25 November 2007

The Australian Election

The wash-up is likely to see plenty of buck passing on the Liberal / National coalition side of the fence as well as myriad recriminations, but the Libs and Nats are not the only party to be decimated in the 2007 Election. The Democrats, the party that is supposed to be keeping the 'bastards honest' lost the two senators that were on the ballot. And now they have none!

This leaves the Bob Brown Greens as the balance of power in the Senate, at least after July 2008. However, there is still a family first senator who would appear to be more ideologically aligned with the Libs/Nats. There is also Nick Xenophon, no political novice who got himself elected to the South Australian Parliament on a 'No Pokies' ticket. Yet, this is a step up in the political spectrum and he is likely to be able to wield some swing if he holds a swinging vote.



It is with interest that I read the recriminations have already started, and this is to be expected, but I was equally surprised that John Howard in his concession speech acknowledged and accepted responsibility for the Libs failure. It was very manly of him but when you lose more than 20 seats including your own there are not a whole lot of options on the plate! Even more interesting was the anointing of Peter Costello as the obvious future of the Liberal Party. Considering, the former PM's reluctance to hand over the reins of power this could be construed as recognizing the inevitable.

Yet, by holding onto power John Howard may have in fact done Costello a favor in the sense that the Libs/Nats after 11+ years in government were destined for a fall and as this election showed, spectacularly so. This has saved Costello from being viewed as damaged goods. There has really only been one true Lazarus of Australian politics and he is now readying his departure from political life.

But equally spectacularly as the crushing loss the anointed opposition leader has announced that he is going to quit the parliament for a life in business sometime during the next term. In a very LBJ way he has stated unequivocally that he will not seek nor will he accept the nomination of his party for the leadership of the Coalition. This serves to open-up the leadership race and at the same time it highlights the disarray that the Coalition is in as it prepares to enter opposition. The prospect of a bruising Liberal leadership battle undoubtedly has the newly elected Labor government salivating at the opportunity to inflict further pain on the severely wounded Coalition ranks.

Well, the Labor party made many a promise to the electorate about how it was going to conduct the business of government going forward and for the last 24 hours there has been nothing much said except for 'we are ready to hit the ground running'.

So, as Big John McCarthy of UFC fame was renowned for saying, "let's get it on!"

Steal and Lose a Hand!

The implementation of strict Sharia Law in Indonesia was always thought to be a matter of time proposition in the world's largest Muslim nation. However, there was always an underlying hope that this would not come to pass as the potential for this to become a trigger of social unrest and conflict is also a matter of time proposition. Unless, the laws apply universally across the archipelago then a double standard of punishment will be in effect. No doubt an interesting case for the Constitutional Court to hear in light of the no discrimination articles in the 1945 Constitution.



With the decentralization and devolution of central government authority as a consequence of greater regional autonomy there has been a significant increase in the number of Sharia-based or inspired laws finding their way on to regional statute books. Bulukumbu in the Province of Sulawesi is touted often as an example of Sharia Law implementation.



Since 2002 there have been laws implemented relating to the drinking of alcohol, gambling, the compulsory wearing of Islamic attire, as well as compulsory learning of the Koran. Depending on who you ask there is a sense that with the implementation of Sharia Law there has been a decrease in crime, gambling, and other sinful activities. There is also a belief that women are more pure. This is to be expected considering that Sharia Law is seen as the laws of God as implemented on earth.



For non-Muslims wanting to become part of the Civil Service in this part of the world, a headscarf for women is also compulsory attire. The justification is that it is part of the uniform and if you want the job you wear the uniform, simple enough!



However, it is being reported that 20 villages within the Gantarang municipality have agreed to implement a regulation that requires the hand of a thief to be cut off. It seems that this is conditional on the thief being caught red-handed (pun intended). At the same meeting it was also agreed that for offences relating to alcohol and gambling the public canings will be upped to a level of 80 lashes.

In the period since regional autonomy was legislated there has been an explosion in the numbers of regional regulations being enacted. The exact amount of suspect regional and local regulations that would not comply with the necessary superior legislation is estimated to be in the hundreds and possibly thousands. It is not uncommon for the Department of Home Affairs to cancel non-complying regulations. So, it will be interesting to see whether this particular regulation survives the cut (again the pun intended).

The biggest fear is vigilante justice. How is this regulation to be enforced and who gets to decide when the punishment must be implemented. In Indonesia it is not uncommon for a victim to scream out thief and the local populace come to the rescue by chasing down the alleged perpetrator and beating them senseless, sometimes to death, but without a doubt within an inch or two of their lives. This form of retribution is often excessively violent and because of its instantaneous nature completely free of any due process of law.

But in the meantime if you are ever in any one of these villages make sure anything you pick up you put back or pay for it!

21 November 2007

CSR - Kalbe Farma Style

Corporate Social Responsibility (CSR) has become a big issue in Indonesia over recent months with the enactment of the new Company Law which now mandates that companies incorporated in Indonesia undertake CSR programs. CSR prior to the changes to the law was voluntary and most companies did some form of CSR generally to promote good will within the communities in which they operated.

However, as part of a recent Jakarta Post supplement there was a report on how PT. Kalbe Farma Tbk. was providing its CSR program to the masses. Kalbe is a pharmaceutical company and has decided to provide free psychological assessments to school children in grades four, five, and six across 20 State-run primary schools in West and South Jakarta. The program is presumably to identify the skills and interests of the children tested. However, the program is really a marketing tool as it also includes a free seminar on child development and intelligence which then endeavors to promote the value of a multivitamin product in a proper diet and education program. The question is this really what the concept of CSR is or is this purely another means of marketing a firms' product with a view to fattening up the bottom line?

What is even more interesting is that Kalbe intends to evaluate whether there has been any positive impact on the children's school performance six months after they have started taking the multivitamin supplements. I am no medical ethicist but this sounds like a medical / medicine trial to me. Where the purpose of the free testing and subsequent seminar is to secure the parents' consent to their child being a part of the trial. If the idea of CSR for pharmaceutical companies is putting their local communities into medical trials then I must have misunderstood and also missed the point of CSR as it is defined in the new company law.

A better CSR option would be Kalbe setting aside funds for the development of free community clinics and then providing medicines to those clinics. Or better still developing local capacity through the granting of education scholarships to those most in need.

Medical trials as fulfilling the obligations for CSR programs - shame on you!

Promulgating and Disseminating Legislation

The enactment of Presidential Regulation No. 1 of 2007 on the Enactment, Promulgation, and Dissemination of Legislation has meant that there is a need for the Minister of Law and Human Rights to issue Regulations to give effect to the provisions of the Presidential Regulation.

The Regulation is intended to provide guidelines on the promulgating and dissemination of legislation through the State Gazette, the Supplement to the State Gazette, the State Reports, and the Supplement to the State Reports, as well as to the broader community.

The Minister of Law and Human Rights retains the authority to publish legislation in the relevant State Gazette and Reports and their Supplements. This Authority is delegated to the Director General of Legislation.

The Regulation lists the types of legislation that is to be published and where it is to be published. Generally primary legislation is to be published in the State Gazette and other regulations are to be published in the State Reports. The elucidations to primary legislation are to be published in the Supplement to the State Gazette and elucidations to regulations are to be published in the Supplement to the State Reports.

Promulgation is to include the assigning of a number and year to the relevant Gazette and Report. Once numbers have been assigned these are to be forwarded to the Minister of Law and Human Rights for signature.

Gazettes and Reports are to be published no later than 14 days after legislation is enacted. And there is to be an annual publication of both the Gazette and the Report.

Dissemination can be done through print, electronic, and other forms of media. The publication of the Gazette and the Report can be either individual or as a collection. The electronic dissemination is based on access through the following website:
www.djpp.depkumham.go.id. The dissemination process includes socialization of the legislation through seminars, workshops, and direct dialogue, among others.

Criminal Procedure in Indonesia

The Bill on the Criminal Procedure Law is expected to be finalized and ready for submission to the House of Representatives (DPR) by August 2007 (and it is still yet to do this). However, this target date is far from being assured and further delays are possible. Nevertheless, the Bill introduces some significant changes to criminal procedure and these changes will have an immediate impact on the conduct of criminal matters from the investigation stage through to the verdict and appeal stages.

The most interesting of these changes is the incorporation of the Judge de Liberte de la Detention concept as the Judge Commissioner in the Bill. In essence the Judge Commissioner has the authority to evaluate the investigation and prosecution phases and other powers as granted under the provisions of the Bill.

Some of these other authorities include re-interrogating suspects and witnesses to ensure that a proper trial has been conducted. These authorities permit the Judge Commissioner to make determinations regarding the legality or not of any arrest or detention, to issue search and seizure orders, and the tapping of telecommunications, among others. The Judge Commissioner will also oversee the cooperation between the various law enforcement agencies to ensure that the case file does not bounce around these agencies and cause a delay to a fair and speedy trial process.

The position of Judge Commissioner will be held by a judge selected from the High Court and then appointed by the President for a term of 2 years.

The time a suspect can be kept in detention is reduced to 15 days and any extension to this period of detention is to be based on an application to the Judge Commissioner. If the application is granted the detention period can be extended.

In terms of legal recourse for the parties to a proceeding, all decisions may be appealed to a higher court; District Court to High Court and High Court to Supreme Court. However, acquittals are specifically excluded from this list. The current practice within the courts makes a distinction between absolute and conditional acquittals however this distinction is not made within either the current law or the Bill. On face value this distinction would appear to allow subjective discretion to be applied by the courts in accepting lower court decisions on appeal.

The judicial review (peninjauan kembali / PK) for cases will only be granted if there is new evidence or a situation existed that was not know at the time or adduced in the hearings that would have resulted in a different decision. Decision where there are conflicting decisions handed down for the same crime to different defendants, one is found guilty and the other is acquitted. In these cases the decisions will be subject to review.

The other issues in the Bill of interest are the broadening of the authorities for prosecutors to set aside cases where the allegations relate to minor offences subject to a term of imprisonment of less than a year or a fine or where the suspect / defendant is above 70 years of age.


It is unlikely that this Bill will pass the DPR in 2007.

Supervision of Business Competition - Indonesian Style

Business competition in Indonesia is an interesting dilemma particularly when you are trying to develop a more conducive investment climate for both local and foreign capital investors while simultaneously always trying to ensure that the competition that you allow under this climate is fair and not monopolistic in nature. The decision handed down by the Commission for Supervision of Business Competition (Komisi Pengawas Persaingan Usaha / KPPU) in a recent case involving monopolistic and unfair business practice in the telecommunications sector is an important lesson as well as indicator as to where Indonesia stands on the issue of cross-ownership. The case will undoubtedly become known as the Temasek case and the case itself involves both an Indonesian telecommunication company and nine Singaporean telecommunications companies.

The most interesting aspect of the decision relates to the manner in which the KPPU is going to define cross-ownership in the future. If the KPPU is to maintain this definition and interpretation then foreign firms will need to consider the way in which they structure their ownership interests in Indonesia. This would be for no other reason than to avoid the steep fines that the KPPU has dished out in this case.


The crux of the case revolved around the ability to appoint members to key positions and access to sensitive business data and information that would allow the Reported Parties (defendants) in this case to dictate market practices and prices.

There are ten defendants in the case and each were fined IDR 25 billion for the breaches of Law No. 5 of 1999 on The Prohibition Against Monopolistic Practices and Unfair Business Competition (Anti-Monopoly Law). The KPPU has the power to fine but the size of these fines is at the very high end of what the KPPU has dished out in the past. When combined with the other orders that further restrict the defendants' income generating potential, then the decision has long-term implications for all the companies concerned.

The ten defendants are: Temasek Holdings Pte. Ltd (Temasek), Singapore Technologies Telemedia Pte. Ltd (STT), STT Telecommunications Ltd. (STTC), Asia Mobile holding Company Pte. Ltd (AMHC), Asia Mobile Holdings Pte. Ltd (AMH), Indonesia Communications Limited (ICL), Indonesia Communications Pte. Ltd (ICPL), Singapore Telecommunications Ltd. (SingTel), Singapore Telecom Mobile Pte. Ltd (SingTel Mobile), and PT. Telekomunikasi Selular (Telkomsel).

It was argued that the Indonesian government was the majority shareholder in the respective local companies and therefore the defendants had no ability to dictate market practices or prices. Unfortunately for the defendants the KPPU rejected this position. The basis for the rejection was reasoned solely on the point that the government is not a business entity and in any event holds shares in the national or public interest. There are a number of logical extensions that lawyers will be able to explore based on this interpretation of the government not being a business entity (but these are for another blog entry).

Aside from the heavy fines the KPPU also ordered the foreign defendants to sell all their shares in the Indonesian companies and then restricted them to repurchasing a maximum of 5% of the shares sold. This must be completed within a period of two years. The KPPU further ordered that the purchasers of the shares do not enter into any association with Temasek.


What can be derived from this decision is that the KPPU views cross-ownership as a scourge of fair business practices and the power that cross-ownership provides is akin to a monopoly that allows a single business entity to determine key appointments and have access to crucial business data that then permits them to engage in unfair business practices and ultimately price-setting for the entire market.

There is little doubt that the defendants will appeal. The appeal will be held at the District Court. It is expected that this appeal will be lodged within the next 14 days.

Any suggestion that this decision will bring into question the independence of Indonesia's courts and tribunals is a little premature. Furthermore, the impact on business confidence is likely to be limited, at least until after the judicial process has run its course. The reality is that there is precedent for bad tribunal and court decisions being overturned on appeal.

Calm heads and patience needs to prevail.

18 November 2007

RFK

Here are a couple of Robert F. Kennedy quotes to ponder...

  • There are those who look at things the way they are, and ask why... I dream of things that never were, and ask why not?

  • Few will have the greatness to bend history itself; but each of us can work to change a small portion of events, and in the total; of all those acts will be written the history of this generation.
If each of us were to keep these two things in mind we would collectively make the world that we live in a much better place for everyone, including ourselves!

Revisiting the Past - Making it Right

Australia has a rich and proud history and just like any other country we have issues in our history that must never make us proud. But historically these dark moments have always been swept under the carpet or hidden out of sight, yet always haunting us and preventing us from moving forward as we might have done as leaders in reconciliation. The cold hard reality of Australian history is that it does not start in 1788 with the arrival of the first fleet and a couple of boat loads of criminals.

This arrival perpetrated another myth in Australian history that the British were simply off-loading their petty criminals to a desolate land many thousands of miles away; another out of sight out of mind scenario. Yet, another reality that Australia is only now beginning to talk about more openly is that many of these transported criminals were not petty thieves stealing bread and lace handkerchiefs but hardened murders and rapists. So, this badge of honor that many Australians claim of being descended from convicts might also be revisited just to make sure your famous ancestors were in fact petty criminals and not the more-hardened version.

Australia's history started many, many, many millenia before the arrival of the British folks from across the vast seas. Australia may in fact claim to have one of the longest continuing living indigenous cultures in the world. The history of Australia's indigenous population in the post-1788 period is anything but rosy. This tragic past includes the extermination, perhaps even a holocaust in the terms of the outcome, but in any language it was the complete annihilation of the indigenous aboriginal population from Tasmania. When one considers this event it is hardly surprising what was to follow.

It was not until 1967 that Australia's indigenous population were even recognized as citizens, which not only allowed people to vote but also to own property and the like; those things that everyone else always takes for granted. Yet, this is not the start or finish point of this tragic story. The story is also way more than a single blog entry. The policies of successive Australian governments was always characterized as protecting the indigenous population from itself, the underlying premise was very much one of assimilation and not multiculturalism, simply an ill-conceived attempt to make black into white.

These policies included removing indigenous children from their families and fostering them with white families. It is not rocket science to imagine what sort of confusion this is likely to do to a child who is destined to never fit in anywhere and never have a full understanding of their cultural identity and underpinnings. This governmental stupidity spawned the stolen generations and it is only now that the broader Australian community is getting a sense of the tragedy that was allowed to occur under our collective noses.

Once again there is too much to this story for a single blog entry. So, to the point! Can we make the past right? Probably not and probably never. However, we can try. The Prime Minister, although unlikely to be re-elected for another term has indicated that the current government would hold a referendum to insert specific wording into the Australian Constitution to recognize indigenous Australians. Perhaps too little too late, but it is a start. This aside the most appropriate response is a full-fledged apology. This apology must not be short on substance. It must recognize that the policies of the past led not only to mistakes but to tragedy and it is these tragedies that must be recognized. It really is a simple word - Sorry! Let us all move towards reconciliation not only in words but in content. We might not be able to make it right but we can commit to not making the same errors of the past.

Sorry!

Prospective Prosecutions

Will Indonesia prosecute based on the findings of the NSW Deputy State Coroner? Not likely! As far as the Indonesian government is concerned, it is case closed. And to all intents and purposes it probably is. But that does not belittle the work of the coroner in exposing the cover-up of events of that fateful 16 October 1975.

The cover-up was not only one-sided and to this end the Australian government was complicit in allowing events to unfold as they did and any failure to acknowledge this fact would see an inaccurate alternative history continue to be perpetrated. The findings of the coroner clearly show that this was not simply a case of being caught in the cross-fire but rather a case of cold, calculated, and brutal murder of civilian journalists.

Despite Indonesia's claims that the process was one-sided, the insinuation here being the proceedings were biased against Indonesia, the fact remains that there was considerable eyewitness testimony without the need for any appearance by Yunus Yosfiah. There was ample testimony available to reconstruct the alleged events of that day. It must be remembered that the
NSW Coroner's Court is a court for the purposes of inquiry. Inquiries generally occur where the death is violent, unnatural, unusual, or suspicious or the circumstances surrounding the death are unclear.

Ali Alatas, the former Indonesian Foreign Affairs Minister, has written an interesting account of his time as the Foreign Minister and the fact that East Timor was like a pebble in Indonesia's shoe. The analogy suggests that the 'issues' surrounding Indonesia's occupation and integration of East Timor were a distraction more than an all consuming focus. Similarly, for the Australian government what happened in Balibo is perhaps a similar distraction. This is not to lessen the tragedy of either but rather the point is to highlight why these matters have been allowed to go on with so little governmental action. Yet, the findings handed-down in this case are an opportunity for both the Indonesian and Australian governments to remove any further distractions from the bilateral relationship once and for all.

What is likely to complicate things for the Indonesian government is that it is a signatory to the
Geneva Conventions and the characterization of the murders of Brian Peters, Malcolm Rennie, Greg Shackleton, Tony Stewart, and Greg Cunningham as a war crime in effect demands that Indonesia follow-up on the allegation. The Geneva Conventions would provide for Indonesia to either extradite the alleged perpetrators to Australia for trial or conduct the trials within Indonesia.

Will Indonesia extradite? Simply, No! Will Indonesia prosecute the still living alleged offenders, Simply, No! Even if Indonesia were to further investigate the risks are great as any further investigation will lead to two possible outcomes; the case really is closed and there is no additional information to be uncovered or the investigation will reveal a 30-year cover-up that exposes a whole range of other military and government officials, perhaps on both sides of the Timor Sea.

Yet, even if a prosecution was to go ahead the likely outcome based on previous experience would seem the perpetrators being acquitted. The direct referendum in Timor Leste, the violence that occurred in the immediate aftermath, and the subsequent trials held in the Central Jakarta District Human Rights Court suggest that convictions are unlikely for serving or retired Indonesian military personnel.


The way forward would see Indonesia finally giving a full account of what occurred, accepting responsibility where required, and really closing this matter once and for all. The positives for Yunus Yosfiah in this scenario are limited but in contrast the positives for the Indonesian government are numerous. The most prominent of these would be wide-spread and global recognition of Indonesia's coming of age as a democracy committed to the ideals of justice and humanity in addressing its past.

Indonesia is not the only country that needs to address its past. Australia must also revisit and address its failures in this matter and hopefully the findings of the NSW Deputy Coroner will provide the impetus for this to happen.