Phelim Kyne, Jakarta – Foreign companies contracted to help rebuild Indonesia's tsunami-ravaged Aceh province must actively protect themselves from involvement in potentially graft-tainted projects, an international anti-corruption expert says.
Foreign investors run the risk of criminal prosecution if they are implicated in activities in which reconstruction funds are stolen or misspent, Bertrand de Speville, head of de Speville & Associates Anti-Corruption and Governance Consultants, told Dow Jones Newswires recently.
"Indonesia's got a bad reputation (for corruption)... and there are a hell of a lot of contracts yet to be let and masses of construction work to be done (in Aceh)," de Speville said. "(Foreign executives) they send out there need to be very carefully briefed and very carefully warned of the consequences if they do anything (corrupt) and be given guidance on how to deal with any corrupt approaches they may receive."
De Speville headed Hong Kong's official Independent Commission Against Corruption from 1993 to 1996 and has provided public and private sector advisory services on anti-corruption tactics in countries including Cambodia, Serbia and Venezuela. He spoke at the conclusion of a two-week consultancy on anti-corruption strategy and policy for Aceh's Rehabilitation and Reconstruction Agency.
His warning comes just days before the US Agency for International Development announces which US contractors will take part in a $245 million road project linking the provincial capital of Banda Aceh with the western coastal port town of Meulaboh. USAID last month awarded a $13.5 million contract to Indonesian construction firm PT Wijaya Karya to rebuild sections of that 240-kilometer route.
Graft could kill Aceh peace deal
The Indonesian government has tasked Aceh's rehabilitation agency with disbursing $7 billion in donor funds to rebuild from the ruins of the Dec. 26 earthquake and tsunami that killed more than 130,00 people and devastated the area's infrastructure.
The government is also keen to entice foreign firms to invest in Aceh's tourism, petroleum and agricultural commodity sectors.
"You've got very large amounts of revenue being allocated, (but) the safeguarding of those resources from being diverted into things where they ought not to go... is a clear risk," de Speville said. "You can set up very good tendering procedures... what is difficult to guard against is the collusive ring that forms before the tendering gets underway."
Analysts and government officials have warned for months that Aceh recovery and reconstruction dollars are at risk of pilferage from corrupt government officials.
Indonesia ranked as one of the world's 14 most graft-plagued nations in the 2004 Corruption Perceptions Index by watchdog organization Transparency International, and President Susilo Bambang Yudhoyono has bemoaned that corruption is "systemic" to the country. Aceh has long been recognized as its most corrupt region.
De Speville said the government's official Anti-Corruption Commission, or KPK, is seriously outgunned in its efforts to detect and prevent corruption in Aceh. "There clearly is an urgent priority for the KPK to beef up its presence there... in Aceh they're not there in any meaningful way (and) they need to be," he said.
Misuse and theft of reconstruction funds could also undermine public trust that may sabotage the still-fragile peace deal recently struck between Indonesia's government and the Free Aceh Movement, de Speville said.
The two sides signed an agreement last month that ended a three-decade pro-independence insurgency that killed thousands and hobbled Aceh's economic development.
"The risks in political terms are obvious – (there's a) real risk to the peace process and the government of Indonesia's credibility would suffer immeasurably," he said. "If (reconstruction) goes badly, it will take a long time (for Indonesia) to recover from it."