Source: 2001
Released by the Bureau for International Narcotics and Law Enforcement Affairs
Although by international standards Indonesia is not a major drug producing, consuming, or drug-transit country, the use of drugs produced or manufactured in Southeast Asia is increasing. To improve its ability to combat this trend, the Indonesian National Police (INP) has participated in several international donor-initiated training programs. The INP received much needed equipment, re-directed the focus of its forces to operations, and improved its relationship and interaction with NGOs dealing with drug users and rehabilitation. Yet these efforts fall well short of having a demonstrable impact on illicit drug trafficking, manufacturing, sales, and use. For example, the Narcotics Detective Unit of Greater Jakarta has a total of 150 investigators, who cover a city with a population of nearly 15 million. The head of this unit also doubles as the head of the Anti-Terrorism and Bomb Unit. Indonesia has legislation to support and enable an aggressive response to illicit narcotics activities. The police have the support of the judiciary and civil society in this regard, but they lack the organizational framework and certain fundamental capacities to effectively target the drug trade. The INP is limited not only by what assistance it can derive from major international donors, but also by its own inability to plan, develop, and implement a comprehensive drug prevention and enforcement program. Indonesia is a party to the 1988 UN Drug Convention.
The drug of choice in Indonesia continues to be amphetamine-type stimulants (ATS), such as methamphetamine, MDMA (ecstasy), and especially "ice," which is also known locally as "Shabu Shabu" (crystal methamphetamine). Police and NGO statistics indicate use of these and other narcotics has increased in 2001. Although use remains comparatively low per capita, heroin, cocaine, and marijuana use is reportedly up 90 percent from 2000. These drugs are readily available in all major urban areas, including schools, Karaoke lounges, bars, cafes, discotheques, night clubs, and, in increasing numbers, certain neighborhoods and villages becoming known for their tolerance of drug trafficking.
Informal reports and other anecdotal information received by the DEA indicate that marijuana continues to be harvested in North Sumatra, the Aceh area in particular. The INP alleges that the Free Aceh Movement (GAM), a separatist organization in Aceh, traffics in marijuana domestically to support its operations. However, the INP has produced no evidence to support this allegation. Nevertheless, arrests for distribution and possession of marijuana have increased significantly throughout the archipelago.
The coordinator of the National Anti Narcotics Movement (Granat), the most prominent drug prevention NGO in Indonesia, confirms that the use of heroin and opium derivatives is increasing, particularly in Jakarta. The INP Narkoba Unit, Directorate of Customs and Excise, and DEA believe heroin is smuggled into Indonesia from the "Golden Triangle" countries (Thailand, Burma, and Laos). Arrests and intelligence indicate that drugs entering Indonesia frequently transit Thailand, either from Bangkok to Jakarta or from Bangkok to Singapore to Jakarta. The INP also reports an increase in heroin and opium derivatives being smuggled into Jakarta and Bali from the "Golden Crescent" countries (Afghanistan, Pakistan, and Iran). From either area, the bulk of these narcotics are transiting Indonesia en route to Australia, the United States, and Western Europe. Drugs transiting Indonesia do not have a significant impact on the United States.
The INP and Directorate of Customs and Excise indicate that much of the heroin coming in from East and Southwest Asia is being transported by or on behalf of Nigerian traffickers. It is alleged they solicit, or in some cases marry, Asian women for the purpose of transporting heroin into and through Indonesia. Anecdotal information to the DEA, as well as news accounts, suggests that Africans (especially Nigerians) are very closely scrutinized by Indonesian enforcement, and that the potential for them to be brutalized or killed during an attempted arrest is statistically greater than any other ethnic group.
There are reports from Narkoba of an increasing number of clandestine methamphetamine and ecstasy laboratories in Indonesia. Yet international trafficking of these drugs into Indonesia still represents the largest source for these stimulants. China is said to be the primary source of ecstasy and crystal methamphetamine, entering through any one of hundreds of entry points along Indonesia's extremely porous coastline. None of these entry points, including Jakarta, have adequate detection or enforcement mechanisms. Neither the Airport Police, nor the Navy, nor the Directorate of Customs and Excise is trained, equipped, funded, or otherwise adequately supported to deter or detect drugs. The same can be said of the entities responsible for domestic enforcement, the INP's Narkoba and Criminal Investigations Units.
Arrest statistics, information about users in rehabilitation, and hospital data indicate that cocaine is not widely used in Indonesia. However, one arrest at Soekarno Hatta Airport in June 2001 netted 15.2 kilograms of cocaine. By comparison, according to INP statistics, from 1997 through 2000, a total of half a kilogram was confiscated in Indonesia. The traffickers arrested in June were from Mexico.
Policy Initiatives. Indonesia has not passed any new counternarcotics legislation since 1997. Nevertheless, the Indonesian counternarcotics code is sufficiently inclusive to enable the police, prosecutors, and the judiciary successfully to arrest and prosecute offenders. Enforcement officials lack training and experience in contemporary enforcement and investigative methodologies, and corruption is a constant problem.
In November 2000 Indonesia hosted the ACCORD conference in Bali, which brought together experts from ASEAN countries and China to discuss narcotics abuse/trafficking issues.
Indonesia plans to order its Narkoba Unit to assist the Airport Police. Narkoba's assistance to the Airport Police, a concept long supported by the DEA, will improve the Airport Police's enforcement capacity as well as enhance its in-service training capability. With previously allocated State Department funding support, training will be provided in support of this Indonesian initiative. The program will focus on management, logistical and tactical considerations, detection, interdiction, and use of canines and appropriate scanning equipment.
Accomplishments/Law Enforcement Efforts. Indonesia has no counternarcotics master plan. Until one is developed, the INP will have difficulty articulating its immediate and long-term counter narcotics enforcement goals. Nonetheless, the INP and other entities have taken some measures to address Indonesia's growing drug problem.
During a recent seminar in Jakarta, President Megawati called on the National Coordinating Board Against Narcotics (BKNN) to become operational. The chief of the INP, Da'i Bachtiar, has stated publicly that he will model BKNN after the United States DEA, and it will have specific responsibility for intelligence networking and investigation of international drug syndicates that impact Indonesia's counternarcotics efforts.
The Indonesian Navy, with support from President Megawati, has begun to act more aggressively against crimes committed within Indonesia's territorial waters, to include drug enforcement and interdiction. Furthermore, there are efforts under way to better define and clarify the roles of the Navy and the INP's Air and Sea Police to avoid duplicating efforts.
Agreements and Treaties. Indonesia is a party to the 1988 UN Drug Convention, the 1971 Convention on Psychotropic Substances, the 1961 UN Single Convention on Narcotic Drugs, and the 1972 Protocol amending the Single Convention. Indonesia signed the UN Convention against Transnational Organized Crime, the Protocol to Prevent, Suppress and Punish Trafficking in Persons, and the Protocol against the Smuggling of Migrants in December 2000.
Corruption. Indonesia has laws to punish official corruption, including corruption by high level officials. Indonesian law also punishes anyone who tries to hamper the investigation or prosecution of a narcotics crime with five years in prison and a fine of Rupiahs 150,000,000 (approximately $15,000). These laws are rarely enforced, and low salaries mean individual officials are susceptible to bribery.
Bilateral Cooperation. Indonesia and the United States continue to enjoy excellent law enforcement cooperation. For example, the DEA continues to have an excellent operational relationship with the INP's Narkoba Unit. The United States offered training to Indonesian officials through the regional International Law Enforcement Academy (ILEA) in Bangkok and the U.S. Justice Department International Criminal Investigative Training Assistance Program (ICITAP). The Department of State's Bureau for International Narcotics and Law Enforcement Affairs (INL) provide funding for experts from many U.S. agencies to travel to Indonesia to provide assistance and training. INL also provides funding to support the full-time police advisor currently in Indonesia. The INP continues to work very closely with the DEA regional office in Singapore in all narcotic investigations. Several airport interdiction courses are scheduled for 2002, sponsored by the DEA.
The Road Ahead. Indonesia and the United States will continue to work closely together to improve capacity in Indonesia to enforce its counternarcotics laws and to administer justice more effectively. Both countries will continue to exchange information about narcotics traffickers operating in Southeast Asia. During 2001, the DEA will encourage the INP's Narkoba Unit to develop a counternarcotics master plan.
Indonesia's economy is particularly vulnerable to money laundering because of its strategic geographic location, strict bank secrecy laws, public official corruption and lack of anti-money laundering legislation. In recent years, several Indonesian banks have become the targets of fraud schemes and corruption that might have been prevented if adequate safeguards had been in place; these banking scandals are symptomatic of the country's lax financial regulatory system.
In June 2001, the Financial Action Task Force (FATF) identified Indonesia as non-cooperative in international efforts to fight money laundering. The FATF in its report cited several concerns: lack of basic anti-money laundering provisions, including a failure to criminalize money laundering; the absence of a mandatory system of reporting suspicious transactions to a financial intelligence unit and unsatisfactory customer identification requirements.
On June 18, 2001, the Bank of Indonesia (BI) enacted Regulation No. 3 of the "Know Your Customer" Principles. The regulation contains customer identification and record keeping measures that would help counter money laundering. It should be noted that this regulation does not apply to walk-in customers whose transaction value does not exceed 100 million rupiah (U.S. $8,800). There are regulations with requirements for monitoring and reporting of cross-border financial transactions, however these regulations are non-money laundering specific. However, more comprehensive legislation is needed to prevent and detect money laundering through financial institutions.
There are no laws at present that provide for a mandatory system that governs the reporting of suspicious transaction reporting to a competent authority. BI has, however, issued a regulation requiring banks to report suspicious transactions in the absence of the anti-money laundering legislation. An officer that is appointed by BI handles these reported transactions.
The Government of Indonesia (GOI) has begun to take steps to address some of the deficiencies in its anti-money laundering regime. The Indonesian Parliament is considering draft legislation entitled "The Eradication of Criminal Acts of Money Laundering," which was submitted by the GOI in May 2001. The proposed law would criminalize money laundering, require suspicious transaction reporting by financial institutions, and mandate the reporting of currency transactions in excess of one hundred million rupiah and cross-border currency movements. The draft law also would establish the Commission for the Eradication of Criminal Acts of Money Laundering (KPTPPU). The KPTPPU, which is modeled after a financial intelligence unit, would receive and analyze currency and suspicious transaction reports, and would be authorized to provide international assistance in criminal money laundering investigations.
Currently, there is no financial intelligence unit dedicated to countering money laundering in Indonesia. Under the Bank Indonesia Act No. 23/99, BI may co-operate with other central banks and international organizations concerning matters related to the central bank's tasks, including banking supervision. However, Indonesia does not yet have any administrative authority charged with overseeing anti-money laundering activities and receiving and analyzing suspicious transaction reports. There is little information on how the Commission will be structured or interface with other law enforcement organizations.
Indonesia is a member of the Asia/Pacific Group on Money Laundering, a party to the 1988 UN Drug Convention, and has signed but not yet ratified the 2000 UN Convention against Transnational Organized Crime. Indonesia has extradition treaties with the Philippines, Malaysia, Thailand and Australia. The treaty with Australia includes money laundering as an extraditable offense. In 1997, Indonesia signed a "Surrender of Fugitive Offenders" agreement with Hong Kong (which also covers money laundering).
The lack of a comprehensive anti-money laundering regime will continue to subject Indonesia's financial system to crime and abuse. Indonesia should pass anti-money laundering legislation and enact additional bank supervisory practices that are consistent with accepted international standards.