Indonesia: Environmental losses counted in graft probe

Haeril Halim and Hans Nicholas Jong The Jakarta Post 8 Oct 16;

The Corruption Eradication Commission (KPK) will now include potential environmental losses in its indictments to show how damaging corruption can be, not only to the state’s coffers, but also to the country’s natural resources.

The antigraft body has claimed that a mining permit issued by a graft suspect, Southern Sulawesi Governor Nur Alam, may cost nearly Rp 3.5 trillion (US$269.5 million) in environmental losses.

This is the first time the KPK has used an audit of environmental losses in court to build a strong case against a graft defendant. This audit is expected to strengthen the antigraft body’s separate audit of state losses, which is still ongoing, for the case.

The combination of state and environmental losses in the case aims at sending a message to state officials charged with corruption in the environmental sector about the magnitude of their alleged crimes.

KPK commissioner La Ode Muhammad Syarif said that the approximately Rp 3.4 trillion in losses consisted of the loss of sources of drinking water for local people and the loss of protected forest that had been used as a mining site.

“[The environmental losses] also cover the value of the absence of rehabilitation at the mining site. The KPK will pay special attention to corruption in the natural resource and environmental sectors in the future,” La Ode told The Jakarta Post on Thursday.

The mining site had been operated by PT Anugrah Harisma Barakah for years and the KPK accused the company of channeling billions of rupiah of kickbacks to the governor’s bank accounts to pay for Nur Alam’s decision to issue the permit for Anugrah. The KPK revealed its assessment of the environmental losses during a pretrial hearing for Nur Alam on Wednesday.

Nur Alam’s petition aimed to challenge the KPK’s decision to name the governor a suspect, even though his administration in the past three years received a reasonable without exceptions (WTP) assessment from the Supreme Audit Agency (BPK).

The antigraft body has long targeted corruption in the environmental sector. It previously conducted a comprehensive study of the mining sector in 34 provinces in 2015 and found a number of irregularities that could have led to potential losses of hundreds of trillion of rupiah. The study, however, was never used against a graft defendant.

The KPK detected that 724 of 3,066 mining companies did not have tax identification numbers (NPWP) and many companies failed to report their taxes to the government.

“We found that as much as Rp 23.7 trillion of non-tax state revenue (PNBP) funds had yet to be paid by mining companies to the state,” La Ode said.

The KPK charged Nur Alam with bribery after finding that billions of rupiahs sent to his bank accounts had allegedly come from PT Anugrah.

Nur Alam’s case is not the first environment-related graft case that the KPK has handled.

In 2009, the KPK investigated former Pelalawan regent Tengku Azmun Jafar in Riau in a case involving the issuance of forestry permits to seven companies that Tengku allegedly owned in the region.

The KPK at that time did not calculate the environmental losses like it had done on Nur Alam’s case. However, the KPK’s calculations of state losses in Palalawan’s case reached Rp 1.3 trillion.

Separately, the head of the legal and research department of the Indonesian Forum for the Environment (Walhi), Zenzi Suhadi, lauded the KPK’s move to calculate environmental losses and potential economic losses in Nur Alam’s case, saying that it would hold offenders in the natural resource sector more accountable for their actions.

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