Esther Samboh, Jakarta – There is mounting concern that the Financial Services Authority (OJK) will be unable to provide better and more reliable supervision as most of the 21 candidates picked by the selection committee to join the race have links to the government.
The selection committee tasked to pick 21 candidates in the race for the OJK's board of commissioners announced on Thursday the names that have been submitted for the President to make another cut. The chosen candidates, however, are dominated by those with connections to the Finance Ministry, Bank Indonesia (BI) and state-owned enterprises.
Nine of them are incumbents or former officials in the Finance Ministry; six have a history with BI; four are linked to state lender Bank Mandiri; and two are commissioners at Bank Negara Indonesia (BNI).
"There needs to be a mixture of people from outside BI and the Finance Ministry so that there will be a breakthrough in the culture of supervision – better and integrated," banking expert Mirza Adityaswara told The Jakarta Post on Friday. "Regulators must be proactive and anticipative. So, leaders of the OJK must be progressive."
The OJK will take over the banking and other financial institutions' supervisory role from BI and the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) effective 2014, overseeing all sectors of Indonesia's financial system, from banks, listed companies, insurers, to multifinance companies.
BI Governor Darmin Nasution has said that to supervise such a sensitive and complex industry, which accounts for funds of thousands of trillions of rupiah, OJK leaders had to have extensive experience in the sector.
Indonesia Corruption Watch (ICW) has caught a potential conflict of interest within the selection process given that most of the candidates have links with selection committee chairman Agus Martowardojo, both as Finance Minister and former president director of Bank Mandiri.
"The OJK could be led by people that are close to the finance minister or could be influenced to secure his interests. That should not have happened," ICW researcher Apung Widadi told the Post.
The corruption watchdog found 14 figures with such a conflict of interest and 4 retired officials among the 21 candidates, grouping them into four connections: Bank Mandiri, Finance Ministry, retired BI officials and Bapepam-LK people.
"Given the dominance of the [finance] minister during the selection process, we hope that the President will pick the candidates on his own, without suggestions from his ministers," Apung said.
President Susilo Bambang Yudhoyono will pick 14 of the 21 candidates to be submitted to the House of Representatives, which will conduct fit-and-proper tests to appoint the final seven names for the OJK board of commissioners by June this year.
The candidates were selected from a pool of 290 applicants who had to undergo four selection stages: administration, capability, and health, competence – including writing papers, interviews and general tests.
"I am sure that there are more people who are competent in the financial sector but they don't apply because they don't want to be bothered with fit and proper tests at the House and the political matters, or simply they don't want to see a decrease in salary. So they are more comfortable staying where they are," Mirza said.
"Besides, it's difficult to find people in the private sector who understand the philosophy of regulation because most of them are focused on making profits."