Jakarta – More than two years after their last meeting in 2010, chair of the Indonesian Democratic Party of Struggle (PDI-P) Megawati Soekarnoputri made a conciliatory gesture toward President Susilo Bambang Yudhoyono by turning up at the State Palace to receive the National Hero title bestowed on her father, Sukarno.

Megawati, present in body if not mind, gave Yudhoyono the cold shoulder and appeared distant and aloof as the President acknowledged her presence.

While Yudhoyono gave his speech, praising what Sukarno had done for the country, Megawati only occasionally set her sights on the President, who stood directly in front of her, but was otherwise looked around the room distractedly.

She also declined to applaud when Yudhoyono wrapped up his speech, while everyone in the room including Speaker Marzuki Alie and Vice President Boediono were more than enthusiastic.

When Yudhoyono and First Lady Ani Yudhoyono moved around the room to congratulate the families of Sukarno and Mohammad Hatta, Yudhoyono and First Lady Ani hugged and kissed the cheek of Megawati's older brother, Guntur Soekarnoputra, and Hatta's first daughter, Meutia, but then hestitated when approaching Megawati.

Yudhoyono and Megawati ended up only shaking each other's hand and giving each other awkward, simpering smiles.

It was the first time the two national figures, who twice competed in for the presidency, had been seen together in public since 2010 when Megawati attended a state dinner to honor US President Barack Obama.

Yudhoyono's bitter rivalry with Megawati started when the former decided to run for the presidency in 2004 using the newly founded Democratic Party as his political support. Previously, Yudhoyono was one of Megawati's most trusted aides and was even coordinating political, legal and security affairs minister in her cabinet.

When Yudhoyono decided to compete with her head-to-head, their relationship turned sour. The rivalry also turned personal, with Megawati's husband Taufiq Kiemas once calling Yudhoyono a general who acted like a "child".

With Golkar's Jusuf Kalla as his running mate, Yudhoyono defeated the pair of Megawati and Hasyim Muzadi in 2004.

The rivalry continued and in 2009, Yudhoyono again emerged the winner, this time with Boediono as running mate, defeating Megawati and Prabowo of the Great Indonesia Movement Party (Gerindra); and Kalla and Wiranto of the People's Conscience Party (Hanura).

Yudhoyono has given long-overdue recognition to Sukarno and Hatta with the title of National Heroes. In his speech during the ceremony, he called on the nation to revisit the legacy of Sukarno and recast him in a new light.

"Let us leave behind all the stigma and negative, unnecessary views of them," Yudhoyono said, quoted by Antara news wire. Yudhoyono said that the sacrifice the two figures had made for the country far exceeded their flaws as human beings.

Responding to the award, Megawati said the two deserved the title more than anybody else. "It should have been given long time ago," she said.

Political analyst Arie Sujito said the Megawati-Yudhoyono reunion was a rare moment when politicians came together for a noble cause. "The recognition for Sukarno has been long overdue because of manipulation by the New Order regime. While we suspect political motives behind the title, I see as Yudhoyono projecting his status as a statesman."

Police to send 3,000 students to boot camp

Jakarta Post - November 7, 2012

Jakarta – The Jakarta Police, in coordination with the Jakarta Education Agency, plan to send 3,000 disruptive high school students to boot camp as part of an effort to quell school violence.

Jakarta Police spokesman, Sr. Comr. Rikwanto, said on Tuesday the students would be divided into 14 groups. The first batch began their program on Tuesday at the State National Police School (SPN) in Lido, Sukabumi, West Java.

"There will be 250 students participating from all over Jakarta in the first batch of the program and they will stay at the police school for one week," Rikwanto told reporters. "The students will participate in several disciplinary activities and be given ethics and moral lessons. There will be outbound activities as well," he added.

This week's program is designed for students from vocational schools, mainly those studying engineering. The program for students from general high schools will start on Nov. 20.

Jakarta Education Agency deputy chief Agus Suradika said that the agency hoped that the program would change the students' mind-sets and discourage them from taking part in brawls.

"We aim to change their mind-set on the meaning of life and friendship. We want them to appreciate their lives more. The program is aimed to repress their will to fight," Agus told The Jakarta Post on Tuesday.

According to Agus, the agency also incorporated Islamic-based "emotional and spiritual quotient" motivational training to develop the students' emotional sensitivity.

"We have numbers of preventive approaches to resolve student brawls. One of the approaches is by encouraging the schools to give extra attention to troubled students. If needed, the teachers will communicate with the students' parents to solve the problems together," he said.

He said that the schools had also been encouraged to organize more extracurricular activities to minimize the possibilities of students becoming involved in fights.

"The rehabilitative approach to prevent brawls is to expel the students involved. However, they will be given choices of schools that might help them to deal with their problems before being expelled," he said.

Concerns have risen over the escalating number of student brawls in the city after two high school students were killed in separate clashes in September.

On Sept. 24, a confrontation between SMA 6 high school and its long-time rival SMA 70 high school in Kebayoran Baru, South Jakarta, caused the death of SMA 6 first-year student Alawy Yusianto Putra.

Two days later, a Yayasan Karya 66 student, Deni Yanuar, died during a brawl with students from SMK Kartika Zeni on a street in Manggarai, South Jakarta.

The police have completed their investigation into the murder of Alawy and handed the case over to the prosecutor's office last week. One SMA 70 high school student, FR, will be charged with murder. (nad)

Sukarno, Hatta national heroes at last

Jakarta Post - November 7, 2012

Margareth S. Aritonang, Jakarta – President Susilo Bambang Yudhoyono has given long-overdue recognition to the country's first president and vice president, Sukarno and Mohammad Hatta, by giving them the title of National Heroes.

Presidential spokesman Julian Aldrin Pasha said on Tuesday that Yudhoyono would host a ceremony on Wednesday to bestow the titles at the Merdeka Palace.

"The nation's highest tributes for our founding fathers are based on their services when they were both fighting for and proclaiming our independence, and also the services that they contributed afterward," he told The Jakarta Post.

Julian said that members of the Sukarno and Hatta families have agreed to attend the ceremony and accept the titles on their behalf.

The presidential spokesman also shrugged off speculation that the decision was politically-motivated, given the fact that descendants of the two figures are now major political players in the country.

Sukarno's daughter Megawati Soekarnoputri is the chair of the Indonesian Democratic Party of Struggle (PDI-P) while her younger sister, Rachmawati Soekarnoputri, joined the National Democratic (NasDem) Party in September.

The first daughter of Hatta, Meutia Farida Hatta, served as Women's Empowerment minister in Yudhoyono's first Cabinet from 2004 to 2009. She is now chair of a minor political party, the Indonesian Justice and Unity Party (PKPI).

Meutia's younger sister, Halida Hatta, founded the Great Indonesia Movement Party (Gerindra), along with the former leader of the Indonesian Military's (TNI) Special Forces Command (Kopassus), Prabowo Subianto. Halida resigned from the rising political party on July, citing personal reasons.

Julian said that the granting of the titles was based on a system regulated in Law No. 20/2009. Under the law, a candidate to be "hero" is usually nominated by regional governments (municipal or regency level), which then submit the name to the provincial government and later to the Social Affairs Ministry.

Following a selection phase at the ministry, the name is taken to the seven member Board of Titles, Orders of Merit and Decorations for examination before final approval is given by the President.

A regulation from the Social Affairs Ministry stipulates that the family of a National Hero is entitled to monthly benefit of Rp 1.5 million (US$176) and an annual health allowance of Rp 3 million.

The New Order regime of Soeharto balked at a proposal to name Sukarno a National Hero considering his close ties with the Indonesian Communist Party (PKI).

Responding to the granting of the title to Sukarno, the chairperson of the PDI-P faction at the House of Representatives Puan Maharani, who is also Sukarno's granddaughter, said that the policy would end debate as to whether Sukarno deserved the title.

"It's all clear now that Bung Karno is a national hero. The award is recognition for his services and sacrifices for Indonesia," Puan said.

West Papua

Army units torch houses, shoot villager, during Wamena sweep operation

West Papua Media - November 7, 2012

Credible Reports have again emerged detailing a rampage by troops from the notorious Indonesian Army (TNI) Battalion 756, who have reportedly run amok burning houses and beating up Papuan civilians, during a recent security sweep against Papuan civil society activists.

At 2pm local time on November 4, a joint force of 756 BTn troops, together with Brimob paramilitary police units and troops described as "non-organic special forces" – most likely troops from the Australian-supported Detachment 88 counter-terror unit – conducted a sweep of the houses behind the New Jibama market in Wamena town. The troops laid siege to a group of houses and started shooting at the houses and directly at residents, according to witnesses interviewed by local human rights sources.

One person was reportedly seriously injured by gunshot wounds sustained during the attack, and many more people received major burn injuries after being caught in three houses that were torched by the joint force. Exact casualty figures have been unable to be ascertained and the gunshot victim has yet to be identified, however family members confirmed that several people had been treated at the Wamena hospital for their injuries.

Family members of those targeted, spoken to by stringers for West Papua Media, have fled Wamena after their houses were set on fire by the joint force. According to local sources, they fled to the forest outside Wamena, and are too scared to return for fear of being shot by Indonesian security force. Those fleeing are being forced to survive on the resources in the forest, as the security presence makes in difficult to return home, according to our sources.

Local human rights activists have also claimed that people in Wamena are confused over the reason behind the attack and the arson, and have questioned who has commanded the attack. "What forces are behind this? This case is not obvious, but the combined forces commit arson and loot residents' property in the home of all three victims," said the activist.

The behaviour of security forces against Papuans "is very exaggerated beyond procedures that should be enforced under applicable human rights law in Indonesia and Internationally," he continued.

On june 7, members of Battalion 756 went on another rampage of arson, looting, shootings and beatings after one of their members was killed after an accident that seriously injured a young boy. In recent months, Detachment 88 troops have also led an intensifying and brutal crackdown on activists from the West Papua National Committee (KNPB), after claims of their involvement in a bombing campaign.

Many credible observers have cast doubt on the motivations of the security forces in this crackdown, accusing them of engineering a situation to criminalise legitimate peaceful free expression.

New Papua interim government brings hope for Papuans

Jakarta Post - November 6, 2012

Nethy Dharma Somba, Jakarta – The replacement of former Papua interim governor Syamsul Arief Rivai, who held the position for 16 months, with Constant Karma, a high-ranking civil servant, is aimed at making the upcoming Papua gubernatorial election a success, according to a government official.

Constant was appointed as Papua interim governor based on Presidential Decree No. 89/2012 and was sworn by Home Minister Gamawan Fauzi in Jakarta on Monday.

"The former official has retired and has been replaced by a new one. We don't know when the election will be organized. The time line might still be long, so rather than extending his [Syamsul's] term, it's better to replace him with a new official," said Gamawan after the swearing-in ceremony.

Before being appointed as Papua interim governor, Constant was a first echelon official serving as Papua provincial secretary.

The main duty of the interim governor is to facilitate the election process in Papua, which has been delayed for almost two years.

Prior to Syamsul's replacement, the Coalition of Youth and Students Care on Constitution filed a legal challenge against Presidential Decree No. 20/P/2012, which had extended his term as interim governor, at the State Administrative Court in Jakarta.

The coalition also claimed that the Papua interim governor should be a native Papuan, in accordance with the Papua Special Autonomy Law.

Regarding the replacement of the interim governor, the coalition's legal advisor, Budi Setyanto, said the group's lawsuit would automatically be withdrawn.

"Yes, the lawsuit will be withdrawn by itself because our demand that the Papua interim governor should be a native Papuan has been met," he said.

Constant said that in line with his main duty to facilitate the Papua gubernatorial election, he would immediately coordinate with regional leaders to make the election process, set by the Papua General Elections Commission (KPUD), a success.

The Papua KPUD is currently arranging the election, which has been scheduled for Jan. 29, 2013, and has opened registration for candidates.

Former Papua governor Barnabas Suebu and his running mate, former Tolikara regent John Tabo, plan to register as gubernatorial candidates on Nov. 10, coinciding with Heroes Day.

Nine candidate pairs have so far registered to contest the election, five of which have been nominated by political parties and four are independent candidates.

Meanwhile, US Ambassador to Indonesia Scot Marciel will visit Jayapura, Papua on Nov. 5-6 to meet with government officials and community leaders.

During his visit, Marciel will highlight new and existing US Agency for International Development (USAID) programs that support growth and development for the people of Papua.

Marciel met with James Modouw, the head of the Department of Education, Youth and Sport Affairs for Papua, to discuss the roll-out of a new education curriculum for more than 32,000 students in 355 schools spread across six districts.

PRD Merauke secretary badly beaten by TNI 755 battalion

West Papua Media - November 6, 2012

Information and video footage has emerged from Merauke, Papua, documenting the beating by Indonesian soldiers of the Secretary General of the Parlemen Rakyat Daerah (People's Regional Parliament), further fulling tensions in the area between occupation forces and the local population.

The incident occurred around 3pm local time on November 3, as the SekJen, Peter T. Katem was riding his Yamaha motorcycle with a community member, Mr Robert Mayonim. The pair lost control of their bike due to newly made but rough village roads in Domba Empat street, accidentally nudged a military officer with their motorbike outside the office of E Company, 755 Battalion (Merauke) of the Indonesian Army (TNI), according to witnesses.

Citizen journalists, Lintah Digoel and Rade Minyak, who interviewed the victims reported that the TNI member and two colleagues then gave chase after they refused to accept the accident, and attacked the pair at the crossroads outside the Company post. As the beatings continued, more soldiers arrived on the scene and joined in, some in plain clothes and some in uniform. The beating was filmed (below) by a witness.

According to local sources, Katem and Mayonim were taken forcibly to the E/755 Btn Post with beatings continuing as they were being dragged. Arriving at the office, they were then tortured for about an hour and a half, they were punched, kicked and beaten with wood, fruit and bamboo.

The persecution ended after a number of Domba Empat community members came to the office to demand their release, which occurred two hours later, Digoel and Minyak reported.

So far, none of the perpetrators have been investigated.

[With KNPBNews.com]

KNPB activist, Klismon Woi dies from his injuries after mysterious shooting

KNPB News - November 6, 2012

[Note: West Papua Media has again independently verified all contents of this report with contacts in Fak-Fak, and is reprinting the KNPB News report in full as WPM has confidence in this reportage.]

Fak-Fak – After Paulus Horik was laid to rest yesterday (5/11), another KNPB activist in Fakfak, Klismon Woi, took his last breath this afternoon (6/11) at 12 noon, at the Regional General Hospital of Fakfak in West Papua. The late Klismon was in a critical condition for two days due to the countless bruises and serious injuries on his face and ribs.

According to information submitted to KNPB News this afternoon by Arnold Kocu, regional coordinator of KNPB Fakfak, the body of the now deceased Klismon Woi was brought back to the funeral home. He also confirmed that Paulus Horik was buried the day before (5/11).

Klismon Woi was a member of KNPB-Fakfak. According to information collected from the field, there are reasons to believe that Paulus and Klismon were killed by people who were especially trained by Indonesian forces that had been monitoring the activities and events led by KNPB activists in the Fakfak region.

Special operations by the Indonesian security forces against KNPB activists have been stepped up since KNPB Chairman Mako Tabuni was shot dead on 14 June. Search and arrest operations, raids and killings have been undertaken continuously by the Indonesian Special forces in an effort to eradicate the peaceful resistance movement led by the KNPB (wd)

[Translation by LT.]

Indonesian president's visit to UK marred by protests

Channel News Asia - November 1, 2012

Natalie Powell, London – Indonesia's President Susilo Bambang Yudhoyono has become the first world leader on a state visit to the UK during the Queen's Diamond Jubilee Year.

Dr Yudhoyono and his wife, who are on a three-day visit, will meet members of the British royal family and discuss investment and business development with politicians.

On Wednesday, Dr Yudhoyono met British Prime Minister David Cameron and Deputy Prime Minister Nick Clegg at Buckingham Palace. On Thursday, he will meet Mr Cameron again at No 10, Downing Street.

Dr Yudhoyono's visit to Britain, however, has not been well received by everyone. Dozens of protesters also turned out at Mr Cameron's Downing Street residence to greet the president over alleged human rights abuses in Indonesia.

Prominent rights campaigner Peter Tachell was arrested trying to reach the president's car as he visited Westminster Abbey.

Mr Paul Hainsworth, UK Country Coordinator, Amnesty International, said: "What we would like to see since the president of Indonesia is here is not just an emphasis on trade, not just an emphasis on education. Important as these things are, we think there is another agenda to it and that's the human rights agenda, and we think that is all part of the package. We would very much like the prime minister and other parliamentarians who the president of Indonesia might meet, we would like them to ask these questions and I think they will."

Ms Sophie Grigg, Senior Campaigner of Survival International, said: "We are here to protest against the Indonesian president's (visit)... also to protest the British government for supporting him and inviting him here on a state visit. They have to take a much stronger stand, they have to make any trade and arms sales conditional on a far better human rights record to stop what's happening in West Papua."

But Britain's Foreign Secretary William Hague has praised Dr Yudhoyono for the political development in Indonesia that is helping shape a political change in Asia.

Dr Yudhoyono's visit will wind up at the end of the week, but not before he addresses a business forum, visits the Tower of London and attends a state banquet hosted by the Queen. (CNA/AFP/de)

Indonesian president greeted by protests on London visit

ABC News - November 1, 2012

Dozens of protesters have denounced alleged torture in Indonesia and accused Britain of putting commercial interests ahead of human rights on the first day of a state visit by the Indonesian president.

President Susilo Bambang Yudhoyono received a lavish royal welcome for the first Indonesian state visit to Britain in more than 30 years, but activists criticised the British government for valuing commercial ties over the rights of Indonesian minorities.

"The West Papuans are being held, tortured and killed and all England and the whole European Union do is back him (Yudhoyono) up – they are only in it for the money," said one protester Nal Pattinama, with tears in her eyes.

Indonesia has one of the world's fastest growing economies and is seen as one of the most democratic countries in Southeast Asia, but its military has kept a tight rein on Papua, home to a mine with the world's largest gold reserves.

Indonesia's government and military have been criticised in the past for human rights abuses in West Papua, after Indonesia took over the province in 1969 in a vote by community leaders that was widely criticised as flawed. A low-level insurgency for independence has simmered on Indonesia's eastern-most island for decades.

Protesters, some wearing Halloween masks and ghoulish face paint, gathered outside the prime minister's office on Downing Street and waved red paint- splattered placards calling for the release of Papuan political prisoners, imprisoned for advocating independence from Indonesia.

Others, including representatives from Amnesty International and Indonesian non-government organisations, waved West Papuan flags, an act they said is punishable by 15 years in prison in Indonesia.

"It's disgusting that one can walk up towards the Palace and the Indonesian flag is flown on behalf of our government supporting the like of Indonesia," protester Bob Corn said.

Nearby, Britain's Queen Elizabeth greeted President Yudhoyono and his wife in a red-carpeted pavilion on Horse Guards Parade, as a 41-gun salute rang out and regimental bands in bearskin hats played the Indonesian national anthem.

Britain is keen to foster a strong commercial relationship with the fast- emerging nation and has channelled resources from its embassies in the European Union to boost its diplomatic presence in Indonesia and the region.

After the official welcome, Yudhoyono was whisked off in a gilded carriage to Buckingham Palace for a private lunch with the queen. In the three-day official visit, Javanese-born Yudhoyono will attend a state banquet, address parliament and open the Indonesia-UK Business Forum.

Human rights activist arrested for unfurling Morning Star flag near SBY

Jakarta Globe - November 1, 2012

Police in London detained Peter Tatchell, an Australian-born human rights activist, on Wednesday after he unfurled the West Papuan Morning Star flag as Indonesian President Susilo Bambang Yudhoyono's limousine departed from Westminster Abbey.

"I was arrested for peaceful protest against #Indonesia crimes in #WestPapua," he tweeted. "Only held a flag."

The 60-year-old Tatchell said he was wrestled to the ground by Yudhoyono's presidential security guard (Paspampres) before he was arrested by Metropolitan Police officers.

"The president stands accused of war crimes in East Timor and West Papua," Tatchell said on his foundation's website, petertatchellfoundation.org.

"It is appalling that the Royal Family and the Prime Minister are hosting a man who is implicated in mass murder," he went on. "I am saddened that some police officers apparently have no respect for freedom of expression and the right to peaceful protest.

According to Tatchell, he was released without charge two hours after being taken to Charing Cross police station. "Clearly, the police knew they had over-stepped the mark and that the charges against me were baseless," he said.

Tatchell had been planning to perform a citizen's arrest – something he has attempted before – on Yudhoyono, but failed to do so. In 2001, Tatchell, who is a well-known for gay rights proponent, was attacked by Zimbabwean president Robert Mugabe's security personnel during a visit to Brussels.

Beside Tatchell, dozens of protesters on Wednesday denounced alleged human rights abuses in Indonesia and accused Britain of putting commercial interest ahead of basic freedoms.

"The West Papuans are being held, tortured and killed and all England and the whole European Union do is back him [Yudhoyono] up – they are only in it for the money,' protester Nal Pattinama said with tears in her eyes, as quoted by Reuters.

Indonesia's government and military have been criticized in the past for human rights abuses in West Papua after Indonesia took over the province in 1969 via a vote by community leaders that was widely criticized as rigged.

A low-level insurgency for independence has simmered on Indonesia's eastern-most island for decades.

Others, including representatives from Amnesty International and Indonesian non-government organizations, waved West Papuan flags, an act they said is punishable by 15 years in prison in Indonesia.

"It's disgusting that one can walk up towards [Buckingham Palace] and the Indonesian flag is flown on behalf of our government supporting the likes of Indonesia," protester Bob Corn said.

Human rights & justice

Indonesia dismisses human rights concerns over German tank deal

Deutsche Presse Agentur - November 6, 2012

Jakarta – Indonesia on Tuesday dismissed concerns voiced by human rights groups over its purchase of more than 150 tanks from Germany.

The Defence Ministry confirmed that it has purchased 100 Leopard battle tanks, 50 lighter Marder tanks and several supporting vehicles from German defence company Rheinmetall AG.

Deputy Defence Minister Sjafrie Sjamsoeddin said delivery was expected to start this year.

The deal was opposed by human rights groups in Indonesia and the German Green party, who argued that the military was still committing human rights violations in the Papua region, the scene of a low-level separatist conflict.

"Who says it's one of the conditions?" Defence Ministry spokesman Colonel Bambang Hartawan, when asked if Indonesia had assured the German government that the tanks would not be used against its own people. "Indonesia is a sovereign and civilized nation," he said.

Hartawan said the tank purchase was part of the government drive to modernize its under-equipped military. "We need to upgrade our defence capabilities like other countries have done, in terms of human resources and equipment," he said.

Hartawan cast doubt on a planned signing of a memorandum of understanding between the Defence Ministry and Rheinmetall on Wednesday. "It's not fixed yet," he said. "It's still being deliberated and let's hope it will go smoothly."

The ministry said earlier that the deal had been completed and that the subsequent agreement would only be related to future maintenance and a transfer of technology.

Hartawan said an MBT Revolution, which is an upgraded Leopard A24, and a Marder had arrived in Indonesia to be displayed at the exhibition. The Indonesian Coalition of Civil Society has urged the government to cancel the tank purchase.

"The coalition has a reason to be concerned that, given the government's poor track record on human rights in Papua, that the MBT Leopard could be used as a tool of repression," it said.

Poengky Indarti, executive director of the human rights group Imparsial, said there were also questions on whether battle tanks like the Leopard were needed or even suited to Indonesia's geography as an archipelago.

"The government said it would place tanks in border areas. The question is does the Leopard answer the need for border security?" she said. "Biggest threat in borders areas like Kalimantan and Papua are people, goods and weapons smuggling," she said.

The military was accused of gross human rights violations under the rule of autocratic president Suharto. Activists said that despite a series of reforms following Suharto's downfall in 1998, there has been little accountability for past and recent abuses committed in Papua.

The government has allocated a defence budget of 156 trillion rupiah (16.4 billion dollars) for the 2011-14 period, allowing it buy hardware such as modern fighter aircraft, submarines and tanks.

Unlike neighbouring Malaysia and Singapore, Indonesia does not have main battle tanks. The Indonesian military has for years relied on ageing French-made AMX-13 and British-made Scorpions light tanks.

The country's main weapons company, PT Pindad has developed and produced the Anoa armoured personnel carrier and the government hopes it would eventually be capable of making tanks similar to the Leopard in cooperation with Germany.

PKI stigma still marks survivors of Indonesia's 1965 killings

Inter Press Service - November 4, 2012

Alexandra Di Stefano Pironti – If the caste system existed in Indonesia the 10 elderly people who live in Jakarta's Jalan Kramat would surely be untouchables: for decades they and their families have been banned from jobs and access to education and, until 2005, their identity cards marked them as former political prisoners.

They are survivors of the 1965-66 military crackdown on the now outlawed Indonesian Communist Party (PKI), during which time between 500,000 and three million people were massacred and thousands tortured and imprisoned without trial.

Ostracized since General Suharto ousted independence leader Sukarno in 1965 and began a 32-year dictatorship marked by anti-communist zeal, the former prisoners interviewed by IPS at the old two-story villa in downtown Jakarta offered a string of traumatic tales that give but a glimpse into a blood- soaked chapter of Indonesian history that many have chosen to forget.

Pak Rosidi, an 86-year-old former agricultural engineer who graduated from the University of New England in Australia, recalled in perfect English the horrors he suffered until 1980 in the notorious detention camp of Baru Island, where a recent investigation uncovered conditions that had amounted to slavery.

"I was dismissed from my job at the Department of Agriculture in 1970 and arrested because I was Sukarnist, not a communist," he said.

"I am speechless about my years in prison. I was beaten, and continuously electrocuted for three hours at a time during those years," the soft-spoken Rosidi recounted. "I had three children and I was married before I went to jail, but my wife rejected me when I returned," he added.

Strained family ties are a common theme in the stories of former prisoners, at a time when fear pushed children to turn against their parents in a bid to escape a life of discrimination. Like many others, Rosidi faced difficulties making a living after jail because his identity card was marked "Ex Tapol" (former prisoner). That barred people like him from decent jobs, and banned them from careers in law, politics and the military. Their children were denied access to university education.

Ibu Snanto, now 85 and a housemate of Pak Rosidi, was in jail from 1966 to 1975 because her husband was a communist party member.

"My husband was the communist and I was only a housewife, but they arrested me and I was often electrocuted and sexually abused. I suffer from heart problems and trauma because of those years," she told IPS.

The massacres started against the backdrop of the Cold War on Oct. 1, 1965, when a group inside the armed forces calling itself the "Thirtieth of September Movement" kidnapped and killed six senior army generals, allegedly to prevent a coup against Sukarno, who was sympathetic to the PKI. How many were killed and tortured, and the number who were imprisoned or are still alive, is not clear.

"We have spent two years of inquiry to find the numbers of people killed, but we cannot conduct validation. We haven't had help from military officials," Nur Kholis, a senior executive of the official Indonesian National Commission on Human Rights (Komnas HAM), told IPS.

In the first official report of its kind – released last July and based on interviews with 349 former prisoners – Komnas HAM acknowledged that "gross human rights violations" had taken place during the purge, including "murder, slavery, torture, sexual abuse, disappearances, cleansing, forced displacement and persecution."

The report recommends that the government of Indonesia, the world's most- populous Muslim nation, launch a national reconciliation process, and that the attorney general prosecute those found to be responsible for the crimes.

Kholis recounted to IPS the story of a witness in South Sumatra island who saw army soldiers push 100 half-starved prisoners into the sea. He also recounted the tale of a woman survivor in the city of Medan in North Sumatra island who was forced to lie down naked while soldiers pushed bunches of lit matches into her vagina.

Details of the anti-communist massacres are not found in Indonesian schoolbooks, and communism remains banned to this day. As recently as 2008, police summoned a group of artists in Bali to court for using symbols of the communist party during an exhibition.

Although Indonesia started its path to democracy in 1998 after Suharto was ousted as president, the current president, Susilo Bambang Yudhoyono, also a retired army general, has also been reluctant to re-open old wounds.

Meanwhile, the 10 former prisoners living on Jalan Kramat want nothing more than to have their names cleared of any wrongdoing.

"I want the stigma to be taken off us and a recognition that the government says that we are good people," 87-year old Ibu Pujiati, who spent 14 years in jail after 1965 for being a labor activist, told IPS.

Australian university professor Robert Cribb, who has written extensively about Indonesia's recent history, believes that the government's refusal to acknowledge the suffering of victims has had a "profound effect" on the former prisoners.

"They have not only suffered discrimination, but they have been portrayed as unreliable citizens. Things that they believed in have been portrayed as evil," Cribb told IPS.

The biggest Muslim organization in Indonesia, Nahdlatul Ulama (NU), whose members took part in the persecution and killing of suspected communists alongside the military, believes that the former prisoners are best forgotten.

"They should not look for compensation. The conflict should be forgotten," As'ad Said Ali, a senior NU official, told IPS.

He justified the killings and persecution as "human nature," saying the massacres were driven by "revenge" for previous deadly conflicts between the PKI and NU.

"We don't like revenge because everything depends on God, but we want official rehabilitation for all of us," said former prisoner Ibu Snanto, eliciting nods from fellow victims at the Jalan Kramat home.

The poetry of former prisoner Putu Oka Sukanta succinctly paints those years as a time "when human life was as cheap as a gutter rat's."

Seventy-three-year-old Sukanta describes Leftists as being "hunted down by hungry dogs". Although never tried, he was jailed for 10 years for belonging to the cultural organization Lekra, which was affiliated to the communist party.

Political parties & elections

Celebrity politicians' star power derails Indonesian politics: Joko

Jakarta Globe - November 8, 2012

Indonesian celebrities have hijacked the electoral process, Jakarta Governor Joko Widodo warned on Thursday in a speech criticizing what he called a common shortcut to office.

"Political parties have been taking shortcuts, [it's] an indication of the poor political recruitment system," Joko said at a National Defense Institute Foundation (Lemhanas) seminar in Jakarta on Thursday.

The newly elected governor, widely seen as a reformer, told the crowd he was "concerned" with the phenomenon, explaining that many celebrities lack the experience needed to serve in government. In direct elections, political parties often rely on celebrities' clout to push through less popular candidates.

It's become a common practice in Indonesian politics where dozens of politicians got their start in the entertainment industry. Among the celebrity turned lawmakers are former actor Primus Yustisio, comedian Eko "Patrio" and model Venna Melinda.

It is an open secret that political parties use celebrities to market lesser-known candidates, said Dedi Gumelar, a former comedian and lawmaker the Indonesian Party of Struggle (PDI-P).

"We have to admit that political parties still recruit members who do not have proven track records," Dedi said. "Political parties 'hire' celebrities who lack political and social experience as vote-getters and marketing tools." It is a system that needs to change, Dedi said.

"What Pak Jokowi said is right, but unfortunately he was generalizing," he said. "It's not that celebrities cannot run for governor or district heads, but they have to have proven track records.

"As long as they have the capability and capacity, there's nothing wrong with it." Joko urged political parties to reform their nominee systems to select those best suited to lead, not merely the most popular candidate.

"We must re-arrange our political recruitment [system], we must re-arrange [the nominations] of regional heads and the national recruitment system," he said, according to the Indonesian news portal republika.co.id

In an odd twist, Joko threw his support behind former actress and West Java Governor candidate Rieke Diah Pitaloka on Thursday. The Indonesian Democratic Party of Struggle (PDI-P) candidate entered Indonesia's political sphere in 1999 under the National Awakening Party (PKB).

She is preparing to run in the gubernatorial race with anti-corruption activist Teten Masduki, the former secretary-general of Transparency International Indonesia.

"[The party's choice] is based on the results of a survey about who the people of West Java want," Joko said.

The popular governor is advising Rieke on campaign strategies similar to those that won him the Jakarta governor's seat. "But West Java is a larger area, so surely there will be some modifications," he said.

Dedi admitted that celebrities might not make for the best politicians, but said he was ready to work for his party. "Rieke and I are quite popular with the masses," he said. "We're not the best politicians out there, but we're [the people who are] ready to compete."

Major parties yet to pass crucial Elections Commission test

Jakarta Post - November 6, 2012

Jakarta – All of the major political parties still have to undergo the factual verification stage's tough screening process, which is conducted by the General Elections Commission (KPU).

Out of the 16 political parties that passed the administrative verification process, only the newly established National Democratic Party (NasDem) and the Islamic-based National Awakening Party (PKB) had met all requirements to pass factual verification at the central executive board level, conducted on Monday.

All KPU commissioners were dispatched on Monday to the national headquarters of the 16 parties to match the data submitted for the administrative verification with the actual condition of the parties.

To pass the factual verification stage, political parties are required to set up their headquarters in the country's capital, to prove the validity of memberships cards submitted for the administrative stage and to have, at least, 30 percent of female membership in their central boards.

So far the election commission has only declared the central board of the PKB and the NasDem Party of meeting the basic requirement. "The central executive board of the NasDem has met all requirements," KPU commissioner Arief Budhiman said at the party's office in Jakarta.

For the factual verification, the KPU found that women made up 32 percent of the NasDem central board. Despite the result, the NasDem and PKB parties would have to wait a few weeks before the KPU completes the factual verification process at the provincial level and below.

The KPU is expected to make the final announcement on Jan. 8, next year at the latest. Several other political parties including the ruling Democratic Party and the Prosperous Justice Party (PKS) have still not been declared eligible to stand in the 2014 election.

The Democratic Party failed to provide evidence for its claim of meeting the minimum requirement for female membership in its central board. Only 43 of the 57 registered female members with the board were present when KPU commissioners arrived at its national headquarters in East Jakarta.

Responding to the no-show, the KPU said that all absent members of the central board should have made an official statement stating the reasons for their absence. "Fourteen female members were absent without notifications," Arief said.

The Democratic Party was given until Tuesday (today) to prove their claims that 14 female members did belong to the party's central board, he said.

KPU commissioner Ida Budhiati said the PKS still had to show the membership cards of the party's chairman Luthfi Hasan Ishaaq and secretary general Anis Matta who are overseas and were absent for Monday's verification process.

Separately, the General Election Supervisory Body (Bawaslu) issued a statement on Monday, saying that the KPU had violated its code of ethics on openness by remaining secretive in the earlier verification process.

The KPU has failed to give sufficient information as to why 18 of 34 registered political parties failed to pass administrative verification and be disqualified to compete in the 2014 elections.

Twelve of the 18 disqualified parties filed an appeal to the supervisory body, accusing the KPU of lacking transparency. "We recommend that the KPU include the 12 political parties in factual verification," Bawaslu chairman Muhammad said.

Aburizal-Mulyani ticket in 2014 makes for intriguing, but unlikely, pair

Jakarta Globe - November 3, 2012

Senior Golkar Party officials are divided over the notion of pairing Aburizal Bakrie, the party chairman, with former Finance Minister Sri Mulyani Indrawati for the 2014 presidential election.

Fadel Muhammad, a Golkar deputy chairman, said on Friday that an earlier proposal by another deputy, Priyo Budi Santoso, that Sri Mulyani would make an ideal vice presidential candidate would not suit the party's platform.

"Sri Mulyani is clever and smart but she represents a different political stream, different from Golkar's," he said.

"So it's unlikely that she will be recruited [as Aburizal's running mate]." Fadel explained that he understood why Sri Mulyani's name was mentioned as a candidate, pointing out that as a non-Javanese candidate, Aburizal would need a Javanese native on his ticket to appeal to the country's biggest voting bloc.

However, Fadel said he was afraid that Sri Mulyani's orientation might not fit Golkar's mainstream of political agenda.

Earlier this week, Priyo, who is also a deputy speaker of the House of Representatives, said that Aburizal could choose Sri Mulyani as his running mate in 2014. He called the former finance minister, now a World Bank managing director, an "honest and credible" figure who understood the problems that Indonesia faced.

Priyo's statement came after the Independent People's Union Party (SRI), which planned to nominate Sri Mulyani as its candidate in the presidential election, failed to qualify for the legislative election.

Idrus Marham, the Golkar secretary general, agreed with Priyo, saying that Sri Mulyani would be on the list of potential vice preseidential picks next year.

"Golkar will consider several possible candidates," he said. He added that this particular issue would be discussed internally by the party's leadership.

The proposition of foisting Sri Mulyani onto Aburizal is not likely to go down well with loyalists of the chairman, who is widely believed to have engineered her abrupt exit from the cabinet in 2010 amid moves by Golkar legislators to pursue an inquiry into the controversial Bank Century bailout that she oversaw in 2008.

In a report published by the Financial Times shortly after her departure, Sri Mulyani said her efforts to reform the economic system had been "hijacked by a number of actors in the business and political sectors."

She said the reason for her resignation was the barrage of political attacks she had to face and that "a political marriage had occurred" that would not uphold the needs of the public, and which she could not "afford to be a part of."

Fadjroel Rachman of the Anti-Corruption Civil Society Coalition said at the time that Sri Mulyani was referring to the alliance between President Susilo Bambang Yudhoyono and Aburizal.

Fadjroel added that Aburizal needed Yudhoyono to clear his companies of tax-related legal disputes. In turn, Yudhoyono needed Aburizal to reel in Golkar's political pressure over the Bank Century saga.

However, analysts contend that in politics there are no eternal friends or foes, only eternal interests, and and that is what is now happening.

They argue that political foes across the spectrum are now moving closer to each other – not for a fight but to team up to contest the 2014 presidential election. That include the possibility of an Aburizal-Sri Mulyani ticket.

However, Golkar has reportedly written down the names of two other potential candidates – Constitutional Court Chief Justice Mahfud M.D. and Army Chief of Staff Gen. Pramono Edhie Wibowo – for possible selection next year.

Golkar remains confident about its chairman's popularity and electability despite opinion polls that have never put Aburizal on top of the list.

Most opinion polls have Prabowo Subianto, a retired Army general and co- founder of the Great Indonesia Movement Party (Gerindra), as leading the pack, while others favor former President Megawati Sukarnoputri. Another favorite is Jusuf Kalla, the former Golkar chairman. Aburizal typically comes behind these others.

In recent months, younger generation leaders have called for "new faces" to contest the presidential election because they have gotten tired of seeing the same old candidates running over and over again.

Metrotvnews.com conducted an opinion poll to see who were the favorite alternative candidates from the younger generation. Golkar's Priyo came out on top. Other popular names on the list were Anies Baswedan, the rector of Paramadina University; businessman Sandiaga Uno; Corruption Eradication Commission (KPK) chairman Abraham Samad; and Puan Maharani, Megawati's daughter and the House chairwoman of the Indonesian Democratic Party of Struggle (PDI-P).

Other alternative candidates polling well because of their experience, credibility and good track records are Irman Gusman, the speaker of the Regional Representatives Council (DPD), and Chairul Tanjung, chairman of the National Economic Commission (KEN).

Irman is currently accompanying President Yudhoyono on state visits to Britain and Laos. His close personal ties with Yudhoyono mean he could be endorsed by the ruling Democratic Party as its candidate when the party holds its caucus next year.

All these possibilities will represent a big challenge for Aburizal, therefore Golkar needs to multiply its efforts to win over voters, analysts say.

In a related development, Golkar issued a 10-point declaration on Friday to appeal to voters. This comes weeks after a report by Cabinet Secretary Dipo Alam said the party had the largest number of corrupt regional executive leaders.

Among other points, the party reiterated its commitment to eradicating corruption down to its roots in the bureaucracy and in the executive, legislative and judicial branches of government.

Thumbs down for poll bodies from NGOs

Jakarta Post - November 2, 2012

Several NGOs are criticizing the General Elections Commission (KPU) and the Election Supervisory Body (Bawaslu) for poor performance. "Out of 10 points, we can only give the KPU five, while Bawaslu gets four," Ray Rangkuti of the Indonesian Civil Society Circle (LIMA) said in Jakarta on Thursday.

Ray made his comments at an event organized by LIMA, the People's Synergy for Democracy in Indonesia (Sigma), Indonesian Parliament Watch (Formappi), the Independent Elections Monitoring Committee (KIPP) and the Indonesian Election Committee (TePI).

The NGOs said the KPU has not been transparent, while the supervisory body has been unprepared.

The poll bodies have come under criticism after the KPU announced the results of the first round of party verifications for the 2014 legislative elections. "The KPU always boasts about its openness. Why doesn't the KPU disclose details about the administration verification?" Ray said.

After two delays, the commission announced on Sunday that it had disqualified 16 of 34 political parties submitting registration papers for failing to pass administration verification.

The applications of the 18 parties that made the cut are undergoing factual verification by the commission, the final stage before a political party can be deemed eligible to field candidates in the election.

Rothschild forming consortium with Prabowo to counter Bakrie buyout

Reuters - November 2, 2012

Hong Kong/Jakarta – Financier Nat Rothschild is forming a rival consortium, including a contender for Indonesia's presidency, to launch a counter-offer to the $1.4 billion Bumi Plc buyout proposal from the Bakrie family, in a deal that would pour fuel on an already smoldering relationship.

Sources familiar with the matter said Rothschild – who set up Bumi with the Bakries two years ago – was in talks with various partners including former general and current presidential candidate, Prabowo Subianto, to thwart the Bakrie plan and take control of parts of the coal empire.

The sources, who declined to be identified because the information was confidential, would not say in what capacity Prabowo, the former son-in-law of ex-Indonesian President Suharto, was involved. Calls to Prabowo's cell phone were not returned.

The Bakrie Group, led by family patron Aburizal Bakrie who is also a candidate for the 2014 election, said last month it planned to quit the Bumi venture and dismantle the company by buying back its stakes in two main operating assets – coal miners Bumi Resources and Berau Coal Energy.

The Bakrie plan has three stages: swapping their Bumi Plc shares for part of the 29 percent of Bumi Resources held by the London-listed company; acquiring the rest of the stake for cash; and then eventually buying Bumi Plc's 85 percent stake in Berau.

The Bakries injected the mining assets into Bumi Plc two years ago to help co-found the London-listed company with Rothschild. The two sides have since fallen out following boardroom rows, a drop in coal prices and a collapse of the company's shares.

Sources said the Bakries' existing shares in Bumi Resources should allow them to take back the coal asset. The battle instead is expected to be fought over Berau, Indonesia's fourth-largest coal miner, given the lack of influence the Bakries have over that business.

The Bakrie family has offered to buy Bumi Plc's stake in Berau, according to company filings, with sources citing a price tag of around $950 million. No details have emerged since the Bakries made the Berau offer.

The Bakries' Bumi buyout plan was unveiled last month when the relationship between the family and Rothschild fell apart. The financier resigned from Bumi and the Bakries later released their buyback proposal, in what looked to be a resolution to dissolve the mess and walk away.

But the Rothschild consortium would offer an alternative to that plan – details of which remain fluid, sources said – and allow the financier to get his hands back on some of the coal assets he desired. A spokesman for Nat Rothschild declined to comment.

Bumi's share price plunged by more than 80 percent this year, though it has steadily risen since the breakup proposal.

Inquiry

Nat Rothschild's relationship with the Bakries hit a low point last month, when he officially stepped down from the board of Bumi Plc, after news of an inquiry into possible financial wrongdoing strained their already tense relations.

A formal Rothschild counter-bid for the Bumi assets is expected to wait until the inquiry is completed, one of the sources said.

Though still heavily in debt, the Bakrie Group is aiming to get the coal mining assets back under the family's roof. The conglomerate has businesses spanning from agriculture to banking to real estate.

Aburizal Bakrie, the eldest child of the late Achmad Bakrie, was the chairman of the group until 2004, when he became Indonesia's Coordinating Minister for Economy.

In 2009, he was elected as the chairman of the Golkar Party, which was defeated at the last election by the ruling Democratic Party. Prabowo, a candidate of the Gerindra party, has led in recent opinion polls ahead of the 2014 election.

Failed parties unable to meet KPU leaders

Jakarta Post - November 1, 2012

Leaders of 18 political parties that the General Elections Commission (KPU) declared unqualified to contest the 2014 poll came to the KPU office in Jakarta on Wednesday protesting the decision.

They wanted to meet the KPU leaders, who were unavailable as they were visiting regions as part of the factual verification process.

Antara news agency reported that some of the protesters were political party chairpersons, including Daniel Hutapea, chairman of the Indonesian Employees and Businesspersons Party (PPPI) and Sonny Pudjisasono, chairman of the Labor Party.

The KPU announced on Sunday that 16 political parties had passed the administrative verification and progress to the final stage.

Labour & migrant workers

Labor 'violence' may trigger corporate exits

Jakarta Post - November 8, 2012

Amahl S. Azwar, Jakarta – One of the country's oldest foreign investors PT Sepatu Bata, the makers of the well-known footwear brand Bata, says it may move its operations overseas after a series of violent labor disputes.

External union organizers at the company's factory in Purwakarta, West Java, have on several occasions sealed the doors of the plant and refused to allow people to leave.

Such incidents have not been exclusive to the Swiss-based company, whose products have been beloved by Indonesians for generations.

The Japanese connectivity component maker PT Japan Solderless Terminal Indonesia said it lost US$6 million between January and October after external union organizers "attacked" their factory in Cibitung, Bekasi, West Java.

The disruptions that have plagued the firms are two examples of a host violent labor actions that have occurred in Southeast Asia's largest economy since the start of the year. The incidents have tarred the perceptions of investors of the nation's impressive economic growth in the past five years.

Criticizing the "lackluster" response of the government and the police, business representatives disclosed plans on Wednesday to relocate plants overseas, risking at least 10,000 local jobs.

"Our regional office in Malaysia has considered relocating our plants after continuous intimidation from labor organizers outside the firm," Sepatu Bata director Fabio Bellini said.

"Last month, hundreds of our workers were locked inside the factory by union members until the next morning. The police, somehow, were unable to act," he said. The company shut down production after the incident, temporarily laying off around 600 workers, Bellini said.

Indonesian Employers' Association (Apindo) chairman Sofjan Wanandi said that one locally owned and five foreign owned companies had permanently shut down operations due to prolonged labor disputes. Four other multinational companies are expected to follow suit, Sofjan said, declining to name the firms on concerns for their bank financing.

"The estimated investment loss may just reach more than US$100 million," he said.

Japan Solderless human resources manager Mangasi Simanjuntak said that the company might postpone its planned investment in Indonesia if security did not improve.

"One of our workers suffered a miscarriage during the attack by members of the outside labor organizers," Simanjuntak said. The company employs around 1,400 workers.

David Yaori, the managing director of China-based chemical company PT Dharma Guna Wibawa, said that the company had "had enough" of intimidation on the part of union organizers. He said that several of the firm's managers were detained by union organizers in October.

"We have decided to move our factory to Malaysia," he said. The company employs around 400 workers.

Indonesia has been struggling to lure more foreign direct investment (FDI) to maintain economic growth rates that have exceeded 6 percent for the last several years amid sluggish exports that have gradually shed growth.

FDI in the nation has grown by an average of more than 20 percent on a quarterly basis, luring labor-intensive powerhouses, such as Taiwan's Foxconn, which recently announced plans to set up a major manufacturing facility here.

However, the recent labor incidents have frightened foreign investors, which may endanger efforts to reduce the nation's exceptionally large unemployment rate.

According to the Central Statistics Agency (BPS), around 41.4 million people, or 35 percent of the 118-million-person strong workforce, are actually categorized as open or half-unemployed workers.

While the government has insisted that the nation's unemployment rate was only 6.14 percent of the workforce, that figure excludes the half unemployed.

Separately, Apindo deputy-secretary-general Franky Sibarani, said that 23 business associations comprising around 1,000 companies have threatened to halt production if the situation persisted.

Apindo, he said, would wait for talks with the government to conclude before taking radical measures.

Workforce 'unable to fill available jobs'

Jakarta Post - November 7, 2012

Hans David Tampubolon, Jakarta – Indonesia must improve the quality of its local human resources so that more unemployed people can find jobs amid robust economic growth, a senior official says.

Deputy Finance Minister Mahendra Siregar told reporters here on Tuesday that the poor quality of the local workforce meant that people were unable to find jobs in the growing industrial sector.

A report from the Central Statistics Agency (BPS) published this month said that unemployment dropped by only 460,000 in August on a year-on-year basis, despite growth of at least 6 percent recorded in the same period.

Labor absorption to date has been far lower than government estimates, which have assumed that every 1 percent of economic growth can create 450,000 jobs.

Gadjah Mada University economist Tony Prasetiantono said that the disparity between government assumptions and realized growth could be attributed to the central government's failure to develop labor-intensive sectors properly.

According to Tony, growth has been mostly driven by sectors that were not labor intensive and also required high-quality human resources. Examples of those sectors are the financial services, telecommunications and aviation sectors.

Data from the BPS showed that most of the workers in Indonesia were poorly educated. Around 53 million workers in Indonesia, or 48.63 percent of the workforce, have only finished elementary school. Only 10 million workers in Indonesia have a diploma or bachelor's degree. Most workers continue to work in agriculture.

However, although the agricultural sector absorbs most of the nation's workers, its growth has been relatively mild compared to the financial and service sectors, which require workers who are better educated and technologically oriented.

Based on BPS data, the agriculture and industrial sectors contributed 4.80 percent and 5.86 percent to 6.29 percent growth in the first three semesters of 2012, while the financial and the telecommunications sectors contributed 7.41 percent and 10.48 percent, respectively.

"The government should have been able to push for more development within the manufacturing sector and open new agricultural areas, like in Papua," Tony said.

In addition, Tony said the government should start accelerating infrastructure development by launching new projects. "Infrastructure projects are usually labor-intensive as well," he said.

Separately, Aviliani, an economist from the Institute for Development of Economics and Finance, said that structure development had to be accelerated by the government within the next two years.

"As of 2014, the government is planning to implement numerous export bans to boost industrialization in the country. Industrialization will surely absorb more manpower and create new jobs, but it will not happen if we fail to properly develop our infrastructure to lure investors to invest here," she said.

"We can only achieve the quality growth that we have been dreaming of by properly developing infrastructure, which will create massive multiplier effects in society," she added.

Businesses vow to lock out workers

Jakarta Post - November 7, 2012

Nurfika Osman and Hans David Tampubolon, Jakarta – Rather than ensuring that the police take firm action against violent or prolonged labor protests, top government officials are content to issue vague promises to calm angry executives, an industry lobby has said.

The Indonesian Employers Association (Apindo) has warned the government that its members will temporarily close their doors if they do not receive assurances from the government that it would enforce the law and uphold their rights to a legal certainty, which Apindo says has been put to the test by prolonged and often chaotic worker protests.

One top official has acknowledged Apindo's concerns. Speaking to reporters on Tuesday, Coordinating Economic Minister Hatta Rajasa said that Indonesia was facing a serious task to prove to the international community that it was competent enough to simultaneously protect the rights of workers and investors.

Hatta, however, offered no concrete solutions, save encouraging both sides to meet to discuss contentious issues such as outsourcing and the minimum wage so as to find common ground.

The minister has not asked the police to crack down on anarchic labor actions perpetrated by workers that have forced several companies to temporarily halt operations or endure financial losses due to the protests.

The police's reluctance to use force to quell worker demonstrations and labor actions has been widely criticized by executives.

"This is a test for the country where we have to prove to the world whether we are a destination investment country. We need to remember that if people think Indonesia is not conducive for investment, we are going to lose," Hatta said in Jakarta on Tuesday.

Contacted separately, Apindo chairman Sofjan Wanandi said that about 100 labor-intensive local and foreign-owned companies are planning to lock out workers for the three days.

The firms employ about 100,000 people. Most of the companies are located in Bekasi, Karawang, and Purwakarta, all in West Java.

"This is a very serious case. [Wednesday], we are going to meet with representatives from those companies to discuss the details of the shutdown and its timeframe," Sofjan told The Jakarta Post.

He said the firms needed to temporarily close as they would no longer tolerate violent demonstrators who have damaged their facilities.

He claimed that some foreign executives were uneasy about the tenor of the labor actions, including the incident where workers barred people from leaving a factory in Bekasi during a demonstration that was held several weeks ago.

"The police seems to have neglected the case because they let this happen. We are now facing uncertainty in security and labor policy. The uncertainty of doing business is very high," Sofjan continued.

The chairman of Indonesian Textile Association (API), Ade Sudrajat, agreed. "We cannot count [the losses] anymore because the impact has been so huge on our business. Local players cannot expand their business while new foreign businesspeople decide not to invest in Indonesia," Ade told the Post.

The chairman of Indonesian Footwear Association (Aprisindo), Eddy Widjanarko, said that his members have had to suspend operations at more than 200 factories.

"We plan to communicate this issue with the government, but I am not that sure they will be able to help us. We hope that Apindo can find a solution immediately," Eddy said.

Meanwhile, Investment Coordinating Board (BKPM) chairman M. Chatib Basri lashed out at the criticism of local businesses that threatened to close their doors in response to protests and labor actions.

"The solution is not threatening against each other. The problem won't be solved that way," he said on Tuesday. "If they [investors] close their business, [they] will get no income. What will they do?"

Chatib also dismissed reports that several businesses in the country were pondering relocating overseas. The BKPM, according to Chatib, has not received "a single proposal from any business wanting to relocate from Indonesia". (sat)

Six provinces adopt wage hike, others to follow suit

Jakarta Post - November 6, 2012

Ridwan Max Sijabat, Jakarta – Only six provinces in the country have agreed to increase the regional minimum wage for 2013, while 27 others are expected to follow suit soon.

The North Sumatra provincial government, which hosts three industrial estates in Medan, Tanjung Morawa and Pematang Siantar, has decided to raise the minimum wage to Rp 1.31 million (US$135) from the current Rp 1.2 million, while Papua will increase its provincial minimum wage to Rp 1.71 million from the current Rp 1.52 million.

Manpower and Transmigration Ministry data show that the provincial minimum wage in Bengkulu will be raised to Rp 1.2 million from the current Rp 930,000. In Bangka Belitung, the local government will increase the minimum wage to Rp 1.27 million from the current Rp 1.11 million, whereas in West Kalimantan, the amount will rise to Rp 1.06 million from the current Rp 900,000 and in South Kalimantan from Rp 1.23 million to Rp 1.34 million.

Jakarta, West Java and Banten – which host a number of industrial areas in Tangerang, East Jakarta, Bekasi, Karawang, Purwakarta and Bandung – have yet to announce new wage figures for 2013, but governors in the three provinces agreed to increase the regional minimum wage during a meeting with Manpower and Transmigration Minister Muhaimin Iskandar over the weekend.

Both the government and labor unions have called for a significant increase in minimum wages for 2013, especially in industrial estates. The Manpower and Transmigration Ministry recently issued Decree No. 13/2012 on an increase in the wage components from 46 to 60.

Muhaimin has called on governors and local wage committees to expedite their deliberation of the new minimum wages to allow time for information about the final decisions to be disseminated before they come into effect on Jan. 1, 2013.

He said that according to a 1994 ministerial decree, provincial minimum wages should be set two months before they take effect, whereas the minimum wages for regencies and municipalities must be announced 40 days before their enforcement.

The minister also urged regional heads and regional wage committees to factor in not only minimum physical needs and the price index of all basic commodities but also inflation, macro-productivity and economic growth, before deciding on the new minimum wages.

Labor unions and economists have suggested that a wage increase of about 100 percent in Jakarta and surrounding areas to around Rp 3 million from the current Rp 1.5 million would allow workers to not only live decent lives but also make payments to the pension scheme under the national social security system.

The Indonesian Employers Association (Apindo) has made efforts to review the wage system by designing special minimum wages that would enable small and medium companies to grow.

Apindo chairman Sofjan Wanandi has said it is unfair for the government to force small companies to pay minimum wages while allowing major companies to pay workers far higher than the minimum wage level.

Salary rises needed for insurance scheme

Jakarta Post - November 5, 2012

Ridwan Max Sijabat, Jakarta – Increases in workers' monthly salaries are important as they will help them pay the premiums for the national social security program to be implemented in 2014, social security analysts have said.

Economist Bambang Purwoko of Pancasila University said he was worried that without salary rises a large number of workers would not be able to afford the premiums and, thus, would not enjoy the benefits of the social security program.

With annual economic growth of 6 to 6.5 percent and a relatively high gross domestic product (GDP), Bambang assumed, the government and employers must have financial and fiscal capability to double the monthly wage of civil servants and workers in the formal and informal sectors.

"Workers, civil servants and their families won't be able to enjoy maximum compensation from the occupational accident and death benefit schemes," Bambang said in a seminar here recently.

He added that they would face a heavy burden in their retirement if their contribution (premium) to the occupational social security programs was not raised.

The three-day seminar, which discussed the occupational social security programs, was jointly organized by the ILO office in Jakarta and Paramadina University.

He said the 5 percent premium, which was proposed by the government for the insurance program, was as small as workers paid under the Jamsostek social security program.

"Workers who are disabled and unable to go back to work after workplace accidents, will be unable to support themselves and their families only on the compensation they receive from the programs, while retirees and their families will be able to enjoy their pension benefits in four to seven years after they retire," he said.

Meanwhile, Achmad Subianto, former president director of state pension insurance PT Taspen, said Indonesia should learn from other ASEAN countries such as Malaysia and Singapore which have contributed 30 percent and 40 percent respectively to the provident fund program.

"If the government hasn't have the financial capacity to pay contributions to the programs, it should make a better regulation to have workers and their employers pay a higher contribution to the programs," he said.

Achmad who chairs the National Social Security Society, also said the government should continue promoting the informal sector, which employs around 70 million low-income workers, including the self-employed.

"Workers employed in the informal sector are paid below the minimum-wage level while the self-employed, such as ojek drivers, food vendors and traditional market traders, receive irregular incomes," he said.

Unionists lambasted the government, who they said looked doubtful in implementing the national social security programs, because the country would face a setback if the national program's implementation was suspended again.

The National Committee for National Social Security Program Monitoring (KAJS) secretary-general Indra Munaswar said workers were disappointed with the government who had suspended issuing 10 government and 11 presidential regulations mandated by the 2004 National Social Security Law to implement the five mandatory national programs.

10 companies to shut down their production in Indonesia

Jakarta Globe - November 5, 2012

Ten big companies will shut down their production in Indonesia as a result of unfavorable employment policies, according to Sarman Simanjorang, the deputy chairman of the Jakarta chapter of the Indonesian Chamber of Commerce and Industry.

"Indonesia is less competitive than Vietnam and Cambodia. Both countries provide [better] industrial facilities and lower wages for workers by 10 percent," Sarman told Temp.co on Monday, adding that the current national industrial sector was in trouble.

Sarman refused to reveal any of the 10 names as the companies have planned to officially make an announcement at the office of the Indonesian Employers Association (Apindo) on Wednesday.

Sarman, who said that these companies would relocate their factories to other countries, added that the impact could increase unemployment figures.

Hariyadi B. Sukamdani, the deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin), said other companies likely to close included Samsung, Panarub, Shukakhu and Patria.

Hariyadi said that the investment and industrial climate was no longer conducive in Indonesia as the government was taking the side of employers related to worker's demands for higher wages.

Government not transparent on Rp 1.7 trillion workers' fund

Jakarta Post - November 3, 2012

Margareth S. Aritonang – The government has been called on to disclose details on a huge amount of insurance funds collected from migrant workers and to explain how it has managed the money.

Migrant Care, an organization that provides legal advocacy for Indonesian migrant workers, questions why the fund's management is not transparent.

According to the group's estimation, the funds collected from workers between 2006 and 2011 have reached Rp 1.79 trillion (US$185.91 million).

The money is supposed to be spent on activities to promote the welfare of migrant workers. Migrant Care director Anis Hidayah said the funds should be used to improve protection of Indonesian migrant workers, including hiring lawyers to help workers with legal problems.

"Each migrant worker must pay Rp 400,000 for the insurance. Sadly, they gain nothing in return but humiliation from their employers due to the government's ignorance," Anis said during a discussion on Friday.

According to Migrant Care, the Rp 1.79 trillion in insurance funds included only the amount collected from 2006 to 2011, in which only about Rp 4 billion was accounted for.

Thus, Migrant Care asked the government to immediately audit the use of the funds as well as the performance of governmental institutions in charge of the management of the Indonesian migrant workers, including the Manpower and Transmigration Ministry and the Agency for the Placement and Protection of Indonesian Migrant Workers (BNP2TKI).

"The government must explain where the money goes when in fact there is no protection for our migrant workers abroad. We recorded that at least 162 Indonesian migrant workers in Malaysia are facing the death sentence without appropriate legal assistance," Anis added.

"The government should've provided legal aid for them, as well as all Indonesian migrant workers in other countries because we have budget for that," she added.

Meanwhile, lawmaker Ribka Tjiptaning of the Indonesian Democratic Party of Struggle (PDI-P) said that the House of Representatives (DPR) setup a working committee in 2009 to investigate the whereabouts of the insurance funds.

"The committee is responsible for examining the use of insurance funds that are supposed to be spent on the protection of our migrant workers, but this has yet to work due to unconfirmed reasons," Ribka, who chairs the House's Commission IX on demographic affairs, health, manpower and transmigration, said.

Ribka herself is not in the committee as she is being "punished" by the House's ethics council for inserting additional articles in a law on tobacco.

In addition to the working committee, the House had also recently formed a special committee on the protection of Indonesian migrant workers, comprising lawmakers from House Commission IX, Commission I on foreign affairs, and Commission III on law and human rights affairs.

"The committee will work on comprehensive efforts to protect the rights of our migrant workers abroad, especially in Malaysia and Saudi Arabia, where many workers suffer abuse," committee member Tantowi Yahya said.

Environment & natural disasters

Environmental destruction blamed for major flooding

Jakarta Post - November 8, 2012

Apriadi Gunawan, Medan – The Regional Disaster Mitigation Agency (BPBD) in North Sumatra has attributed the major flooding that hit several regencies over the last week to the rapid rate of environmental destruction.

"Large-scale oil palm plantation has infringed embankments along many rivers in North Sumatra, including in Padang Lawas. When heavy rainfall takes place, the narrower rivers are unable to accommodate the volume of water, which thereby overflows," North Sumatra BPBD chairman Ahmad Hidayat Nasution said on Wednesday.

The major flooding, sparked by incessant and heavy rainfall, hit several regencies, including Serdang Bedagai, Deli Serdang, Mandailing Natal, Padang Lawas and Labuhan Batu.

Besides disrupting the Trans-Sumatra highway, which links the northern part of Sumatra in Banda Aceh to the southern tip of the island in Bakauheni, Lampung, the disaster submerged thousands of houses and forced their residents to evacuate.

A 4-year-old boy was also found dead in a ditch near Pekong River in Serdang Bedagai on Wednesday afternoon. The victim was identified as Reza.

Hidayat said that the magnitude of the flood which hit a large part of North Sumatra was so huge it had overwhelmed the provincial administration, which claimed to be unable to deal with it alone and asked for help from the private sector. "If it is all left to the government, it will be impossible. There must be a role for the private sector," he said.

Serdang Bedagai BPBD Joni Walker said on Wednesday that the flooding in the regency was still 1 or 2 meters deep.

In Serdang Bedagai alone, up to 1,800 houses were still inundated as of Wednesday afternoon, he said. "All residents of the affected areas have been evacuated to safer locations," Joni said, adding that at least 4,000 evacuees had been temporarily accommodated at nearby makeshift shelters.

The director of the North Sumatra branch of the Indonesian Forum for the Environment (Walhi), Kusnadi Oldani, explained that all the areas hit by the flooding in the province no longer had forested lands. There has been a massive conversion of forest to agricultural land.

"You see nearly all forested lands have been converted into plantation areas. It is ironic, though, that the plantation also covers river embankments," he said, adding that ideally areas up to 70 meters from riverbanks should be free from plantation trees.

Kusnadi was convinced the flooding would remain endemic in those areas until delinquent plantation owners who planted trees wherever they liked were reprimanded.

Land conversion causes environment crisis in Java

Jakarta Post - November 2, 2012

Bambang Muryanto, Yogyakarta – The Yogyakarta, East Java, West Java and Jakarta branches of the Indonesian Forum for the Environment (Walhi) have blamed the conversion of agricultural and residential lands for industrial and mining purposes for serious damage to the environment across Java Island.

Citing one example, Walhi Yogyakarta director Suparlan said that land conversion in Yogyakarta province had occurred along the coastal area of Kulonprogo regency. Provincial Bylaw No. 2/2010 on spatial planning rezoned the agricultural area as an iron ore mining site.

"This is a new style of colonialism because the mining project will disadvantage farmers," Suparlan told a public dialogue on Java Island's environmental conditions in Yogyakarta on Tuesday. He said that some 2,500 farmers in the region currently earned combined profits of Rp 5.6 billion (US$589,473) monthly.

Other possible land conversions in Yogyakarta, according to Suparlan, included the Southern Toll Road (JLS) development project that would pass through the province, cutting into the province's agricultural areas.

Husaini of the Society for Health, Education, Environment and Peace (SHEEP) Foundation concurred, saying that growth of high-tech industries in the six regencies of Blora, Grobogan, Jepara, Kudus, Pati and Rembang in Central Java threatened residents' safety.

"Worse is that the government is also planning to develop a steam-generated power plant [PLTU] and nuclear power plant [PLTN] in the Kendeng and Muria mountain ranges," Husaini said.

Ony Mahardika of Walhi's East Java branch also blamed rapid growth of industries and infrastructure in his province for the loss of 20,514 hectares of agricultural fields over the last few years.

"In fact, East Java had been producing 40 percent of the nation's total food output," he said, adding that an industrial project in the northern coastal area of Gresik regency was slated to further decrease the province's agricultural, horticulture and limestone hill areas by some 2,000 hectares.

Ony also said that East Java's 873 million barrels of oil reserves had drawn the oil industry to the region but many had neglected the boundaries of people's property. The livelihoods of the people in the surrounding area had been hard-hit as a result.

Ramdhan of Walhi's West Java branch said that between 1994 and 2005, 261,000 hectares had been converted from agricultural fields, forests and fish ponds into residential complexes, plantation and mining areas in his province. This, he said, had caused some 250,000 workers in the agricultural sector to lose their jobs.

In response, Barlin Abdurrahman, the head of the Environment Ministry's Java regional eco-management center, said that environmental damage was indeed a serious threat in Indonesia.

He therefore hoped that environment activists could keep reminding the government of the serious implications of environmental degradation, adding that land conversion was a complicated problem influenced by regional political dynamics.

Health & education

Halal law 'will destroy' Indonesia's pharmaceutical industry: Bio Farma

Jakarta Globe - November 2, 2012

Made Arya Kencana, Denpasar – Indonesia's vaccine industry has requested to be exempt from a controversial halal bill that would require the raw ingredients of food, medicine and cosmetic products to meet halal requirements.

The nation's vaccine industry faces up to Rp 1.5 trillion ($156 million) in losses if the bill is passed into law, said Iskandar, president director of the state-owned vaccine producer Bio Farma.

The vaccine maker currently imports 95 percent of the raw material used to make vaccines, Iskandar said. It is unlikely the Indonesian Council of Ulemas (MUI) will issue halal certification for all vaccines, he added.

Indonesia has been unable to produce its own meningitis vaccine because the MUI had issues with the vaccine, which uses a derivative of pork enzymes, he said.

"We will die if this regulation comes into force," Iskandar said on the sidelines of the 13th Meeting of the Developing Countries Vaccine Manufacturers Network (DCVMN) in Kuta, Bali, on Friday. "This will destroy the pharmaceutical industry."

Iskandar called the bill counterproductive, explaining that the government cannot both tackle the nation's many health concerns and pass a sweeping halal-only law.

He urged all domestic pharmaceutical companies to push for an exemption. "It will be better off if [the law] is only applied to food products," Iskandar said.

The controversial bill is still under deliberation in the House of Representatives. Lawmakers are at odds over who should enforce the halal law, according to the Indonesian news portal kontan.co.id.

Indonesian Muslims have championed the bill, saying that few food products, and even less cosmetics are certified halal by the MUI. According to MUI estimates, some 15 percent of all products sold in Indonesia have halal certifications.

The certification is voluntary in Indonesia. Cosmetic companies only account for 10 percent of requests received by the MUI. But companies have called the bill an unnecessary burden.

Bio Farma currently earns 70 percent of its income from exporting vaccines to 117 countries, he said. The vaccine maker predicted a 15 percent boost in earnings this year.

Refugees & asylum seekers

Australia's refugee rules will not work: Indonesian official

Agence France Presse - November 2, 2012

Sydney – Australia's new policies designed to stem an influx of boatpeople will not deter thousands of asylum-seekers from trying to reach the country, a top Indonesian immigration official said on Friday.

Australia recently announced it will send asylum-seekers arriving by boat to remote Pacific islands as a means of stopping them from making the dangerous sea voyage, and also increased the number of refugees it accepts.

But the policies have yet to halt a record number of boats from being picked up in Australian waters, and Indonesia's head of immigration enforcement has told state broadcaster ABC that they will not deter boatpeople.

Djoni Muhammad said there were some 100,000 people across the region, including in Indonesia and Malaysia, who want to leave for Australia and sending them offshore would not halt the tide.

"It's a dilemma really. If the asylum-seekers in Indonesia got sent there [to Australia] sooner, it would just be like an advertisement," he said. "Other people waiting in Malaysia and other places would immediately come here saying, 'It's good in Indonesia; it's a much swifter process there'."

Asked what the answer was to stopping people heading to Australia, he replied: "No answer."

There are an estimated 6,000 asylum-seekers in Indonesia and some of those traveling there have reportedly caused problems for residents, including in Bogor in west Java where their presence has prompted protests by locals.

"In the end it's not an easy problem to solve. We don't have the facilities, and we only have 13 immigration detention centers," Muhammad told the ABC. "At the moment immigration is looking into finding some locations but after what's happened in Bogor, we are now being careful."

Muhammad said with so many people waiting for refugee status in the region, Canberra's decision to send as many as 2,100 to the Pacific state of Nauru or Papua New Guinea's Manus Island would not make a difference. "It's a problem," he said.

Australia recently toughened its refugee policies in response to a record influx of people-smuggling boats – more than 200 vessels carrying in excess of 13,360 passengers since January 1.

Asylum-seekers arriving by boat are now liable to be sent to spartan camps on Nauru or Manus and kept in detention camps for indefinite periods in a move that has been criticized by human rights groups.

Canberra hopes the measures will deter people from paying smugglers for passage, often from Indonesia or Sri Lanka on rickety and overcrowded boats.

Graft & corruption

Nazaruddin makes new threats

Jakarta Post - November 8, 2012

Jakarta – Graft convict Muhammad Nazaruddin claims that he has provided the Corruption Eradication Commission (KPK) with documents that can reveal identity of those responsible for graft in the construction of the Hambalang sports complex.

Nazaruddin arrived at the KPK headquarters on Wednesday to hand over the documents.

"I come here today to explain the real actors at play behind the Hambalang case. I will hand these documents [to the KPK]," Nazaruddin, a former Democratic Party treasurer, said upon his arrival at the KPK's office in Jakarta for another round of questioning on Wednesday.

Nazaruddin hinted that his documents could shed light on the alleged involvement of Youth and Sports Minister Andi Mallarangeng and Democratic Party chairman Anas Urbaningrum in the case.

Late last year, the antigraft body launched an investigation into the construction of the Rp 1.17 trillion (US$121 million) Hambalang sports complex in Bogor, West Java, following Nazaruddin's accusations that Andi and Anas had personally benefited from the construction project.

The commission later found that irregularities occurred when the project was handed over from Andi's predecessor, Adhyaksa Dault, in 2009. After Andi took over, the project's site plan was changed and the budget swelled from Rp 125 billion to Rp 1.2 trillion.

According to Nazaruddin, Anas gave around Rp 67 billion, allegedly sourced from the project, to several heads of the Democratic Party's regency offices during his campaign for the party chairmanship in 2010.

"We all know the real actors behind the case. Unfortunately, they happen to belong to the ruling party, which now runs the country," he said. Nazaruddin also lambasted the Supreme Audit Agency (BPK), which issued a report obscuring the role of Andi in the project.

The report states that the country suffered losses of Rp 234 million in the project. It also states that Andi and Finance Minister Agus Martowardojo are responsible for the misuse of funds in the sports center's construction and failed to follow regulations on government projects.

"However, the BPK's audit obscures so many issues," Nazaruddin said, adding that the BPK could have succumbed to political pressure.

The BPK, meanwhile, has reiterated on various occasions, that it always kept its independence when conducting the audit. "There [has been] no such intervention [from any parties] regarding the investigation into the Hambalang case," BPK chairman Hadi Purnomo said recently.

Currently, the BPK is preparing to conduct a second investigative audit of the Hambalang complex, which will try to further trace the flow of funds that implicated several subcontractors, including PT Dutasari Citralaras, allegedly owned by Anas' wife, Athiyyah Laila.

The agency's second audit is also expected to examine the motives of lawmakers who approved the project's budget increase as members of the House of Representative's Commission X overseeing sports.

Nazaruddin is currently serving a nearly five-year jail term for taking Rp 4.6 billion in bribes to rig a tender for the construction of an athletes' village for the 2011 Southeast Asian Games. He was then a sitting member of the House. (riz)

Lawmakers to strike back against Dahlan

Jakarta Post - November 7, 2012

Margareth S. Aritonang, Jakarta – Two lawmakers say they will take legal action against State-Owned Enterprises Minister Dahlan Iskan for allegedly slandering them.

The move comes after Dahlan showed up at the House of Representatives (DPR) on Monday to give the House's ethics council the names of the lawmakers – two of several legislators that he said had allegedly asked for kickbacks from state-owned companies.

Lawmaker Usman Jafar, who attended the council's closed-door meeting with Dahlan on Monday, has identified the lawmakers as Sumaryoto, an Indonesian Democratic Party of Struggle (PDI-P) lawmaker on House Commission XI overseeing finance, and Idris Laena, a Golkar Party lawmaker from Commission VI on state-owned eneterprises.

Sumaryoto's attorney said his client was innocent. "The House's ethics council has confirmed that Pak Sumaryoto is one of the two names mentioned by him [Dahlan]. We demand that Dahlan provide evidence, because my client has denied the allegation," Warsito Sanyoto, Sumaryoto's lawyer, told reporters on Tuesday. "We will sue him for defamation if he cannot prove it," Warsito added.

The lawyer called for an audit of the finances of PT Merpati Nusantara Airlines to track between Rp 5 billion (US$519,750) and Rp 18 billion that was allegedly transferred to Sumaryoto in exchange for his approval of a capital infusion for the airline.

Separately, the second lawmaker named by Dahlan, Idris Laena, said that he too would prepare legal action.

"I'm preparing myself to give clarification, because the person I am facing now is a media tycoon and a very influential one," Idris said, referring to Dahlan, the owner of the Jawa Pos media group. "I am worried the news about me will be biased. Thus, I will talk when I'm ready," Idris commented via a text message.

Idris allegedly demanded kickbacks from state salt producer PT Garam and state-owned shipyard company PT PAL.

House's ethics council member Usman also disclosed on Thursday that another House Commission VI lawmaker identified as IS allegedly attempted to extort officials at state-run diversified group PT Rajawali Nusantara Indonesia (RNI), which is run by president director Ismed Hasan Putro.

"After a tough discussion, Pak Ismed from RNI finally identified the lawmaker as IS, who demanded 2,000 tons of sugar to be distributed to voters. "If proven guilty, this lawmaker can suffer punishment for attempting to abuse his authority," Usman said.

While some lawmakers expressed concern about Dahlan's continued eagerness to disclose allegations of extortion in the House, others saw the minister's move as the latest in a series of grandstanding, self- aggrandizing actions.

Critics have said that the timing of Dahlan's allegations may be connected to the previously announced plan of lawmakers to question the minister on irregularities at state-own electricity company PT Perusahaan Listrik Negara (PLN) that led to Rp 37.6 trillion in state losses.

The alleged irregularities took place when the company was headed by Dahlan. Usman said that some lawmakers have made the connection between the PLN probe and Dahlan's allegations.

"We don't know for sure, but some lawmakers, particularly those from House Commission VII on energy affairs have thought so because they are planning to summon Dahlan for his explanation," Usman said.

Meanwhile, lawmakers have also challenged Dahlan to make good on a promise to reveal the names of other lawmakers who allegedly extorted officials at the State-Owned Enterprises Ministry, as Dahlan previously announced that he received reports that 10 lawmakers were engaged in such practices.

Dahlan said he would submit a written report to the House's ethics council on Wednesday that would name the lawmakers.

Golkar, PDI-P named in extortion scheme

Jakarta Post - November 6, 2012

Margareth S. Aritonang, Jakarta – State-Owned Enterprises (SOE) Minister Dahlan Iskan gave the names of two lawmakers who allegedly demanded kickbacks from his officials to the House of Representatives' ethics council on Monday.

Dahlan said that the kickbacks potentially involved huge state losses and that he had told his officials to report the lawmakers to the Corruption Eradication Commission (KPK).

"It's up to the House ethics council to decide what it should do with these lawmakers. I'll do my best to clean up my institution from future corrupt practices," he said after a two-hour closed meeting with the council on Monday.

Dahlan alleged that the lawmakers demanded kickbacks to approve capital injections for some state-owned enterprises. More lawmakers are expected to be put into the hot seat later this week.

"I will submit a written report later on Wednesday, which will also reveal more lawmakers names," he said, declining to discuss his report in specifics.

Lawmaker and ethics council member Usman Jafar confirmed that the initials of the lawmakers named by Dahlan were IL, a lawmaker from the Golkar Party, and SM from the Indonesian Democratic Party of Struggle (PDI-P).

IL allegedly demanded kickbacks from state salt producer PT Garam and state-owned shipyard company PT PAL, while SM allegedly shook down executives from PT Merpati Nusantara Airlines.

Usman said exactly how Dahlan alleged that IL and SM extorted money from the state-owned enterprises. "The pair allegedly demanded that executives of the companies kick back 5 percent of the capital injection if approved."

The ethics council would talk to ministry officials and the executives in question before proceeding.

"First we will summon the executives for clarification before we question the two lawmakers," Usman, a lawmaker from the United Development Party (PPP), said.

Chairman of the House ethics council, M. Prakosa, said the council would suggest the harshest punishment possible for the lawmakers if they were proven guilty.

"They could be expelled from their positions. There could be heavier punishment, because we plan to file a report with the law enforcement agencies," he said.

Prakosa of the PDI-P declined to comment on the potential involvement of a fellow party member in the scandal, saying that the allegations would be investigated without consideration to party affiliation. "The council will justly deal with the matter, and we will not be partial."

Ethics council deputy chairman Siswono Yudo Husodo of the Golkar Party similarly declined to comment on the alleged involvement of a peer.

"We can't take it as a fact yet, as we need to investigate it further. We don't want to punish those who are yet to be proven guilty," he said.

Also on Monday, the ethics council summoned the president director of the state-run diversified group PT Rajawali Nusantara Indonesia (RNI), Ismed Hasan Putro, who previously claimed to be the victim of an extortion scheme run by legislators.

"A lawmaker once asked me to hand out 2,000 tons of sugar to be distributed for voters, but I refused to do it, even after the lawmaker bargained for lower amount," he said.

"For me, this is only one of techniques used by lawmakers to demand kickbacks from SOE."

Ministers tangled in Hambalang

Jakarta Post - November 1, 2012

Margareth S. Aritonang and Rabby Pramudatama, Jakarta – An investigative audit by the Supreme Audit Agency (BPK) reveals that Youth and Sports Minister Andi Mallarangeng and Finance Minister Agus Martowardojo are responsible for the misuse of funds in the graft-ridden construction of the Hambalang sports center in West Java.

In the BPK audit, Andi and Agus were considered guilty by omission for failing to follow regulations on government projects.

Andi, who is also a Democratic Party politician, was found to have breached a 2003 Presidential Decree that requires a minister to approve any procurements worth more than Rp 50 billion (US$5.26 million).

"AAM, as the youth and sports minister, has failed to perform his duty to determine the winner in the tender for the procurement project because he allowed the ministry's secretary [Wafid Muharam] to usurp his authority," the 93-page audit report states, referring to Andi's initials.

The report further revealed that Andi's lack of oversight had allowed Wafid to produce crucial documents for the construction project, including a multi-year contract that was later proposed to Agus.

"A lack of oversight has encouraged irregularities [surrounding the Hambalang construction project]. It's not enough for the minister to claim innocence for procedural violations in the procurement project because he, [Andi] himself, should have been familiar with all the regulations," BPK chairman Hadi Poernomo told reporters at a meeting with members of the House of Representatives on Wednesday.

The BPK audit report found Agus failed to appropriately exercise his authority by approving the budget proposal from the Youth and Sports Ministry without seeking prior clarification from Andi.

The BPK is expected to deliver its report to the Corruption Eradication Commission (KPK) and other legal institutions who will examine the violations.

"We will soon submit the result of our audit to the KPK and other law enforcement institutions for further investigation because they are the ones that have the authority to punish parties responsible for the oversight," Hadi added.

Responding to the BPK's plan to collaborate with law enforcement agencies, both ministers said they were willing to cooperate fully with authorities in the matter, as quoted by Antara news agency.

In the audit, the BPK also found evidence of alleged fraud in the form of fraudulent official documents used to clear the status of a 31.2-hectare plot of land for the sports center's construction. It also found evidence that the project lacked a feasibility study on the construction site.

The BPK report also dropped a bombshell that could implicate the Democratic Party chairman Anas Urbaningrum.

The investigative audit found indications that Rp 63 billion in project funds were illegally wired to PT Dutasari Citralaras, a firm owned by Athiyyah Laila, Anas' wife.

PT Dutasari Citralaras was subcontracted for the construction of the sports center by the project's main firm, PT Adhi Karya. According to the audit, Dutasari president Mahfud Suroso received the payment before construction began in 2010.

Other individuals alleged to have received illegal advanced payments are Teuku Bagus W.N. of PT Adhi Karya, who got Rp 189 billion, and R. Isnanta of the Youth and Sports Ministry, who allegedly received Rp 217 billion as an advanced payment.

Separately, KPK spokesperson Johan Budi said that BPK's audit report would bolster the antigraft body's case.

"The progress of the investigation depends on the evidence [that the KPK obtained]. And the KPK also expects the BPK to disclose how much the state stands to lose from the graft," he said at a press conference on Wednesday.

Johan also said that the KPK would likely announce major progress in the Hambalang probe later this week.

Terrorism & religious extremism

Police arrogance, brutality may harden resolve in Poso

Jakarta Post - November 6, 2012

Bagus BT Saragih and Ruslan Sangadji, Poso, Central Sulawesi – A mother of two children could not conceal her contempt for the police while displaying a 3-centimeter scar left near her left eye.

The woman, who requested anonymity citing fear of reprisals, claimed that she was struck by a police officer during a counterterrorism raid in Poso, Central Sulawesi.

"Why me? If the police had evidence that I did something illegal, then just arrest me. I can't accept their arrogant and brutal acts against innocent civilians like me," the woman said.

Her run-in began when she heard a ruckus outside her house in Kayamanya on Saturday at noon. "Suddenly somebody shouted 'Anybody here?' I was a little shocked and I didn't immediately open the front door. To my surprise, a police officer holding a rifle kicked in the door when I was just about to open it. As a result, my face was slammed and heavily bloodied," the woman, who was wearing a burqa when she was interviewed by The Jakarta Post on Monday, said.

"I was then violently pushed aside by the officer. It was really rude, especially given that I am a woman."

The woman, along with six other Poso residents who claimed to be the victims of police brutality, are now receiving treatment at Poso Regional Hospital.

Another victim, Jamil, an Islamic cleric in Poso, suffered more severe injuries. He claimed he had been kicked, trampled and dragged by police.

Jamil said he was detained at Poso Police headquarters for more than six hours. "If I had been detained overnight, dozens of people from Tanah Runtuh were going to come to the police station to demand my release," he said, referring to a hamlet on the outskirts of Poso City that police believe hosts Muslim extremists.

A group of local lawyers led by Azriadi Bachry Malewa, the director of Poso Legal Aid Foundation, said they would use doctors' reports to file complaints against the police. The lawyers also plan to sue the police and file complaints with the National Commission on Human Rights (Komnas HAM).

"The police claimed their operation in Poso was to enforce the law. But they themselves violated the law in their operation," Azriadi said.

The police, led by officers from the National Police's Densus 88 counterterrorism unit and the Indonesian Military (TNI), have been conducting operations in Poso for more than a week, looking for the perpetrators of several violent incidents in Central Sulawesi in the past three months.

On Saturday, Densus 88 officers clashed with local residents who protested the killing of Abdul Halid Tumbingo, 27. Halid, a Poso native, was killed by the police, who claimed that the Poso Forestry and Plantation Agency employee was involved in a series of violent incidents in Poso.

Some local residents who claimed to have witnessed Halid's killing said that he was shot three times. "Halid fell after his leg was shot. But then the already disabled Halid, as he lay on the ground, was shot again, two times," said an eyewitness who declined to be identified.

The police have killed two suspects and arrested seven other in the past week.

Robi Sugara, a terrorism analyst from the Barometer Institute, said the police's violent methods could backfire. "The extremists' network in Poso has actually been weakened and fractured. But the violence by the police might reunite them," Robi said.

Poso residents to file complaint against Densus 88

Jakarta Post - November 5, 2012

Ruslan Sangadji, Palu, Central Sulawesi – Several residents of Kayamanya subdistrict in Poso, Central Sulawesi, will file complaints against the National Police's counterterrorism unit, Densus 88, following a clash between locals and elite squad that broke out after a local leader was killed in an antiterrorism operation on Saturday.

Poso Legal Aid Institution (LBH) director Azriadi Bachri Malewa said on Monday that as many as 14 residents were currently being examined in Poso Hospital to complete the documents and to collect evidence needed to proceed with the report.

Police and locals were involved in a clash during a protest against Densus 88, after the unit raided a house that was allegedly used as a terrorist base, arrested M. Yasin and shot dead 27-year-old Abdul Halid Tumbingo in Kayamanya. The police reportedly hit, dragged and arrested people who protested the arrest of Yasin and the killing of Abdul, both of whom were community leaders in the area.

Thirteen were detained after they ran amok and attacked police with stones and small explosives, but were released the following evening. Police believed Abdul was a leader of an extremist group in Poso.

Abdul's neighbor, Indo, said that she objected to the Densus 88 squad's forceful entry into her house.

"They smashed my door and it hit my eyes. They frightened my children," she said, adding that she would have accepted the actions, if she were proven guilty. "But I am not. I am only an innocent civilian," she said. (cor/swd)

Battle against militants heats up in Poso

Jakarta Post - November 1, 2012

Nani Afrida and Ruslan Sangadji, Jakarta/Palu – The National Counterterrorism Agency (BNPT) warned the fight against militants in the area might get uglier. This announcement came on Wednesday as the authorities shot six suspected terrorists in a raid in Poso, Central Sulawesi.

BNPT chairman Ansyaad Mbai said nearly all notorious terrorist suspects were currently gathered in Poso as the regency was the main base and training ground of terrorists suspects.

"Poso is the place where the most wanted terrorist suspects are hiding," said Ansyaad. "They train their followers to terrorize locals. This is why our men are now in the area to hunt them down," he said.

Among the high-profile targets, according to Ansyaad, are Santoso alias Abu Wardah and Taufik Bulaga alias Upik Lawangga. Santoso is a long-time fugitive who allegedly shot dead three police officers last year in Palu, the capital of Central Sulawesi.

It is also alleged that he is the head of a terrorist training camp in Poso, and once, over the Internet, directly declared war on the National Police's counterterrorism unit Detachment 88.

Santoso is affiliated with the Jamaah Islamiyah (JI) terrorist group. JI was co-founded by terrorist convict Abu Bakar Ba'asyir, who is now serving 15 years in jail for organizing terrorist training camps.

According to BNPT, he left the organization to form his own splinter group to wage violent jihad against Christians and the police in Poso.

Terrorism expert Taufik Andrie of the Prasasti Perdamaian Foundation said that Santoso had a penchant for waging war in the field and preaching hate speech to lure followers.

Unlike Santoso, Upik was notorious for his bomb-making skills. Upik infamously assembled the bomb that blew up the lobby of the JW Marriot hotel in Jakarta in 2005.

In the past couple of weeks, the police have found dozens of highly sophisticated bombs in several areas in Poso. Some of the bombs were highly explosive and could be detonated remotely through mobile phones.

According to terrorist expert Al Chaidar, Upik was a student of Azhari Husin, a Malaysian national known as master bomb maker implicated in the 2002 Bali bombing. Azhari was shot dead by the police in 2005 in Malang, East Java.

"Upik is very meticulous when it comes to making bombs. That's why Azhari admired him," he said.

The BNPT believed the fugitives wanted to stir up tension between Christians and Muslims in Poso in the hope of reviving the sectarian conflict.

Poso, with a population of around 215,000, was the site of bloody clashes between Christian and Muslim communities between 1997 and 2001 that claimed around 1,000 lives and displaced 25,000.

After a government-influenced peace pact in 2001, local extremists, many of them linked to and directed by JI, mounted attacks on Christians and local officials in the hope of reviving the conflict.

"These terrorists burn churches so that Christians will do the same to mosques. After the conflict is revived, the group will take advantage by requesting extremists in other parts of the country to join their fight," he said.

On Oct. 22, several unidentified men attempted to set fire to the Pantekosta Jemaat Tiberias Church in Mandale subdistrict, North Poso.

Detachment 88 shot six suspected terrorists in Kalora village, Poso, killing one and wounding the others. The dead suspect was identified as Jippo, a suspected member of the Jamaaah Ansharut Tauhid (JAT), an organization also founded by Ba'asyir.

"We also found some bombs, which we later defused," said Central Sulawesi Police chief Brig. Gen. Dewa Parsana.

Freedom of religion & worship

Sampang Shiites forced to convert to Sunni: Kontras

Jakarta Post - November 6, 2012

Surabaya – The Surabaya office of the Commission for Missing Persons and Victims of Violence (Kontras) has reported that 26 Shia refugees currently taking shelter at a sports center in Sampang, Madura, East Java, had been forced to sign statements saying that they were willing to convert to Sunni.

Kontras Surabaya coordinator Andy Irfan said Monday that the 26 Shiites comprising nine families had been forced to sign such statements on Nov. 1.

The statements say, among other things, that the Shia followers were willing to return to "the right path" and to obey Sunni clerics' directives. "Officials and even police officers witnessed the signings," Andy said as quoted by tempo.co on Tuesday.

Andy said that such coercion violated Article 28 of the 1945 Constitution and Article 22 of Law No.39/2009 on human rights and he therefore urged the government not to yield to religious figures who spread hatred against different faiths and religions.

Muslim clerics in the Islamic Boarding Schools Forum admitted that the forum had been actively disseminating its teachings among Shia followers to "straighten out their religious understandings".

Forum representative Nailul claimed that the clerics had secured permission from the East Java governor to enter the sports center and carry out their mission. "Madura has been Sunni since forever. So it's our job to set them on the right path," Nailul said.

Hundreds of Sampang Shiites were forced to take shelter at the sports center after hundreds of Sunni Muslims attacked and set ablaze their houses in Nangkernang village in Sampang in August.

The police named seven people as suspects in the incident, including Rois Al Hukama, a brother of Tajul Muluk, a Shia leader in Sampang currently imprisoned for blasphemy against Islam. (swd)

Parliament & legislation

Despite public unease, House plans costly renovation projects

Jakarta Post - November 8, 2012

Margareth S. Aritonang, Jakarta – While all eyes are on the House of Representatives (DPR) for alleged extortion by several lawmakers, the legislative body is proceeding with its unpopular plan to spend Rp 8 billion (US$832,896) on renovations.

The renovation projects have not yet begun but the House secretariat has opened tenders inviting companies to bid for the projects.

According to proposals available on the official House website the projects consist of a Rp 1 billion renovation of the main fences, Rp 730 million repairs to the water-proof floors in the meeting hall, Rp 1.4 billion toilet renovations and a Rp 6.3 billion refurbishment of lawmakers' offices.

House secretary-general Nining Indra Saleh said the renovation projects were needed because 145 toilets in the House complex were broken, 18 of which were seriously damaged.

In addition, several parts of the fencing encircling the House site are damaged and immediate refurbishment is needed to prevent them collapsing.

"We've allocated between Rp 2 million and Rp 4 million for each less- damaged toilet and around Rp 20 million for those which are in a critical condition," Nining said.

Nining, who has been summoned twice by the Corruption Eradication Commission (KPK) as a witness in different graft cases, added that her office had allocated around Rp 50 million for the renovation of each of the lawmakers' 197 offices that needed maintenance.

"None of the offices needs serious work. We only need to change the wallpapers and air conditioners, for example, or replace dirty carpets. This is only for maintenance in order to keep state assets in good condition," Nining said.

According to Nining, the renovations are based on lawmakers' requests, and have been approved by the House's secretariat and Household Affairs Committee (BURT), which is chaired by House Speaker Marzuki Alie.

Speaking to the press separately, Marzuki called for the cancellation of some of the renovation projects arguing that the House complex was generally in good condition.

"I don't think that we need to renovate lawmakers' offices until the end of their terms. We don't need to change the fences either. The House needs to wisely use state funds especially as the public is apparently disappointed by our performance," Marzuki told reporters on Wednesday.

The House's secretariat aims to begin the renovations later this month, finishing them by the end of this year, which, according to the Indonesian Forum for Budget Transparency (FITRA), is suspicious.

"We sense that the House is imposing its plan. This will potentially lead to corruption because officials of the secretariat might mark up prices for the renovations in order to use state funds that are allocated for the project," FITRA coordinator Uchok Sky Khadafi said.

Uchok suggested the House cancel the renovation plans and reschedule the project for next year. "I know that the decision will taint the budget performance of the House's secretary-general, but it will protect them from more public criticism over misuse of taxpayers' money," he said.

Earlier this year, the House was criticized for wasting Rp 20.3 billion to unnecessarily renovate the House's budget committee room, procuring luxurious furniture to expand the capacity of the room.

Previously, the House was criticized for purchasing fingerprint-scanning devices to encourage lawmakers to attend hearings.

The Rp 279 million devices apparently failed in this endeavor as more than half of the total 560 lawmakers skipped at least two of the latest plenary meetings.

Ethnic & communal conflicts

Lampung truce achieved, but at expense of justice for dead

Jakarta Globe - November 6, 2012

Dessy Sagita & Ezra Sihite – The government has welcomed a peace deal between rival ethnic communities in Lampung, where long-simmering tensions boiled over into violent clashes last week that left at least 14 people dead and thousands displaced.

Djoko Suyanto, the coordinating minister for political, legal and security affairs, said on Monday that the 10-point truce was agreed on Sunday night between representatives from the native Lampung community and migrant Balinese community in South Lampung district.

"Early in the meeting, no agreement was reached because tensions were still high," he said, adding that it took urging from Lampung Governor Sjachroedin Z.P. to get them to see eye-to-eye.

"Even though several agreements were finally made, the governor continued to push for them to hold follow-up meetings," Djoko said.

He added that Bali Governor Made Mangku Pastika would also visit Lampung to help follow up on the peace pact. "We are coordinating with the governor and the district administration to promote this agreement at the grassroots level," the minister said.

The violence was sparked by a trivial spat on Oct. 27, which, fueled by long-running tensions between the predominantly Hindu migrant Balinese community in Balinuraga village and surrounding villages with mostly Muslim populations, led to a series of clashes and attacks.

At least 14 people were confirmed killed in the violent, while around 2,000 of the Balinuraga residents fled their homes.

Crucially, however, one of the 10 points in the peace deal calls for police and residents alike not to pursue criminal charges over the death and destruction.

Brig. Gen. Boy Rafli Amar, a National Police spokesman, said as quoted by Metrotvnews.com that the police would study that point further, but insisted that the perpetrators needed to be held accountable.

Another requirement under the 10-point agreement is for members of the ethnic Balinese community to be less insular and blend more with their neighbors.

Djoko said that besides promoting the peace pact, the provincial and district authorities should also work hard to reduce the wealth gap between the locals and the more enterprising migrants, which has been blamed as a major factor underlying the tensions between the two groups.

"We need to reduce the economic disparity between the groups because conflicts can arise from these differences and can even hinder the resolution of the problems," he said.

Other points in the agreement include a pledge by both sides to maintain security, order, harmony, solidarity and peace with one another.

They also vowed not to repeat their violent conduct of the past, and agreed that if there were personal disputes with the potential to incite wider violence, the case should be resolved immediately by the concerned parties.

Should they be unable to reach a resolution, they must bring the dispute before a council made up of community and religious leaders, youth leaders and local officials, the agreement states.

However, if even this measure fails to settle the spat, then the matter should be handled by law enforcement officers.

Both sides also vowed to admonish and counsel any of their members whose actions or statements had the potential to aggravate tensions or lead to unrest.

The agreement stated that if the individuals in question failed to comply with the rules, they could face being exiled from South Lampung.

Legislators welcomed the signing of the agreement, but cautioned that security should not be allowed to lapse.

"Reason and common sense have prevailed in this matter, but we still need the police and the military in place there to make sure the peace deal holds, said Martin Hutabarat from the Great Indonesia Movement Party (Gerindra).

Government negligence blamed for Lampung conflict

Jakarta Post - November 1, 2012

Oyos Saroso H.N. and Bagus BT Saragih, Bandar Lampung/Jakarta – The recent violent ethnic clash in Lampung, which has claimed the lives of at least 14 people, could have been prevented by the local administration, especially given the occurrence of similar incidents in the past, a noted sociologist has said.

"This nation has witnessed so many horizontal conflicts with many of them showing similarities. The government does not appear to learn from the past," sociologist Thamrin Amal Tomagola of the Jakarta-based University of Indonesia, said on Wednesday.

Two violent incidents involving people from Kalianda and Way Panji districts in South Lampung on Sunday and Monday left 14 people dead. Angry mobs also set at least 16 houses and one police car on fire.

The violence was triggered by an alleged assault committed by men from Way Panji, many of whom are of Balinese descent, on two young women from Kalianda district, who are mostly natives of Lampung.

Thamrin said the incident was simply a "trigger". Relationships between the migrant and native populations had been sour for years but the situation had not been addressed seriously by officials, he added.

"It's like a hotbed for violence. You only need a trivial incident as a trigger," Thamrin said. "Ironically, President Susilo Bambang Yudhoyono is now preparing to receive an honor from the British Queen while his people are still mourning," he added.

South Lampung Regent Rycko Menoza acknowledged there had been an "enormous and very strong primordial spirit" within each ethnical group in that area. "However, the clash was ignited by the spreading of false information through social media and text messages," Rycko said.

Lampung has been a melting pot since the 1950s, when the area saw the arrival, through the government's transmigration program, of people from other provinces.

During the New Order era, transmigration was an ambitious project to resettle millions of people from the islands of Java, Bali and Lombok to other lesser populated islands in the archipelago. The program was aimed to reduce the population density of the three islands, where more than half of Indonesians lived.

Javanese and Balinese descendants living in Lampung have been involved in numerous conflicts with native Lampung residents even though they have lived there for years.

On Wednesday, community leaders from the conflicting groups reportedly agreed with the proposal to officiate a truce during a ceremony to be held within the next three days.

"The ceremony will be held in a place where thousands of people can gather to forgive each other," Deputy Lampung Governor Joko Umar Said said. "It will be attended by Bali Governor Made Mangku Pastika and Lampung Governor Sjachroedin ZP."

He added that the agreement had been reached after top figures from both the Lampung and Balinese communities met. The meeting, facilitated by the provincial administration, explored the roots of the conflict, Joko said.

Lampung Police chief Brig. Gen. Jodie Rooseto, who also attended the meeting, said he had also personally met with the top figures of both groups. "They were eager to [...] call a truce and find a resolution. Both parties regretted the violence," Jodie said after the closed-door meeting.

He also warned that once the agreement was signed both parties must obey it. The leaders had previously signed a peace pact after a clash between the communities broke out at Napal village in Sidomulyo district on Jan. 24.

January's clash was triggered by a dispute over the ownership of a parking lot and resulted in the burning down of 63 houses.

Jakarta & urban life

Jakarta sets out waste recycling policy

Straits Times - November 2, 2012

Wahyudi Soeriaatmadja, Jakarta – Recycling is largely unheard of in Indonesia, but this will soon change.

Each of its more than 500 cities and districts must now produce a recycling master plan. These must detail how they would reduce, recycle and reuse, as well as separate, collect and transport household trash under new regulations announced by the Environment Ministry Thursday.

Cities and districts can no longer use open dumping sites for household waste. Instead, they must build sanitary landfills, Masnellyarti, deputy to the Environment Minister, said during a press briefing.

Officials admit that implementing the rules will be a challenge. The latest move comes as more Indonesians move to towns and cities, and littering and dumping become widespread.

The government is mindful of appearing environmentally-conscious, making commitments to sustainable forestry and emissions reduction, among others.

"Forming environmentally conscious behavior in society could take years, but we must start now as it involves a change in lifestyle and culture," Environment Minister Balthasar Kambuaya said.

Citing the practice of commuters tossing cups and snack wrappers from the windows of moving vehicles, he compared them to people in developed countries. "They have stopped doing that for a long time," he said. "Why can't we do that now?"

Under the rules, garbage disposal points to be built will have waste separated into hazardous, biodegradable, recyclable and reusable categories. Regular pick-up times must be scheduled.

Companies must use either biodegradable packaging or a system where consumers are encouraged to return their packaging – such as plastic bottles – for recycling, said Masnellyarti. She praised one Indonesian mineral water company which buys back its used plastic bottles.

The new rules also ban the rampant traditional burning of household trash that goes on even in the capital Jakarta. Each city or district will add detailed regulations to its bylaws.

Ministry officials say some 6,500 tons of garbage are collected in Jakarta every day, and this is only about 70 percent of the city's estimated trash load.

Urban planning expert Yayat Supriatna welcomed the news. But he said: "Serious efforts are needed to ensure the necessary follow-ups – from public campaigns to having adequate garbage bins throughout city areas."

He said one reason why residents often burn their trash is because garbage collectors do not show up for days and the rubbish just piles up.

Companies have expressed some misgivings regarding the rules on biodegradable packaging as it costs more, said a senior environment ministry official who helped to draft the rules and gathered input from the private sector during the process. He declined to be named.

The regulations also concern scavengers, known as pemulung, who pick through waste dumped on the streets, under bridges and even in rivers and sell it to informal "recycling" centers that resell metal or plastic.

Pemulung in big cities like Jakarta, Surabaya, and Bandung focus on certain items such as used plastic cups, bottles and scrap steel.

"We are discussing this issue with some of them... We will not make pemulung lose their jobs," said Sudirman, head of the waste management department at the environment ministry. Asked if they might be given jobs like recycling attendants, he said it was too early to tell.

Jakarta governor: No more weapons for Satpol PP

Jakarta Globe - November 2, 2012

Lenny Tristia Tambun – Jakarta Governor Joko Widodo on Thursday redefined the duty of the city's Public Order squad as a "civilian force to help the government preserve public order and harmony," effectively canceling the home affairs minister's ruling that the security force should carry weapons.

Home Affairs Minister Gamawan Fauzi issued a 2010 decree authorizing the squad, known as Satpol PP, to carry gas-fed revolvers, electric-shock sticks, and other weapons. But on Thursday, the Jakarta governor declared in front of 5,000 members of Satpol PP that they were a force for peace and not one to harm people.

In a symbolic move, he took the batons from several members of the squad during the morning gathering.

"If anybody breaks the law or refuses to listen, do your job, but never harm them physically. Don't start a quarrel, just do your job," Joko told the squad. "Acting proportionally means stop using sticks, knives, and other weapons. "Satpol PP was established for peace and order, not for the opposite purpose."

Satpol PP is operated by the Ministry of Home Affairs, which deploys the force to all governors. The decree says the governors are representatives of the Indonesian president in their provinces so they must be facilitated with a civilian security force that helps them maintain public order.

In reality, however, Satpol PP has become notorious for its violent behavior against traders in traditional markets, sidewalk vendors, the destitute, beggars, and residents from the lower walks of life, including slum dwellers.

Even before the ministerial decree was issued, Satpol PP had been famous for its violent approach to creating public order. The decree gave it the legitimacy to act even more brutally, with members knowing that they were armed.

"Your duty is to create peace, tranquility and public order for the sake of all the residents of Jakarta," Joko said. "From now on, no one should use violent means or methods to physically harm any resident. You must apply dialog and persuasion while being firm in your action.

"You need to be firm in action, otherwise you will lose respect and authority. But do so proportionally. To be firm does not mean to be violent."

The governor told the officers that if they behaved violently, residents would assume that theirs is a cruel government. "That must not happen again," Joko said.

After giving them the advice, he asked some of the officers to demonstrate how they would deal with stubborn sidewalk vendors and sex workers.

The officers demonstrated how they would do it – rather awkwardly – to which the governor said: "From what I have just seen, I am confident that you will soon be able to approach them properly. But never shout at them or else you will incite a quarrel. No fighting should ever occur henceforth. Just perform your duty with passion."

Joko told journalists that Jakarta must become a clean and neat city, and the Satpol PP needed to help spread that idea.

"Their duty is to preserve public order in the city," he said. "The emphasis will be on finding the right solutions for the many problems gripping the city. These include dealing with sidewalk vendors in the market.

"We will find solutions for them because they need proper space to operate. Otherwise they will operate anywhere they want. That should not happen because we cannot afford to see a chaotic and dirty city."

Reports on Thursday said that about 3,000 Satpol PP officers would be assigned to the Transportation Department to secure the TransJakarta bus routes. The idea was introduced by Deputy Governor Basuki Tjahaja Purnama but Joko said he had to study it before making a decision.

Transportation figures said Basuki's proposal would be useful in keeping Trans-Jakarta lanes free from private motorists, which contribute to traffic jams during rush hour.

Effendi Anas, the commander of Jakarta's Satpol PP, said Joko's instructions would become the guideline for his officers to base their actions on. He said he had been trying to get his personnel to act more humanely and the governor's instructions would now strengthen his policy.

But social observers say Joko's bold plans may be limited by the low education levels of many Satpol PP officers, which influences the way they behave. The governor may need to improve their education, said Agus Pambagio, a University of Indonesia academic.

"The most important thing is eradicating illegal fees taken by Jakarta officials," he said. "The fact that so many illegal street vendors are allowed to operate in the city is proof that officials take bribes."

Armed forces & defense

Defense expo aims to bridge local and foreign companies

Jakarta Post - November 8, 2012

Jakarta – The 2012 Indo Defence Expo and Forum, the country's largest military equipment exhibition, is expected to boost partnership between local and global defense companies, says Vice President Boediono.

Given the fact that local companies are still developing, Boediono emphasized that international cooperation on defense technology will still play a pivotal role in strengthening the Indonesian Military's (TNI) minimum essential force (MEF).

"While we are building our defense business and its supporting industries, we can also boost the industry by fostering partnerships with established overseas companies," he said during the opening ceremony of the 5th defense expo at Jakarta International Expo (JIExpo) Kemayoran in Central Jakarta on Wednesday.

Boediono added the efforts of domestic companies in engaging international cooperation had been supported by the National Defense Industry Law passed in early October.

The law mandates foreign defense companies to provide education, training and transfer of technology to their local counterparts, in order to participate in improving the capabilities of Indonesia's defense industry.

The biennial event is indeed a prospective forum for domestic companies to get new deals as 600 companies from 50 countries are participating in the four-day exhibition.

Among them are the world's biggest defense contractors, such as American global aerospace and defense company, Lockheed Martin and Russian aviation giant Sukhoi.

Robert Laing, an executive from Lockheed Martin, said that his firm had initiated a partnership with a local company, CMI Indonesia, prior to the enactment of the National Defense Industry Law.

The agreement was signed in February and they recently completed a review to check the readiness of CMI to begin production. The review qualified the Bandung-based company to start manufacturing the TPS-77 and FPS-117 long- range surveillance radars.

Lockheed and CMI are jointly pursuing the National Airspace Surveillance – Republic of Indonesia (NASRI) program, with a purpose to produce more than 20 new radars. "If we get the contract, all the ordered radars will be made in Indonesia. And maybe, we can produce more for export," he told The Jakarta Post.

Korean Aerospace Industries (KAI) has had a partnership with state-owned aircraft manufacturer PT Dirgantara Indonesia (PT DI) since 2005.

Junhyun Jo, a KAI marketing executive, said that PT DI is responsible for reassembling, coloring and checking the FA-50 light combat aircraft ordered by Indonesia's Air Force. "We want to conduct more production here, but this means we need to build new facilities, which needs big investment," he said.

The Indo Defence Expo is not only being used as an up-to-date military equipment market, but is also a space for the government to show its latest shopping items.

German tank producer, Rheinmetall, displayed Leopard 2 main battle tanks (MBT) and a Marder infantry fighting vehicle (IFV), which Indonesia has ordered 100 units worth US$280 million in an effort to upgrade its obsolete military equipment.

"The procurement is still in progress, but at least now we can see this Leopard MBT and Marder medium tank. By having these vehicles, we will have a complete series of tanks, ranging from light to heavy ones," said Defense Minister Purnomo Yusgiantoro at the expo venue.

Indonesia has been trying to upgrade the TNI's worn-out equipment in recent years. In addition to the 2012 law on national defense industry, the government has proposed raising next year's defense budget to Rp 77 trillion ($8 billion), from Rp 72.54 trillion in 2012. (yps)

Judicial & legal system

Disgraced Bekasi judge claims he had 'drug parties' with other judges

Jakarta Globe - November 2, 2012

The Judicial Commission said on Friday it will look into claims by a disgraced Bekasi judge that many of his colleagues in Jakarta were drug users and often engaged in "drug parties."

"He [Puji Wijayanto] said he often used ecstasy together with other judges in Jakarta," Judicial Commission deputy chairman Iman Anshari Saleh told Detik.com on Friday.

Puji was arrested by the National Narcotics Agency at the aptly named Illigals Hotel and Club in West Jakarta in October with an undisclosed quantity of ecstasy pills and meth.

Iman said Puji told him he often had these parties with judges from the Central Jakarta district court and judges who work for Supreme Court justices.

"But he did not want to say how many judges or name names," Iman added. A Central Jakarta district court judge named Sudjatmiko denied Puji's claims.

"As far as I know, none of my colleagues are using drugs," Sudjatmiko said as quoted by Detik.com. "I'm sure they're all clean. That confession is completely not true. I can guarantee that 100 percent of Central Jakarta district court judges are drug-free. My colleagues and I are ready to be tested, both urine and blood."

Following Puji's arrest, the Judicial Commission and BNN on Wednesday signed a memorandum of understanding to prevent judges from consuming illegal drugs.

Judicial Commission Chairman Eman Suparman has asked BNN to give urine tests to all judges at all courts in Indonesia, from the district level all the way to the Supreme Court.

"We have to uphold the dignity of Indonesian judges," Eman said as quoted by Hukumonline.com.

Criminal justice & prison system

Executions on hold in Indonesia

Straits Times - November 1, 2012

Zakir Hussain, Jakarta – More than 100 inmates are on death row in Indonesia, some for well over 10 years.

But no one has been executed in the past four years, since three Bali bombers and seven others were dispatched by firing squad in 2008.

Last month, Indonesian officials admitted to being influenced by the global trend that frowns on the death penalty on humanitarian grounds.

They also feel loosening the noose at home might help Indonesia better campaign for its citizens to be spared from death row abroad, at a time when recent executions have proven to be emotionally charged occasions at home.

"There is a de facto moratorium on the death penalty," prominent lawyer Todung Mulya Lubis told The Straits Times. "There is also a realization that imposing the death penalty does not deter crime or solve problems, be it corruption, drugs or terrorism."

This reluctance to execute is not unique. A weakening stomach for the death penalty in Indonesia comes at a time when several neighbors, including Singapore, Malaysia and Thailand, are loosening up on its application and Reviewing existing death row cases.

Five other Asean countries have either abolished it or not executed anyone in decades, while Vietnam changed the method of execution from firing squad to lethal injection last year.

Indonesian Foreign Minister Marty Natalegawa told a recent press briefing: "There has been a sharp increase in the number of countries which have abolished the death penalty from their laws because it is not consistent with human rights."

He noted that 140 of 193 United Nations members have either abolished or imposed a moratorium on the death penalty. "Indonesia itself is moving towards that direction," he said.

Marty's update itself was prompted by a recent decision by President Susilo Bambang Yudhoyono to grant clemency to four inmates on death row for drug offenses, which drew a backlash from some quarters.

And soon after Marty's remarks, his spokesman clarified that although there had been a reduction in death sentences meted out, Indonesia would still retain the penalty. However, observers say only a handful of those on death row, if any, were likely to face execution.

While activist Alvon Kurnia Palma of the Indonesian Legal Aid Foundation welcomed this new reality, he told The Straits Times that the dozens who are now on death row need some legal certainty as their fates will remain in limbo otherwise.

One welcome move is that several judges, in commuting death sentences on appeal, have cited the constitutional guarantee of the right to life.

Critics, however, doubt leniency will spare Indonesians who are on death row abroad. For example, some 50 citizens who potentially face the death penalty in Saudi Arabia are unlikely to be spared, given that no Saudi nationals are on death row in Indonesia.

Foreign Ministry figures show, as of last year, 143 Indonesians were on trial in Malaysia for offenses that could attract the death penalty. Of these, 17 were on death row and awaiting clemency.

Anti-drug campaigners and leaders of the largest Muslim organization, Nahdlatul Ulama, have also attacked the trend against executions as a sign that the government is going soft on drugs and crime.

But human rights monitor Imparsial's executive director Poengky Indarti said: "Many parties, especially conservatives and especially on religious grounds, continue to view the death penalty as a commandment from God that must be carried out. They need to be made aware that the right to live is also a commandment from God."

Lawyer Todung suggested the government introduce life sentences without parole for the most heinous crimes.

"If you explain the severity of this, opponents will probably change their mind," he said. "My reading is the President understands the trends. I hope that in the remaining two years of his presidency, there will be no executions taking place."

Foreign affairs & trade

Trade minister gloomy on exports, expects 5% decline

Jakarta Post - November 8, 2012

Jakarta – Taking a contrary view to his deputy, Trade Minister Gita Wirjawan has said he is pessimistic about Indonesia's exports being able to meet the government's target of US$203 billion this year given the bleak outlook in global trade.

Gita estimated that with the slow recovery in the world economy, especially in Europe and the fall in commodity prices, Indonesia's exports would likely fall by about 5 percent this year.

"I think we would be happy if the decline in exports is around 5 percent compared to last year's figure," the minister said in his speech during the Indonesia Investment Summit in Jakarta on Wednesday.

Such a gloomy forecast for Indonesia's exports, Gita explained, was mainly caused by weakening global demand stemming from stalled economic recovery in the West.

Deputy Trade Minister Bayu Krisnamurthi said last week that the government was quite optimistic that the export target would be met, despite the uncertainties in the world economy.

"We're not exposed directly to Europe as much as other Asian countries," said Gita, who is also former chairman of the Investment Coordinating Board (BKPM) that organized the investment summit. He said, however, that the economic slowdown suffered by Indonesian trade partners as a result of the European crisis caused a decline in orders for Indonesian commodities.

During January to September, Indonesia's total exports stood at $143 billion, falling six percent compared to last year's figure, the Central Statistics Agency (BPS) reported this week.

With such figures, the agency's director, Satwiko Darmesto, said that the country would not meet its exports target of $203 billion, predicting that monthly exports would likely average around $15 billion in the three months before year's end.

Speaking to reporters on the sidelines of the summit, Gita acknowledged that Indonesia's exports might only top $190 billion by the end of this year because of the lower commodity prices. "We know that 65 percent of our exports are commodities-related. So, if there is a decline in [commodity] prices, then our exports will fall as well."

Despite the country's under-performance in exports, Gita said Indonesia still booked a trade surplus of $1 billion as of September, resulting from improvements in the country's import structure.

In the third quarter this year, Indonesia saw strong growth in imports of capital goods, up 20 percent compared to the same period last year, evincing the country's strong investment climate. Imports of consumer goods, meanwhile, only increased by 0.6 percent.

"The reduction in consumer-goods imports is in line with our long-term goal and aspirations; and that is for Indonesia to move up the value chain," said Gita, who forecast that Indonesia would post a $2.5 billion trade surplus this year.

In front of the foreign investors attending the Indonesia Investment Summit, the minister also took time to defend government policies that many international stakeholders regard as a form of protectionism, such as imposing taxes on certain mineral exports.

"Going forward, I think you will see more [such policies being implemented]," he said. "I don't think that we can be construed as protectionist: it is more about the need for everybody to understand where Indonesia needs to be in the future."

Gita's statement on the need for Indonesia to climb up the value chain was echoed by his successor on the investment board, M. Chatib Basri, who also countered complaints by Indonesia's trade partners labeling the country protectionist.

"If you look at the structure of the market itself, it is biased toward protectionism against finished products. This has been done by developed countries," the BKPM chairman said during the press briefing held in the Indonesia Investment Summit.

"I'm not saying that this is a form of retaliation. But we have to see that the world's economy itself is distorted – it is not free trade." (sat)

Australian Foreign Minister talks Indonesia's Papua & Asian Century

ABC News - November 3, 2012

Foreign Minister Bob Carr says Australia has been "explicit" in its support for Indonesia's sovereignty over Papua.

Senator Carr told Newsline the provinces have been recognised "by all the nations in the earth" as Indonesian territory.

"There are Australians, a very small number I think... who take an interest in the notion for more autonomy for Papua but I remind them that you'd be doing a disservice to the Indonesian population of those two provinces if you held out any hope that Australia could influence the cause of events," he said.

Indonesia's government and military have been criticised in the past for human rights abuses in Papua, after Indonesia took over the province in 1969 in a vote by community leaders that was widely criticised as flawed.

A low-level insurgency for independence has simmered on Indonesia's eastern-most island for decades.

The Foreign Minister has dismissed suggestions public pressure would cause Australia to change its policy on Papua's autonomy. "Indonesians have been very sensitive to human rights implications of law and order activity in the Papua provinces," he said.

"I just ask those idealistic Australians who might entertain some other arrangement, that what would be the cost in terms of our friendship with Indonesia and in terms of our budget of a different arrangement. It's inconceivable, utterly inconceivable."

'Australians seen as Asians'

The Foreign Minister says Australia's relationship with Indonesia involves a "habit of consultation" – a relationship it enjoys with a number of its Asian neighbours including Japan, South Korea and Singapore.

"We had the Singaporeans through in recent weeks and again we have common approaches to issues like the South China Sea, he said. "A comfortable alignment of our foreign policy positions."

He also countered criticisms Australia's perceptions of Asia are superficial and too "Eurocentric" in response to the recently-released Asian Century policy paper.

"The foreign minister of Myanmar was through here last week and he said.. 'We see Australia as Asians'," he said. "Why wouldn't he? We were there in Myanmar lifting, not just suspending our sanctions."

Senator Carr says the fact Australia won a seat on the United Nations Security Council is also testament of its strong relationship with its neighbours.

"I was struck by this when I stood there in the UN and I was being congratulated by nations from every region in the world and it dawned on me that they're comfortable with Australia and that reflects our diplomacy," he said.

Indonesia and Britain ink deals on trade, defense, education

Agence France Presse - November 2, 2012

London – Britain's Prime Minister David Cameron and Indonesian President Susilo Bambang Yudhoyono signed a string of agreements on trade, defense and education on Thursday, the British government said.

"They had constructive discussions on a number of subjects, with the focus on the UK-Indonesian trade and investment relationship," said a spokeswoman for Cameron's Downing Street office.

On the second day of Yudhoyono's state visit to Britain, aimed at boosting ties with the emerging Asian power, the two leaders and Liberia's President Ellen Johnson Sirleaf also chaired talks in London on global efforts to fight poverty.

The Downing Street spokeswoman said Cameron and Yudhoyono had sealed a defense deal which would boost cooperation in "research and development, investment and production."

They also announced a #7.5 billion ($12.1 billion) deal for BP to develop liquid natural gas in Indonesia, and signed an agreement strengthening links between the two countries' universities.

Cameron's spokeswoman added that while he had praised Yudhoyono for "his leading role in Indonesia's transition from autocracy to a vibrant democracy," the pair had discussed the protection of human rights in regions such as Papua.

Dozens of demonstrators gathered at Downing Street on Wednesday to protest against alleged rights abuses by Yudhoyono's government in West Papua and East Timor.

The two leaders and Johnson Sirleaf had earlier chaired a panel of politicians from 26 countries charged with developing an anti-poverty strategy after the Millennium Development Goals expire in 2015. The eight goals, established in 2000, set targets on improving education, health and women's rights, ending hunger, and protecting the environment.

Cameron said he believed world leaders now had a real opportunity to eradicate poverty. "That is something politicians have been talking about for a while -but for the first time I believe this generation really has the opportunity to do it," he said after the meeting.

"We think the Millennium Development Goals have made great progress. There's more progress to be made between now and 2015, but we're clear the next stage should be aiming to eradicate absolute poverty in our world completely."

The panel is meeting for three days in London, the second of four rounds of talks before it reports back to UN Secretary General Ban Ki-moon in May next year.

On Friday, the final day of Yudhoyono's state visit, he will address officials at the Foreign Office and meet with Indonesian business figures.

Queen Elizabeth II hosted a glittering banquet in honor of Yudhoyono and his wife Ani on Wednesday night, after formally welcoming them with a guard of honor and a ride in her ceremonial carriage.

Mining & energy

Renewable energy seems unlikely in near future: Minister

Jakarta Post - November 6, 2012

Elly Burhaini Faizal, Jakarta – In spite of the adverse impact from the excessive use of fossil fuels, Indonesia would be unlikely to meet the target of conversion to renewable resources as its dominant source of energy.

National Development Planning Minister Armida S. Alisjahbana said on Monday that fossil fuels would remain the country's primary source of energy given the hefty cost of converting to renewable resources.

"I have to admit that at this point we have not managed to fully develop an incentive mechanism or the proper pricing policies needed to boost the use of renewable energy," Armida said during the Third Indonesia Carbon Update.

Fossil fuel makes up 95 percent of the country's energy sources, in fact the government pays subsidies for the use of fossil fuel. Data from the Energy and Mineral Resources Ministry said that renewable sources only contribute less than 5 percent.

President Susilo Bambang Yudhoyono has issued Presidential Regulation (Perpres) No. 5/2006 on national energy policy which aims to accelerate the use of new and renewable energy, citing climate change concerns. In Vision 2025, designed by the Energy and Mineral Resources Ministry, the use of new and renewable energy is expected to reach 25 percent of the total by 2025, exceeding the 17 percent stipulated in Perpres. In Vision 2525, the use of coal is forecast to reach 32 percent, gas 23 percent and oil 20 percent.

Armida said the key to the expansion of renewable energy is changing the behavior of consumers. In the absence of proper incentives, disincentive mechanisms and pricing policies, such changes seem unlikely, she said.

"People, including those in the industrial sector, will only respond to incentives if we use the command and control mechanisms. But such mechanisms are not popular anymore," she said.

Indonesia has pledged an emission reduction target of 26 percent by 2020 or 41 percent with international support. In September last year, the government announced the national action plan for reducing greenhouse gas emissions (RAN-GRK).

"[The RAN-GRK] is a framework for mainstream climate change mitigation into the country's development. We bring this national commitment to the local level," said Armida.

Currently, 12 provinces have formulated regional action plans for reducing greenhouse gas emissions (RAD-GRK) through Governor Decrees (Pergub) based on local conditions.

To address climate issues, the government has taken a number of initiatives with international counterparts, including Japan.

During the East Asia Summit in November last year in Bali, Japan proposed the establishment of the East Asia Low Carbon Growth Partnership to promote low carbon growth in the region.

As a follow-up, Japan hosted the partnership's first meeting called the East Asia Low Carbon Growth Partnership Dialogue in Tokyo in April this year.

Economy & investment

Fewer local jobs despite booming growth

Jakarta Post - November 6, 2012

Hans David Tampubolon, Jakarta – More than 400,000 jobs were to have resulted for every 1 percent increase in the nation's economic growth rate, according to the 2011 and 2012 state budgets.

Ironically, while Indonesia has boasted an average economic growth rate greater than 6 percent for the last several years, less than 500,000 jobs were created last year.

The shortfall augurs the question of why has it been so hard to create jobs in a nation with one of the most vibrant economies in the world.

The Central Statistics Agency (BPS) revealed in a report released on Monday that open unemployment in Indonesia was 7.24 million as of August, dropping merely 460,000, or about 6 percent, compared to the same period of last year.

Half unemployment, defined as people working part time and principally comprised of those working in the informal sector, also dropped slightly in August, down 30,000, or less than 1 percent, to 34.3 million from the same period a year ago, according to the BPS.

Measuring unemployment in Indonesia should also take into account the numbers of the half employed, according to analysts, who say that unlike in developed economies, where the unemployed receive state aid, the unemployed in Indonesia do just about anything to make ends meet.

"The sectors that became the major contributors to growth are not labor- intensive ones such as manufacturing and agriculture," economist Adam Latief of state research agency the Indonesian Institute of Sciences (LIPI) said.

"Instead, the sectors that enjoyed most of the growth had low take-up [of employees]: banking, finance, trade and telecommunications."

According to the BPS, the agriculture sector lost 450,000 jobs between August 2011 and August 2012, while the trade sector shed 250,000 workers.

The agriculture sector accounts for 35 percent of 110 million employed people, followed by the trade sector at 21 percent and industry at 13.8 percent, the BPS data said.

"The government has not been able to fully utilize its spending to develop labor intensive industries, such as agriculture and manufacturing. These sectors should have been the ones receiving more incentives from the state budget," Harry Azhar Aziz, the deputy chairman of House of Representatives' Commission XI overseeing finance, said.

As the agriculture sector has seen less improvement in infrastructure, the manufacturing sector has recently been hit with violent labor protests and unfavorable labor policies.

According to the Indonesian Employers Association (Apindo), these factors have created higher costs for business and legal and security uncertainties, as the police have been reluctant to take action to squash violent labor movement.

Latief called for a new course. "There's an urgency for revising the government's mind-set on making growth as the final destination of a nation's economy. The final destination must be on job creation," he said.

As doubts emerge on the quality of growth in the nation, the BPS also reported that the nation's economy may miss its growth target of 6.5 percent for 2012 due to a decline in exports.

Indonesia's economy grew by 6.17 percent in the third quarter compared to the same period last year, which was the lowest year-on-year quarterly growth this year. In the first and second quarter, growth stood at 6.3 percent and 6.4 percent, respectively.

"One of the major factors that has slowed our economic growth is weakening exports," BPS statistics analysis deputy Suhariyanto said. "We have three major markets for our exports: China, Japan and the United States. The impact of the current global crisis has been deeper for those markets."

Exports during the third quarter declined by 2.78 percent year-on-year, while imports dropped by 0.54 percent.

The decline in growth was also attributed by Suhariyanto to a 3.22 percent drop in government spending based on its decision to disburse additional salary to public officials earlier in the year.

While other economic indicators, such as domestic consumption and investment, were still showing healthy growth in the third quarter, according to the BPS; Suhariyanto believed that it would be very unlikely for the economy to achieve its economic growth target for 2012 set by the government.

"If we manage to improve our exports and maintain domestic consumption growth, we may well achieve 6.3 percent growth this year," Suhariyanto said.

Bank Mandiri economist Destry Damayanti said the government should focus on domestic industry rather than trying to open up new export markets, which he described as a long-term measure.

Indonesia court scraps mineral export regulations: Industry body

Jakarta Globe - November 5, 2012

Indonesia's Supreme Court has scrapped a government ban on the export of unprocessed minerals, the country's chamber of commerce said on Monday, and urged the government to draft new mineral export rules.

"With the Supreme Court decision all the chapters [of the ban] have to be dropped as soon as possible, and mineral exports will be regulated by the Trade Ministry," Natsir Mansyur, a senior official of the chamber of commerce, told Reuters.

He was referring to portions of the regulation that authorize the central government to oversee mineral processing and ban mineral exports. The Supreme Court decision was issued in September, according to local news portals, but was only made public on Monday.

"The Energy and Mineral Resource ministry has no right any more to regulate exports, including determining the mineral export quota," Mansyur added.

The government mining regulations this year sent shockwaves through the industry, which contributes 12 percent to Indonesia's economic output, and hit exports.

Syahrir A.B., an executive director at the Indonesian Mining Association, said in October that Coordinating Minister for Economics Hatta Rajasa agreed in late July to review the regulation that banned the export of numerous minerals and ores unless mining companies smelted them in Indonesia or meet other strict conditions. (Reuters, JG)

Finance & banking

Despite BI campaign, banks keep high margins

Jakarta Post - November 5, 2012

Jakarta – The third quarter financial reports of Indonesia's biggest banks show that the banking industry in the country remains one of the world's most profitable, as banks retained their high net interest margins (NIM) despite campaigns by Bank Indonesia (BI) to push down lending rates to expand banking in the country.

The average NIM of Indonesia's top 10 banks was 6.11 percent, according to the banks' third quarter financial reports, most of which were published last week. NIM, the difference between lending rates charged to customers and interest rates paid to deposit holders, is used to measure a bank's profitability, as a bank with a higher NIM normally sees higher interest income.

The NIM in Indonesia's banking industry is the highest in ASEAN, and among the highest in Asia. For comparison, data from IBCA Bankscope shows that the average NIM for banks in Thailand and Malaysia is currently around 2.5 to 3 percent, while the average NIM for banks in China and India is around 2 to 2.5 percent.

"This [the high NIM of Indonesian banks] is the problem for which we will seek the solution," BI deputy governor Halim Alamsyah said recently.

"We do not want banks to suffer losses, which would cause the public to lose access to credit. However, we also do not want the channeled credit to exploit the public – we should find the balance between these two," he added.

The central bank introduced the "prime lending rate" policy earlier this year, which requires banks to publicly announce the rates they charge to their most valued customers. The policy is aimed at increasing transparency so that customers can choose the best rates, consequently boosting competition in the lending market and, eventually, pushing down lending rates.

"The fact that Indonesian banks' NIM remain high shows that the prime lending rate policy issued by BI is not yet optimal," Banking expert Paul Sutaryono said over the weekend.

Analysts have also argued that the high rates charged by Indonesian banks are caused by the fact that the banking industry is controlled by a only few big banks, which are deemed as influential enough to steer lending rates in the country.

At the moment, of all the 120 banks operating in Indonesia, the 10 biggest banks control 63 percent of total banking assets of Rp 3,652 trillion (US$378 billion).

"There's an indication of monopoly," University of Indonesia economist Lana Soelistianingsih said. She explained that the monopoly occurred due to "unintentional collusion", a condition where banks operating in a country used the industry's market leaders as the benchmark for setting their lending rates, instead of the benchmark rate set by the central bank.

"Such a thing could occur based on the market mechanism. They [the banks] may not set the agreement together, but there is an indication that they are closely monitoring each other [in setting their rates]," she added.

Local bankers, however, shrugged off notions of monopoly, arguing that a high NIM is still needed to support Indonesia's fast-growing banking industry, given the fact that banking penetration in the country remains low.

"Compared to other countries, banks in Indonesia are still relatively small in terms of assets, if we don't have a large NIM, then we will see small profits that will not be enough to support our 20 to 30 percent asset growth every year," said Bank Central Asia (BCA) president director Jahja Setiaatmadja. (sat)

Analysis & opinion

'Ease' of doing business in Indonesia making would-be investors uneasy

Jakarta Globe - November 1, 2012

Foreign direct investment in Indonesia continued to grow in the third quarter, rising more than 22 percent, year-on-year, to Rp 56.6 trillion ($5.9 billion). As economies continue to slow in the United States and Europe, some experts predict that trend to continue.

But despite the positive economic outlook, Indonesia remains a very difficult place to do business. Legal and regulatory uncertainties prevail. As one government official recently stated, the only guarantee for an investor here is that there will be problems, a view supported by the World Bank's recently released "Ease of Doing Business" report.

This report ranks 185 countries across a number of key areas important to investors, including the ease of starting a new business, registering property, getting electricity, paying taxes and obtaining construction permits. The report also measures how well contracts are respected and enforced and the degree to which investors are protected.

The Indonesian government set an ambitious goal to become an advanced economy by 2025. If it is to achieve that goal, it needs to evolve its manufacturing beyond domestic consumption, and start exporting raw commodities and materials. It needs to move up the value chain and become a global player in manufacturing high-value exports. Protectionist policies will not achieve that goal. Improving the business environment here will.

As it strives to move up the export value chain, Indonesia will increasingly be engaged in fierce competition with its neighbors for the same investment dollars. This is why the report is a valuable barometer of future potential FDI. It allows Indonesia to measure its performance against other countries in the competition for investment dollars, and it also measures many of the key factors that drive investors' decisions.

Unfortunately, there is very little good news in the report, especially where Indonesia is concerned. While the country improved its overall ranking by two points in 2013, moving from 130th to 128th, the country now ranks just below Ethiopia and just ahead of Bangladesh in the global ranking. It continues to lag far behind most of its Southeast Asian neighbors. Singapore is in first place globally, Thailand is at No. 18, Malaysia is at 12, and Vietnam ranks 99th.

Contract enforcement and investor protection have received significant media attention during the past year, fueled in part by the government's uncertain stance in regards to investment in the mining, oil and gas sectors, and most recently by the targeting of Chevron and the detaining four of its Indonesian employees in a bioremediation cost-recovery dispute.

Therefore, it doesn't come as a big surprise that Indonesia continues to lag behind in the area of contract enforcement, with a ranking of 144th (tied with Malawi), and again, far below its Southeast Asian neighbors. In the area of investor protection, Indonesia dropped three places to 49th this year, and continues to provide significantly less protection than Singapore, Malaysia and Thailand, which rank 2nd, 4th and 13th respectively.

One bright spot in the report is in the area of electricity supply, where Indonesia moved up 11 places. But even this improvement is qualified by the fact that Indonesia remains in the last quartile globally in terms of electricity supply with a rank of 147.

Not surprisingly, it continues to take an enormous amount of time to start a business here and the situation is getting worse. On average, it takes 47 days to start a new business in Indonesia, versus 36 days in the Philippines, 34 days in Vietnam, 29 days in Thailand, six days in Malaysia and just three days in Singapore. More alarming is that Indonesia has dropped five places, to 166th globally, in this category and now ranks between Swaziland and Niger.

Recognizing the problems investors face in starting new businesses, the new head of Indonesia's Investment Coordinating Board (BKPM), Chatib Basri, recently announced a program that will allow companies in Jakarta that apply to the BKPM for business and investment licenses to do so online. The new system announced will allow applicants to track the approval process, and require the BKPM to issue approvals within 14 days of receiving an application, or be more responsive when delays occur.

BKPM's decision to set up an online approval system, increase transparency and reduce the approval bureaucracy within its own department may seem like a small step, given the wider problems that businesses face here. In some ways it is. But great things come from small beginnings. Removing the obstacles to establishing new businesses is the surest way to promote investment and increase Indonesia's relative competitiveness. By demanding that his own department speed up the process of approving business licenses, and measuring improvement against that goal, Chatib is walking the talk and setting the right example for other agencies and ministries to follow.