JAKARTA - Indonesian Audit Watch (IAW) assesses that the practice of seizing assets from criminal acts in Indonesia for decades still leaves serious problems at the management stage. Although the state often wins in court and manages to seize assets, the victory often turns into a loss when assets must be recorded, maintained, and utilized for public benefit.
IAW Founding Secretary Iskandar Sitorus said that the findings of the Financial Audit Agency (BPK) over the years showed a recurring pattern. The seized assets often stagnate, their value decreases, maintenance costs swell, and the responsibility for management is unclear among law enforcement institutions.
"Historically, the legal facts, state audits, and the experience of the eight decades of the Republic of Indonesia should be a lesson. We often win in court, but lose in the state balance sheet," said Iskandar in Jakarta, Monday, December 22.
IAW traces the root of the problem since the beginning of independence. According to Iskandar, Law Number 86 of 1958 concerning the nationalization of Dutch-owned companies is indeed a symbol of state sovereignty. However, this political courage was not accompanied by fiscal prudence.
"Plantations, factories, banks, and strategic companies are turned over to the state without a starting balance sheet, without independent assessment, and without an audit. The state learns to seize without counting," he said.
The BPK study in 2007 on SOEs resulting from nationalization, continued Iskandar, showed that the historical value of these assets had never been recorded systematically in the country's books. He called this condition a "original sin" of state wealth management.
Similar problems continued in the following era. Presidential Decree Number 11 of 1963 and Law Number 5/PNPS/1959 gave broad authority to confiscate the assets of parties considered subversive. However, many of the confiscated assets at that time never entered the state financial system.
"Confiscation turns into an act of power, not an accountable legal process. This is a dangerous precedent," said Iskandar.
Entering the New Order, Law Number 8 of 1981 concerning the Criminal Procedure Code does regulate the authority of investigators and public prosecutors over seized and confiscated goods. However, according to IAW, the Criminal Procedure Code has never designed the final stages of state asset management.
"There is no storage deadline, no obligation to hand it over to the state wealth manager, and no standard for assessing the value of assets," he said.
The failure of the legal design, according to Iskandar, was evident in the Bank Indonesia Liquidity Assistance (BLBI) scandal. Based on the BPK LHP Number 01/III/3/2004, the assessment of non-independent assets and the non-integrated recording caused the potential state losses to reach IDR 138.4 trillion.
"The state is not only harmed by crime, but also by the mismanagement of seized assets," he said.
IAW also highlighted the lack of synchronization of regulations in the reform era. On the one hand, the Tipikor Law strengthens the confiscation of assets from corruption. On the other hand, the State Finance and State Treasury Law stipulates that all state assets must be managed by the Minister of Finance as a single custodian.
"These two legal regimes run parallel but never really meet," said Iskandar.
The impact is visible in the findings of the BPK in recent years. The BPK 2020 LHP recorded that approximately 34 percent of the seized assets at the KPK had a value depreciation of more than 50 percent before being auctioned, with an average waiting time of 3.2 years and maintenance costs of almost Rp48 billion per year. Meanwhile, the BPK 2022 LHP at the Attorney General's Office found 1,247 assets worth Rp2.3 trillion with unclear legal status.
Data from the Directorate General of State Assets in 2024 also shows that only about 45 percent of seized assets are recorded as State Property within one year after the ruling has the force of law.
"Without serious reform, asset seizures will continue to be a Pyrrhic victory. The state wins at the green table, but loses in managing public wealth," concluded Iskandar.
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