Jakarta, January 25, 2017 - Indonesia consistently shows improvement in eradicating public sector corruption. This consistent improvement will only produce an immediate result if accompanied by real measures from all parties to strengthen business integrity in the business/private sector. Experiences from several countries prove that this strategic combination will realize clean government and conducive business climate much faster. By doing so, in only the next two to four years, Indonesia will be comparable to those countries with CPI scores equal to or above regional and global average. The inclusion of Indonesia into the G20 should be treated as a momentum for advancement. These are the main findings and recommendations of Transparency International (TI) in the Corruption Perception Index (CPI) 2016, launched globally today.  

"Indonesia’s Corruption Perception Index (CPI) 2016 increased slightly by one point to 37. The CPI is scored within a range of 0 - 100. A score of 0 means the country is perceived as highly corrupt, while a score of 100 means very clean. The increase indicates a continuing positive trend of corruption eradication in Indonesia. From 2012, the Indonesian CPI score has jumped five points in a span of five years," explained Dadang Trisasongko, Secretary General, Transparency International Indonesia.

"A five point increase in five years is too slow to reach the target score of 50 by the end of 2016. The reason being so far corruption eradication efforts only focused on the bureaucratic sector. Bureaucratic reform did contribute to improved public service integrity and accounts for a 1-point increase in the average CPI score each year. But, the national corruption eradication strategy remains far removed from political, law, and business corruption," added Dadang Trisasongko, Secretary General, Transparency International Indonesia.

"In the context of improving competitiveness and business regulation, it’s important to focus on bureaucratic corruption, but that’s not the only strategy for accelerating national corruption eradication. Bureaucratic corruption is closely linked to political, law, and business corruption. Corrupt bureaucratic practices are only a symptom of greater political, law, and business corruption (grand corruption)," said Natalia Soebagjo, Chair of Executive Board, Transparency International Indonesia.  

Natalia Soebagjo further highlighted that the Panama Papers case had increased public awareness of corruptors using shell companies as a front for corruption, money laundering, and transnational crime. Following the case, the public demands that companies implement their anti-corruption programs more seriously, become more transparent in ownership and company structure, and more transparent in financial reporting, especially on transnational transactions. The three demands should be incorporated into the national corruption eradication program, so that we can boost Indonesia’s CPI score. Meanwhile, in the national context, the Tax Amnesty program is expected to contribute positively not only to state revenues, but also to anti-corruption values.

Stagnant Global Average Score
"In 2016, the global average score of CPI remained stagnant at 43. Of the 176 surveyed countries, 60% (105 out of 176) have a lower CPI score than the global average, or a 3% difference compared to 2015. It shows that 3% of the countries worldwide have surpassed the CPI global average score," said Lia Toriana, Deputy Secretary General, Transparency International Indonesia. The five (5) countries ranked the highest include Denmark (score 90/rank 1), New Zealand (score 90/rank 1), Finland (score 89/rank 3), Sweden (score 88/rank 4), and Switzerland (score 86/rank 5). There are 7 countries with the lowest score, namely Yemen, Sudan, and Libya (score 14/rank 170), Syria (score 13/rank 173), North Korea (score 12/rank 174), South Sudan (score 11/rank 175), and Somalia (score 10/rank 176).  

Asia Pacific and America Hold the Second Highest Average Scores
At the regional level, the European Union and Western Europe were considered the cleanest with an average score of 66 (down), followed by Asia Pacific and American Region with an average regional score of 44 (up). Asia Pacific’s average score is higher than the Middle East and North Africa with a score of 38 (down), Sub-Saharan Africa with a score of 32 (down), and Eastern Europe and Central Asia with a score of 34 (up).

Indonesia: One Point Up and Two Ranks Down
"In 2016, Indonesia’s CPI score is 37 and ranks 90th out of the 176 surveyed countries. Indonesia’s CPI score has increased by 1 point, but the ranking has gone down by 2 spots compared to last year. The slight increase can only overtake Thailand (score 35, down), which ranked above Indonesia in the past 5 years. But, it fails to surpass Malaysia (49, down), Brunei (58), and Singapore (85, down). Indonesia is slightly better than Thailand (35, down), Philippines (35, same), Vietnam (33, up), Myanmar (28, up), Cambodia (21, same)," explained Lia Toriana.

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The formula for CPI score increase is 3-2-3. It means that 3 CPI constituent data sources show an increase, 2 show stagnancy, and 3 show a decrease. The increase is largely attributed to the debureaucratization packages (streamlining of licensing, taxation, unloading procedures, etc.) and the establishment of cross-agency anti-corruption task force (Stranas PPK, Saber Pungli/Eradication of Illegal Charges, and law reformation, etc.) that are effective in cutting through the prevalence of corruption.


CPI Targeting: Revising Mid- and Long-Term Objectives
Indonesia is the only ASEAN country that consistently has its score up in the last five years. The higher CPI score has placed Indonesia closer to the ASEAN regional average of 41. With the combined strategy of bureaucratic and grand corruption eradication involving the private sector, it is very possible that in the next 5 or 10 years, Indonesia will surpass the G20 elite group average score.  

The Importance of Collaborative Action in Eradicating Corruption
The risk of corruption can emanate from two sides, public or private sector. In response to the CPI 2016, Transparency International Indonesia (TII) makes the following recommendations:  
•    Central and Regional Governments
–    Maintain the focus on strengthening law enforcement reform and improving public sector integrity.
–    Saber Pungli team should be more aggressive and move in a massive scale to build up corruption eradication momentum and encourage wider public participation.  
–    Maintain and intensify the new public optimism by ensuring fair prosecution of corruption cases.
–    Immediately establish legal instruments to help the private sector develop and implement a business integrity system.  
–    Public sector reform in goods and service procurement, including weapon system key equipment (alutsista) procurement for the Ministry of Defense/TNI (Indonesian National Armed Forces).
–    Collaboration between central and regional governments in the fight against “corruption decentralization”.

•    KPK (Indonesian Corruption Eradication Commission), Polri (Indonesian National Police), Attorney General, and Supreme Court
–    Designate KPK as a focal point in encouraging a private sector anti-corruption program
–    Law enforcement agencies should promptly leverage the Regulation of the Indonesian Supreme Court on Corporate Criminal Responsibility as a legal instrument to minimize private sector corruption risks.

•    Private Sector
–    Develop internal regulations and anti-corruption culture to ensure the implementation of business integrity system by companies to reduce corruption risks.
–    Develop a more comprehensive anti-corruption program reporting system and use it as a determining criterion for investment.
–    Encourage the publication of audit standards to assess anti-corruption programs and improve the quality of corruption risk assessment.

•    Civil Society
–    Encourage companies to be more transparent in their Anti-corruption Law compliance program.
–    Conduct independent monitoring to encourage business practices with more integrity and to oversee the private sector’s Tipikor (Corruption Crime) judiciary.
–    Push for legislation refinement to encourage private sector integrity, for example, by monitoring the Tipikor Law revision process.
–    Monitor and analyze anti-corruption programs to improve compliance to National and Global Anti-corruption Laws.
–    Encourage country-by-country reporting standards to promote public transparency and accountability.  
–    Take advantage of existing initiatives, such as Lapor! and Saber Pungli to encourage greater public participation and engagement in corruption prevention and eradication.

Jakarta, January 25, 2017| Transparency International Indonesia

Contact person: Lia Toriana   0812 8027 5652 | Wahyudi Thohary 0815 7992 747