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Optimizing the Role of the Regional Advocacy Committee in Addressing Corruption in the Private Sector

KEMITRAAN and B-Trust in the INTEGRITAS program, held a Focus Group Discussion (FGD) as an effort to strengthen the role of the Regional Advocacy Committee (KAD) in fighting corruption in the private sector.

The Corruption Eradication Commission (KPK) through the Directorate of Anti-Corruption of Business Entities (AKBU) noted that the private sector ranks highest in corruption cases. There were 297 cases recorded from 2004 to May 2020. To face this challenge, KPK established the Regional Advocacy Committee (KAD) based on Presidential Regulation No. 91/2017 on the Acceleration of Business Implementation. KAD is designed as a dialog forum between the government and business actors to discuss strategic issues related to corruption prevention efforts in Indonesia. The hope is to strengthen governance and integrity in the private sector and government.

However, the high number of corruption cases from the private sector shows the need to optimize the role of KAD, both at the regional and institutional levels. In order to strengthen the capacity of KAD, KEMITRAAN through the support of USAID in the INTEGRITAS program with B-Trust, seeks to strengthen the capacity of KAD in several critical provinces, namely East Java, South Sulawesi, and East Nusa Tenggara. These capacity building efforts include providing institutional support, conducting surveys to identify corruption gaps, and providing technical assistance to develop advocacy action plans, as well as developing effective prevention strategies.

In June 2023, B-Trust conducted an assessment of KAD in the three provinces. The assessment showed that there were still some serious challenges. Among them were the lack of budget support and minimal involvement of the provincial government, which resulted in KAD not functioning optimally. In South Sulawesi, KAD experienced difficulties in establishing a standardized working mechanism after the change of officials and the dependence on the chairperson of KAD. In NTT, KAD has been inactive for four years (since 2020) due to budget reallocation for COVID-19 handling. In East Java, although KAD is more active, there is still a need for a more formal and sustained multi-stakeholder dialog.

Furthermore, B-Trust conducted an e-survey in January-February 2024. The survey was conducted by sending a Google Form to 100 entrepreneurs as respondents who were randomly selected in each province. Respondents were asked 27 questions covering various aspects of KAD institutions, procurement of goods and services, and licensing processes. Respondents were given “yes”, “no”, and “don’t know” response options, with some questions having options for additional information for further exploration.

The survey results showed that in South Sulawesi Province, 60 percent of respondents were aware of KAD. Furthermore, about 78 percent of those who were aware understood the purpose and function of KAD. This indicates an increase in awareness and understanding of KAD’s role due to effective socialization. However, there are still strong indications of corrupt practices in the procurement of goods or services, with 43 percent of respondents admitting that working on activity packages for a fee is a major problem. In the area of licensing, about 61 percent of respondents indicated that there is a “thank you” given to local officials who facilitate the licensing process. Then, 75 percent of those who mentioned corruption considered the permit issuance stage to be the most prone to corruption.

A similar situation exists in NTT and East Java, where awareness of KAD is still relatively low. Corrupt practices were also recognized as high by the majority of respondents, especially in the procurement of goods and services and licensing. The e-survey showed that in NTT, only 25 percent of the respondents knew about KAD and in East Java only 40 percent had knowledge about the existence and function of KAD.

Based on these findings, some strategic recommendations include:

  1. Goods and services procurement: LKPP needs to develop stronger policies to close potential corruption loopholes, including encouraging reporting systems and developing effective reward and punishment systems. APH should also develop stricter supervision and law enforcement strategies.
  2. Licensing Sector: The One-Stop Investment and Integrated Services (DPMPTSP) office in each province needs to improve transparency and conduct wider socialization of the licensing process to prevent corruption. KAD needs to improve coordination with DPM-PTSP to strengthen prevention and monitoring measures.
  3. Strengthening KAD: There is a need for restructuring and internal strengthening of KAD to ensure active involvement of local governments and the private sector in all activities and policies. KAD is also expected to have priority work programs to make its presence more visible. Internal strengthening should also ensure multi-stakeholder representation consisting of professionals in their fields, such as construction, consultancy, land, and advocacy. In addition, KPK should increase support and supervision of KAD, and ensure that communication and advocacy strategies are effectively implemented to achieve the expected results.

Following up on the results of the e-survey, KEMITRAAN and B-Trust will organize a Focus Group Discussion (FGD) in May 2024. The main objective of the FGD is to explore the e-survey findings and formulate an action plan agenda for KAD in East Java, South Sulawesi, and East Nusa Tenggara provinces. The FGDs were not only attended by KAD members, but also involved representatives from the government such as the One-Stop Investment and Integrated Services Agency (DPM-PTSP), the Goods and Services Procurement Bureau (PBJ), and the Provincial Inspectorate. The results of this FGD will serve as a basis and reference for KAD in developing programs and optimizing its role, particularly in East Java, East Nusa Tenggara, and South Sulawesi.

The series of activities consisting of assessment, e-survey, FGD, and action plan development are expected to increase the capacity of KAD. It is hoped that they will be stronger and able to carry out their main activities and tasks, especially in the context of building dialog spaces for corruption prevention in their respective regions.

This initiative is expected to reduce corruption cases from the private sector and also increase public confidence in the effectiveness of local governments and businesses in Indonesia in running clean and transparent business practices.