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Transparency International released its annual Corruption Perception Index (the CPI) in January of this year. The index ranked 180 countries or territories by their perceived levels of public sector corruption in 2019.

Indonesia was ranked 85 out of the 180 countries surveyed in the latest CPI, improving by four spots from the prior year. Nevertheless, Transparency International cited Indonesia as a country to watch closely in 2020, because of legislative developments in the latter half of 2019 that were targeted at the country’s anti-corruption agency, the Corruption Eradication Commission or Komisi Permerantasan Korupsi (KPK). These developments are viewed by Transparency International as threatening the independence and effectiveness of the KPK’s anti-corruption activities. Transparency International, as well as other commentators, predict a loss of investor confidence and slowing economic progress in Indonesia as a result of these legislative developments.

Authors: Calvin Chan

Brief background to the KPK

The KPK was established in 2002, via Law No. 30 of 2002 (the KPK Law), as an independent government agency to investigate and prosecute corruption in Indonesia. The KPK has played a crucial role in investigating corruption among Indonesia’s state-owned companies, government agencies and private sector. Since its inception, it has generally been viewed as an independent and effective government agency for combating corruption in Indonesia. According to former KPK chairman Agus Rahardjo, the organisation launched 498 investigations and 433 prosecutions between 2015 and 2019, in which 608 individuals were named suspects.

The KPK’s effectiveness in conducting investigations and high conviction rate were attributed to its ability to conduct wire-tapping, searches and seizures without warrants. The KPK also had the ability to (i) instruct banks and financial institutions to provide information and to block the bank accounts of suspects; (ii) request the help of local police, Interpol and overseas law enforcement agencies to conduct searches and arrests; and (iii) instruct relevant agencies to issue travel bans on individuals. As an independent government agency, the KPK also had the autonomy to manage its own manpower and the salaries of its officers.