Internal controls 'key' to fighting corruption: Anwar Suprijadi

Aditya Suharmoko, The Jakarta Post, Jakart..." /> Internal controls 'key' to fighting corruption: Anwar Suprijadi

Aditya Suharmoko, The Jakarta Post, Jakart...">
Internal controls 'key' to fighting corruption: Anwar Suprijadi

Aditya Suharmoko, The Jakarta Post, Jakarta

In 2006, Finance Minister Sri Mulyani Indrawati appointed Anwar Suprijadi as the ministry's director general of customs and excise.

Anwar has since striven to cleanse his office of corruption. A substantial task considering numerous independent surveys had labeled it one of the most corrupt institutions in the state.

Recently, The Jakarta Post spoke with Anwar regarding his reputation as a "clean" person., and his capacity to improve the customs office.

Question: What do you think is the main problem at your office?

Answer: The main problem I face is compliance -- internal and external. This is the biggest obstacle for the main functions of customs and excise. When I first came here, I was not accepted with arms wide open.

I received protests for two months, and the protesters slept at the directorate general of customs and excise. Perhaps they were not happy I had become the new director general because of my track record. I saw this was a combination of internal and external (people). My house was surrounded by cars and motorcycles.

Text messages (containing threats) are common. The children of one of my good officials (a director) were also threatened. None of the threats have been realized. My principle is that if I become afraid, they would threaten me further.

So how can you improve compliance at the directorate general of customs and excise?

The most notable method is through the development of an internal control division. We created such units in both primary and secondary service offices. For external compliance, there is the guidance and consultation division.

I select (officials) based on quality. First we managed the offices at Tanjung Priok, Batam, Tanjung Perak, Tanjung Emas, Belawan, Soekarno-Hatta, Kediri, Malang and Kudus.

Officials who can show they are capable (at maintaining internal control at this level) will be promoted to other areas as office heads.

How do you recruit them?

First we conducted an assessment test. We offered the positions to 11,008 employees, but only about 7,000 applied. Of these, only 1,700 (employees) passed, many of whom we placed in the internal control division.

To be successful, the internal control units must function like the KPK (Corruption Eradication Commission), building good networks and conducting thorough investigations.

How do you know the 1,700 employees have integrity?

I am always scouting for talent. What is important is that we are consistent and do not give up. And we must dare to punish.

After Tanjung Priok (May 30 raid conducted jointly with the KPK), we raided Juanda (Surabaya airport). We were not with the KPK, but did catch some employees receiving bribes. The internal control division has caught eight high-level officials this year. Overall, about 40 to 50 officials have been sanctioned.

Are there any incentives for internal control officers?


Yes. Remuneration is based on performance. The internal control division has a key performance indicator, how successful they are in preventing violations. We are still making improvements. I am looking for a continuously developing system ... our rivals are developing themselves.

Bribes used to be given in envelopes put in amongst documents. Now (they are arranged) via text messages, and sometimes couriers exchange money using cars.

Have there been any significant changes since the establishment of the internal control unit(s)?

It has been satisfactory. Usually, ahead of the general elec tions, there is an increase of smuggling through ports. But not now. I requested KPK support me if I was obstructed (by corrupt officials), and they agreed. We've made significant improvements to supervision -- indicated by an increase in revenue.

People used to say if we became too strict and tough (in monitoring ports), goods would not be able to enter the country. Well, this has not been the case so far. Despite the implementation of stricter rules, the volume (of goods) keeps increasing, and so does (the money collected from) import duties.

Are there any indications this has increased costs? What about the custom brokers?


Different reactions have emerged. Some say the flow of goods has been delayed. Well, checking goods takes time. If they are not checked, we are asking for trouble.

There used to be about 5,000 customs brokers in Priok. We asked the Finance Minister to enforce registration and access rules to see whether these agents were legitimate or not. It turned out that there were only 1,800 nationwide who were licensed.

This was interesting. The number of cigarette firms liable to pay excise tax has declined but production and revenue from these taxes have increased.

In customs, the number of customs brokers shrank, the number of importers shrank, but import volumes increased, so did customs duties. This means that now, by getting 'tough', we have less unregistered brokers and importers, and more state revenue.

What is the main trick to smuggling now?

The modus is they (smugglers) are using the free trade zone, via Batam, to import goods before distributing them to other islands.

I requested to the Finance Minister that I (customs and excise office) would no longer operate in the free trade zone directly, as we would operate better from outside the zone.

This was to simplefy our work. I could not do anything while my men were there as the zone is outside the customs regulations which apply elsewhere in Indonesia. I would prefer to focus from the outside, which means we monitor the flow of goods from the borders of this zone.

And of course there is always under-invoicing.
<span style="font-size: 14pt"><span style="font-weight: bold">Internal controls 'key' to fighting corruption: Anwar Suprijadi</span></span><br /> <br /> Aditya Suharmoko, The Jakarta Post, Jakarta<br /> <br /> In 2006, Finance Minister Sri Mulyani Indrawati appointed Anwar Suprijadi as the ministry's director general of customs and excise.<br /> <br /> Anwar has since striven to cleanse his office of corruption. A substantial task considering numerous independent surveys had labeled it one of the most corrupt institutions in the state.<br /> <br /> Recently, The Jakarta Post spoke with Anwar regarding his reputation as a &quot;clean&quot; person., and his capacity to improve the customs office.<br /> <br /> <span style="font-style: italic">Question: What do you think is the main problem at your office?<br /> </span><br /> Answer: The main problem I face is compliance -- internal and external. This is the biggest obstacle for the main functions of customs and excise. When I first came here, I was not accepted with arms wide open.<br /> <br /> I received protests for two months, and the protesters slept at the directorate general of customs and excise. Perhaps they were not happy I had become the new director general because of my track record. I saw this was a combination of internal and external (people). My house was surrounded by cars and motorcycles.<br /> <br /> Text messages (containing threats) are common. The children of one of my good officials (a director) were also threatened. None of the threats have been realized. My principle is that if I become afraid, they would threaten me further.<br /> <br /> <span style="font-style: italic">So how can you improve compliance at the directorate general of customs and excise?</span><br /> <br /> The most notable method is through the development of an internal control division. We created such units in both primary and secondary service offices. For external compliance, there is the guidance and consultation division.<br /> <br /> I select (officials) based on quality. First we managed the offices at Tanjung Priok, Batam, Tanjung Perak, Tanjung Emas, Belawan, Soekarno-Hatta, Kediri, Malang and Kudus.<br /> <br /> Officials who can show they are capable (at maintaining internal control at this level) will be promoted to other areas as office heads.<br /> <br /> <span style="font-style: italic">How do you recruit them?</span><br /> <br /> First we conducted an assessment test. We offered the positions to 11,008 employees, but only about 7,000 applied. Of these, only 1,700 (employees) passed, many of whom we placed in the internal control division.<br /> <br /> To be successful, the internal control units must function like the KPK (Corruption Eradication Commission), building good networks and conducting thorough investigations.<br /> <br /> <span style="font-style: italic">How do you know the 1,700 employees have integrity?</span><br /> <br /> I am always scouting for talent. What is important is that we are consistent and do not give up. And we must dare to punish.<br /> <br /> After Tanjung Priok (May 30 raid conducted jointly with the KPK), we raided Juanda (Surabaya airport). We were not with the KPK, but did catch some employees receiving bribes. The internal control division has caught eight high-level officials this year. Overall, about 40 to 50 officials have been sanctioned.<br /> <span style="font-style: italic"><br /> Are there any incentives for internal control officers?</span><br /> <br /> Yes. Remuneration is based on performance. The internal control division has a key performance indicator, how successful they are in preventing violations. We are still making improvements. I am looking for a continuously developing system ... our rivals are developing themselves.<br /> <br /> Bribes used to be given in envelopes put in amongst documents. Now (they are arranged) via text messages, and sometimes couriers exchange money using cars.<br /> <br /> <span style="font-style: italic">Have there been any significant changes since the establishment of the internal control unit(s)?</span><br /> <br /> It has been satisfactory. Usually, ahead of the general elec tions, there is an increase of smuggling through ports. But not now. I requested KPK support me if I was obstructed (by corrupt officials), and they agreed. We've made significant improvements to supervision -- indicated by an increase in revenue.<br /> <br /> People used to say if we became too strict and tough (in monitoring ports), goods would not be able to enter the country. Well, this has not been the case so far. Despite the implementation of stricter rules, the volume (of goods) keeps increasing, and so does (the money collected from) import duties.<br /> <span style="font-style: italic"><br /> Are there any indications this has increased costs? What about the custom brokers?</span><br /> <br /> Different reactions have emerged. Some say the flow of goods has been delayed. Well, checking goods takes time. If they are not checked, we are asking for trouble.<br /> <br /> There used to be about 5,000 customs brokers in Priok. We asked the Finance Minister to enforce registration and access rules to see whether these agents were legitimate or not. It turned out that there were only 1,800 nationwide who were licensed.<br /> <br /> This was interesting. The number of cigarette firms liable to pay excise tax has declined but production and revenue from these taxes have increased.<br /> <br /> In customs, the number of customs brokers shrank, the number of importers shrank, but import volumes increased, so did customs duties. This means that now, by getting 'tough', we have less unregistered brokers and importers, and more state revenue.<br /> <br /> <span style="font-style: italic">What is the main trick to smuggling now?</span><br /> <br /> The modus is they (smugglers) are using the free trade zone, via Batam, to import goods before distributing them to other islands.<br /> <br /> I requested to the Finance Minister that I (customs and excise office) would no longer operate in the free trade zone directly, as we would operate better from outside the zone.<br /> <br /> This was to simplefy our work. I could not do anything while my men were there as the zone is outside the customs regulations which apply elsewhere in Indonesia. I would prefer to focus from the outside, which means we monitor the flow of goods from the borders of this zone.<br /> <br /> And of course there is always under-invoicing.
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