INDONESIA SEMI-WEEKLY BRIEF (February 21-24, 2015) (Jakarta)

APAC ASSISTANCE REPORT
INDONESIA SEMI-WEEKLY BRIEF
(February Protected content , Protected content

SECURITY, PEACE AND ORDER, PUBLIC SAFETY

General Overview and Assessment. Indonesian authorities are expected to tighten security in the capital Jakarta and key cities following two bomb-related incidents in Bekasi and Depok. Police were able to pre-empt an alleged bombing attempt in Bekasi but were unable to stop the explosion at a mall in nearby Depok. No one was reported hurt from either incident, but the twin developments highlighted the country’s continuing proneness to terrorist attacks. The Depok blast came on the heels of a recent travel advisory from Washington and Canberra warning of possible terror strikes in the country.

Meanwhile, public safety issues again figured prominently in the mass transport sector after a ferry sinking and a road accident left at least 18 people dead. Environmental concerns were also highlighted following the arrest of 11 people believed to be engaged in illegal forest clearing. The arrests came against the backdrop of new studies showing the extent of illegal logging in a country that is grappling with one of the fastest rates of deforestation in the world.

Bomb-related incidents hit West Java cities. Two bomb-related incidents hit two key cities of West Java.

• On Saturday (Feb 21), the Jakarta Police’s Gegana bomb squad detonated a suspicious package at Ciketing Asem village, Mustikajaya district in Bekasi, a report by The Jakarta Post said. Local police said the package was delivered to a businesswoman by an ojek (motorcycle taxi). The trader’s son, who received the package, became suspicious as a cable had pierced a hole in its wrapping paper. He reported the matter to the police, who later discovered that the package contained a cable, 20 centimeters of PVC pipe, a device believed to be a detonator, tiny steel pellets and white powder.

• On Monday (Feb Protected content , a suspected bomb blast rocked the ITC Depok shopping mall in the city of Depok, The Jakarta Post reported. The mall was located next to the City Hall on JI. Margonda Raya. The explosion occurred at Mezzanine, a children’s play area on the second floor, but no one was reported hurt. Police sealed off the blast site for investigation and increased security in the area.

Ferry capsizes in Sulawesi; two dead, three missing. Two children died and three adults went missing after a passenger ferry sank in a river in Sulawesi Island on Monday (Feb 23). Local media said rescuers managed to save 20 passengers. The case is still being investigated but preliminary investigation reports showed that a leak in the ferry’s hull probably caused the sinking.
16 dead in Central Java bus crash. A crowded bus overturned on Jatingaleh turnpike near the Central Java capital of Semarang on Friday (Feb 20), leaving 16 people dead, the Associated Press reported. Citing police, the report said the bus ran out of control and rolled over on a sharp bend, hitting a road divider before ending up on a gorge wall. It was carrying members of a Quran recitation group back from the Central Java town of Pekalongan to Bojonegoro in East Java.
11 nabbed for illegal forest clearing in Riau. Riau police arrested 11 people for illegal forest clearing in separate operations in the sub-districts of Bukit Batu, Bengkalis and Pinggir over the weekend, The Jakarta Globe reported. The arrests came just days after a new study claimed that more than 30 percent of the timber used by Indonesia’s industrial forest sector is sourced from illegal and unsustainable sources. The report entitled, Indonesia’s Legal Timber Supply Gap and Implications for Expansion of Milling Capacity, found a wide gap between the legal supply of wood to mills and the output declared by the industrial forestry sector. The study said raw material used by these mills exceeded the legal supply by the equivalent of 20 million cubic meters.
MAJOR POLITICAL DEVELOPMENTS
General Overview and Assessment. As anticipated, the unprecedented court ruling which stopped the KPK from pushing ahead with its investigation of National Police chief candidate Budi Gunawan has encouraged other high-profile graft suspects to employ the same legal maneuver against the anti-graft agency. Under pain of opening a floodgate of similar pre-trial petitions, it seems that the KPK has little choice but to launch a legal battle all the way up to the Supreme Court.
In the diplomatic scene, PM Tony Abbott’s reference to Australian aid in his latest pitch to save two of his countrymen from execution may have only made matters worse, as this has evoked strong nationalist pressure on Indonesian president Joko Widodo to stand firm on his no-clemency policy. Notably, a ‘coin diplomacy’ campaign has spread in key cities across the country in a sign of growing Indonesian resentment towards Australia. Meanwhile, there were reports circulating that Cabinet officials want execution officials to ‘get it over and done with’.
Graft suspect Suryadharma Ali files pretrial motion against KPK. Former Religious Affairs Minister Suryadharma Ali on Monday (Feb Protected content a pre-trial motion against the Corruption Eradication Commission (KPK) for naming him a graft suspect, The Jakarta Globe reported. Suryadharma, former chief of the United Development Party (PPP), has been charged last year with mismanaging the country’s multi-billion dollar hajj fund during his time as minister. Suryadharma’s legal team filed the motion with the South Jakarta District Court, the same court that last week granted National Police chief candidate Budi Gunawan’s pre-trial motion against the KPK for naming him a suspect in a bribery case last month. Suryadharma’s lawyer, Humphrey R. Djemat, accused the KPK of arbitrarily declaring his client as a suspect, after insufficient investigation and while lacking evidence.
Diplomatic fallout as spat over foreigners on death row worsens. The diplomatic standoff between Indonesia and foreign governments over Jakarta’s death penalty policy appeared to take a turn for the worse.
• The Administrative Court in Jakarta on Tuesday (Feb Protected content a bid by two Australian drug mules on death row to avoid execution by challenging the president’s rejection of their pleas for clemency, the Agence France Presse reported. Rejecting the applications of Australian nationals Myuran Sukumaran and Andrew Chan, presiding Judge Hendro Puspito said: "Clemency is the prerogative of the president ... the state administrative court has no right to rule on the challenge."

• Calls are mounting for Australian Prime Minister Tony Abbott to apologize for his ‘hurtful’ comment that Jakarta should pardon Sukumaran and Chan as a gesture of gratitude for Canberra’s A$1 billion aid for victims of the Protected content . Following a campaign in Aceh to collect loose change to repay the aid, a coalition of community groups in Jakarta calling itself the Pro-Indonesia Coalition has followed suit, staging a rally at the Hotel Indonesia traffic circle to criticize Abbott on Sunday (Feb 22).

• Indonesia has withdrawn its ambassador-designate to Brazil after the South American country postponed a ceremony sealing his accreditation, Reuters reported citing a Feb 21 statement from Indonesia’s foreign ministry. Toto Riyanto, who was chosen to be Indonesia’s new ambassador-designate to Brazil in October last year, had been invited to present his credentials at a ceremony at Brazil’s presidential palace on Friday (Feb Protected content was postponed at short notice, the statement said. Brazil and the Netherlands withdrew their ambassadors from Indonesia for “consultations” after two of their citizens were among six people executed for drugs offenses last month.
MAJOR ECONOMIC DEVELOPMENTS
General Overview and Assessment. The Finance Ministry at the last minute decided to indefinitely postpone the implementation of a new tax rule which required banks to file more detailed reports on the withholding of tax on deposits and savings they collected from customers. Many policy analysts acknowledged that the new law provides a powerful legal instrument to prevent money laundering and tax evasion, but it has also given rise to fears among bankers that the bank secrecy law would be violated. The postponement appears to be a prudent move and should give the government time to refine the policy and make sure that it is adequately communicated and explained to key stakeholders. The moratorium should also pave the way for a more comprehensive policy review to ensure that the new measure does not contradict other existing or planned tax reforms, such as the proposed tax amnesty scheme.
Finance ministry delays tax rule. Bowing down to strong pressure from the Indonesian Bankers Association, the Ministry of Finance taxation directorate general deferred indefinitely the implementation of a new tax regulation that was supposed to take effect this month, The Jakarta Post reported. The new rule would have required banks to reveal the names of big depositors and information on withholding income tax returns from their customers. Under the current filing system, on a monthly basis, banks report the withholding of income tax on deposits and savings to the tax authority only in a consolidated report covering all depositors anonymously. Bankers warned the government that the new rule would scare big depositors into moving their money to banks overseas. Bankers also warned the government that the new tax return filing format risked violating the banking secrecy provision.

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