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Indonesian Corruption & Fraud





First time or even regular visitors to Bali may wonder what all the fuss is about, or even if Indonesian fraud and corruption is that much of a problem, and even if it is whether it actually affects them or the Balinese that much. The difficulty in foreigners understanding how bad this cancer actually is and the harm it does others is that the corrupt authorities and unethical businesses of course do not inflict anything but a mere smattering of their nastiness upon the money tree holidaymakers. The most corruption and fraud foreign visitors generally get exposed to are spot fines without receipts for highly questionable alleged motoring offences, being ripped off by foreign exchange desks, being sold fake goods as genuine, being sold low quality items as "best, best" and being poisoned by food vendors (including famous expensive restaurants)!

But fraud and corruption ruins, and even takes lives. One business person with a grudge against or commercial fear of another abusing their "good" contact with a high ranking corrupt police officer to make problems for their competitor or even put them out of business. Corrupt police officers too busy looking to make a dishonest buck delegating police duties to murderous local vigilante groups, taking bribes from drivers to wave them through security checks, working with drug dealers and pimps to extort money out of anyone stupid enough to use the services of these gutter dwellers, escorting coach loads of "dignitaries" to a funeral or festival through traffic for a fee, ignoring illegal effluence dumping, stopping Balinese tourism drivers for a "donation", etc. In short, corruption equates to human misery, increased health and safety risks for anyone on the island, and the economic suppression of its people.

Corruption extends beyond the police of course. Defense lawyers, prosecutors and judges all have a nasty reputation for colluding with police officers to extort money from victims. Local government offices which issue things like passports, driving licenses, building permits, qualifications, tourism permits, etc. etc. are all seemingly as corrupt as you can get. But of course such extensive corruption can only come from the top if it is to survive, even flourish. The origins of Indonesian corruption go back to colonial days but were entrenched during the Suharto era. But corruption has actually gotten worse since democracy came to Indonesia after Suharto's downfall. In an interview with Tempo Interactive former premier Megawati is reported to have indicated in no uncertain terms that every member of her cabinet was corrupt. Recent statements by Indonesian health officials clearly indicate Megawati herself was corrupt and authorized the suppression of details of bird flu outbreaks as "favours" to the main poultry companies. So if the whole government is corrupt, what else do you expect from their subordinates and even citizens?

Publicly Indonesia claims to be tackling corruption, but that seems to be just lip service. The presidentially appointed Indonesian Commission Reduction Commission (KPK) actually only appears to deal effectively with cases of fraud, not corruption. An example is where the corruption commission claims success by bringing successful prosecutions against bank employees and their accomplices for defrauding state owned banks; but that is dealing with fraud, not corruption, and they are clearly only doing Indonesia's ineffective police's job for them. In point of fact even if you lodge a complaint of corruption against the police with the corruption commission and the commission agrees there is a case to answer for, the case is turned over to the police for investigation! Therefore, if someone's complaint is against Bali's most senior police officers they end up investigating themselves, which of course is not likely to bring just conclusions. Also fueling the corruption fire and preventing any fire fighting ability is the fact Indonesia does not allow foreign lawyers to conduct criminal law in their country, there is no police complaints or ethics department, and we have yet to find a single case of where anyone has managed to actually sue the Indonesian government / authorities for compensation; little doubt because the police, prosecution, defense lawyers, judges and politicians all collude so much for their mutual interest.

BLTF's own world renowned defamation and human rights specialist lawyers, Simons Muirhead & Burton in London successfully defended the right for the Guardian Newspaper in England to publish the facts of £16.5m corruption money paid by British company Alvis PLC to a Suharto family member in order to secure funds from the Indonesian Government for an army tank order. Apparently because the facts of the corruption were first divulged during a court case by Alvis' agent against them for unpaid commissions and because the case was subsequently settled out of court and included a confidentiality agreement between the agent and Alvis PLC, Alvis claimed that no details of the corruption could be reported. It is widely believed the British Government supported and even prompted Alvis to so act because of the sensitive nature of what these tanks were to be used for. You see there were no proper military needs for these weapons, they were believed therefore to be destined for the suppression of their own people in Aceh and the people of East TImor; that is used against civilians. So it seems corruption not only cost Indonesian tax payers dearly, but also the lives of more than a few innocent civilians of their rebellious provinces.

This therefore somewhat answers the question why foreign governments do not issue travel warnings to their citizens about corruption in other countries, because they have "wider issues" to consider. Of course this basically translates to maintaining one set rules for us at home and another for them in other countries. All for the sake of a buck or rather big bucks for their major powerful corporations through trade deals, and for the fear of seeing Indonesia's fledgling democracy collapse into a militant Islamic revolution. To an extent you can even understand why foreign governments have to play such duplitious games, especially as other countries like North Korea, Russia and Pakistan are keen to develop their military sales links with Indonesia. And where there are plenty of other countries ready to sell big ticket items such as hydroelectric dam project management and equipment to the Indonesians. You can't officially go upsetting such a nepotistic country because you will lose out. That's why foreign governments make pious statements about International responsibilities on the one hand and yet tolerate what goes on inside and with Indonesia on the other. And that is why it is up to the conscientious individual to do what they can to help Indonesia fight corruption by being very selective about where they stay, who they use and what they do if and when they witness or even experience corruption or fraud themselves. Only by making responsible tourism more profitable and unethical tourism more painful will the traveller and the Balinese people win.

For more details of some of the shocking effects of police and judicial corruption and business fraud, please visit our pages Fugly Bali and Bali BS. For details of our recommendations on how to report any fraud or corruption you become aware of or exposed to, please see our appropriate pages; e.g. to report police corruption, please see our page: Bali Police.

To understand some of the problems that result from corrupt that affect foreign travellers to Bali, please see: Bali Health Risks.