Indonesia and Singapore signed a new extradition treaty on Tuesday (Jan 25) that Jakarta hopes to use to repatriate corrupt Indonesians who have been hiding their ill-gotten gains in the city state.
An extradition treaty between the two countries was signed in 2007 under then-President Susilo Bambang Yudhoyono but the Indonesian parliament refused to ratify it amid concerns over a defence co-operation agreement that had been negotiated in parallel. Lawmakers said the defence agreement, that would have allowed Singapore to hold military exercises on Indonesian territory, could compromise Indonesia’s sovereignty.
However, some critics suggested at the time that the real reason lawmakers dragged their feet was so that corrupt Indonesians – possibly including themselves – could use Singapore as a safe haven.
Singapore has long refuted offering such a haven. Its Ministry of Foreign Affairs has pointed to instances when it assisted Indonesia in dealing with criminal investigations under the mutual legal assistance treaty that both have signed up to as part of the Asean (Association of Southeast Asian Nations) bloc.
Singapore has long maintained that it would be ready to proceed with both agreements as soon as Indonesia was ready to do so. Its diplomats have also pointed out Indonesians who reportedly fled with ill-gotten gains had travelled out of Southeast Asia’s largest economy legally.
On Tuesday, Indonesian Minister of Law and Human Rights Yasonna Laoly said: “After a long process, we can finally sign this agreement after the Indonesian government first started pursuing an extradition treaty in 1998.
“This extradition agreement will create a deterrent effect for criminals in Indonesia and Singapore.”
Indonesia has long grappled with the problem of graft. From 2010 to 2019, 586 lawmakers – at national and regional levels – were identified as being suspected of corruption, according to Indonesia Corruption Watch.
Under the new extradition treaty with Singapore, Jakarta can ask for Indonesians who have committed crimes – or are suspected of committing them – to be returned to the country.
The latest treaty still needs to be ratified by the Indonesian parliament and no implementation date has yet been set.
However, when it does enter force, the treaty will cover 31 crimes including corruption, money laundering, bribery, narcotics and terrorism funding that took place up to 18 years before the implementation date.
The new treaty will also close a legal loophole regarding changes in citizenship that some fugitives previously used to evade prosecution. Under the new treaty, extradition requests will be based on the citizenship status of the perpetrator at the time the offence took place.
Ferry Amsari, a lecturer at the Faculty of Law in Andalas University in West Sumatra, said the 18-year limit meant that corrupt individuals who escaped with government money during the Asian financial crisis of 1997 could evade extradition.
“[The Indonesian] constitution lays out that anyone deserves the right not to be sued retroactively for any types of crimes. So it will be difficult to implement this due to constitutional limitations,” he said.
However, Ferry said there was a precedent for Indonesia breaking this principle in the case of “extraordinary crimes” such as massacres, arbitrary killings, torture, slavery, or systemic discrimination.
In the case of 2002 Bali bombing that killed over 200 people, lawyers for the terrorists Amrozi and Imam Samudra – who were charged under anti-terrorism legislation passed six days after the bombing – argued that the trial against their clients breached the constitution for retroactive prosecution.
The Constitutional Court at that time agreed with the lawyers’ arguments, ruling that terrorism was not categorised as an “extraordinary crime”. Even so, the trial against the pair continued with the same charges and both were executed by firing squad in 2008.
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“If the principle could be [breached] for terrorism, why can’t we do it for corruption? Are they not similar in a way, as graft is also a form of ‘terrorism’ towards good governance,” Ferry said.
The new extradition treaty will also complete the Mutual Legal Assistance (MLA) in Criminal Matters agreement made in 2008 between the 10 members of Asean.
Andi Widjajanto, senior adviser at the Presidential Staff Office, said the new extradition treaty would “strengthen” legal co-operation between Indonesia and Singapore, complementing the MLA scheme.
Indonesia has extradition treaties with places including Malaysia, Thailand, the Philippines, mainland China and Hong Kong.
The new agreement will only allow Jakarta to repatriate wanted individuals from the city state, not the money; for that Indonesia must use the MLA framework. The two countries have exchanged information for taxation purposes, under the Automatic Exchange of Information agreement, since 2018.
A report by Merrill Lynch and Capgemini in 2006 estimated that Singapore was home to 18,000 high-net-worth Indonesians (those with net financial assets of more than US$1 million (S$1.4 million) and that taken together they had US$87 billion in assets stored in the city state.
Indonesian Finance Minister Sri Mulyani in 2014 said a McKinsey study had estimated that of the US$250 billion wealthy Indonesians had hidden overseas, US$200 billion of it had been parked in Singapore.
The Coordinating Ministry of Maritime Affairs and Investment said the new extradition treaty would also allow law enforcement to follow through on a presidential decree issued last year about seizing back money and assets gained through a central bank fund known as the Bank Indonesia Liquidity Assistance (BLBI). The task force has until 2023 to chase these assets overseas.
During the Asian financial crisis, Indonesia’s central bank bailed out bank owners to maintain liquidity so that the banking system would not collapse. Forty-eight debtors received bailouts, which amounted to 144.5 trillion rupiah (US$10 billion). Much of the bailout was misused by bank owners who used it to buy other assets and failed to repay the debt.
As for Singapore, the extradition treaty would show that it took “its role in the global anti-corruption fight seriously,” Andi said.
Singapore’s former prime minister Lee Kuan Yew said in 2007 that it was “laughable” to think that Indonesians who were likely to be extradited would be in Singapore.
While he acknowledged that the extradition treaty would act as an “inhibitor”, he was confident that it would not frighten wealthy Indonesians away. Singapore, Lee added, had very strict rules to prevent money-laundering.
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Prime Minister Lee Hsien Loong reiterated this point on Tuesday, telling local media that the treaty with Indonesia would “enhance co-operation in combating crime and send a clear positive signal to investors”.
The city state currently has extradition arrangements with countries including Australia, Britain, Malaysia and the United States.
In the past 20 years, there have been at least 20 Indonesians convicted or suspected of corruption who fled to Singapore or are suspected of being there. Some of them were eventually arrested by authorities, either in Singapore or other countries.
Among them is Muhammad Nazarrudin, a former treasurer of the Democratic Party (the party of former President Susilo Bambang Yudhoyono). He was convicted of taking kickbacks from the winning bid to build athlete dormitories for the 2011 Southeast Asia Games.
The case is thought to have cost Indonesia 50 billion rupiah. Muhammad fled to Singapore a day before Indonesia’s Corruption Eradication Commission (KPK) issued a travel ban against him. He was caught in Colombia in 2011 and sentenced to 13 years in prison. He was released in 2020.
Another big name is tycoon Sjamsul Nursalim, who was among the BLBI recipients and according to KPK, still owes the country 4.5 trillion rupiah. He was named as a graft suspect in 2019 and is thought to be in Singapore with his wife. The KPK dropped the case last year, saying the priority was not to put him in jail because of his advanced age but to recover the missing government funds.
Maria Pauline Lumowa, who was accused of embezzling around US$200 million from loans she received from the state-owned Bank BNI using forged documents, fled to Singapore in September 2003, a month before she was named as a corruption suspect. She was arrested in Serbia in 2020 and last year was sentenced to 18 years in prison.
This article was first published in South China Morning Post.
