Tuesday, November 28, 2017
Kerry B. Collison Asia News: nominating Kerry B. Collison for the Australia-Ind...
Kerry B. Collison Asia News: nominating Kerry B. Collison for the Australia-Ind...: http://australia-indonesia-awards.com/nominate/ Please consider nominating Kerry B. Collison for the Australia-Indonesia Awards....
nominating Kerry B. Collison for the Australia-Indonesia Awards.
Please consider nominating Kerry B. Collison for the
Australia-Indonesia Awards.
Category: "Research"
Many thanks
Saturday, November 25, 2017
Kerry B. Collison Asia News: Indonesia’s Armed Forces’Role In Counterterrorism:...
Kerry B. Collison Asia News: Indonesia’s Armed Forces’Role In Counterterrorism:...: Indonesia’s Armed Forces’Role In Counterterrorism: Impact On Military Reform – Analysis Lawmakers in Indonesia are currently revising...
Indonesia’s Armed Forces’Role In Counterterrorism: Impact On Military Reform – Analysis
Indonesia’s Armed Forces’Role In
Counterterrorism: Impact On Military Reform – Analysis
Lawmakers in Indonesia are currently revising an existing anti-terrorism
law. The proposed legislation will give TNI, the Indonesian armed forces, a
more direct role in combatting terrorism. This may pose a hurdle to continued
military reform.
Indonesian lawmakers are currently deliberating revisions to an existing
anti-terrorism law which appears insufficient in facing the threat of Islamic
State (IS). One of the main points debated in the terrorism bill is the role of
the Indonesian National Armed Forces (TNI) in counterterrorism.
According to existing law, the TNI is only allowed to assist
counterterrorism operations under the command of the Indonesian National Police
(POLRI). The new bill allows for certain conditions under which the TNI may
assume a more active role, rather than serving only as an Auxiliary Support
Force (BOK).
Generals Back More Authority
The process of revising the anti-terrorism law has been underway for
more than a year and the final draft is expected to be ready for a vote at
year’s end. One of the points that has prolonged the discussion is the role of
the TNI in counterterrorism. President Joko “Jokowi” Widodo began advocating a
more active role for TNI after a twin suicide bombing struck a bus terminal in
Kampung Melayu, East Jakarta in May 2017. The attack killed three police
officers.
A number of current and former military generals, many of whom serve in
important posts in the government, have emphasised the importance of the TNI’s
role in counterterrorism. The TNI commander, Gen. Gatot Nurmantyo, has argued
forcefully that terrorism must not be treated as a crime but as a threat to
state security. He asserted the impending danger of a “proxy war” where
subversive foreign agents will infiltrate Indonesia in a variety of ways,
including exploiting the threat of terrorism.
Defence Minister Ryamizard Ryacudu, a retired general, has further
asserted that combatting terrorism should not be the exclusive purview of just
one agency, as they will be insufficient to the task. This statement might
suggest a rebuke of POLRI as they are at the forefront of counterterrorism
measures in Indonesia.
TNI’s Direct Role in Counterterrorism?
Another retired general, Coordinating Minister for Political, Legal, and
Security Affairs Wiranto argued that the TNI should be given a direct role and
no longer work as BOK, playing a supporting function. He believed regulations
pertaining to TNI involvement in counterterrorism operations should be
simplified and made less burdensome so that when the need arises, appropriate
forces can be deployed quickly and effectively.
As these generals hold important positions in the defence and security
sectors, their opinions about the proper role of the TNI in counterterrorism
carry significant weight. However, there is also a base of public support for
their ideas.
According to a survey done by Kompas, a leading daily, 93% of
respondents supported the TNI having some role in counterterrorism, while 38%
supported the idea of TNI autonomy in combating terrorism. More than half or
55% percent of respondents believe the TNI should remain under the command of
POLRI, although the number who support autonomy is still significant.
TNI’s Expanded Role: Inevitable?
A coalition of civil society groups has been strongly opposed to the
TNI’s expanded involvement in counterterrorism for fear of human rights abuses
and the potential erosion of civilian control of the military. Yet the
legislation continues to march forward, with lawmakers confident that the new
bill will soon be finalised.
The House’s committee chairman on the anti-terrorism bill, Muhammad
Syafi’I, has ensured the public that despite this expansion of TNI authority,
Indonesia is committed to the rule of law and that law enforcement will remain
the responsibility of POLRI.
The revised legislation will first establish that the TNI is no longer
limited to serving in a BOK or auxiliary capacity. The exact conditions under
which and in what manner the TNI should be given a direct role in
counterterrorism will be clarified after the bill is ratified using Peraturan
Presiden (Presidential Regulation).
Jokowi will consult with the House of Representatives (DPR) on the terms
before issuing the Regulation. This should grant him sufficient leeway to
bypass their approval in the future should it be necessary to rapidly deploy
the TNI in response to a terror attack.
Challenges Ahead
The main concern over the TNI’s expanded involvement is that it will
hinder the ongoing process of military reform. Efforts to reform the military
in Indonesia have stressed the division of duties and responsibilities between
the TNI and POLRI.
Under this arrangement, the TNI’s main task has been to protect the
nation from external threats while POLRI’s has been maintaining internal
security and order. The TNI’s active role in counterterrorism could blur this
dividing line and presage a return to the political culture of the New Order,
when the military had an internal security role.
One potential benefit of the proposed new arrangement is that the Army
(TNI AD), the most dominant service, could use its advantage in
intelligence-gathering and guerrilla warfare to combat terrorism. However, this
has the potential to further entrench the Army as the most dominant service and
allow its territorial command structure – which many observers consider
problematic – to remain untouched by reforms.
Indonesia is striving for a more balanced armed forces, and has laid out
plans for key doctrines such as Minimum Essential Force (MEF) and Global
Maritime Fulcrum (GMF) which would direct additional resources to both the Navy
(TNI AL) and the Air Force (TNI AU). However, if the Army begins to play a more
outsized role in monitoring and combatting terrorism, the defence budget
allocation for TNI AD will likely increase at the expense of the other
services.
Additionally, the territorial command structure – which mirrors the
civilian structure of governance and creates opportunities for political
transactions during local elections – has long been the target of military
reform efforts. With an expanded role in internal security, the Army will
likely be able to fend off these efforts by claiming the structure is necessary
to combat terrorism.
Given all this, Indonesia must sustain its efforts toward military
reform. TNI AL and TNI AU should continue receiving additional resources to
raise their profiles and develop a balanced armed forces that can address
threats from air, land and sea – especially considering the intensifying danger
of transboundary terrorism. It is important that Indonesia remains wary of
involving the TNI too much in the preservation of internal security, even in
the interest of national security.
*Chaula Anindya is a Research Analyst with
the Indonesia Programme S. Rajaratnam School of International Studies (RSIS),
Nanyang Technological University, Singapore.
Thursday, November 23, 2017
Kerry B. Collison Asia News: Sydney Morning Herald Book Review
Kerry B. Collison Asia News: Sydney Morning Herald Book Review: Sydney Morning Herald Book Review “Rockefeller & the Demise of Ibu Pertiwi review: Mystery and politics in W Papua” Cameron Wo...
Sydney Morning Herald Book Review
Sydney Morning Herald Book Review
“Rockefeller & the Demise of Ibu Pertiwi
review: Mystery and politics in W Papua”
- Cameron Woodhead
Rockefeller
& the Demise of Ibu Pertiwi
Kerry B.
Collison
Sid Harta,
$24.95
Kerry B.
Collison brings a deep knowledge of Indonesian history and politics to his
latest novel. Using as a hook the mysterious disappearance of Michael C.
Rockefeller in 1961, the novel soon immerses us in a multi-faceted history
of West Papua (Irian Jaya), a former Dutch colony annexed by Indonesia in the
1960s. It's a geopolitical thriller that includes every conceivable perspective
and stakeholder, from remote mountain villages to the United Nation, from
international mining companies and the Indonesian military to the Papuan
independence movement. Rockefeller's vanishing gets an imaginative explanation,
as events conspire to ignite the possibility of war between Australia and
Indonesia (in a case of East Timor revisited on a larger scale) over the
question of self-determination. Perhaps a touch scattered as fiction, but sure
to intrigue anyone interested in geopolitical strategy and the history of our
region
Kerry B. Collison Asia News: ARCHIPELAGIC SEA-LANES IN INDONESIA – THEIR LEGALI...
Kerry B. Collison Asia News: ARCHIPELAGIC SEA-LANES IN INDONESIA – THEIR LEGALI...: ARCHIPELAGIC SEA-LANES IN INDONESIA – THEIR LEGALITY IN INTERNATIONAL LAW Chris Forward * Introduction In May 1996, Indo...
ARCHIPELAGIC SEA-LANES IN INDONESIA – THEIR LEGALITY IN INTERNATIONAL LAW
ARCHIPELAGIC SEA-LANES IN
INDONESIA – THEIR LEGALITY IN INTERNATIONAL LAW
Chris Forward*
Introduction
In May 1996, Indonesia submitted the
first (and only) proposal for the designation of three Archipelagic Sea Lanes
(ASLs) within its archipelago to the International Maritime Organisation (IMO).
The IMO has claimed the mandate of being the ‘competent international
organisation’ referred to in the United Nations Convention on the Law of
the Sea (LOSC)1 for designating ASLs.2 After significant protests from major
maritime countries including Australia and the United States (a prominent
non-signatory to the LOSC),3 the IMO declared Indonesia’s submission a ‘partial
designation’ of ASLs.4 This has provided maritime countries a significant
victory as the declaration has rendered the Indonesian ASLs practically useless
because because there is no compulsion for maritime countries to use them.
Maritime countries, through their influence over the IMO, have maintained
almost complete and unfettered access for shipping within the archipelagic
waters of Indonesia. This paper examines the Indonesian submission to determine
the validity of the IMO’s declaration at international law. Specifically, it
examines the authority of the IMO as a self professed ‘competent
international organisation’, the role it has undertaken in the process, and
the legality of its determination that Indonesia’s ASL submission was a ‘partial
declaration’.
This
paper makes three assertions. First, despite claims to the contrary,5 the LOSC
is not a universal codification of the law of the sea nor is it a ‘Constitution
for the Oceans’.6 It is a fundamental treaty which numerous states are
bound to adhere through being signatories. However, numerous important
non-signatories, the significant quantity of declarations on the interpretation
of its provisions and the failure of the treaty to declare its jurisdiction
over non-signatories mean the treaty is not a full embodiment of universally
applicable customary law. The LOSC has universal application where it can be
shown that it codifies existing customary law. However, the treaty has
introduced significant new concepts such as the archipelagic state,
archipelagic sea-lane passage (ASLP) and ASLs. To be universally applicable
(that is applicable to all states, including non-signatories), it must be
demonstrated that the international legal concepts pioneered by LOSC have been
accepted as representing customary international law.7 This paper argues that
as there has been no complete implementation of the process for designating
ASLs through the process designated by the LOSC, the process cannot be accepted
as valid international customary law. Therefore the process is only binding on
countries who are party to the treaty. Secondly, in the absence of being
specifically named in the LOSC treaty, the IMO must show it has been recognised
as having the mandate as the ‘competent maritime authority’ to designate
ASLs.8 It is argued that the IMO does not have this mandate yet, despite its
declaration to the contrary. Finally, the paper analyses the conduct of the IMO
in its consideration of Indonesia’s submission for recognition of ASLs within
its territory and specifically the legality of its declaration of the
submission as being a ‘partial submission’.
Read the full report at https://ssl.law.uq.edu.au/journals/index.php/maritimejournal/article/view/113/152
Wednesday, November 22, 2017
Kerry B. Collison Asia News: Indonesia boosts its air and sea denial capabiliti...
Kerry B. Collison Asia News: Indonesia boosts its air and sea denial capabiliti...: Indonesia was reported to be among the countries that expressed interest in the Indo-Russian BrahMos supersonic cruise missile at ...
Indonesia boosts its air and sea denial capabilities
Indonesia was reported to be among the countries that expressed interest
in the Indo-Russian BrahMos
supersonic cruise missile at the recent Dubai Air Show. Under its
Minimum Essential Force program, Jakarta aims to improve air and sea denial
capacities, with a primary focus on anti-ship and anti-submarine warfare in
coastal waters.
The Indonesian military expansion is coming amid escalating tensions
with China over a contested area around the Natuna Islands, which belong to the
Southeast Asian country.
Bottom
of Form
Missiles, frigates and subs
Jakarta’s
arsenal of anti-ship missiles is already quite robust. It includes the French
MM-38 and MM-40 Exocet, the Russian SSC-3 Styx and SS-N-26 Yakhont, and the
Chinese C-802. BrahMos would be a pretty notable addition to Indonesia’s
missile forces, as it is one of the world’s fastest anti-ship and land-attack
cruise projectiles.
BrahMos
can be fired from ships, submarines and ground-based platforms. A variant for
the Su-30 MKI fighter is set to be tested for the first time,
according to Indian media reports.
Frigates
and submarines are the other two pillars of Indonesia’s planned sea denial
architecture
Frigates
and submarines are the other two pillars of Indonesia’s planned sea denial
architecture. On October 30, the second of two Sigma 10514 PKR guided-missile
frigates was delivered to Jakarta by local shipbuilder PT Pal and Dutch defense
contractor Damen. The Sigma 10514 PKR frigate is a multi-role vessel that can
be used for patrol missions in the country’s economic exclusive zone (EEZ), as
well as for anti-air, anti-surface and anti-submarine warfare and maritime
security.
The
Indonesian navy has also delayed the decommissioning of its Ahmad Yani-class
frigates. A number of them will be sent to the Natuna Sea before the deployment
of Sigma 10514 PKR frigates is completed.
As well,
Indonesia received a Type 209 Chang Bogo-class attack submarine in August. The
first of three vessels ordered in 2011, it was built by South Korean defense
firm DSME. Jakarta plans to construct a fleet of 10 to 12 multipurpose
submarines capable of operating in shallow (“green”) and blue waters alike.
As far as
air defense is concerned, Indonesia recently finalized the acquisition of a
complete NASAMS medium-range air defense system from Norwegian manufacturer
Kongsberg. The ground-based platform will have to be equipped with US-made
Raytheon AIM-120 missiles.
Indonesia
currently relies on short-range surface-to-air missiles like the
Swiss-manufactured Oerlikon Skyshield system. NASAMS will be deployed to
protect the country’s capital city, but it could also be stationed to defend
military installations on the Natuna islands.
Changing posture
Indonesia
is an archipelago nation of about 18,000 islands. In July, Jakarta renamed the
northern portion of its EEZ in the South China Sea as “North Natuna Sea.” This
move drew a harsh
response from Beijing, which disputes Indonesian claims to the
waters surrounding the Natuna Islands.
The
Natunas do not fall within China’s “Nine Dash Line,” which delineates the Asian
giant’s claims to the South China Sea. However, Beijing lays claim to waters
north of these Indonesian islands. The area is a rich fishing ground and is
believed to have abundant oil and natural gas reserves.
To
counter Chinese territorial demands, the Indonesian government is building up
air and naval facilities on the Natuna Islands. Last year, Indonesian
Defence Minister Ryamizard Ryacudu said his country would ramp up
defenses around the Natunas by deploying warships, F-16 fighters,
surface-to-air missiles, drones and a radar. In support of military activities
on the Natunas, the Indonesian air force has also proposed developing an air base on
Batam island, 20 kilometers off Singapore’s southern coast.
Susi
Pudjiastuti, Indonesia’s maritime affairs and fisheries minister,
said last month that her country would have to reinforce naval defenses against
illegal fishing by foreign-flagged ships. Poaching cases in Natuna waters have
multiplied in recent years. Notably, the constant presence of Chinese fishing
boats, supported by their country’s coast guard, has strained relations between
Indonesia and the Asian powerhouse – Jakarta and Beijing had three naval
skirmishes last year.
Indonesia
has maintained a low profile in the South China Sea until recently. Now, while
Vietnam and the Philippines have softened their opposition to Chinese
territorial demands (which have also been rejected by an international
tribunal), Jakarta has become more assertive in safeguarding its maritime
interests.
The
Indonesian military build-up in the region bordering the South China Sea can be
viewed mostly as geopolitical posturing. Jakarta wants to send a message to
Beijing that it will defend its sovereign rights. But only strategic
cooperation with regional and non-regional actors wary of China’s military
expansion will give teeth to Jakarta to face Chinese pressure on the (North)
Natuna Sea.
By Emanuele Scimia November 20,
Saturday, November 18, 2017
Kerry B. Collison Asia News: Indonesia's Orang Rimba: Forced to renounce their ...
Kerry B. Collison Asia News: Indonesia's Orang Rimba: Forced to renounce their ...: Indonesia's Orang Rimba: Forced to renounce their faith The Sumatran rainforests of Indonesia are home to the Orang Rimba - the p...
Indonesia's Orang Rimba: Forced to renounce their faith
Indonesia's Orang Rimba: Forced to renounce their faith
The Sumatran rainforests of Indonesia are home to the
Orang Rimba - the people of the jungle. Their faith and nomadic way of life are
not recognised by the state and, as their forests are destroyed to make way for
palm oil plantations, many are being forced to convert to Islam to survive.
In a wooden hut on stilts, a group of children dressed in
white sit on the floor. They sing "I will protect Islam till I die"
and shout "There is no god but Allah", in unison.
Three months ago, the 58 families that make up the
Celitai tribe of Orang Rimba converted to Islam. They were picked up and bussed
into Jambi, the nearest city, and given clothes and prayer mats.
The Islamic Defenders Front - a vigilante group whose
leader is facing charges of inciting religious violence - helped facilitate the
conversion.
Ustad Reyhan, from the Islamic missionary group
Hidayatullah, has stayed to make sure the new faith is practised.
"For now we are focusing on the children. It's
easier to convert them - their mind isn't filled with other things. With the
older ones it's harder," he says.
"Before Islam they just believed in spirits, gods
and goddesses, not the supreme god Allah.
"When someone died, they didn't even bury the dead,
they just would leave the body in the forest. Now their life has meaning and
direction.
Outsiders are the "people of the light",
because they live in open areas and are often in the sun, unlike the people of
the jungle.
The surrounding majority Muslim population calls the
Orang Rimba "Kubu".
"It means that they are very dirty, they are
garbage, you can't even look because it is so disgusting," explains
anthropologist Butet Manurung, who has lived with the Orang Rimba for many
years.
"It also means primitive, stupid, bad smelling -
basically pre-human. People say their evolution is not complete."
It's thought there are about 3,000 Orang Rimba living in
central Sumatra.
"If you came before, you would have seen our forest.
It was pristine, with huge trees," says Yusuf
Now there are seemly endless ghostly white burnt-out
sticks in one direction, and palm oil trees in neat rows in the other.
The absence of any natural sounds is eerie.
"It's all gone. It happened just in the last few
years. The palm plantations came in, and then the forest started to burn,"
adds Yusuf, referring to 2015's devastating fires,
which burnt more than 21,000 sq km of forest and peat land.
The streams in the plantation are polluted with pesticide
and his family is getting stomach problems drinking from it.
"There is no forest for them to hunt in, the water
they fished in and drank from is polluted, and so is the air," says social
affairs minister Khofifah Parawansa, matter-of-factly. "So we are giving
them houses, villages to live in."
The government - working with plantation companies - has
built a number of housing estates for the Orang Rimba.
Last year, President Joko Widodo announced more new
housing and some land for them, following a meeting with tribal leaders - the
first organised by an Indonesian head of state.
Minister Khofifah says faith is part of this process.
"On the identity card, they have to state what
religion they have. There are those that have become Muslims, some who have
become Christians. So now they are getting to know God."
But many of the housing estates have failed and are
effectively ghost towns.
Without work or a way to feed their family, many Orang Rimba who lived in
them briefly went back to the traces of jungle that are left.
"What we want is for them to stop taking away our
forest. We don't want houses like the outsiders," says Ngantap, one of the
elders of an Orang Rimba tribe.
"I am at peace and happy in the forest, I am a
person of the jungle."
Ngantap wears the traditional loincloth of the Rimba
people, with a bag of cigarettes hanging from the side.
Unmarried women traditionally wear simple sarongs
covering the breasts. Once married, the sarong is tied around the waist leaving
breasts open for feeding babies. Many now wear clothes from the outside.
But Ngantap insists they are holding on to their faith.
Ngantap's wife Ngerung tell me they are connected to the
trees from birth.
"After a baby is born, three trees must be planted,
one for the placenta, one for the baby, one for the name. They can never be cut
down or hurt. When we walk through our forest we remind people of this."
Mr Manurung explains: "Orang Rimba worship many
gods, the tiger [being] one of the most powerful.
"They have a god of bees, a god of hornbill birds,
gods and goddesses of many trees. They also worship a god of water springs.
They will never go to the toilet or put soap in the river, so you can drink it
directly."
Sacrifice
Miyak, my guide, converted to Islam so he can travel and
fight to try and protect his family's forest.
They are trying to register the forest as their ancestral
land, following a landmark 2013 court ruling which said indigenous people have
rights over forests they have lived in for centuries.
He can take part in meetings but not in religious
ceremonies or rituals. As he now uses soap to wash himself and eats chicken and
cows, he can't enter his family home.
"When I got educated in the outsiders' ways, there
were many things that I had to sacrifice.
"But I accept that, because I am a messenger and
bridge for many people here with the outside world and the government, about
our forest and rights."
He still fears the gods and goddesses of the old
religion.
"It's the sacred people - our women shamans - [that]
I fear. They can communicate and see the gods and goddesses.
"The shaman can become a tiger, can become an
elephant if the gods are very angry, and attack people. I am scared of that. I
worry about breaking the rules."
But Miyak's greatest fear is that is his people's way of
life will disappear forever.
By Rebecca
Henschke BBC Indonesian Editor
Thursday, November 16, 2017
Kerry B. Collison Asia News: Mauritius Lawsuit Accuses Top Indonesian Officials...
Kerry B. Collison Asia News: Mauritius Lawsuit Accuses Top Indonesian Officials...: Mauritius Lawsuit Accuses Top Indonesian Officials of Laundering Billions Billions of US dollars belonging to Indonesian taxpayers ha...
Mauritius Lawsuit Accuses Top Indonesian Officials of Laundering Billions
Mauritius Lawsuit Accuses Top
Indonesian Officials of Laundering Billions
Billions of US dollars belonging to Indonesian
taxpayers have allegedly been spirited out of Indonesia and into bank accounts
in Singapore, Lebanon, Russia, Cyprus, the UK and Bermuda by some of the most
powerful financial figures in Jakarta with the help of an international cabal
of money launderers, according to a lawsuit filed in the Supreme Court of
Mauritius on Sept. 29.
Six plaintiffs led by the
Mauritius-based closed-end investment company, Weston International Capital Ltd
are seeking US$410 million from the Indonesian Deposit Insurance Corporation
(LPS) and 12 other J Trust and LPS associated defendants that Weston claims it
was defrauded out of three years ago through the sham sale of Indonesia’s Bank
Mutiara to a then-unknown Japanese financial concern, J Trust, along with
various money laundering, bribery and theft charges.
Weston has chased the money in court cases from Mauritius to Singapore to Switzerland
and now to Cyprus and Thailand and claims through a spokesman
that it is either nearing collection on monies owed or in the alternative
moving for the bankruptcy, liquidation and collapse of J Trust Co. Ltd, J Trust
Asia Pte, PT J Trust Investments Indonesia, Group Lease PCL and the Indonesian
Deposit Insurance Corporation (LPS) and their shareholders.
Indonesia’s notoriously corrupt
courts have traditionally ignored a long list of international creditors
attempting to collect in any manner on international legal judgments against
Indonesian corporate deadbeats. However a Weston spokesman contends that
“it is time for either the LPS to settle these debts and self-report these
charges to global regulators or for the Indonesian banking system to face
further intense global anti-money laundering scrutiny and embargos.”
Saga of Bank Century
The Weston lawsuit revolves around
the long-running takeover of the remains of a failing Indonesian financial
institution previously named Bank Century, which nearly
capsized in 2008 during the global financial crisis.
According to a series of Asia
Sentinel stories, Indonesian Deposit Insurance Corporation (LPS) officials
reportedly were ordered to pour US$830 million at then-prevailing exchange
rates into the bank from 2008 to 2013. These capital injections were intended
to conceal the fact that the bank’s former owner, Robert Tantular, was allowed
by the Indonesian government to steal more than US$500 million of the bailout
funds and launder them back out of Indonesia to Singapore, Cyprus, Switzerland,
Russia, the USA and Lebanon through the likes of Standard Chartered Bank
Singapore, Wells Fargo Bank N.A., Federal Bank of Lebanon and FBME Bank.
The attempt to prop up the bank in
2008 and 2009 nearly brought down the entire Indonesian financial system and
led to the ouster on what are widely regarded as trumped-up charges of Sri
Mulyani Indrawati, the internationally-respected finance minister in 2016, who
quit and joined the World Bank as its managing director. Sri Mulyani’s return
as finance minister has led to little progress in correcting the Indonesian
banking system’s anti-money laundering concealment program
In 2008, the sinking Bank Century was
expropriated by the Indonesian Deposit Insurance Corporation, a
quasi-government agency. The bank was renamed Bank Mutiara and sold to J Trust,
a Tokyo-based consumer finance company partly owned by and advised by the US
activist hedge fund Taiyo Pacific LLP, the California Public Employee
Retirement System (CalPERS), Invesco Capital and WL Ross & Co, headed by
Wilbur Ross, the current Secretary of Commerce. As Asia Sentinel has reported,
J Trust appears to have illicitly paid just US$28.5 million instead of the
publicly claimed US$368 million to acquire 99.996 percent of Bank Mutiara,
which was later renamed Bank JTrust.
There is little about the Japanese
parent, J Trust Co. Ltd, that inspires confidence. Its CEO, Nobuyoshi Fujisawa,
was president of several units of Livedoor, a Japanese internet service
provider that went belly-up in a 2006 Ponzi scheme amid charges of market
manipulation and securities fraud. J Trust is also connected closely to
Takefuji Co. Ltd., another notorious Japanese US$5.2 billion pyramid fraud and
bankruptcy that ended in its demise in 2010.
It is now affiliated with and
announced it intends to take over Group Lease PLC, a Bangkok-based hire
purchase lender whose share price has collapsed and whose shares were recently
suspended from trading by the Thailand Securities and Exchange Commission and
the Stock Exchange of Thailand (SET) because of fraud, corruption and money
laundering charges.
Group Lease’s now-departed Chairman
and CEO, Mitsuji Konoshita, has been charged by Thai authorities with fraud,
theft, statutory audit fraud and money laundering. He has left Thailand ahead
of the charges.
J Trust Co.’s stock ownership
appears to be intertwined in a maze of cross shareholdings with APF Financial,
Showa Holdings Ltd, Wedge Holdings Co., Ltd, Group Lease PCL, PT Bank JTrust
Indonesia TBK in addition to Group Lease Holdings Pte Ltd (Singapore), Taiyo
Pacific LLP, CalPERS and Invesco.
Prominent Banker Accused
A leading defendant in the Weston
lawsuit is Kartika Wirjoatmodjo, currently president director of PT Bank
Mandiri TBK, Indonesia’s biggest bank, which is owned by the Indonesian
government. Wirjoatmodjo is one of the country’s most prominent banking officials
and is also the sitting chairman of the Indonesian Association of Banks.
In the lawsuit, he is referred to as “the primary architect, orchestrator and
director of all of the fraudulent acts of concealment, money laundering and
theft committed at Bank JTrust from 2014 until late 2015.”
Other Indonesian government
officials named in the lawsuit include Sukoriyanto Saputro, Bank Mandiri’s
former corporate secretary, Fauzi Ichsan, the current CEO and Commissioner
of the Indonesian Deposit Insurance Corporation, Ahmad Fajar, an LPS appointed,
international director and President Director of Bank JTrust Indonesia, now a
Bank JTrust Commissioner, and Felix Istyono Hartadi Tiono, Bank JTrust’s chief
Money Laundering Compliance Officer (MLCO) since 2014.
Wirjoatmodjo headed the Indonesian
Deposit Insurance Corporation, known under its Indonesian name Lembaga Penjamin
Simpanan (LPS), from 2014 to 2015 before taking over as chief executive of Bank
Mandiri. He was in charge of the LPS sale of Bank Mutiara to J Trust in 2014
under the explicit directions of the presidential office of Susilo Bambang
Yudhoyono according to the suit. He is alleged to have ordered the Indonesian
Financial Services Authority’s approval of J Trust Co. and Fujisawa as
qualified buyers under “fit and proper test” requirements even though J Trust’s
credentials to acquire a bank were considered dubious at best, much less
Fujisawa’s.
Finally, several board members of PT
Bank JTrust Indonesia TBK and four J Trust Co. and J Trust Asia executives are
named in the Weston lawsuit as enjoined individuals, namely Nobuyoshi Fujisawa,
Shigeyoshi Asano, Nobiru Adachi and Felix Istyono Hartadi Tiono, a globally
registered MLCO.
Enter the Saabs
Among the most tarnished defendants
named in the lawsuit are Fadi Michel Saab, Ayoub Farid Michel Saab and Michel
Norbert Saab, all officers and owners of the notorious Tanzania-based FBME
Bank, FBME Bank’s Cyprus branch, FBME Card Services Ltd. and the Federal Bank
of Lebanon, purportedly long a bank of interest to global regulators. FBME Bank
was in effect closed down by the US Treasury Department’s Financial Crimes
Enforcement Network (FinCEN) earlier this year.
All of the Saabs are alleged to be
the transferors and past recipients of hundreds of millions of dollars of
laundered money including over US$400 million missing from the Saab Financial
(Jersey/Bermuda) Ltd. offshore vehicles which have acted as the Saabs’ personal
piggy bank.
It is alleged that over US$40
million has been paid by the Saabs to their legal advisers since 2014 to
conceal their money laundering activities and primarily to US law firms that
may face money laundering charges themselves.
The Saabs and Bank JTrust under the
ownership of both Tantular and the LPS continued to launder money from 2006 to 2015,
according to an explosive report authored by Peter Barrie-Brown, a UK
money laundering and compliance expert. It was written for and secretly
distributed only to the LPS, J Trust and Bank JTrust in mid-2014 and was
concealed until 2016.
Authorities of the US Treasury
Financial Crimes Enforcement Network (FinCEN) in effect shut down FBME Bank in
April of this year after a three-year battle, citing massive acts of money
laundering and aiding and abetting terrorist financing to the likes of
Hezbollah and Syrian manufacturers of sarin gas. The Saabs recently lost their
final fight before the US Appeals Court in Washington, DC to prevent FBME Banks
final closure and liquidation after the government of Tanzania unexpectedly
withdrew its support for the appeal on Oct. 3
LPS Sale Process of Bank Mutiara
The sale of Bank Mutiara was
allegedly executed under a confidential and conditional share purchase
agreement that required a down payment of just US$28.1 million and
exclusively provided leveraged buyout debt to J Trust Co. through a Rp3
trillion sharia promissory note issued secretly through the LPS to J Trust
which was later written down to zero by the LPS and never paid. Neither J Trust
Co. nor the Indonesian Deposit Insurance Corporation have responded adequately
to questions from the Asia Sentinel regarding the affair.
J Trust Co. was thus basically given
Bank Mutiara for virtually free using the flailing bank’s cash on hand in
exchange for covering its losses, which have run into the tens of millions of
dollars. The bank was widely believed in Jakarta to be the repository of vast
amounts of slush funds for the Indonesian Democratic Party in 2008 headed by
then-President Susilo Bambang Yudhoyono.
During the discovery process for the
LPS sale of the bank, the lawsuit alleges, the 21 collective Weston defendants
acted in a conspiracy to “collectively and collusively conceal the existence” of the Barrie-Brown report, which was
concealed to over 20 potential bidders throughout 2014 in order to mask the
money laundering operations of Bank JTrust that would have rendered the bank
unsellable.
Indonesian LPS a Key Player
The lawsuit alleges that the
Indonesian Deposit Insurance Corporation “operated as a key functioning member
of an Indonesian government kleptocracy and was sanctioned and empowered to
conceal and cover up over US$1 billion of fraud, theft, embezzlement and money
laundering committed between Bank JTrust, Tantular, Saab family members, Saab
Financial Jersey/(Bermuda) Ltd, J Trust and FBME Bank.”
The complaint alleges that officials
of the Indonesian government and the LPS government officials in control of
Bank JTrust from 2008 to 2015 along with Nobuyoshi Fujisawa, Nobiru Adachi,
Bank JTrust’s current president commissioner, And Felix Istyono
Hartadi Tiono, Bank JTrust’s money laundering compliance officer, who are
accused of collectively conspiring to violate global banking and
money laundering laws and regulations to the tune of US$410.5 million, with
Wirjoatmodjo as the principal architect.
The lawsuit further charges the Saab
family members, FBME Ltd, the Federal Bank of Lebanon and FBL executives with a
separate US$287.8 million of claims arising from acts of fraud, theft,
embezzlement and money laundering.
Weston alleges that the LPS auction
was illegal because Bank JTrust, under the orders of Wirjoatmodjo, failed to
disclose to its regulators and auditors that FBME Bank and another Saab unit
had sued Bank JTrust in the London Court of International Arbitration, alleging
fraud and theft and seeking a US$38.5 million return from Bank JTrust of US$40
million in cash already laundered back to Saab Financial Limited (Jersey) by
Tantular and Fadi Saab.
The London court claim was never
disclosed to the prospective bidders although it should have nullified the
possibility of the sale of the bank to various suitors, which also included
Bank Rakyat Indonesia and the Bank of China (HK). The lawsuit alleges
Wirjoatmodjo authorized a US$8 million bribe paid to the Saabs to continue the
concealment of the money laundering, theft and fraud. The US$8 million was
purportedly disbursed to Bank of America London disguised as £5 million of
legal expenses credited to Saab Financial Bermuda’s lawyers in London by Bank
JTrust.
Mutiara Sale Goes Forward Anyway
Nonetheless, the sale of Bank
Mutiara went forward in November 2014. WICL, Weston’s holding company, withdrew
from the auction process in June 2014 after reaching the final round of six
qualified bidders. Weston claims that Wirjoatmodjo and the LPS were concealing
at least US$400 million of financial irregularities at the bank including
hidden internal cash deposit disbursements illicit securities illicit
transferrals, FBME money laundering, embezzlement, theft, fraud and statutory
audit fraud while the Indonesian financial regulators turned a blind eye.
The Weston plaintiffs allege that J
Trust Co. and the other LPS defendants led by Wirjoatmodjo also failed to
disclose that Tantular and Budi Mulya, then Deputy Governor of Bank Indonesia
had been convicted of by the Central Jakarta District Court in 2010 and 2014
and sent to jail for 20 and 14 years respectively for criminal fraud and money
laundering. Simultaneously, Wirjoatmodjo was leading the illegal LPS sale of
the bank.
The lawsuit alleges that at a secret
J Trust Co. board meeting held on August 14, 2008 – well before the LPS
had formally ended the Bank Mutiara sale process, and long before the LPS had
disclosed the winner of the auction, the entire J Trust board of directors in
Tokyo had already internally approved the purchase of Bank Mutiara with terms
never offered to any of the other bidders including over US$340 million of upfront
leveraged debt forgiveness.
J Trust Co. “knew with absolute
certainty that it was conspiratorially pre-chosen…as the ‘exclusive buyer’ in
the non-transparent fixed sale of the shares,” the lawsuit alleges, with a
mandate “to hide all of Bank JTrust’s previous and future criminal acts from
the public at large to global regulators and criminal authorities.”
Theft Continues
In the wake of the sale, according
to the suit, the carnage has continued, with more than US$1.5 billion laundered
out of Bank Mutiara, now renamed Bank JTrust, and various J Trust in violation
of a US$120 million Supreme Court of Mauritius global Mareva injunction – a
court order freezing assets so that J Trust and Bank JTrust defendants couldn’t
dissipate them beyond the court’s jurisdiction.
The money-laundering has continued,
according to the suit, partly through a long list of alter ego subsidiary units
including J Trust Asia, a Singaporean subsidiary wholly owned by the J Trust
parent, that “acts as the base implementation agent” for all of J Trust’s
investment and other strategic directives, as well as PT JTrust Investment
Indonesia and Group Lease PCL.
As much as US$211 million in cash
and other funds is said to have been diverted from J Trust, Bank J Trust and J
Trust Asia since May 2016 to Group Lease PCL and Group Lease Holdings Pte
(Singapore) in questionable acts of Weston alleged J Trust money transfers
ordered by Nobuyoshi Fujisawa, Shigeyoshi Asano and former Group Lease
Chairman, Mitsuji Konoshita to related party entities of Group Lease Holdings
Pte in Singapore and Cyprus in what appears to be a vanishing act of hundreds
of millions of laundered funds to J Trust related parties.
The Thailand Securities and
Exchange, with the help of the Cyprus Securities and Exchange Commission,
recently accused former Group Lease Chairman and CEO Mitsuji Konoshita
diverting US$54 million purported to be loans to four related party
“independent” groups of borrowers in Cyprus and one in Singapore under
Konoshita’s ultimate control, according to a Group Lease Independent Auditors
Report dated Sept. 30 and released on Nov.14.
The lawsuit claims these funds are
in fact owed to Weston and depict a plan between Group Lease, Wedge Holdings,
Showa Holdings and various Group Lease and J Trust board members, officers and
shareholders led by Fujisawa to defraud J Trust Co. and Bank JTrust creditors,
all in violation of the Mauritian Mareva injunctions.
Final Act Near?
“Either the Indonesian LPS
respectfully defends Wirjoatmodjo and the other Indonesian LPS and Bank JTrust
defendants as well as J Trust associated executives in the Mauritius courts or
it chooses to voluntarily self-report billions of US dollars of global money
laundering concealment and fraud to international regulators led by the
Monetary Authority of Singapore and the US Department of Justice while
simultaneously settling their debts to us in the amount of US$410.5
million and the regulatory fines to global regulators” said the Weston
spokesman.
“The last thing the Indonesian
government needs right now is to have one of the most senior ranking bank
officials in Indonesia admitting under oath to concealing global money
laundering, and massive fraud at the LPS and Bank JTrust while Indonesian banks
led by Bank Mandiri are looking to dangerously expand their retail depositor
global footprint into Singapore and other parts of Asia.”
John
Berthelsen