on the impact of the defamation law and other laws said that these cases were discriminative and structural in nature.

"We have filed three judicial reviews – including an ongoing one on the 2008 Information Law – with the Constitutional Court. The court rejected the two previous cases because of its conservatism," activist and legal expert Anggara said.

"The laws and their enforcement are inherently problematic," Elaine Pearson, the deputy director HRW's Asia division, said.

HRW has asked the House of Representatives, the President's Office, the Justice and Human Rights Ministry and the Communications and Information Technology Ministry to review the laws, Elaine said.

HRW released a report on Tuesday titled "Turning Critics into Criminals". The report covers the impact on human rights of the criminal defamation law in Indonesia to inform both the Indonesian and international communities, Elaine said.

"HRW has sent a letter to [Communications and Information Technology] Minister Tifatul Sembiring, but he has been too busy to meet with them," ministry spokesman Gatot S. Dewa Broto told The Jakarta Post.

"Don't blame us or force the ministry to change the laws. That's the House's job," he said. Gatot said the ministry only provided input on the criminal defamation provisions in the 2008 Information Law and the 2002 Broadcasting Law. (ipa)

Slander laws democracy's enemy: NGO

Jakarta Globe - May 4, 2010

Ismira Lutfia & Markus Junianto Sihaloho – Indonesia's credentials as a democratic success story are under threat from a worrying trend toward litigation in response to free speech or criticism, a US-based rights watchdog said on Tuesday.

"Criminal defamation laws undermine democracy, the rule of law and freedom of expression in Indonesia," Human Rights Watch said in a statement to accompany the release of a 91-page report on the issue. "The government should not send those brave enough to speak their minds to prison."

Elaine Pearson, deputy director for HRW Asia, said people charged with criminal libel suits had "their lives shattered" while enduring lengthy prosecutions that could drag on for years.

"Criminal defamation investigations and prosecution can have a dramatic impact on the lives of those accused," she said. "Some reported that their personal and professional relationships were strained by the stigma of prosecution or conviction."

HRW urged legislators to repeal these laws and "replace them with civil defamation provisions that contain adequate safeguards to protect freedom of expression from unnecessary limitations."

Lawmakers, however, played down the group's call, saying the laws in place were essential to strengthen democracy.

Prosperous Justice Party (PKS) legislator Almuzzamil Yusuf said the laws were needed to protect individuals from libel. "It's part of how we protect individual human rights," he said. "If they were repealed, people could just commit slander and get away with it"

Ramadhan Pohan, from the ruling Democratic Party, said the laws were "in line" with the principles of democracy. "Civil society groups and mass media organizations are free to express their opinions, and so far it's gone well," he said.

"Even President [Susilo Bambang] Yudhoyono has seldom invoked defamation laws when it comes to his critics, so there's nothing to worry about. It's fine if HRW wants to comment on this issue, but don't dictate what we should do," he added.

According to the HRW report, "complaints appear to have been used to retaliate against people who had made allegations of corruption, fraud or misconduct against powerful interests or government officials."

Anggara, executive director of the Advocate Association's Legal Aid Center (PBH Peradi), said there were seven distinct laws dealing with defamation in the country. These include the Criminal Code, the 2003 Broadcasting Law and the controversial 2008 Information and Electronic Transaction Law.

"This is more than any other Asean country," he said. "Criminal defamation is a powerful weapon for people who want to silence their critics."

Margiyono, a coordinator for the Alliance of Independent Journalists, alleged that in libel cases the authorities were often biased for plaintiffs, most of whom were politicians or businesspeople, over defendants, who were mostly journalists or marginalized groups.

Illian Deta Arta Sari, a deputy coordinator at Indonesia Corruption Watch, said the trend to turn to litigation as a first resort had grown over the last five years.

"Criminal defamation charges are a cancerous scourge on democracy," she said. "As long as we allow these charges under our laws, our country will never be free from corruption."

Journalists affirm commitment to fight repression

Jakarta Post - May 3, 2010

Jakarta – Indonesian journalists took the opportunity of Press Day on Monday to affirm their commitment to fight against all forms of repression towards journalists that have been hindering press freedom in the country.

A senior journalist from Pantau Magazine, Andreas Harsono, said Monday that many journalists, particularly in the provinces outside Java Island continuously, faced repressive actions from certain groups of people who consider press freedom a danger to their power or authority.

"Take Papua as an example, the level of repression there is still very high," he told The Jakarta Post. He said that currently the level of press freedom in the country remained below expectations.

According to the France-based international journalist organization, Reporters Without Borders, Indonesia ranked 101 out of 175 countries in the 2009 press freedom index, while Denmark took top place and North Korea and Eritrea ranked 174 and 175 respectively. In 2008, Indonesia had ranked 111 out of 173 countries.

Andreas said that the 2008 Freedom of Information Law, which took effect on April 30, was a big leap forward for press freedom in the country. He urged public institutions to ensure the positive impact of the new law by adhering strictly to legal procedures when implementing the law.

"The process of revealing information should be simple. If it's too complex, the law won't have any function at all," he said. (rdf)

Journalists still face daunting task, activists warn

Jakarta Globe - May 2, 2010

Nivell Rayda & Ismira Lutfia – Taking note that today is World Press Freedom Day, activists and experts said on Sunday that journalists in Indonesia still faced intimidation and the threat of criminal defamation suits.

Despite improvements, especially since the fall of the late President Suharto in 1998, Indonesia still ranked a dismal 101 out of 175 countries surveyed by the group Reporters Without Borders late last year.

Freedom House, a US-based watchdog, ranks Indonesia 107 out of 196 in its annual survey, released last week. It said the Indonesian press was "partly free" but the situation was improving.

Former Press Council deputy chairman Leo Batubara said the negative impression was largely due to the government's reluctance to protect press freedom and reform the legal system.

"There are twice as many articles on criminal defamation today than there were in the Dutch colonial era," Leo said. "Despite the enactment of the 1999 Press Law and the 2008 Freedom of Information Law, police continue to charge and imprison reporters for criminal defamation."

Leo cited the 2009 arrest of Doan Tagah, the editor in chief of North Sulawesi's Media Sulut newspaper, for allegedly defaming former Manado Mayor Jimmy Rimba Rogi by publishing an article citing the fact that the Corruption Eradication Commission (KPK) had charged him with embezzlement.

"The KPK charged the mayor with embezzlement and the police arrested the chief editor for defamation," Leo said. "Cases like this are abundant."

Jimmy was sentenced to seven years in prison but police are still investigating Doan for libel.

Usman Hamid, chairman of the Commission for Missing Persons and Victims of Violence (Kontras), said the government should eliminate criminal defamation from the legal system.

"The government must instead empower institutions like the Press Council, LBH Pers [Press Legal Aid Foundation], the Commission on Information and the Indonesian Broadcasting Commission [KPI] to mitigate press-related disputes," Usman said.

Andreas Harsono, Indonesian coordinator for Human Rights Watch and a former journalist, said intimidation of the media was still rife.

"In Papua, journalists receive death threats almost on a weekly basis, while in Aceh reporters who write about attacks on the local Aceh Party often become targets of attacks themselves," he said.

Andreas added that commercial factors may also inhibit press freedom. "In Papua, for example, most of the news outlets are owned by businesses operating in the province, so it is hard to find media that are not siding with businesses and have a local perspective," he said. "There are also news organizations established or partially owned by political parties and public officials to voice certain political agendas."

Leo said the quality of journalism was still largely appalling.

"The recruitment and training process should be improved. The government still controls much of the journalism schools' curriculums, while journalists in Indonesia are among the worst paid in the world," he said. "This makes journalists below standard."

A survey by the Jakarta chapter of the Alliance of Independent Journalists (AJI) suggests the minimum monthly wage for a journalist in Jakarta should be Rp 4.6 million ($510).

The survey found some journalists were paid not much more than Rp 1 million and were not given permanent status despite having worked in their media organizations for more than two years.

In a statement marking International Labor Day, AJI chairman Nezar Patria said many journalists still received less than the provincial minimum wage.

Andreas said poor pay contributed to a serious shortage of qualified journalists. "Being a print reporter is considered only a stepping-stone toward becoming a public relations officer or a politician, so there is little commitment to the profession," he said.

Leo said poor pay also led to unethical or even criminal conduct. "Many journalists resort to accepting bribes in return for a favorable article and even to extorting public officials," he said.

Jakarta/urban life

Get gas cylinder problems under control: Activists

Jakarta Globe - May 6, 2010

Arientha Primanita – The city administration should crack down on the illegal distribution of faulty gas cylinders feared to be the cause of recent explosions in the capital, consumer advocates said on Wednesday.

Bachrowi, of the Indonesian Community Association of Gas Consumers (Himkogasi), said it had identified a distributor that was allegedly selling gas cylinders with fake components in the Greater Jakarta area.

He said Himkogasi had received complaints from members of the public about a distribution company in Tangerang, from which the group bought two three-kilogram gas cylinders to investigate.

"We saw many problems with the cylinders, like there was no SNI [Indonesian National Standards] certified logo and the actual body of the cylinder differed from the original body," Bachrowi said, adding that the matter was reported to the Jakarta Police last week and the two cylinders handed over as evidence.

"People don't seem to be ready anyway to shift from kerosene use to liquefied petroleum gas; some have died because of these explosions," he added. "The government must control this situation and take steps so that it never happens again."

The call for government action comes a day after Jakarta Police said recent explosions involving state-subsidized gas stoves and cylinders may have been caused by counterfeit parts.

"There is a possibility that the explosions were caused by fake components," the head of the police's industry and trade department, Adj. Sr. Comr. Eko Saputra, said on Tuesday.

According to police, several gas-cylinder suppliers were distributing products that did not comply with national standards. "This includes valves, regulators and much more," Eko said.

As part of their investigation into the blasts, the police will check with state oil and gas company PT Pertamina's distributors because it keeps a list of certified partners. "That is why we're asking for permission from Pertamina to look for agents that are not officially certified," Eko said.

Chandra Andi Salam, executive director of the Indonesian Development Studies Institute (LKPI), said the distribution of the fake cylinders had occurred because of weak management and oversight.

"Pertamina must increase monitoring of the production of gas cylinders," he said, adding that if producers or distributors were found to have committed violations, they needed to be severely punished.

Wianda Pusponegoro, manager of public relations at Pertamina, vowed it would tighten monitoring procedures in relation to the production and distribution of its gas cylinders. "Aside from national standards, we also have our own quality controls that check each cylinder before filling it with gas. If it is not based on our standards, we throw them out," she told the Jakarta Globe.

Wianda said Pertamina would cooperate fully with police in their investigations into the fake cylinders. Moreover, it also vowed to conduct its own surprise inspections of production and distribution companies to ensure compliance with standards.

"We urge people not to be afraid to use gas cylinders. With proper usage, it is safe," Wianda said.

Social affairs minister steers into trouble for using bus lane

Jakarta Globe - May 5, 2010

Nurfika Osman & Arientha Primanita – Social Affairs Minister Salim Segaf Al Jufri has provoked the ire of commuters and officials alike after barreling down a restricted busway lane in the morning rush hour because he was "running late for a meeting."

"We had permission from the Jakarta Police's Traffic Management Center in the morning, as the minister needed to avoid the traffic in the Mampang area [in South Jakarta]," Heri Kristianto, a spokesman for the ministry, told the Jakarta Globe on Tuesday.

"The minister's aide called the police and they allowed us to use the busway lane. It was urgent. The minister needed to be at the State Palace for a meeting, and on-duty police officers helped direct the car onto the lane."

The Traffic Management Center, however, has denied the claim. "We've never given any permission for official or private vehicles to use the Trans-Jakarta busway lanes," said Adj. Comr. Mujiana, a senior officer there, in a written statement.

"It's a clear violation of regulations, as the lane should be free of all other vehicles. "We are currently in the process of keeping all lanes in all busway corridors free of other traffic. No vehicles are entitled to use them."

Jakarta Governor Fauzi Bowo said he would reprimand Salim as soon as possible. "We'll warn him just as we warned a former vice president who tried the same stunt," he said, referring to Hamzah Haz.

A picture of the minister's car was posted on news portal detik.com and on social networking site Twitter, where it went viral. Users posted comments ranging from, "Why doesn't he wake up earlier, like the rest of us?" to "They expect us to obey the rules while they don't."

Salim posted his own tweet 12 hours after the fact to apologize.

The Transportation Study Institute has long complained about the futility of keeping the busway lanes exclusive, saying public order officials should guard them to prevent other vehicles from encroaching.

"If the city administration really wants to reduce traffic jams, it should pay more attention to the [busway] so that more people will want to use it," said Izzul Maro, a researcher at the institute.

Street thugs still rule city's parking spots

Jakarta Post - May 3, 2010

Jakarta – Street thugs run a virtual monopoly of Jakarta's on- street parking spaces, taking the lion's share of fees paid by motorists and ruling over the city's parking division.

"I take in an average of Rp 100,000 (US$11) a day, of which Rp 50,000 goes to my boss while Rp 30,000 goes to the city transportation agency. I only get Rp. 20,000," said a parking attendant who requested to remain anonymous.

He claimed to have been operating in front of a shop on Jl. Gajah Mada, West Jakarta, for five years, adding that his earned more than the administration. He added that two other "bosses" operated the parking spaces facing a popular family restaurant and shop next to his turf.

The three buildings are just a small section of the row of offices, banks, hotels and entertainment spots lining the road, each boasting at least one attendant who usually receives Rp 2,000 from car owners and Rp 1,000 from motorcyclists.

The phenomenon is not unique to West Jakarta. A parking attendant in the Santa area in South Jakarta's upscale Kebayoran Baru – home to cafes, salons, and boutiques – also admitted that he gave 60 percent of the fees collected to a "boss", with only 20 percent each going to the administration and his own pocket.

"Around 250 cars park here every day. I don't ask for a fixed amount so some drivers give Rp 1, 000 and others give Rp 2,000. Generous ones give me Rp 5,000," he said.

The attendant added that his boss had men watching over him, collecting Rp 150,000 from his daily earnings of around Rp 250,000. The transportation officials, he said, only collected Rp 40,000 while the rest was divided among himself and four of his fellow attendants.

"The amount given is not fixed but depends on how many cars parked on that day. On quiet days, when only 200 cars park, I give Rp 100,000 to my boss and Rp 30,000 to officials," the middle-aged man told The Jakarta Post on Saturday.

Street thugs do not only take the biggest chunk of parking fees, but also hit back at the transportation agency through threats of violence.

"Challenging street thugs is a death wish," Jakarta Transportation Agency parking head Benyamin Bukit told the Post, adding that the thugs formed organizations and frequently resorted to violence, including chasing city parking officials with sharp weapons.

He added that some of the critical spots included Glodok, Pasar Pagi and Asemka, all in West Jakarta.

"It's not easy to wipe out this scourge. The process would be long and the strategy would have to be advanced," Benyamin said, adding that the phenomenon had been around for 20 years and would require cooperation from other parties to stamp out.

He said the city received Rp 19.5 billion in 2009 in parking fees from on-street and neighborhood parking spots as well as parking license fees, although the number could be higher if all parking fees were channeled back to the administration. (gzl)

Armed forces/defense

Military to boost spending on weapons

Jakarta Post - May 6, 2010

Dicky Christanto, Jakarta – Defense Minister Purnomo Yusgiantoro said Tuesday for the first time in years the military plans to spend more on revamping its weaponry than improving the welfare of its personnel.

The Defense Ministry is also aiming to gradually raise the defense budget from the current 0.9 percent to 1.5 percent of the country's GDP by 2015, Purnomo said, adding the government began raising defense expenditure this year. "We are hoping to reach the 1.5 percent target by 2014 or 2015".

Indonesia's GDP was about Rp 5,000 trillion (US$555 billion) in 2008, according to the Central Statistics Agency. The government allocated about Rp 360 billion for defense spending this year. The ministry, according to Purnomo, would only spend Rp 152.9 billion to finance staff welfare programs.

"We will apply zero growth policy to our force – meaning we will recruit a number of men proportionate to the number that retire every year," he told reporters.

The ministry, he added, would also implement a rightsizing policy, which would create more military commands (Kodam) without increasing personnel.

Purnomo said the Navy was now in talks on whether they should add another fleet to the existing two fleets; the West and East Navy Commands.

The plan to improve the weaponry system is part of the military's efforts to maximize its essential minimum force designed to be able to safeguard the country's territory in day to day basis.

The ministry, Purnomo said, would also begin to purchase more weapons from the domestic weapons industry. "By implementing this policy, we could save more money on maintenance," he said.

The ministry's inspectorate general Vice Marshall Errys Heryyanto dismissed allegations that the military was planning to become more aggressive by revamping and purchasing more weapons.

"We are doing it in order to be able to safeguard the country's vast territory. We have no intention of becoming a regional aggressor," he said.

Economy & investment

Rampant economic inequality threatens Indonesia's impressive rise

Jakarta Globe - May 5, 2010

Titania Veda – Seen from Jakarta's glass-walled towers, the government's reform drive is bearing fruit, with rising economic growth and foreign investment promising an even brighter future.

But in the grimy Pasar Senen market, char-ridden from a recent fire, the economic benefits reaped by the city's financiers have yet to trickle down to small informal businesses.

A seller of locally made handbags, Sri Wahyuni, shares a tiny kiosk with another merchant because she cannot afford renting her own.

Indonesia's reputation as one of Southeast Asia's star performers after sailing through the global financial crisis relatively unscathed means nothing to her. She continues to struggle for her livelihood as she has done for 25 years.

Since Reformasi, the government has tried to reduce corruption within public institutions. The Finance Ministry was the first to undergo bureaucratic reform, in 2007. But poverty levels have not dropped and the access to economic resources continues to be unbalanced.

Joachim von Amsberg, the World Bank's country director for Indonesia, said although its main focus was on tackling corruption and ensuring a healthy fiscal position, the government also needed to take social indicators into account.

"You have a committed government that wants to make a difference but it has a huge implementation challenge," he said. According to the World Food Program, 52 percent of Indonesians live on less than $2 a day, with an estimated 35 million people living on less than 65 cents a day.

Central Statistics Agency (BPS) data show an average factory worker earns Rp 248,000 ($27.28) per month, while universities charge Rp 1 million or more for tuition per semester.

Von Amsberg said it was critical that everyday people felt that growth benefited them and that development was not just something for people living in high-rise apartments. The huge informal sector needed to feel the positive effects as well.

Last year, 68 percent of Indonesians worked in the informal sector, according to the International Labor Organization.

Like many business owners in the sector, Sri Wahyuni does not have a taxpayer registration (NPWP) number and does not pay taxes. Her imitation Chanel and Gucci bags cost Rp 35,000 each to produce and sell for around Rp 39,000, leaving her with an extremely narrow profit margin.

"Most of them don't register themselves for an NPWP number because they're afraid to be chased by the tax men," said Sudianto, who is in charge of regional sales management and marketing at PT Bank Danamon's micro business savings and loans unit. "They don't really understand how the tax system works."

The informal sector is also overcrowded, with high numbers of people trying to scrape by as ojek drivers or bakso sellers creating too much competition and reducing wages.

"There has to be more formal than informal workers so we can have job security, income security and social security," said Djimanto, deputy chairman of the Indonesian Employers' Association (Apindo). "That way we can sort out poverty, which has to be reduced."

Nevertheless, the small- and micro-sized informal business sector is growing, with Bank Indonesia data showing a 16 percent increase in loans to the SME sector, from Rp 633.9 trillion in 2008 to Rp 737.4 trillion in 2009.

The strength of the sector may help President Susilo Bambang Yudhoyono's cabinet reach its second-term targets of lowering poverty levels to 8-10 percent, decreasing unemployment to 6 percent and achieving GDP growth of 7 percent by 2014.

But Center for Information and Development Studies economist Umar Juoro is not convinced the targets can be reached. "We haven't got a step-by-step measure to get delivery," he said.

Meanwhile, experts are calling for the government to use its strong economic position to address infrastructure problems.

"Indonesia as a whole has many different islands, but from one island to another, the Indonesian economy is not really linked in terms of trading," Bank Danamon economist Anton Gunawan said. "For example, a product like corn in Gorontalo is cheaper and easier to buy abroad. And in Java, when they need corn it's cheaper to import it for many reasons, such as expensive transport costs or lack of warehousing or some kind of quarantine system."

It is less expensive to send a container from Shanghai to Belawan than from Tanjung Priok port to Belawan, said Richard Lino, president director of state-owned port operator PT Pelindo II.

The company is pushing upgrades to Tanjung Priok so it can compete with regional ports in Southeast Asia. The port has collaborated with the customs and excise department to increase its efficiency, and as of April 1 the import gates of Tanjung Priok port are fully automated.

"If we don't solve this matter, in the long term Java, as the factory of Indonesia, will lose its competitive position," Richard said. "If the port can be efficient, the ships can be efficient, and logistics cheaper."

Based on Indonesia's strong fiscal position, some experts saythe country is ready to make the big leap forward. But to ensure delivery of government targets, aggressive steps towards a better investment climate, improved infrastructure and a stable broad- based society need to be taken.

Von Amsberg said if Indonesia could achieve development that was broad-based and lifted people out of poverty it would contribute to consolidating a stable democratic system.

Shoe exports may reach $3 billion by 2014

Jakarta Post - May 4, 2010

Jakarta – Indonesia's shoe exports could reach US$3 billion per year in the next three years thanks to the recent relocation of several branded footwear factories from other Asian locations into Indonesia, a senior government official has said.

The director general of the metal, machinery, textile and multifarious industries in the Industry Ministry Ansari Buchari said in Jakarta on Monday that the relocation of a number of shoe factories from Vietnam and China had already contributed to higher export growth in the first quarter.

He said that Indonesia's total footwear sales rose by about 10 percent to Rp 4.6 trillion ($510 million) in the first quarter of this year from Rp 4.14 trillion in the fourth quarter last year.

No export figures are available for the three month period. But the Indonesian Footwear Association (Aprisindo) said that footwear exports rose by 25 percent to $160 million in January up from the same month, last year.

Ansari believed that footwear export growth could go even higher in the coming months as orders from overseas buyers were also on the rise. "With this trend, our footwear exports could reach $3 billion by 2014," he said.

This year, footwear exports are projected to increase by 16 percent to $2 billion from $1.72 billion last year. Aprisindo attributed the high exports to new factories relocated from China and Vietnam, in addition to expansion of existing factories.

Ansari said however, that Indonesian shoe producers were still unable to dominate the domestic footwear market despite the rise in exports. According to him, local producers only controlled less than 50 percent of domestic sales.

"We hope local shoe makers could control at least 60 percent of the domestic shoe market," he told a press conference on the 2010 Indonesian Footwear, Leather and Leather Goods Exhibition held at the Jakarta Convention Hall starting Thursday.

Ansari said that local producers were still unable to compete especially in the branded shoe market in the country because most of the raw materials for the shoe production industry were still imported.

The chairman of the Indonesian Tanners Association (APKI) Senjaya acknowledged the local shoe industries still relied on imported raw materials. The government's policy of imposing an export tax of between 15 and 25 percent on leather products in order to support local shoe producers was not effective, he said.

Senjaya hoped that the government would instead facilitate more imports of raw materials to help cope with the lack of raw material supply.

According to him, Tong Hong, a leather tanning company based in Taiwan had recently relocated its factories in China and Vietnam to Indonesia to produce leather raw materials for the local shoe production industry.

The company has built a factory in Serang, Banten representing a total investment of between $10 million and $15 million. Two tanning companies from Taiwan and another one from Hong Kong had also expressed their willingness to open factories in Indonesia, he said. "But they have not made any decision yet," he added. (ebf)

Consumers wary of food price hikes, survey shows

Reuters - May 3, 2010

Indonesia's consumer confidence was little changed in April, a survey by the Danareksa Research Institute (DRI) showed, with those polled saying the economy was improving but that rising food prices remain a concern.

The consumer confidence index, which is compiled from a survey of some 1,700 households in six main areas, remained at a reading of 86.8 in April, unchanged from March. An index level of below 100 indicates that pessimistic responses outnumber positive responses.

"The rosier economic outlook bodes well for greater consumer spending in the months to come," DRI said in the survey. "This optimism on the economy, together with the easy availability of consumer credit, is also encouraging consumers to purchase more durable goods – our latest survey shows that buying intentions for durable goods remained firm."

But it added that consumers were still "burdened by high prices of foodstuffs," with 64.4 percent of those surveyed still citing rising food prices as a "major concern."

DRI said that it found that 25.2 percent of consumers now plan to buy durable goods over the next six months, slightly lower than in March when 25.4 percent of those surveyed said they planned such a purchase.

The survey found that consumers expect inflationary pressures to ease slightly over the next six months, as food supplies increase thanks to the harvest leading to lower prices for basic foods.

Spike in foreign investment puts 2010 target in reach

Jakarta Globe - May 2, 2010

Irvan Tisnabudi & Ardian Wibisono – Indonesia posted a 41 percent rise in foreign direct investment in the first quarter of 2010 over the same period a year ago, but domestic investment fell 30 percent, the Investment Coordinating Board said on Sunday.

The strong figure for FDI led officials and analysts to agree that 2010 could be a bumper year for investment.

The board, known as BKPM, recorded Rp 35.4 trillion ($3.92 billion) in realized FDI in the first three months, up from Rp 25 trillion in the first quarter of 2009, it said in a statement.

Gita Wirjawan, the board's head, said notable investments by foreigners were in the transportation, warehousing and communications sector, which drew $941.5 million in funds for 23 projects. Mining attracted $711 million in 12 projects.

Singapore was the leading investor in the first quarter, with $676.8 million going to 62 projects, followed by investment from companies registered in Mauritius, a tax haven, of $446.6 million and the United States, with $436.9 million invested in 12 projects.

Meanwhile, domestic investment fell to Rp 6.7 trillion in the January-March 2010 period from Rp 8.7 trillion in the same period of 2009, the statement said, without elaborating on the decline.

The BKPM said the most active sector for domestic investment was transportation, warehousing and communications, with Rp 1.9 trillion in seven projects.

Gita said he remained optimistic that a nationwide push by the agency through the end of this month would help domestic investment rebound.

Total investment rose 25 percent in the first quarter, with more than 123,000 workers employed in 574 projects.

BKPM said the data it provided on Sunday was gathered using a new methodology. The agency has changed the frequency of its data gathering by requiring companies with projects still under development to report to the board. It also changed activity reports on current projects to every quarter, instead of every six months as previously required.

Investors who have obtained formal approval from the BKPM must also submit an Investment Activity Report every six months, instead of once a year as before, BKPM said.

"The new method is meant to increase the accuracy of the investment realization data and to understand the pace of investment," Gita said.

He was optimistic that the board could meet or exceed its target of more than 15 percent growth in total investment this year to Rp 161.5 trillion. In 2009, total investment was Rp 135 trillion.

PT Bank Danamon Indonesia's Helmi Arman agreed that Gita's target was realistic.

"There is, of course, rising optimism from foreign investors on Indonesia, because ratings agencies have improved the country's ratings due to its solid economic performance," Helmi said.

"I think in the months to come the investment climate will be better, so in the next three quarters of this year the investment goal should be achieved, and even surpassed."