OPINION: (Anti) Corruption in China’s Belt and Road Initiative
Early this year, Laode Syarif, the deputy chief of the Corruption Eradication Commission (KPK), asked the government to be careful with investments from China, citing data from the United States Department of Justice on enforcement of the Foreign Corrupt Practices Act (FCPA).
The data show 83 FCPA cases involving conduct in China — more than any other country by far, although it turns out all the cases involved multinational corporations operating in China.
“If a European or American investor gets caught bribing officials in a foreign country, they will be punished back home. That doesn’t happen in China, or in Indonesia,” Laode said.
That is true, albeit partly. One example is the graft case involving Malaysia’s former prime minister, Najib Razak. While investigation reports on Najib are manifold, we have barely heard news about any investigation in China into the Chinese counterpart who was linked to the 1Malaysia Development Berhad project or other China-linked projects overseas.
The data show 83 FCPA cases involving conduct in China — more than any other country by far, although it turns out all the cases involved multinational corporations operating in China.
“If a European or American investor gets caught bribing officials in a foreign country, they will be punished back home. That doesn’t happen in China, or in Indonesia,” Laode said.
On the other hand, China has already enforced a legal instrument akin to the FCPA. China’s Criminal Law criminalizes Chinese corporations and individuals that bribe foreign officials and international organizations. The punishment is three to 10 years in years and a fine, depending on the amount of the bribe.
Why have not we heard anything? This is a contrast to the glossy achievements of China’s anticorruption campaign. The country’s hunt for “flies and tigers” has been in overdrive ever since President Xi Jinping came into power in March 2013.
According to the Chinese Communist Party’s Central Commission for Discipline Inspection (CCDI), by 2017, the anticorruption drive had investigated more than 2.7 million officials, penalized more than 1.5 million people and criminally convicted 58,000, including more than 120 “tigers” (high-ranking civilian and military officials).
In 2018, the National People’s Congress amended the Chinese Constitution to pave way for the inception of an anti-graft super body: the National Supervision Commission (NSC).
The NSC heads local commissions at all administrative levels and has broader authority and jurisdiction that includes civil servants in the government, the legislature, the judiciary, all 9 parties, industrial and commercial federations, and others who work in organizations that manage public affairs; everything but the People’s Liberation Army and the People’s Armed Police, which fall under the Central Military Commission.
While it may be too early to expect a major breakthrough, particularly on China’s investments abroad, one of the biggest criticisms is the fact that while existing laws do not elaborate on the political relationship between the NSC and the CCDI, the latter has greater clout if one looks at the appointment of its institutional head: NSC director Yang Xiaodu is the deputy director of the CCDI.
This more inward-looking anticorruption drive poses a serious challenge to China’s more assertive posture on foreign policy, as marked by the inauguration of the Belt and Road Initiative (BRI) in 2013.
Not only could this further justify the broad allegations that China is “exporting corruption”, but it also raises questions on China’s efforts in improving global governance.
There are indications that China has been taking the anti-graft drive in the BRI more seriously since mid-2017. The CCDI has been running an experimental program with Laos since the end of 2017, embedding CCDI inspectors at several Chinese state-owned enterprises that are involved in the China-Laos Railway project, and establishing a joint supervisory team.
Thailand and the Philippines reportedly have expressed a desire to adopt the program.
Can we do it in Indonesia, too?
Amidst the brouhaha of identity politics and racial abuse, the proliferation of fake news concerning China and the polemics surrounding the KPK Law, synergizing our anticorruption efforts with China will be very difficult, but not impossible.
First, all forms of supervision and anticorruption efforts must be fair and evidence-based. Corruption in foreign investment is neither new nor exclusive to China. Primordial sentiment, politicization of the anticorruption movement and the lack of mutual understanding between our two countries cannot be allowed to continue to hamper good governance. Do not let the “anti-aseng” [anti-mainland Chinese] or “Communist lackey” narrative blur the objective of this critical partnership.
Second, efforts to strengthen the KPK as the main pillar of Indonesia’s anticorruption drive must continue. Issuing a government regulation in lieu of law (Perppu) to revoke the revised KPK Law is the best option at this time.
Third, this anticorruption synergy must go beyond the ceremonial and be open to public scrutiny and participation.
During the second BRI Summit this April, Vice President Jusuf Kalla signed the joint statement on the Beijing Initiative for the Clean Silk Road, which is committed to “open, green and clean” cooperation. Sadly, no Indonesian media reported this, nor have there been any developments on the government’s plans — if any — to follow up on this joint statement.
Fourth, greater and more effective engagement must be forged between relevant agencies, both domestically and with our Chinese counterparts.
The bribery case involving the development of a coal-fired power plant by Indonesia’s state-owned electricity company, PT PLN, in which a director of China Huadian Engineering was a witness, is one case that highlights the complex challenges facing BRI’s commitment to being “open, green and clean”.
The case is not the first and won’t be the last. The two governments must find effective ways to mainstream anticorruption commitment in bilateral cooperation.
Fifth, optimal synergy must involve both the private sector and civil society, which have unique experiences and understanding of key local issues and can thus contribute constructively to supervision and policy.
Why have not we heard anything? This is a contrast to the glossy achievements of China’s anticorruption campaign. The country’s hunt for “flies and tigers” has been in overdrive ever since President Xi Jinping came into power in March 2013.
According to the Chinese Communist Party’s Central Commission for Discipline Inspection (CCDI), by 2017, the anticorruption drive had investigated more than 2.7 million officials, penalized more than 1.5 million people and criminally convicted 58,000, including more than 120 “tigers” (high-ranking civilian and military officials).
In 2018, the National People’s Congress amended the Chinese Constitution to pave way for the inception of an anti-graft super body: the National Supervision Commission (NSC).
The NSC heads local commissions at all administrative levels and has broader authority and jurisdiction that includes civil servants in the government, the legislature, the judiciary, all 9 parties, industrial and commercial federations, and others who work in organizations that manage public affairs; everything but the People’s Liberation Army and the People’s Armed Police, which fall under the Central Military Commission.
While it may be too early to expect a major breakthrough, particularly on China’s investments abroad, one of the biggest criticisms is the fact that while existing laws do not elaborate on the political relationship between the NSC and the CCDI, the latter has greater clout if one looks at the appointment of its institutional head: NSC director Yang Xiaodu is the deputy director of the CCDI.
This more inward-looking anticorruption drive poses a serious challenge to China’s more assertive posture on foreign policy, as marked by the inauguration of the Belt and Road Initiative (BRI) in 2013.
Not only could this further justify the broad allegations that China is “exporting corruption”, but it also raises questions on China’s efforts in improving global governance.
There are indications that China has been taking the anti-graft drive in the BRI more seriously since mid-2017. The CCDI has been running an experimental program with Laos since the end of 2017, embedding CCDI inspectors at several Chinese state-owned enterprises that are involved in the China-Laos Railway project, and establishing a joint supervisory team.
Thailand and the Philippines reportedly have expressed a desire to adopt the program.
Can we do it in Indonesia, too?
Amidst the brouhaha of identity politics and racial abuse, the proliferation of fake news concerning China and the polemics surrounding the KPK Law, synergizing our anticorruption efforts with China will be very difficult, but not impossible.
First, all forms of supervision and anticorruption efforts must be fair and evidence-based. Corruption in foreign investment is neither new nor exclusive to China. Primordial sentiment, politicization of the anticorruption movement and the lack of mutual understanding between our two countries cannot be allowed to continue to hamper good governance. Do not let the “anti-aseng” [anti-mainland Chinese] or “Communist lackey” narrative blur the objective of this critical partnership.
Second, efforts to strengthen the KPK as the main pillar of Indonesia’s anticorruption drive must continue. Issuing a government regulation in lieu of law (Perppu) to revoke the revised KPK Law is the best option at this time.
Third, this anticorruption synergy must go beyond the ceremonial and be open to public scrutiny and participation.
During the second BRI Summit this April, Vice President Jusuf Kalla signed the joint statement on the Beijing Initiative for the Clean Silk Road, which is committed to “open, green and clean” cooperation. Sadly, no Indonesian media reported this, nor have there been any developments on the government’s plans — if any — to follow up on this joint statement.
Fourth, greater and more effective engagement must be forged between relevant agencies, both domestically and with our Chinese counterparts.
The bribery case involving the development of a coal-fired power plant by Indonesia’s state-owned electricity company, PT PLN, in which a director of China Huadian Engineering was a witness, is one case that highlights the complex challenges facing BRI’s commitment to being “open, green and clean”.
The case is not the first and won’t be the last. The two governments must find effective ways to mainstream anticorruption commitment in bilateral cooperation.
Fifth, optimal synergy must involve both the private sector and civil society, which have unique experiences and understanding of key local issues and can thus contribute constructively to supervision and policy.
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