Because Japanese investors do not want to become involved in any scandals the ABCJ visited Indonesia's Corruption Eradication Commission (KPK) on Wednesday (18/07) to seek cooperation between both institutions in the combat against corruption. The ABCJ was established in 2016 by Japanese lawyers with the aim to support or deal with legal issues that are faced by Japanese businessmen and investors when they conduct business outside the mother country.

Kengo Nishigaki, Chairman of the ABCJ, said Indonesia is among those countries where Japanese companies are often asked to bribe local government officials or civil servants. Other countries where such cases often occur include China, Thailand and the Philippines. He added that in Indonesia illegal charges (bribes) are often asked in export and import activities but also when Japanese companies are applying for a business license or when they participate in tenders for government projects.

The amount of money that is asked from government officials or civil servants varies by a wide margin, from (in US dollar terms) several US dollars to tens of thousands of US dollars, depending on the exact case. Nishigaki said it is a difficult situation for Japanese investors because they are not used to these kinds of situations at home.

The KPK responded by urging the Indonesian Advocates Association (Peradi) and Indonesia's Chamber of Commerce and Industry (Kadin) to immediately report cases of corruption to the KPK if encountered by one of their clients.

Sarman Simanjorang, Deputy Chairman of Kadin Jakarta, said the high number of bribery cases in Indonesia that are reported by the ABCJ are a bad signal for the Indonesian economy because it scares off part of the international investor community.

Throughout history corruption is a persistent problem in Indonesia. If we take a look at recent history then we see a strong rise of Indonesia in the Corruption Perceptions Index between 2005 and 2015 (see tables below). However, the nation's score has been stagnating in the 2015-2017 period despite a stable and clean central government under the leadership of President Joko Widodo. Corruption at the local governments and districts as well as in parliament and political parties remains widespread.

Corruption Perceptions Index Transparency International 2017:

Rank Country Score
 1 New Zealand   8.9
 2 Denmark   8.8
 3 Finland   8.5
 3 Norway
  8.5
 3 Switzerland   8.5
 6 Singapore   8.4
 6 Sweden   8.4
 8 Canada   8.2
 8 Luxembourg   8.2
 8 Netherlands   8.2
 8 United Kingdom   8.2
13 Hong Kong   7.7
20 Japan   7.3
29 Taiwan   6.3
51 South Korea   5.4
62 Malaysia   4.7
77 China   4.1
81 India   4.0
96 Indonesia   3.7
96 Thailand   3.7
107 Vietnam   3.5
111 Philippines   3.4
161 Cambodia   2.1

Source: Transparency International

Scores of Indonesia in the Corruption Perceptions Index:

  2012 2013 2014 2015 2016 2017 2018
Indonesia  3.2  3.2  3.4  3.6  3.7  3.7  n.a.

 

  2005 2006 2007 2008 2009 2010 2011
Indonesia  2.2  2.4  2.3  2.6  2.8  2.8  3.0

Source: Transparency International

-

Poll Indonesia Investments:

Who would you vote for in Indonesia's 2019 presidential election?

Voting possible:  -

Your vote

Discuss