A guide to investigation and indictment using an integrated approach to law enforcement

7/30/2019 A guide to investigation and indictment using an integrated approach to law enforcement

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Topo Santoso

Rosalita Chandra

Anna Christina Sinaga

Mumu MuhajirSof Mardiah

A guide to investigation and indictment using

an integrated approach to law enforcement


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3/98

Topo Santoso

Rosalita Chandra

Anna Christina Sinaga

Mumu Muhajir

Sof Mardiah

A guide to investigation and indictment using

an integrated approach to law enorcement


4/98

2011 Center or International Forestry Research

All rights reserved

ISBN 978-602-8693-63-9

Photos by CIFOR/Aulia Erlangga and Moses Ceaser/Enlight Storyworks

Santoso, T., Chandra, R., Sinaga, A.C., Muhajir, M. dan Mardiah, S. 2011 A guide to

investigation and indictment using an integrated approach to law enorcement. CIFOR,

Bogor, Indonesia.

CIFOR

Jl. CIFOR, Situ Gede

Bogor Barat 16115

Indonesia

T +62 (251) 8622-622

F +62 (251) 8622-100

E [email protected]

Any views expressed in this publication are those o the authors. They do not necessarily

represent the views o CIFOR, the authors institutions or the fnancial sponsors o

this publication.


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Abbrviations v1 Introduction 1

2 Forstry crim 52.1 What are the drivers o orest degradation? 62.2 What is the range o crimes in the orestry sector? 72.3 How is orestry-related crime handled? 12

3 T IleA mod or handing orstry crim 173.1 ILEA instruments 17

3.2 ILEA components 203.3 What are the steps or handling illegal logging under the

ILEA model? 22

4 Corruption and mony aundring 27

4.1 Corruption crime 274.2 Money laundering crime 434.3 Te ILEA approach to prosecuting orestry crime through

antimoney laundering and anti-corruption laws 54

5 Cas handing procsss 635.1 Te role o law enorcement institutions 635.2 Criminal procedures 675.3 Asset recovery: A special issue 79

6 Concusions 81

7 Rrncs 83

Appndix: Rvant gisation 86

Contnts


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Tables

1. Classication o perpetrators o orest degradation (by roles played) 122. Classication o orestry sector businesspeople (by permit, area and

raw materials) 133. Major crimes according to Law No. 41/1999 on Forestry 144. Minor crimes according to Law No. 41/1999 on Forestry 185. Steps in law enorcement using the ILEA model 306. Example corruption cases in orestry-related crime 357. Example money laundering cases in orestry-related crime 558. ypes o orestry-related crime and anti-corruption and antimoney

laundering approaches 62

Boxes

1. Key elements o Article 2 o Law No. 31/1999 in conjunction with LawNo. 20/2001 81

2. Key elements o Article 3 o Law No. 31/1999 in conjunction with Law

No. 20/2001 813. Key elements o Article 5, paragraph (1) (a) o Law No. 31/1999 in conjunction

with Law No. 20/2001 824. Key elements o Article 3 o Law No. 8/2010 835. Key elements o Article 5 o Law No. No. 8/2010 84

Figures

1. Processes in handling orestry-related crime 192. Te ILEA model 293. Te undamentals o money laundering 544. Laundering the proceeds o orestry crime 555. An example o the ow o money rom illegal logging 56

6. KDI Account statements 597. Flow o orestry-related crime including corruption and money laundering,

by perpetrator and method 61

List o gurs, tabls and boxs


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BPK Badan Pemeriksa Keuangan, Supreme Audit AgencyBPKP Badan Pemeriksa Keuangan, Finance and Development Audit Agency

DPR Dewan Perwakilan Rakyat, Legislative Assembly

DPRD Dewan Perwakilan Rakyat Daerah, Regional Legislative Assembly

FAF Financial Action ask Force

GIS Geographic Inormation Systems

HPH Hak Pengusahaan Hutan, Forest Concession

HPHI Hak Pengusahaan Hutan anaman Industri, Industrial Plantation ForestConcession

ILEA Integrated Law Enorcement Approach

KPK Komisi Pemberantasan Korupsi, Corruption Eradication Commission

KUHAP Kitab Undang-undang Hukum Acara Pidana, Criminal Code Procedures

KYC Know your customer principle

MLA Mutual Legal Assistance

PBI Peraturan Bank Indonesia, Bank o Indonesia Regulations

PPAK Pusat Pelaporan dan Analisis ransaksi Keuangan, Financial ransactionsReporting and Analysis Centre

RK Rencana Kerja ahunan, Annual Logging Plan

SKSHH Surat Keterangan Sah Hasil Hutan, Forest Product ransportation Permit

Abbrviations


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opo Santoso is a lecturer at the Faculty o Law, University o Indonesia and directoro the universitys Djokosoetono Research Centre. He lectures on criminal law, historyand comparative studies in criminal law, specication o criminal action in the criminalcode, economic crime and anti-corruption and criminology. He completed his lawdegree in 1992 and earned a masters in law in 2000, both rom the University oIndonesia, and was awarded a doctorate in 2009 rom the University o Malaya. He has

written 17 books and hundreds o articles in scientic journals and national media. Heis a requent guest speaker in seminars, workshops and other scientic orums.

Rosaita Chandracompleted her law degree and a masters degree in economic law

at the Law Faculty o the University o Indonesia. She began her career as a researcherin 2002 at the Center or Indonesian Criminal Justice Studies (Pusat Studi PeradilanPidana Indonesia, PSPPI) and the Society or Democracy and General Elections(Perludem). Chandra is also active as a lawyer, consultant and expert on bankruptcy

with the Azalea Law Oce. Chandra lectures at various universities or courses incriminal law, economic crime and consumer protection law.

Anna Christina Sinagahas been a researcher with the Forests and GovernanceProgramme at CIFOR since 2007. She completed her law degree at the Law Facultyo the University o Indonesia in 2003 and her masters in law at the Faculty o Law,Utrecht University, in 2005. Te ocus o her research includes legislative drating, lawenorcement, corruption and orestry, and the role o banks in law enorcement efortsthat afect the orestry sector.

Mumu Muhajir is a programme manager or law and environmental justice at EpistemaInstitute. Previously, he researched natural resources law in Greenlaw (2006) and IHSA(20062007). Muhajir completed his law degree at the University o Gadjah Mada,

Yogyakarta. In addition to monitoring legal aspects o natural resource management andenvironmental issues, he is active in lobbying and policy advocacy.

So Mardiah has been an assistant researcher with the Forests and GovernanceProgramme at CIFOR since 2007. She completed her bachelors degree at the Faculty oForestry, Bogor Agricultural Institute (IPB) in 2002 and her masters degree in naturalresources management and environment rom IPB in 2006. At CIFOR, her researchocusses on nancial analysis in the orestry sector, the role o banks in law enorcementeforts in the orestry sector, corruption and orestry.

Authors


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Acknowldgmnts

Tis publication is the result o enthusiastic contributions and assistance rom manyparties. We thank to the Corruption Eradication Commission (KPK), the IndonesianFinancial ransaction Reports and Analysis Center (INRAC) and the State AuditBoard (BPK). Staf at all three agencies shared their experiences and gave valuablesuggestions and critiques o earlier versions.

We are also grateul to legal scholars and practicing lawyers who gave us advice andsuggestions by participating in ocus group discussions to acilitate the developmento these guidelines: Dr Yenti Genarsih rom the Law Faculty o risakti University;Dr Eddy OS Hiariej rom the Law Faculty o Gadjah Mada University; Dr Edi

Setiadi rom the Law Faculty o Bandung Islamic University (UNISBA); Dr PrabowoBambang S., Dean Bram and Dr Surastini Fitriasih rom the Law Faculty o theUniversity o Indonesia; Erlin, state prosecutor rom Sleman District; and Edy

Wibisono who serves at the Cibinong District Court.

We also express our gratitude to our partners Riau Forest Rescue Network (Jikalahari)and the Institute or Law and Natural Resources (IHSA) in East Kalimantan. Teycontributed to developing the concept o an integrated approach to law enorcement.

We want to also thank Dr. Bambang Setiono or his involvement in this study.We recognise that eforts to stop illegal logging, corruption and money launderingin the orestry sector have yet to ully enorce the law or substantively help sustainIndonesias orests. We hope this guideline can provide new inspiration to oreststakeholders who continue to untangle the complex threads o orest-related crime, lawenorcement, corruption and money laundering in Indonesia.

Tis guideline was made possible through the generous support rom the Ministry oForeign Afairs o Norway.


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Prac

Signicantly increased rates o deorestation rom the 1970s to the 2000s have broughtpressure on law enorcement agencies to better enorce the law and prosecute orestcrimes. Generally, criminal wrongdoing in the orestry sector is only prosecuted underthe provisions o the Forestry Law. Several reports and results o studies suggest thatthese sanctions are inefective in stopping crimes in the orestry sector because they onlycatch the petty criminals in the eld. Meanwhile, the main actors who und and planlarge-scale illegal activities evade sanctions.

Illegal logging is a multidimensional crime addressed in several legal instruments inIndonesia, including the Forestry Law, the Anti-Corruption Law, the AntiMoney

Laundering Law, the Environmental Law and the Law on Customs. Te complexityand extent o the network o perpetrators o illegal logging require that law enorcementapply a more unied, integrated and comprehensive approach. Tis guideline introducesand describes such an integrated approach.

o respond to this issue, CIFOR conducted research to design efective integratedstrategies to address the large-scale issues. Te project, the Integrated Law Enorcement

Approach (ILEA) encourages an integrated approach and specically promotes the useo anti-corruption and ant-money laundering instruments to better prosecute orestcrime. Tis book presents insights rom the ILEA project to guide law enorcementocers in their eforts to combat crime in the orestry sector.

We prepared this nonbinding instrument to help Indonesias law enorcement ocershandle criminal cases in the orestry sector with a more comprehensive approach.

Although primarily intended or law enorcement ocials including civil servantinvestigators in orestry, police ocers, prosecutors, corruption eradication commission(KPK) staf and judges, we hope that other stakeholders including NGOs andcommunities that depend on orests can also benet.


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Te need or improved enorcement o orestry law has grown as Indonesias deorestationrate has increased signicantly. During 19701990, the rate o deorestation was 0.61.2million hectares a year (Sunderlin and Resosudarmo 1996). Another report shows a higherrate o 1.7 million hectares per year during 19851997 (FWI/GFW 2001). Te latest datarom the Ministry o Environment, based on the Report on Indonesias EnvironmentalStatus 2006, states that the rate o deorestation was 1.19 million hectares per year in2006 (Ministry o Environment 2006). Illegal logging is one o the greatest causes odeorestation. Laporan elapak, an Indonesian campaign group, suggests that illegallogging accounts or 80% o the total logging in Indonesia (acconi et al. 2004).

1Introduction


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2 A guide to investigation and indictment using an integrated approach to law enorcement

Te government has carried out a series o law enorcement operations in the eld tocombat illegal logging. During 20042006, the government conducted SustainableForest Operation (OHL) in Kalimantan, Papua and Sumatra. During OHL II in 2005,or example, the police processed 116 cases o illegal logging in Papua. However, thecourts were unable to reach a verdict in most o these cases, as cases were dismissed

during investigation and by the courts. O the 116 cases brought during OHL II, only88 continued to the Attorney Generals Oce. Moreover, o these 88 cases, 27 werebrought to court, 13 resulted in sentences o 724 months and 14 cases were acquitted(ICW 2009).

Besides the small number o verdicts reached on cases o orestry crime, research byIndonesian Corruption Watch (ICW) in 2009 shows that those sentenced are mostlylow-level perpetrators, such as truck drivers, armers or eld operators. Tis suggeststhat most o the nanciers, government ocials or other intellectual actors involved

were not exposed, let alone punished (ICW 2009).

Te ailure o so many cases o orestry crime raises several questions: Have the judgesmade erroneous verdicts? Do the indictments contain weaknesses? Does the problemlie within the investigations? Or are these ailures caused by a lack o communityinvolvement, due to peoples ear o standing witness?

Weak legal protection o the orests is also due, in part, to a tendency to use only onelaw: Law No. 41/1999 on Forestry. In that law the primary crime is illegal logging.

Why is this mechanism so weak? One common reason is that having a permit is enough

to escape the law. In other words, administrative processes provide an opportunityto cover up existing violations as they only emphasise ormal aspects. Meanwhile, incriminal cases, the emphasis is on material act. Te potential or irregularities in issuingpermits is substantial. Irregularities include: abuse o authority in issuing permits;granting inappropriate permits; utilising regulations and policies to destroy orests andcover up orestry crime; bribing government ocials to issue permits; and companiesproviding acilities, such as cars, to law enorcement institutions, giving ocialscompany shares, and splitting companies to secure concessions above allocation limits(Antasari April 22, 2010). One example is the case o engku Azmun Jaaar, who wasound guilty o corruption in issuing permits to 15 companies in Kabupaten Pelalawan,Riau (Anti-Corruption Court 2008). Te Adelin Lis case, in which the Supreme Courtound him guilty o corruption (Supreme Court 2007: No. 2240), is also evidence othe need to use other legal instruments than Law No. 41/1999 to prosecute ofenders

who hold permits.

A more integrated and comprehensive law enorcement approach is required to combatorestry crime and secure better protection o our orests. Tis means an approachthat does not rely solely on the orestry sector legal ramework and law enorcementprocesses, but can use provisions rom other related legal rameworks such as corruption

and money laundering. For instance, using the provisions o Law No. 31/1999 onEradication o Corruption could help in prosecuting illegal loggers. Expanding themeans or gathering evidence and the rules or substantiation (including limited reverse


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Introduction 3

burden o proo) and improving investigative techniques or anti-corruption lawenorcers can be efective, as in many cases illegal logging begins with various ormso corruption.

Similarly, use o Law No. 8/2010 on Prevention and Eradication o the Crime o

Money Laundering is also essential because its ollow the money principle enablestracing the origins o money to illegal logging. Te legal ramework on moneylaundering also regulates special litigation processes, means o proo, and techniques ortracing the origins o the proceeds o crime and hopeully revealing them. Furthermore,to process a money laundering case, it is not necessary to prove the predicate crime rst(Law No. 8/2010)(all reerences or laws in this book can be ound in Appendix 1).

Te use o anti-corruption and antimoney laundering laws in the orestry sector is stillnew. Concerns have been raised that using these legal instruments will weaken the ocuso investigation and prosecution o crimes in the orestry sector. However, this can beprevented by assessing each case to ascertain whether it concerns only orestry crime, or

whether it is linked to corruption and money laundering.

Another concern in applying anti-corruption and antimoney laundering laws in theorestry sector is the doctrine olex specialis derogat legi generali, which states that alaw governing a specic subject matter (lex specialis) overrides a law that only governsgeneral matters (lex generalis). In this case, the law on orestry is seen as lex specialisand the laws on corruption and money laundering as lex generalis. Tis suggests thatorestry crimes should only be tackled using the orestry law, not other laws. It is key

that orestry bureaucrats and law enorcement authorities rom various institutionswork together. Prosecutors must analyse which provisions are most appropriate or use,whether one or more provisions can be used, and whether the perpetrator(s) can beindicted singularly, alternatively, secondarily or cumulatively.

Te above-mentioned concerns are only part o the challenge in using an integratedapproach to orestry sector crime. In practice, our orms o indictment can be used.Tis is a positive approach that can be used in uture.

It is clear that we must take an integrated approach to enorcing orestry law to betterprotect our orest rom increasing damage. Tis book strives to provide this morecomprehensive approach.


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2Forstry crim

Tis chapter gives a concise overview o orestry crime based on Law No. 41/1999 onForestry. Te discussion begins with an outline o the drivers o orest degradation andcategories o violation o orestry law. Tis is ollowed by an overview o the partiesinvolved in orestry crime and the roles they play. Tis chapter also discusses theapproach normally used in handling illegal logging, using the orestry law. Other lawsclosely linked to orestry such as anti-corruption and antimoney laundering laws

will be discussed in later chapters.


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A guide to investigation and indictment using an integrated approach to law enorcement6

2.1 What are the drivers o orest degradation?

Factors driving orest degradation and illegal logging include (Suarga 2005:10):

1. economic crisis;

2. changes in the political order;

3. weak coordination between law enorcement authorities;

4. collusion, corruption and nepotism;

5. weak orest and orest product security systems;

6. cheap prices o illegal timber.

Based on its role, the perpetrators o orests destruction can be classied in able 1.

Tabl 1. Classication o prptrators o orst dgradation by rols playd

Perpetrators Role

Local and migrant communities Cutting down trees either in their owninterests or to sell to timber businesspeopleor capital owners

Capital owners (cukong) and business people Facilitatorsa or recipientsb o stolen wood,including being the masterminds behind thetimber thet

Wood industry owners and concessionholders

Timber thieves or recipients o stolen timber

Ships captainsc Participating or assisting in timbersmuggling or illegal logging

Government ocials and authorities(military, police, orest rangers, orestryocers, customs ocers, regionalgovernment ocials, district councilmembers, politicians)

Involved in corruption, collusionand nepotism with businesspeople,manipulating orest management policy orgranting concessions that can lead to orestdegradation

Foreign businesspeople Timber buyers or recipients o stolen wood.Linked to cases o money laundering.Foreigners coordinate timber thet usinglocal people who act as i they are timberbusinesspeople

Source: Nurdjana et al.(2005) and Hussein (2007)a In material criminal law this role can be linked to conspiracy to commit orestry crime by giving orpromising something, or by providing inormation, acilities or opportunities to others

b In general criminal law, as stipulated in Articles 5557 o the Criminal Code, receipt does not comeunder provisions on participation but is a crime in its own right (under Article 480 o the Criminal Code).As distinct rom participation, receipt occurs ater a crime is committed, in the case, or instance, o

receiving stolen goods

c The involvement o ships captains in cases o illegal logging shows that this process requires certainparties operating in the transport sector


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Forestry crime 7

In the orestry sector, enterprises that use wood in their core business include:

1. timber concessions (HPH);

2. woodworking industries;

3. plywood industries;

4. urniture industries;

5. cratsmen or handicrats makers;

6. industrial timber plantations;

7. pulp and paper industries. (Suarga 2005: 37)

Tese can be categorised into two groups or the purposes o preliminary investigationsinto orestry-related crime: (i) the orest concession group; and (ii) the industry group.

Forest exploration and exploitation can lead to orest degradation, afecting the physicalor biological characteristics o the orest and preventing it rom maintaining its naturalunctions. Acts that lead to such orest degradation can be categorised as orest crimes.

2.2 What is the range o crimes in the orestry sector?

According to Article 78, paragraph (13) o Law No. 41/1999 on Forestry, a numbero actions are classied as orestry crimes. able 3 presents actions classied as orestrycrimes and violations.

Tabl 2. Classication o orstry sctor businsspopl by prmit, ara and raw

matrials

Classicationa Explanation

White businesspeople

Hold valid concessions (HPH/HPHTI) or industry permits. Parametersthat can be measured include an annual logged-over area o 600000 ha based on an annual logging plan (RKT) o 20 million mand total annual installed capacity or a plywood industry o10 million m. As long as the business adheres to governmentpermits and its ocial work area is based on general, provincial anddistrict spatial planning maps, and until there is a revision o thetypes o legitimate orestry sector businesses, such businesspeopleremain legitimate under the law.

Grey business people Have business permits issued ater 2001 that are valid in juridicalterms, ree rom controversy and with no overlapping authority.However, many regulations issued during the reorm era haveoverlapping authority, are deemed weak, and may be subject toannulment or judicial review.

Black businesspeople

Involved purely in illegal activities and crimes such as cutting downtrees in protection orest, illegal annexation o orest, timber thetand document alsication.

Source: Suarga (2005: 38)

a The terms used here are not juridical but sociological, understood in circles involved in orestry-relatedcrime issues. Despite not being juridical terms, they remain important or mapping actors involved.


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Tabl3.

MajorcrimsaccordingtoLaw

No.41/1999onForstry

Action

Articlea

ndnorm

Sanctions

Damag

ingorestprotection

inrastructureandacilities

Articl5

0

(1)Allpe

opleareprohibitedromd

amagingorest

protectio

ninrastructureandacilities.

Article78

(1)Whosoeverknowinglyviolatestheprovisio

nsoArticle50,

paragraph(1)orArticle50,paragraph(2),sha

llbeliableto

punishmentbyimprisonmentuptoamaxim

umo

10(ten)

yearsanda

neuptoamaximumo

IDR5000000000(ve

billionrupia

h).

Carryingoutactivities

resultin

ginorest

degradation

Article5

0

(2)Anybodywhohasreceivedthelicence

oorestarea

use;thelicenceoutilisingenvironmental

services,theright

otimberandnon-timberorestproductu

tilisation,t

he

licenceo

timberandnon-timberorestproductcollection;

isnotallowedtoundertakeanyactivitiesleadingtoorest

damage.

Asabove

Illegally

occupyingaorest

area

Article5

0

(3)Nope

rsonisallowedto:

a.cultivateand/oruseand/oroccupyilleg

allyaorestarea;

Article78


nsoArticle50,

paragraph(3)letter(a),letter(b),orletter(c),

shallbeliable

topunishmentbyimprisonmentuptoamaximumo

10

(ten)yearsa

ndamaximum

neoIDR5000

000000(ve

billionrupia

h).

Encroachingonaorestarea

Article5

0

(3)Nope

rsonisallowedto:

b.encroa

chonaorestarea;

Asabove


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Forestry crime 9

Action

Articlea

ndnorm

Sanctions

Cutting

downtreesina

oresta

reaincontravention

oprovisions

Article5

0

(3)Nope

rsonisallowedto:

c.cuttreeswithinaradiusordistanceup

to:

1.500(vehundred)metersromt

heedgeoalakeor

ad

am;

2.

200(twohundred)metersromt

he

edgeowater

sourcesandalongsideriversinaswamparea;

3.100(hundred)metersroma

longsid

eariverbank;

4.50

(ty)metersromt

hebanksoa

tributary;

5.

2(two)timesthedepthoaravine

romt

heedgeo

aravine;

6.130(onehundredthirty)timesthedierencebetween

the

highestandthelowesttide,measuredromt

he

coastline.

Asabove

Burning

oresteither

knowinglyorasaresulto

neglige

nce

Article5

0

(3)Nope

rsonisallowedto:

d.burntheorest;

Article78


nsoArticle

50,paragraph(3),letter(d),shallbeliabletopunishmentby

imprisonme

ntuptoamaximumo

15(teen)yearsanda

maximum

neoIDR5000000000(vebillionrupiah).

Article78

(4)Whosoever,duetonegligence,v

iolatesth

eprovisions

oArticle50

,paragraph(3),letter(d)shallbe

liableto


umo

5(ve)

yearsanda

maximum

neoIDR15000000

00(onebillion,

vehundredmillionrupiah).

Tabl3.

Continued

contin

uedonnextpage


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Action

Articlea

ndnorm

Sanctions

Cutting

downtrees,

harvest

ingorcollectingany

orestp

roductswithinthe

oresta

reawithoutholding

anyrightsorlicenceissued

byauth

orisedocials

Article5

0

(3)Nope

rsonisallowedto:

e.cuttreesorharvestorcollectanyorest

productswithin

theores

tareawithoutholdinganyrights

orlicenceissued

byautho

risedocials;

Article78


nsoArticle

50,paragraph(3),letter(e)orletter(),shallb

eliableto


umo

10(ten)

yearsanda

maximum

neoIDR50000000

00(vebillion

rupiah).

Receiving,buyingorselling,

receivin

gasanexchange,

receivin

gasentrustedgoods,

keepingorpossessingany

orestp

roductsknown

oralleg

edtohavebeen

harvest

edroma

orestarea

byillegalmeans

Article5

0

(3)Nope

rsonisallowedto:

.receive,buyorsell,receiveasanexchange,receiveas

entrustedgoods,keeporpossessanyore

stproductsknown

orallegedtohavebeenharvestedroma

orestareaby

illegalmeans;

Asabove

Open-c

astminingin

protect

ionorestand

unlicen

sedexploration/

exploitationomining

materia

ls

Article3

8

(4)Open

-castminingisprohibitedinprotectionorest.

Article5

0

(3)Nope

rsonisallowedto:

g.undertakegeneralinvestigation,activities,explorationor

exploitat

ionominematerialswithintheorestareawithout

theMinistersapproval;

Article78


nsoArticle38,

paragraph(4)andArticle50,paragraph(3),le

tter(g),shallbe

liabletopunishmentbyimprisonmentupto

amaximumo

10(ten)yea

rsandamaximum

neoIDR50

00000000(ve

billionrupia

h).

Carrying,controlling

orkeep

ingorest

produc

tswithoutlegal

documentation

Article5

0

(3)Nope

rsonisallowedto:

h.carry,possessorkeeporestproductsw

ithoutlegal

documentation;

Article78


nsoArticle

50,paragraph(3),letter(h),shallbeliabletopunishment

byimprison

mentuptoamaximumo

5(ve

)yearsanda

maximum

neoIDR10000000000(tenbillionrupiah).

Tabl3.

Continued


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Forestry crime 11

Action

Articlea

ndnorm

Sanctions

Bringingheavyloading

equipm

entintoaorestarea,

withoutlegalauthorisation

Article5

0

(3)Nope

rsonisallowedto:

j.bringh

eavyequipmentorothertoolsco

mmonlyusedor

willpresumablybeusedorloadingorestproductsintoa

orestare

a,w

ithoutlegalauthorisation;

Article78


nsoArticle

50,paragraph(3),letter(j),shallbeliabletop

unishment

byimprison

mentuptoamaximumo

5(ve

)yearsanda

maximum

neoIDR5000000000(vebillionrupiah).

Bringingequipment

commo

nlyusedorelling,

cutting

andsplittingtrees,

withoutlegalauthorisation

Article5

0

(3)Nope

rsonisallowedto:

k.bringe

quipmentcommonlyusedore

lling,cuttingand

splitting

trees,withoutlegalauthorisation;

Article78

(10)Whosoeverknowinglyviolatestheprovis

ionsasreerred

toinArticle

50,paragraph(3),letter(k),shallbeliableto


umo

3

(three)yearsandamaximum

neoIDR100

0000000(one

billionrupia

h).

Discard

inganyinfammable

materia

lintoaorestarea

whichm

aycauseorest

resor

threatentheorest

unctions

Article5

0

(3)Nope

rsonisallowedto:

l.discard

anyinfammablematerialintoaorestareawhich

maycauseorestresandthreatentheexistenceand

sustainab

ilityoorestunctions;

Article78

(11)Whosoeverknowinglyviolatestheprovis

ionsoArticle

50,paragraph(3),letter(l),shallbeliabletop

unishmentby

imprisonme

ntuptoamaximumo

3(three)

yearsanda

maximum

neoIDR1000000000(onebillionrupiah).

Table3

.Continued


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Discussions in this paper are limited to the orestry-related crimes classied in able 3.In addition to classication based on Law No. 41/1991 on Forestry, orestry crimescan also be classied according to terms commonly used in discussing environmentalissues including:

1. Illegal logging a series o activities, rom logging and timber transporting toprocessing and exporting without permits rom government authorities, andthereore illegitimate, in violation o the law and considered acts that damage theorest (Suarga 2005: 15).

2. Destructive logging the illegal cutting down o orests perpetrated by orestrycompanies with ocial government permits (as regulated by Article 50, paragraph(2) o Law No. 41/1999 on Forestry).

2.3 How is orestry-related crime handled?

Provisions in Law No. 41/1999 on Forestry outline the processes involved or lawenorcers handling orestry crime. According to Criminal Code Procedures (KUHAP),parties that can investigate orestry crime include the police, orest rangers, and civilservants rom the orestry oce working under police coordination.

Te outcome o any investigation will be orwarded to the state prosecutor to preparean indictment or submission to a district court. A judge will then examine the case andreach a verdict in consideration o the provisions o Law No. 41/1999 on Forestry.

Tabl 4. Minor crims according to Law No. 41/1999 on Forstry

Type Legal basis Sanctions

Grazing livestockwithout a permit

Article 50

(3) No person is allowed to:i. graze livestock within theorest area which is not assignedspecically by authorisedocials or that purpose;

Article 78

(8) Whosoever knowinglyviolatesthe provisions o Article 50,paragraph (3), letter (i), shallbe liable to punishment byimprisonment up to a maximumo 3 (three) months and amaximum ne o IDR 10 000 000(ten million rupiah).

Removing, carryingand transportingplants and wildliespecies not protectedby the law, romorest areas withoutlegal authorisation

Article 50

(3) No person is allowed to:m. remove, carry, transportplants and wildlie species notprotected by the law, romorest areas without legalauthorisation.

Article 78

(12) Whosoever knowinglyviolates the provisions o Article50, paragraph (3), letter (m),shall be liable to punishment byimprisonment up to a maximumo 1 (one) year and a maximumne o IDR 50 000 000 (tymillion rupiah).


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Forestry crime 13

Generally, orestry-related crimes are processed exclusively according to the provisions oLaw No. 41/1999 on Forestry. Consequently, the subjects o such crimes are limited toindividuals as perpetrators and/or managers rom legal entities or enterprises linked toorestry crime.1 Meanwhile, other links in the chain o orestry-related crime cannot betried i law enorcers reer only to Law No. 41/1999. Tese include government ocialsauthorised to issue permits, and businesspeople and capital owners indirectly linked toenterprises or legal entities violating orestry provisions.

In addition to the orestry law, other laws can be used to charge those involved in crimesin the orestry sector. For instance, Law No. 31/1999 on Eradication o Corruption canbe used in the case o ocials issuing certain letters, permits and documents to helpothers perpetrate illegal logging. Law No. 8/2010 on Prevention and Eradication othe Crime o Money Laundering can also be used when people attempt to conceal theproceeds o illegal logging.

Suspected crime

Police investigation

Public prosecution

Court case

Verdict

Forest ranger/civil service

investigation

Figur 1. Procsss in handling orstry-rlatd crim

Source: Adapted rom Yuliastuti (2006), based on Law No. 41/1999 on Forestry

1 According to Article 78, paragraph (14) o Law No. 41/1999 on Forestry, i a crime is committedby, or on behal o a legal entity or enterprise, the legal proceedings and criminal sanctions should beimposed on the board o management, either individually or jointly, who shall be liable to punishmentin accordance with respective sanction with an addition o 1/3 (one third) o the decided sanctions.


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Evidence o orestry-related crime discovered by investigators in the eld, such asillegally harvested logs, and transport equipment used to perpetrate orestry crimecan be conscated by the state. When seen as links in a chain, we must also question

whether assets belonging to the perpetrator are the proceeds o orestry-related crime.Tis is done taking into account that the losses resulting rom such crimes afect not

only the public, but also the environment.

Sanctions imposed on perpetrators o orestry-related crime should include criminaland administrative penalties. Perpetrators should also be made to pay compensation ordamage and resulting losses to the state, by paying or rehabilitation, orest recovery orother acts required. In considering deterrents to perpetrators in the chain o orestry-related crime, and the resulting environmental impacts upon the public, law enorcerscan also apply the provisions o legislation other than the orestry law to acts o orestry-related crime.

Several laws can be applied to handling orestry crime, including:

a. Law No. 20/2001 on Amendments to Law No. 31/1999 on Eradicationo Corruption;

b. Law No. 8/2010 on Prevention and Eradication o the Crime o Money Laundering;

c. Law No. 32/2009 on Environmental Protection and Management;

d. Law No. 17/2006 on Customs and Excise.

In addition, drat laws on the eradication o illegal logging, and on state intelligence2 are

currently being deliberated, the substance o which is related to orestry crime. Later,this handbook will need to be adapted to include suggestions on how to use these dratlaws in handling orestry crime.

Tis handbook will only discuss the handling o orestry-related crime through theapplication o anti-corruption and antimoney laundering laws. Public prosecutorsapplying these laws have been supported by the issuance o a circular rom the

Attorney General on applying anti-corruption law to orestry crime, and a circularrom the Deputy Attorney General or General Crimes (Jampidum) (No. B-689/E/EJP/12/2004) on using cumulative indictments in cases involving a predicate crime and

money laundering.

Despite the many eforts to control orestry-related crime, weaknesses remain and thesemust be rectied in the uture. Tese weaknesses include:

a. Only those perpetrators caught red handed are brought to trial.

b. Many perpetrators are acquitted or given light sentences. A study conductedby Indonesia Corruption Watch (ICW) shows that o 205 orestry courtcases monitored during 2005 2008, 137 cases or about 67% were acquitted(ICW 2008).Another study also ound that the perpetrators o orestry crime

2 Te drat law on state intelligence allows the use o inormation as preliminary evidence orbeginning investigations.


25/98

Forestry crime 15

were on average sentenced to one year imprisonment and had to pay a ne o27 million rupiah.

c. Te courts verdicts did not ull societys sense o justice, since such light penaltieswere handed down or orestry crimes that had caused signicant damage tothe state.

d. Recuperation o state losses through conscation o the proceeds o crime isinsignicant. In addition, the orestry law itsel sets the maximum ne or orestrycrime at only 10 billion rupiah. Tis amount is smaller than the amount o statelosses usually caused by orestry crime.

e. Ocials involved, those who bribe ocials, and the laundered proceeds o orestrycrime remain untouched. Tis happens because the orestry law does not specicallyaddress corruption and money laundering in the orestry sector. Provisionsconcerning corruption are stipulated in other laws.

Due to these weaknesses, orestry-related crimes should not be handled using only theorestry law, but also by using anti-corruption and antimoney laundering legislation.Tis issue will be discussed again in chapters 4 and 5.


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27/98

3Th ILeA modl or handlingorstry crim

In order to overcome weaknesses in handling orestry-related crime, a new, moreintegrated approach to protecting our orests is needed. In 2003, the governmento Indonesia decided to revise Law 15/2002 on Prevention and Eradication o the

Crime o Money Laundering in 2003. Te Center or International Forestry Research(CIFOR) took the opportunity to encourage the application o other legal instrument

within the revised law, to catch the perpetrators o orestry crime. In the new law, LawNo. 25/2003, orestry crimes was included as one o the predicate crimes o moneylaundering crime. In 2007, CIFORs urther recommended that Law No. 31/1999 onEradication o Corruption likewise be used as a legal instrument in handling orestry-related crime. In 2010, Law No. 25/2003 became incorporated into Law No. 8/2010on Prevention and Eradication o the Crime o Money Laundering. Tis combinedapproach is known as the Integrated Law Enorcement Approach (ILEA). Tis modelcannot be used efectively without the necessary instruments and components: an

instrument constitutes the means or tools necessary to implement an integrated lawenorcement approach, while a component reers to the institutions that play a role inthis approach.

Te conceptual bases o the ILEA model or handling illegal logging and other relatedcrimes are described below. Tis model is diferent rom the usual approach, whichocuses on, or targets, illegal loggers using the orestry law ramework and institutionsinvolved in orestry. Te ILEA model has greater scope and is expected to be moreefective than the standard approach in protecting the orestry sector and state assets.

3.1 ILEA instruments

a. Asset recovery (Stolen Asset Recovery Initiative StAR Initiative)

In tackling corruption, asset recovery mechanisms are essential. Increasing numbers ocountries are attempting to recover assets rom overseas, transerred by corrupt high-ranking ocials beginning in the 1980s. Recovering assets is not an easy process astheir orms have changed and have been purposeully concealed in established nancialsystems in industrialised countries. Tese eforts have pulled back the curtain on illicitnancial processes, involving nancial institutions and mediators (lawyers, accountants,

real estate agents, etc.) rom industrialised countries in acilitating the entry andconcealment o dirty assets rom corrupt ocials in developing countries.


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Asset recovery covers criminal and civil processes and activities in seeking, reezing andreturning unds generated rom activities deemed illegal in the state with rights overthose assets. Tis process requires efective collaboration between countries. In additionto recovery, the use o returned assets must be monitored to ensure they are used or the

welare o people in developing countries.

b. Know Your Customer principle

Every service provider must apply the Know Your Customer (KYC) principle in orderto efectively prevent money laundering. Te principle is obligatory or both nancialservices providers and users o nancial services as stipulated in Chapter IV, SecondSection on Principle Implementation in Service User Recognition, Law No. 8/2010 onPrevention and Eradication o the Crime o Money Laundering.According to Bank oIndonesia regulations (PBI) No. 3/23/PBI/2001 and PBI No. 5/21/PBI/2003, KYC is aprinciple applied by banks to:

1. know the identity o their customers (including customer proles);2. monitor customers transactions;

3. report suspicious nancial transactions to the Financial ransactions Reporting andAnalysis Centre (PPAK).

Te KYC principle was revised and amended with PBI No. 11/28/PBI/2009 on theApplication o Antimoney Laundering and Countering the Financing o errorismProgrammes or Public Banks, and perected with Circular No. 11/31/2009.3

Te high rate o orestry crime, particularly illegal logging, have led to orestrybusinesses being included on the list o high-risk businesses, and customersoperating in the orestry and woodworking sectors are listed as high-risk customers.

Accordingly, through KYC, banks are obliged to know their customers and monitortheir transactions i they have concerns that the money they secure originates romillegal activities (Setiono and Husein 2005). With support rom inormation systems,banks can efectively identiy, analyse, monitor and provide reports on the nature otheir customers transactions, and meet their obligation to report suspicious nancialtransactions to the PPAK.

c. Politically exposed persons

Politically exposed person (PEP) is a new term in monitoring customers o nancialinstitutions or the prevention o nancial crime, particularly money laundering. Teconcept is currently being developed and is encouraged by the need to monitor moreclosely customers that might constitute a high risk to the reputation o the nancialinstitution. Te term politically exposed person is generally associated with governmentocials in positions o power, well known to the public. In its guidelines, the PPAKdenes PEPs as:

3 Since enactment o Law No. 8/2010 on Prevention and Eradication o the Crime o MoneyLaundering, no change has been made to banking regulations which stipulate the KYC principle


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The ilea model or handling orestry crime 19

...individuals entrusted with public unctions in a oreign country, such as heads ostate or government, senior politicians, senior government ocials, court ocialsor military leaders, senior executives o state-owned enterprises, partisans, orunctionaries o large political parties. A PEPs business relationships with amilymembers or close associates involves risking their reputation as well as his or herown. Tis denition does not include middle-ranking or junior individuals in theprevious category. Tis applies to Indonesian and oreign citizens. (PPAK 2008)

Tis PEP mechanism, as proposed by the Financial Action ask Force (FAF), obligesnancial institutions not only to conduct customer due diligence when dealing withPEPs, or instance in the orm o KYC, but also to: (1) have an appropriate risk-management system or determining whether or not someone is a PEP; and (2) have theagreement o a senior manager beore conducting business with anyone categorised asa PEP. Tese mechanisms vary on the ground, and some countries even include juniorocials and politicians on their PEP list.

d. Mutual Legal Assistance

Illegal logging is a crime that crosses state borders and jurisdictions, so law enorcersneed to collaborate with their peers in other countries to pursue perpetrators and returnhidden assets. In addition to diplomatic channels, there is now a mechanism known asMutual Legal Assistance (MLA).

MLA is a criminal law based mechanism or law enorcers in one country to providelegal assistance to law enorcers in another in response to a request or assistance. Tisassistance can take the orm o apprehending and arresting a perpetrator, investigatingand providing evidence o crime, returning assets, and surrendering perpetrators, whichincreases law enorcement capacity.

According to Law No. 1/2006 on Mutual Legal Assistance in Criminal Matters,particularly Article 57, there are currently three orms o MLA cooperation:(1) cooperation o two countries based on bilateral agreements; (2) cooperation basedon regional MLA agreements; and (3) cooperation based on international agreements.MLA only becomes valid once each country has ratied an agreement.

e. Geographic Inormation SystemsGeographic Inormation Systems (GIS) are computer systems with the capacity toinput, collate and analyse geographic data and are extremely useul or decision making(ESRI 1995). Te most useul eature is the capacity o GIS to present spatial datasupplemented with addition inormation. GIS can capture spatial data rom maps ordata attributes with geographic inormation. It can also transorm maps rom variousscales and projections to standard scales so the results generated are also standard.

GIS applications are requently used in agriculture and orestry land-use management,and in planning residential areas and their acilities. One usage linked to orestry iscalculating locations, levels and rates o deorestation. Using GIS, we can easily andquickly conduct spatial analyses and monitor changes in orest cover. It can also be used


30/98


31/98


c. Forestry-related sectors

Te orestry sector acts as an inormation provider or law enorcers combating illegallogging. Te Ministry o Forestry plays a principle role as the institution that managesorests and the natural resources they contain. Included in this component are theMinistry o Forestry, including other orestry institutions, orestry business practitioners,and orestry proessionals, including lawyers working or orestry businesses.

Te specic role o the Ministry o Forestry in this approach is to provide inormationon concessions and areas o orest, prepare spatial plans and concession work plans(or instance annual and 5-year elling allocations), and other inormation relating toorest management.

d. Audit agencies

Tese agencies provide inormation to law enorcers on indications o corruption in

orest management, and estimate the resulting losses to the state. Tis componentincludes the BPK, the BPKP, ministerial inspector generals and appointed auditors.

e. Financial institutions

Financial institutions act as providers o inormation on suspicious transactionsconducted by nancial service providers or other goods or service providers. Tiscomponent includes: the Bank o Indonesia; public banks; unding companies;insurance and broker companies; pension nancial institutions; security companies;investment managers; custodians; trusts and the postal service as providers o the giro

service; oreign currency traders; card payment service providers, e-money and e-walletservice providers; credit unions; commodity and utures traders;and money senderservice providers. Te goods and service providers include: property companies andagents; motor vehicle traders; gold and jewellery traders; art and antique traders; andauction houses.

Tese institutions can provide details o assets belonging to any person reported bythe PPAK, or any suspect or indicted person. I requested by the law enorcementauthorities, these institutions may reeze any assets thought to be the proceeds oorestry crime or corruption, as stipulated in Article 71 o Law No. 8/2010 on

Prevention and Eradication o the Crime o Money Laundering.

In relation to the KYC and Equator Principles,4 nancial service providers alsounction as recorders and supervisors o customers who are either PEPs or are businesspractitioners in high-risk elds. In this specic unction, nancial service providers playan important role and should be included in the ILEA against illegal logging and otherorms o orestry-related crime.

4 Te Equator Principles are a set o voluntary guidelines that have been developed and adoptedby banks and other nancial institutions to identiy and manage environmental and social issues inunding a project.


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Figur 2. Th ILeA modl

Law enforcementPolice, attorneys general, KPK, Forest department investigator

Forestry-related sectorsForestry agencies, forestry businesses, professionals

Auditor agencies

BPK, BPKP, Inspectorate General (Ministry of Forestry), Bawasda

Information/data

Coordination

Investigation

Forestry-related

sectors

Auditor

agenciesFinancial intelligence unit

Civil

society

Law enforcement

Financialinstitutions

. Civil society

Civil society plays an important role in the ILEA as a provider o inormationon orestry crime. Tis component includes nongovernmental, civil society andinternational organisations and donors. Tese institutions work in the elds oenvironment and orestry, and are requently involved in advocacy o cases relatingto illegal logging. Tese organisations are oten able to provide GIS data, which isrequently an important aspect o investigating illegal logging cases.

3.3 What are the steps or handling illegal logging underthe ILEA model?

able 5 shows the steps that law enorcement authorities can take in using theILEA model to prosecute illegal logging, through anti-corruption and antimoneylaundering laws.

able 5 sets out the more comprehensive approach we wish to ofer in handling orestry-related crime. Te laws used are not the orestry law alone, but the anti-corruption and


33/98


antimoney laundering laws. Tis approach also opens the possibilities or using othersuitable legal instruments.

Chapter 4 discusses aspects o corruption and money laundering, and ocusesspecically on the substance o the two crimes that are stipulated in the laws. In its

explanation o these two crimes, details are provided on their links to illegal logging,which is usually approached using only the orestry law.


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Tabl5.

StpsinlawnforcmntusingthILeAmodl

Steps

UsingonlyLaw

No.

41/1999onForestry

With

ILEA

Meansrequired

Gatheringinormation

Inormationneeded:thescaleotheillegal

loggingactivity,

thevolumeotheillegal

logs,thelocation

(Componentsplayingroles:civilsocietyand

orestry-relatedsectors)

Inormationneeded:thelocation,t

hescale

oth

eillegalloggingactivity,thevolum

eo

theillegallogs

(Com

ponentsplayingroles:civilsociety

and

orestry-relatedsectors)

Supportingdatasuchasph

otosolog

piles,etc.

Estim

ationostatelosses(estimationo

environmentaldamage)

(Com

ponentplayingrole:auditagency

such

asBPK)

1.Environmentaldamagea

ssessments,

includingguidelinesromtheMinistryo

Environment

2.Investigativeauditinore

stry

Inquiry/

investigation

oillega

lloggingand

relatedcrimes

Collectingevidenceonillegallogging

andidentiyingt

hesuspectsotheillegal

activities

(Componentsplayingroles:law

enorcementagencies)

Collectingevidenceonillegallogging

and

identiyingthesuspectsotheilleg

al

activ

ities

(Com

ponentsplayingroles:law

eno

rcementagencies,particularlythe

polic

e)

Collectingevidenceocorruptionthat

mightbelinkedtotherelatedorestry

serviceandidentiyingcorruptionsuspects

(Com


eno

rcementagencies,particularlytheKPK

and

publicprosecutors)

Listopoliticallyexposedpersons


35/98


Steps

UsingonlyLaw

No.

41/1999onForestry

With

ILEA

Meansrequired

Identic

ationand

analysis

onancial

transactions

Notundertaken

Documentingallnancialfowsconducted

orre

ceivedbycriminalactorsidentied

byth

eauditingandlawenorcement

instruments

(Com

ponentsplayingroles:nancial

institutions,banks,nancialservice

prov

idersand/orothergoods/service

prov

iders)

Immunitytobanksecrecy

ReerraltoLawNo.8

/2010onPrevention

andEradicationotheCrim

eoMoney

Laundering

Analysingallnancialfowsconducted

or

receivedbycriminalactorsidentiedbythe

auditingandlawenorcementinstruments

(Com

ponentplayingrole:PPATK)

PPATK

Collectingevidenceonpossiblemoney

launderingbyrelatedorestryservices

and

timberindustriesandidentiyingth

e

susp

ectsomoneylaundering

(Com


eno

rcementagencies,thePPATK)

1.P

PATK

2.KnowYourCustomerprin

ciple

3.Customerduediligence

Tabl5.

Continued

contin

uedonnextpage


36/98


Steps

UsingonlyLaw

No.

41/1999onForestry

With

ILEA

Meansrequired

Tracing

andtemporarily

suspendingsuspicious

nancia

ltransaction

andree

zingthe

proceed

socrime

Notundertaken

Estim

atingandtracingthewealththatcan

bed

enedasproceedsocrime

(Com

ponentsplayingroles:nancial

institutions,lawenorcementagencies,

thePPATK)

Assettracingprovidedorinprovisions

oLawNo.31/1999onEradication

oCorruption

Freezingtheproceedsocrime(orderrom

thecourt)

Temporarysuspenseosuspiciousnan

cial

transactionsbythePPATK

(Com

ponentsplayingroles:Law

eno

rcementagencies)

Authoritytotemporarilysuspendsuspicious

nancialtransactionsprovidedinLawNo.

8/2010onPreventionandE

radicationothe

CrimeoMoneyLaundering

Authoritytoreezeassetsprovidedorby

provisionsinLawNo.8

/201

0

Indictm

ent

Bringingthesuspecttotrialbasedonthe

evidencecollect

ed


enorcementagencies)

Bringingthesuspecttotrialbasedonthe

evidencecollected

(Com


eno

rcementagencies,eitherpublic

pros

ecutorortheKPK)

Execution

Puttingtheconv

ictinjail


enorcementagencies)

Puttingtheconvictinjail

(Com


eno

rcementagencies)

Conscatingtheproceedsocrimeand

returningittothestate

(Com


eno

rcementagencies)

StolenassetrecoveryprovidedorinLaw

No.31/1999onEradicationoCorruption

(Articles18and32)

BPK=SupremeAuditCommission,I

LEA=Inte

gratedLawEnorcementApproach,KPK=CorruptionEradicationCommission,P

PATK=FinancialTransactions

Reportingand

AnalysisC

entre.

Tabl5.

Continued


37/98

4Corruption and mony laundring

4.1 Corruption crime

According to ransparency International, corruption is the abuse o entrusted poweror private gain (2011). Tis denition is also used by the World Bank (2011). InIndonesian law, the denition o corruption crime is spelled out in 13 articles in LawNo. 20/2001 on Amendments to Law No. 31/1999 on Eradication o Corruption.Generally speaking, the denition o corruption in Indonesia is similar to that oransparency International and the World Bank; however, the Indonesian denitionalso includes the element o state loss.

A number o actors contribute to widespread corruption: weak law enorcement(low probability o being arrested, charged and tried in addition to the presence oa legal maa), a bureaucratic administration that provides opportunities (permitting

ar-reaching authority, a chain link bureaucracy, etc.), low wages, salary divide, andpoor ethics. TroughLaw No. 7/2006 on Ratication o the 2003 United NationsConvention against Corruption, Indonesia became a state party to this convention(UNODC 2004). Te principles underlying the convention include: the responsibilityo government to develop efective anti-corruption policies; the need to involve civilsociety in applying these policies; and the importance o international collaboration inmaking efective the steps recommended by the convention.

Tis convention has our vital elements or combating corruption: efective domesticanti-corruption legal inrastructure; international legal cooperation; the active support

o people in countries involved; and the political will to make government anti-corruption strategies work.

Corruption prevention eforts can be undertaken by applying good governance, theisland o integrity concept, perormance-based management, minimising corruptionin goods and services procurement processes, integrity pacts, creating public complaintmechanisms, strengthening audit agencies and auditors, strengthening regionalgovernments in identiying political will and capacity to undertake local reorms, publicservice sector reorm with a policy o one-stop services, establishing codes o ethics and

codes o conduct, making inormation accessible to the community, mobilising thepublic through education and awareness raising measures, and investigative journalism.


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Te UNCAC calls on state parties to create, or consider creating, measures againstvarious orms o corruption. Unortunately the present anti-corruption legal rameworkin Indonesia has not ully incorporated the orms o corruption included in theUNCAC. Te government should immediately create an anti-corruption rameworkthat is in line with the UNCAC.

Forms o corruption to be included are: bribing public ocials; bribing oreignpublic ocials; public ocials abusing public property; inuence exchange; illegalsel-enrichment; bribery in the private sector; private sector property embezzlement;laundering the proceeds o crime; concealing property resulting rom crimes in theconvention; and obstructing the course o justice. Tese orms o corruption arehighly relevant to orestry sector in Indonesia and we hope inclusion will improveenorcement eforts.

Te convention also regulates more advanced legal procedures such as: time limitsor corruption; special provisions on extraterritorial jurisdiction; indictment andpunishment or those involved in crimes in the convention; steps or reezing,conscating and destroying the proceeds o crime; protection or witnesses andinormants; and mechanisms to overcome bank condentiality law.

4.1.1 Types o corruption in the orestry sector

In the orestry sector there are at least three types o corruption: corruption relating tothe issuing o permits; corruption relating to monitoring and supervision o orestrybusiness activities; and corruption relating to the monitoring o large-scale orestryenterprises (Santoso 2009). In relation to issuing permits, according to research byIndonesian Corruption Watch, there are our kinds o corruption: transactionalcorruption; investment corruption; kinship corruption; and deensive corruption(ICW 2004).

1. ransactiona corruption is undertaken by public ocials who have the authorityto avoid losses or secure prots, or instance, to evade taxes and other obligations.Tis orm o corruption can also be carried out to acilitate illegal logging andtimber smuggling (as legal or political protection).

2. Invstmnt corruption is undertaken to secure orest concessions. For instance, apublic ocial wanting to secure a permit or concession when they are the decisionmaker over the allocation o a orest concession.

3. Kinship corruption usually occurs when someone in power acilitates the provisiono orest resources management licences to amily members or close acquaintances.

4. Dnsiv corruption is undertaken to prevent particular parties rom securingprots or orcing others to bear losses, or instance by engineering requirements todisqualiy others rom accessing orest utilisation rights (ICW 2004).


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Corruption and money laundering 29

4.1.2 Elements o corruption related to orestry crime

Te orms o corruption discussed above can generally be applied to orestry-relatedcrime, and can be addressed by various articles o Law No. 31/1999 on Eradication oCorruption, as is outlined below. o clariy the correlations between orestry-relatedcrime and corruption, the substance o each article is explained.

Tabl 6. exampls o corruption cass in orstry-rlatd crim

Crime Article Casea

District Head grants HTIpermit in orest withhigh potential trees(in contravention oregulations)

Article 3 o Law No.31/1999 on Eradicationo Corruption (losses tothe state)

Pelalawan District Head grants HTIpermits to 15 companies.

Cutting down treesoutside the RKT areaand paying DR andPSDH or less woodthan has been cutdown

Article 2 o Law No.31/1999 on Eradicationo Corruption (losses tothe state)

AL ordered PT KNDI to cut down treesoutside its RKT area and manipulatedDR and PSDH payments.

A police ocer received

more than IDR 1.065billion rom timbercompanies alleged tobe involved in illegallogging, but thepayment was reportedto the KPK

Article 12 B o Law No.

31/1999 on Eradicationo Corruption(gratuities)

MR, a police ocer, received more

than IDR 1.065 billion rom PT MarindoUtama and PT Sanjaya Makmurclaiming this was a debt settlement. Inact, the money was a bribe to dissuadeMR rom investigating illegal loggingcases against the companies

Accepting a bribe orconverting a protectionorest

Article 12 A o Law No.31/1999 on Eradicationo Corruption (bribery)

ANN was caught red-handed acceptinga bribe rom the Bintan DistrictSecretary at the Ritz Carlton Hotel on

8 April 2008. He was thought to be theliaison between Commission IV o theDPR and Bintan District as the districtsought to convert protected orest.

IDR = Indonesian rupiah, KPK = Corruption Eradication Commission, RKT = annual logging plan, HTI:Industrial Plantation Forest, DR = Reorestation Fund, PSDH = Forest Resource Provision

a. Some abbreviations in case descriptions in this table are used to disguise identities.

Sources: Adapted rom various cases provided by Integrated Law Enorcement Approach Project (ILEAP)CIFOR. Complete data can be accessed at: http://www.cior.cgiar.org/ilea/_re/home/index.htm
http://www.cifor.cgiar.org/ilea/_ref/home/index.htmhttp://www.cifor.cgiar.org/ilea/_ref/home/index.htm


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a. Article 2, paragraph (1) o Law No. 20/2001 in conjunction with LawNo. 31/1999

Anyone unlawully enriching themselves and/or other persons or a corporationin such a way as to be detrimental to the nances o the state or the economy o

the state.

Anyon means an individual person or corporation (based on Article 1, number 3).

Unawuymeans without the right (zonder eigen recht), or in contravention o anotherpersons rights (tegen eens anders recht), or without legitimate reason or in violationo the law. Prior to Constitutional Court Decision RI No. 003/PUU-IV/2006 (25

July 2006), unlawully covered acts committed unlawully in a ormal and materialsense, irrespective o whether they were regulated in legislation, but i those acts wereconsidered reprehensible due to their unacceptability to societys sense o justice andsocial norms, they could be punishable acts. In this provision, the words in such a

way as beore the phrase to be detrimental to the nances o the state or the economyo the state show that corruption constitutes a ormal ofence, where it only needs tomeet the denition o the stipulated acts and does not require proo that actual harm

was done (based on the elucidation o Article 2). However, Constitutional CourtDecision RI No. 003/PUU-IV/2006 (25 July 2006), states that the elucidation o

Article 2, paragraph (1) contravenes the 1945 Constitution and is not legally binding,so the interpretation o this article depends very much on the judges assessment. Inpractice, the Constitutional Court decision is not used as an absolute guideline by the

Constitutional Court or its subordinates. So, in other words, the Constitutional Courtdecision does not immediately cancel the denition o corruption as being unlawul ina material sense.

enriching thmsvs and/or othr prsons or a corporation constitutes an attemptto garner wealth beyond ones earnings or become wealthier rom an illegitimate source(Sukardi 2009: 74).Another denition o enrichment is an act carried out in order tobecome wealthier, whereas according to angerang District Court Decision No. 18/Pid/B-1992/PN/NG(13 May 1992), enrichment is making a person who is not rich

wealthy, or making a rich person richer (Wiyono 2006: 31).

Financs o th stat means state assets in any orm, separable or inseparable,including parts o state assets and rights and/or obligations that arise due to the control,management and responsibility o:

ocials in state institutions; a state-owned enterprise (Badan Usaha Milik Negara/Daerah, or BUMN/BUMD),

oundation, legal entity or company that encloses state capital or third-party capitalbased on an agreement with the state.

economy o th stat means economic lie ordered in a common efort, based on theprinciple o kinship, or an independent social efort ounded on government policy inorder to provide benets, welare and prosperity to the people (Sukardi 2009: 7475).


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b. Article 3 o Law No. 20/2001 in conjunction with Law No. 31/1999

Anyone enriching himsel and/or other persons or a corporation abusing theauthority, the opportunity, or other means at their disposal due to rank or position insuch a way that is detrimental to the nances o the state or the economy o the state.


enriching thmsvs and/or othr prsons or a corporation constitutes an attemptto garner wealth beyond ones earnings or become wealthier rom an illegitimate source

(Sukardi 2009: 74). Another denition o enriching is getting rich, i.e. earning morethan one spends; here it is apparent that enriching themselves and/or other personsor a corporation constitutes the aim o a person committing an act o corruption(Wiyono 2006: 38).

Abusing th authority, th opportunity or othr mans at thir disposa reers toArticle 52 o the Criminal Code in which a civil servant violates a special ocial dutyor employs the power, opportunity or means conerred upon them by their oce, oremploys ways and means or apparatus aforded by their oce, and reers to Article 1,number 2, where a civil servant is:

1. a civil servant as stipulated in laws on personnel;2. a civil servant as stipulated in the Criminal Code;3. someone receiving a salary or wage rom state or regional nances;4. someone receiving a salary or wage rom a corporation which receives assistance rom

state or regional nances; or5. someone receiving a salary or wage rom another corporation that utilises capital or

acilities rom the state or society.

Civi srvic positions can be seen in the elucidation or Article 17, paragraph(1) o Law No. 43/1999, which states that a rank is a position that shows the duty,responsibility, authority and rights o a civil servant in the organisation o the state.

Another denition o authority, according to Article 53, paragraph (1), letter (b) o LawNo. 5/1986 is a series o responsibilities, which apply to a rank or position o corruptionofenders, to act as required in order that they can carry out their duties properly.Te opportunity in this article is a result o a weakness in the provision itsel relatedto the rank or position o the perpetrator o corruption. What is meant by meansin this article is the work methods relating to the rank or position o the perpetratoro corruption.

Application o the word abusing is broader in nature, as it constitutes a common termand is not detailed urther in the elucidation o the article (Sukardi 2009: 7778).

Du to rank or position indicates that the perpetrator is a civil servant in a particular

position. Tereore, the act committed by the suspect must have a connection to theirrank or position (Sukardi 2009: 78).


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Financs o th stat means state assets in any orm, separable or inseparable,including parts o state assets and rights and/or obligations that arise due to the control,management and responsibility o:

ocials in state institutions; a BUMN/BUMD, oundation, legal entity or company that encloses state capital or

third-party capital based on an agreement with the state.

economy o th stat means economic lie ordered in a common efort, based on theprinciple o kinship, or an independent social efort ounded on government policy inorder to provide benets, welare and prosperity to the people (Sukardi 2009: 7475).

c. Article 5, paragraph (1), letter (a) o Law No. 20/2001 in conjunction with

Law No. 31/1999

Anyone rendering or promising something to a civil servant or state ocial so thatperson would perorm, or not perorm, an action in their position in contraventiono their obligations.


Rndring or promisingreers to the denition o gratuities in the elucidationo Article 12 B, which means payment in a broad sense, including money, goods,discounts, recompense, interest-ree loans, travel tickets, lodging, tours, ree medical

treatment and other acilities. Gratuities includes that received at home or overseaseither by, or without using electronic means. Te denition o promise is to give hopeo providing gratuities at a certain time and with certain conditions (Sukardi 2009: 80).Supreme Court Decision RI No. 145 K/Kr/1955 (22 June 1956) states that renderingdoes not mean it has to be accepted, and based on Supreme Court Decision No. 39 K/Kr/1963 (3 August 1963), rendering does not necessarily have to take place when thecivil servant or state ocial is on duty, but can also take place at their home.

A civi srvant or stat ocia is:

1. a civil servant as stipulated in laws on personnel;2. a civil servant as stipulated in the Criminal Code;3. someone receiving a salary or wage rom state or regional nances;4. someone receiving a salary or wage rom a corporation which receives assistance

rom state or regional nances; or5. someone receiving a salary or wage rom another corporation that utilises capital or


Whereas, state ocial as stipulated in Article 2 o Law No. 28/1999 covers stateocials in the highest state institutions, including ministers, governors, judges, state

ocials based on legislation, and state ocials that have a strategic unction.


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With th aim ois to carry out an act knowingly, willingly and in ull awareness o theconsequences. In criminal law urther aim (bijkomend oogmerk)does not need to bereached at the time a person has committed a crime (Lamintang 1984). Tis accords

with Supreme Court (Mahkamah Agung Republik Indonesia MARI) Decision No. 39K/Kr/1963 (3 August 1963).

So that a civi srvant or stat ocia prorms or dos not prorm an action inthir position means through providing or promising something in order that thecivil servant or state ocial does something in the interests o the provider or anotherperson making the promise, whether it has been done or not, but it was ound out rst(Sukardi 2009: 87).

In contravntion o thir obigations means the act the provider wants or does notwant contravenesthe civil servant or state ocials obligations to carry out their duties(Sukardi 2009: 88).

d. Article 5, paragraph (1), letter (b) o Law No. 20/2001 in conjunction withLaw No. 31/1999

Rendering or promising something to the civil servants or state ocials in relation tosomething in contravention o their obligations, done or not done in their position.

Rndring or promisingreers to the denition o gratuities in the elucidation

o Article 12 B, which means payment in a broad sense, including money, goods,discounts, recompense, interest-ree loans, travel tickets, lodging, tours, ree medicaltreatment and other acilities. Gratuities includes that received at home or overseaseither by, or without using electronic means. Te denition o promise is to give hopeo providing gratuities at a certain time and with certain conditions.


1. a civil servant as stipulated in laws on personnel;2. a civil servant as stipulated in the Criminal Code;

3. someone receiving a salary or wage rom state or regional nances;4. someone receiving a salary or wage rom a corporation which receives assistancerom state or regional nances; or

5. someone receiving a salary or wage rom another corporation that utilises capital oracilities rom the state or society.

Whereas, state ocial as stipulated in Article 2 o Law No. 28/1999 covers stateocials in the highest state institutions, including ministers, governors, judges, stateocials based on legislation, and state ocials that have a strategic unction.

With th aim ois to carry out an act knowingly, willingly and in ull awareness othe consequences.


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In contravntion o thir obigations, don or not don in thir position meansthata civil servant or state ocial has carried out the act in accordance with the providers

wishes, so the git is rendered in return or the act (Sukardi 2009: 89).

e. Article 5, paragraph (2) o Law No. 20/2001 in conjunction with Law No.31/1999

Civil servants or state ocials accept gits or promises.


1. a civil servant as stipulated in laws on personnel;2. a civil servant as stipulated in the Criminal Code;3. someone receiving a salary or wage rom state or regional nances;

4. someone receiving a salary or wage rom a corporation which receives assistance romstate or regional nances; or

5. someone receiving a salary or wage rom another corporation that utilises capital oracilities rom the state or society.

Whereas, a state ocial as stipulated in Article 2 o Law No. 28/1999 covers stateocials in the highest state institutions including ministers, governors, judges, stateocials based on legislation, and state ocials that have a strategic unction.

Accpts a git or promis reers to the denition o gratuities in the elucidation

o Article 12 B, which means payment in a broad sense, including money, goods,discounts, recompense, interest-ree loans, travel tickets, lodging, tours, ree medicaltreatment and other acilities. Gratuities includes that received at home or overseaseither by, or without using electronic means. Te denition o promise is to give hopeo providing gratuities at a certain time and with certain conditions.

. Article 8 o Law No. 20/2001 in conjunction with Law No. 31/1999

A civil servant or someone other than a civil servant assigned permanently ortemporarily to a position knowingly embezzles money or securities kept due to theirposition, or who allows money or securities to be taken or embezzled by anotherperson or assists in such acts.

A civi srvant, which includes state ocials, is:

1. a civil servant as stipulated in laws on personnel;2. a civil servant as stipulated in the Criminal Code;3. someone receiving a salary or wage rom state or regional nances;4. someone receiving a salary or wage rom a corporation which receives assistance rom

state or regional nances; or5. someone receiving a salary or wage rom another corporation that utilises capital or



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Somon othr than a civi srvantis an individual or corporation.

Assignd prmannty or tmporariy to a position means through an ocialassignment letter or other orm o explanatory letter, to undertake a particular positionon either a permanent or non-permanent basis.

Knowingymeans committing an act with knowledge, willingness and in ull awarenesso the consequences.

embzzs mony or scuritis kpt du to thir position, or who aows mony orscuritis to b takn or mbzzd by anothr prson means, as stipulated in Article372 o the Criminal Code on embezzlement, knowingly and unlawully possessinganything, in whole or in part, belongs to another person, but is under their control orreasons other than crime.

Assists in such acts: as stipulated in Article 56 o the Criminal Code accomplices to acrime shall be punished i:

1. they knowingly aid in the commission o the crime;

2. they knowingly provide opportunity, means or inormation or the commissiono the crime.

g. Article 9 o Law No. 20/2001 in conjunction with Law No. 31/1999

A civil servant or someone other than a civil servant assigned permanently ortemporarily to a position knowingly alsies books or registers specically or anadministrative audit.

A civi srvantor state ocial is:

1. a civil servant as stipulated in laws on personnel;2. a civil servant as stipulated in the Criminal Code;3. someone receiving a salary or wage rom state or regional nances;4. someone receiving a salary or wage rom a corporation which receives assistance



Whereas, a state ocial as stipulated in Article 2 o Law No. 28/1999 covers stateocials in the highest state institutions including ministers, governors, judges, state

ocials based on legislation, and state ocials that have a strategic unction.


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Assignd prmannty or tmporariy to a position means through an ocialassignment letter or other orm o explanatory letter, to undertake a particular positionon either a permanent or non-permanent basis.

Knowingymeans committing an act with knowledge, willingness and in ull awareness

o the consequences.

Fasis books or rgistrs spcicay or an administrativ auditmeans makesbooks or registers appear to be original. According to a Netherlands Supreme Courtdecision o 15 June 1931, a paper is considered alse i it wrongly gives the impressionthat it has been made by the person axing their signature at the bottom o it(Sukardi 2009).

h. Article 10, letter (a) o Law No. 20/2001 in conjunction with Law No.

31/1999

A civil servant or someone other than a civil servant assigned permanently ortemporarily to a position knowingly embezzles, destroys, damages, or rendersunusable goods, ocial documents, letters or registers used to convince or provebeore an authorised ocial under their control because o their position.

A civi srvant or stat ocia is:1. civil servant as stipulated in laws on personnel;

2. a civil servant as stipulated in the Criminal Code;3. someone receiving a salary or wage rom state or regional nances;4. someone receiving a salary or wage rom a corporation which receives assistance




Somon othr than a civi srvantis an individual or corporation.

Assignd prmannty or tmporariy to a positionmeans through an ocialassignment letter or other orm o explanatory letter, to undertake a particular positionon either a permanent or non-permanent basis.

Knowingymeans committing an act with knowledge, willingness and in ull awarenesso the consequences.

embzzs, dstroys, damags, or rndrs unusab goods, ocia documnts,ttrs or rgistrs usd to convinc or prov bor an authorisd ocia undr

thir contro bcaus o thir positionmeans negates the goods, ocial documents,letters, or registers, and their strength as proo beore an authorised ocial.


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i. Article 10, letter (b) o Law No. 20/2001 in conjunction with Law No. 31/1999

A guide to investigation and indictment using an integrated approach to law enforcement

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