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Indonesian case highlights potential for long-term harms of corruption

A truck carrying fresh oil palm fruit passing the only inter-district road between Mahakam Ulu and West Kutai. Image by Basten Gokkon.

  • Anti-graft investigators have arrested a district chief and four other officials in Indonesian Borneo for allegedly taking $560,000 in bribes to award contracts for public works projects.
  • An independent watchdog says the case is emblematic of how corruption in infrastructure and public procurement contracts ultimately harms the local community and environment.
  • A hallmark of such projects is the low quality of work, which can have long-term impacts on communities and the areas they live in.
  • The watchdog has recorded a more than 50% increase in the number of cases of corruption in infrastructure and procurement projects in Indonesia between 2015 and 2018.

JAKARTA — A corruption scandal now unfurling in Indonesian Borneo is shedding light on how high-level bribery in infrastructure projects poses long-term threats to the community and the environment.

The case came to light with the arrests on July 3 of Ismunandar, the head of East Kutai district in the province of East Kalimantan, and his wife, Encek Unguria, the speaker of the district legislature. Three other district officials have also been arrested, along with two private contractors.

Investigators from the national anti-corruption agency, the KPK, have charged the officials with taking a combined 8.175 billion rupiah ($560,000) in bribes from the contractors in exchange for awarding them contracts for various public works projects.

Siti Juliantari Rachman, program manager for campaigns at the independent watchdog Indonesia Corruption Watch (ICW), said local communities and the environment usually bear the brunt of corrupt activity related to infrastructure projects.

“When these projects are carried out, it can be guaranteed that their quality will be below standard,” she said. “There’s no way the winning contractors can meet building standards if they have already spent money [on bribes]. Let’s say you want to build a 2 billion rupiah house, but you’ve already spent 1 billion rupiah for bribes. How can you still spend 2 billion rupiah to build the house?”

As a result of such corruption, local communities that are in need of infrastructure development will be the ultimate victims, Siti said.

One of the projects mired in the East Kutai corruption scandal is a road project awarded to Aditya Maharani, one of the two contractors charged in the case. The project is meant to repair an existing road connecting the subdistricts of Sanggata and Rantau Pulung.

In January 2020, the road was hit by a landslide caused by a downpour, cutting off access between the two areas. The road also serves as a conduit to other areas outside the district and even the province. For the repairs, the district government earmarked 10 billion rupiah ($691,000) this year.

“If we don’t act fast, [potholes in the road] could lead to accidents for passing vehicles,” Aswandini, the head of the district’s public works agency, said earlier this year. “We’ll try to fix these as soon as possible this year.”

Aswandini was among the officials arrested and charged by the KPK.

If officials like Aswandini personally profit from a project like the Sanggata-Rantau Pulung road, then they’re less likely to scrutinize the project and more likely to turn a blind eye when there are irregularities, Siti said.

“The last line of defense in making sure that a project goes according to plan is the committee that checks whether the finished product matches the specification or not,” she said. “Oftentimes, this committee just accepts the project for what it is [without scrutiny] because its members receive a certain percentage of the project’s value.”

A lack of transparency also contributes to keeping the public in the dark about public works projects. Siti cited an online database developed by the central government called SIRUP, in which local governments can disclose their various procurement and development plans. Local governments are supposed to populate the database with details of projects that are in the pipeline, but in most cases they fill out the fields with bureaucratic boilerplate: “in accordance with the terms of reference.”

“That’s unfortunate because the point is for the public to know what their governments are working on,” Siti said. “When the results don’t match what’s planned, then people can ask ‘the road is supposed to be 10 kilometers in length, but why is it only 5 kilometers?’”

If this lack of transparency persists, then corruption in the infrastructure and public procurement sectors will continue unabated, she added. Data from ICW show an increase in the number of corruption cases relating to public works projects, with 167 cases recorded in 2018, up from 106 in 2015.

In March this year, a former official in Papua province was sentenced to five and a half years in jail for conspiring with a contractor to inflate the cost for building a 24-kilometer (15-mile) road in Jayapura district.

“Based on the last five years, corruption in this sector will remain the same if there’s no significant change such as full data disclosure, instead of partial,” Siti said. “As well as a change in the mindsets of officials so that they can see that procurement in goods and services is aimed to fulfill the needs of the public, not to line their own pockets.”


Banner image: A truck carrying fresh oil palm fruit passing the only inter-district road between the districts of Mahakam Ulu and West Kutai, both of which neighbor East Kutai. Image by Basten Gokkon/Mongabay.


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