Indonesia has some of the most extensive tropical forests in the world. These forests are home to biologically diverse flora and fauna and provide livelihoods for millions of Indonesians. The forestry sector, including timber cutting and palm oil plantations, is an important source of public revenue, but corruption has facilitated illegal logging and undermined sustainable allocation and use of land.

The Indonesian Corruption Eradication Commission (KPK) has successfully prosecuted more than 600 defendants in corruption cases since 2004. However, only about 5% of them were charged for offences related to the forestry sector.

In collaboration with the KPK, the U4 Anti-Corruption Resource Centre undertook a systematic analysis of the KPK’s case verdicts related to forestry sector corruption in order to gain insights for the agency’s prosecution and prevention strategy. The focus is on cases that involved unlawful issuance of forest sector licences.

By 2016, the KPK had brought 30 defendants to court for abuse of power and/or bribery in the issuance of forestry licences in six cases spanning four of Indonesia’s 34 provinces: Sulawesi, East Kalimantan, Riau (3 cases), and West Java. All defendants were found guilty on at least one charge. They included six members of the national parliament, three governors, five heads of agencies, four regents, three other civil servants, and nine business persons. Over the next four years, the KPK only prosecuted one additional case related to the forestry sector.

Locus delicti and place of trial

Judicial power in the Indonesian court system is divided between, on one hand, the Constitutional Court, and on the other, the Supreme Court and four branches below it: the general courts, administrative courts, religious courts, and military courts. The first instance general courts are located in Indonesia’s regencies and municipalities, and the general appeal courts (high courts) are in the provincial capitals. Since 2011, special anti-corruption chambers are located at the district courts and high courts in Indonesia’s 34 provincial capitals. Cassation appeals are heard by special anti-corruption judges at the Supreme Court in Jakarta. The crimes of the indicted cases took place in five provinces, Riau and Jakarta infamously leading with 10 and nine defendants respectively.

Most cases were adjudicated in Jakarta. Even after the decentralisation of the Anti-Corruption Court to district and high courts in provincial capitals in 2011, some cases were nevertheless heard at first and second instance in Jakarta. All defendants from Central Sulawesi were adjudicated in Jakarta, although their trials took place after the decentralisation.

According to the Indonesian Criminal Procedure Code, cases can be trialled at the court responsible for the area where the crime took place; or where the majority of witnesses reside; or at another location for security reasons. In the case of Central Sulawesi, for example, the trial was moved to Jakarta due to the hostile atmosphere in the province when the regent of Buol was arrested.

Types of criminal charges

Law 31 of 1999 on corruption crimes, as amended by Law 20 of 2001, distinguishes 30 different types of corrupt crimes. In its indictments of the 30 forestry defendants, the KPK’s main charges were abuse of power, bribery, gratuities, and, in one case, obstruction of justice related to a bribery case.

The public sector defendants indicted in the first two cases (East Kalimantan and Riau 1) were all charged with abuse of power causing losses to the state under Article 2(1). For these charges, the KPK had to provide evidence that (a) an unlawful act had taken place, (b) someone benefited from this act, and (c) it caused the state to suffer losses.

With the enactment of Law 18 of 2013 on the Prevention and Eradication of Forest Destruction, a special investigative unit under the Ministry of Forestry was set up to investigate criminal acts in relation to forest destruction, including abuse of power by government officials. Since then, KPK prosecutions have focused on bribery and illegal gratuities as the main charges.

Since 2013, the public sector recipients in the cases in Central Sulawesi, Riau 2 and 3, and West Java, with one exception, were charged with acceptance of illegal gratuities or gifts under Article 12 of Law 31 of 1999 as amended by Law 20 of 2001. KPK prosecutors thus maximised the potential punishment by bringing the stronger illegal gratuity charge under Article 12 as the primary charge, putting the onus of proof on the defendants, and bringing bribery charges under Articles 5(2) and 11 as only secondary charges. This strategy by prosecutors resulted in guilty verdicts for all indicted.

The KPK charged the nine defendants from the private sector, all senior managers and directors of the involved companies, with bribery of state officials under Article 5(1). The companies themselves were not charged, even though Law 31 of 1999 as amended by Law 20 of 2001 stipulates that corporations can be held liable for corrupt acts. One reason given by KPK sources is that there was no criminal procedural law for indicting corporations before the enactment of Supreme Court Regulation 13 of 2016 (after the final verdict in the cases discussed in our study).

Imprisonment sentences and appeals

The average and median final prison sentence in the 30 cases is five years. The average difference between what the KPK demanded in its indictment and the final verdict is 1.37 years. Two outliers are the cases against businessman Martias alias Pung Kian Hwa and member of parliament Al Amien Nasution. At cassation level, the primary charge against Martias was dropped and his sentence was reduced by 7.5 years. The final sentence for Al Amien Nasution was seven years less than requested by the KPK, also because the primary charge against him was dismissed. If these two outliers are excluded, the average difference between prosecution request and final verdict is a bit less than one year (0.96).

More than a third of the 30 defendants’ cases went all the way to the Supreme Court, including four case reviews. Only five cases stopped at appeal level. Ten cases were not appealed. No systematic analysis was conducted as to which party appealed. KPK prosecutors will typically ask permission of the KPK commissioners to appeal to the higher court if the sentence is less than two-thirds of what they requested. But it is well known that many of the defendants in KPK’s cases also appeal.

Losses and restitution

It is within the KPK’s mandate to investigate and prosecute cases that involve law enforcement personnel or public officials, that give rise to particular public concern, and/or that involve losses to the state of at least IDR 1 billion. Losses to the state have to be proven as part of the charge of abuse of power causing losses to the state as in Article 2(1) or Article 3, but this does not apply to the other offences listed in Law 31 of 1999 as amended by Law 20 of 2001.

KPK prosecutors requested restitution (payment of compensation) from only five defendants, and the court agreed in all five cases. These individuals were, notably, defendants in the first two cases in which the main charge was abuse of power causing losses to the state, so state loss needed to be established as part of the charges.

Recommendation: a new prosecution paradigm

Based on what it has requested in its indictments, the KPK can be considered relatively successful. Its charges have largely been confirmed by the courts, even if final prison sentences are on average a year lower. It is in the omission of charges against the benefiting companies, as well as the failure to request restitution of assets – full recovery of the proceeds of crime, plus damages for environmental degradation – that its indictments can be considered to fall short of the ideal.

The agency has begun efforts to pursue the companies benefiting from corrupt deals and to assign a value to the economic loss the state is suffering due to environmental degradation. But progress has been slow, and this has hampered the KPK’s ability to show its value in cost-benefit terms.

We offer several recommendations for the prosecution of forestry-related (and similar) corruption cases:

• Implement a coherent strategy of prevention and enforcement in the sector, supported by a robust information- and knowledge-sharing infrastructure.
• Indict the companies benefiting from the corrupt deals.
• Put more emphasis on asset recovery and restitution.
• Continue putting a value on environmental degradation as state economic loss and request restitution.
• Demand the revocation of licences if the court determines they have been obtained illegally.

In the future the KPK should not only pride itself on a near-perfect conviction record, but should clear the legal path for prosecutions in the natural resources sector and set a precedent that the National Police and Attorney General’s Office can follow.