JAKARTA – The countries that are members of the group of twenty (G-20), which are contributors to nearly 90% of world GDP, 80% of total world trade, and two-thirds of the world’s population, will again hold a G20 Summit (Summit). this year which was held from 30 November to 1 December 2018 in Argentina.

The Argentine presidency at least brought up three main issues, namely the issue of infrastructure, the future of work in the digital arena (future of work), and the issue of food security. Apart from these three issues, other issues such as global taxation and finance cooperation, trade, inequality, and sustainable development, energy transition, women, climate change, anti-corruption, and several other issues that have become the workstreams in the G20 remain to be discussed in rounds. ahead of the Argentina summit this weekend.

As a member of the G20, Indonesia is often seen as not having a strong enough bargaining position in influencing the decisions and commitments of the G20. However, this year the Indonesian government seems quite enthusiastic about the issue offered by Argentina, namely the issue of the digital economy / Future of works. Through this issue, the Government of Indonesia is promoting innovative digital economy business models to accelerate inclusive growth, with the outcome of support for the Hub Indonesia’s Inclusive Digital Economy Accelerator (IDEA) platform initiative.

In addition, Indonesia has also prepared several other priority proposals to be included in the communique, namely: first, the issue of development by including the proposed blended finance elements to achieve the SDGs; second, the energy issue by proposing a peer review related to the elimination of ineffective fossil fuel subsidies, encouraging cooperation on the issue of bioenergy and biofuels in the context of achieving the SDGs, with the outcome of the Indonesia-Italy peer review as one of the best practices for eliminating fuel subsidies. ineffective fossils, and promote the role of biofuels in poverty alleviation; third, the issue of Counter-Terrorism, which is to encourage the implementation / concrete program of the 2017 G20 Leaders Statement on Countering Terrorism, with the outcome of the support from Indonesia’s leadership in countering terrorism, especially in the context of Indonesia as a non-permanent member of the UN Security Council.

Responding to the proposal, the Indonesian civil society organization group that is part of the Indonesian Civil Society Forum on Foreign Policy (ICFP) conveyed some specific calls to the Government of the Republic of Indonesia and other G20 countries. The pressure from civil society, among others, is related to the commitment and cooperation of the G20 countries in overcoming inequality, financial restructuring and tax reform, preventing corruption and tax avoidance, as well as the commitment to energy transition and tackling climate change.

Publish What You Pay Indonesia highlights the commitments of the G20 countries, especially regarding transparency, anti-corruption, and tax cooperation, and fiscal restoration. The Program Manager of Publish What You Pay Indonesia, Meliana Lumbantoruan, urged the G20 countries to be serious in taking action against and preventing the practice of illegal money flows originating from tax evasion and evasion practices, money laundering, and other criminal acts by establishing appropriate monitoring mechanisms. Especially for countries that have natural resources and rich reserves as a source of economy and development. Furthermore, Indonesia needs to accelerate the implementation of the Automatic Exchange of Information (AEoI) so that it can run well and effectively, especially since the AEoI implementation framework at the national level has been included in the recently enacted national strategy for Prevention of Corruption (Stranas PK).

Meliana also asked President Joko Widodo to urge G20 countries that do not yet have commitments and regulations regarding the opening of beneficial ownership (BO) to immediately legalize them, and for countries that already have regulations regarding BO to immediately develop a Joint implementation strategy to ensure that companies no longer take advantage of closed BO data, so that practices of money laundering, theoretical funding, tax avoidance, and corruption can be massively prevented.

“Indonesia and the G20 countries must also urge and guard multinational companies regarding the implementation of financial transparency and country-by-country reporting that can be accessed between countries, including cooperation in handling BEPS (Base Erosion Profit Shifting) to increase state revenue. However, financing of development and overcoming inequality is very much determined by how the fiscal management in each member country also requires global cooperation, Meliana continued.

Hamong Santono, Senior Officer – INFID, asked the government to make the G20 meeting an arena to solve common problems that cannot be resolved solely by the Indonesian government itself, such as the problem of inequality. The problem of inequality that occurs in Indonesia is partly due to the difficulty of access to decent work because one of the ways a person gets out of poverty is through decent work. Access to work is increasingly difficult, coupled with the industrial revolution that replaces robotic labor with an impact on the increasing number of unemployed. For this reason, the government must encourage joint development financing by the G20 countries to developing countries to improve the quality of labor through reskilling and up-skilling as part of the creation of decent work which is one of the goals to be achieved at this meeting.

As a forum that is considered very important and is expected to have a big impact on the Indonesian State, the government should prepare for the G20 meeting more inclusively, involving the participation of civil society organizations at large, “Hamong continued.

Meanwhile, Prakarsa urged President Joko Widodo to immediately reform the Indonesian tax system so that it is in line with the principles of social justice. Tax incentives on the rich and corporations are like two sides of the sword. The support for tax incentives that encourage increased investment is considered too excessive, which in turn injures justice in taxation. The Indonesian government also needs to seriously handle illicit financial flows out of Indonesia, which causes Indonesia’s limited fiscal capability. Various commodities, especially those originating from natural resources, which are the entry points for the flow of illicit funds, need to be addressed immediately. If not, the exploitation carried out will not only result in damage but also depletion without providing economic benefits. The government needs to take advantage of sustainable and independent funding opportunities, one of which is by pursuing tax receivables from taxpayers which amount to 54 trillion rupiah so that it can help sustainable government funding. President Joko Widodo must take advantage of the G20 forum to follow up the AEOI Law massively and concretely; cooperation among G20 members to handle illicit financial flows; improved tax governance; sharing system knowledge and capacity of tax authorities, etc. “

Transparency International Indonesia (TI-Indonesia) also highlighted Indonesia’s anti-corruption commitment at the G-20 Summit in Argentina, especially Indonesia’s commitment to raising the standards for the anti-corruption program of BUMN. “Supreme Court Regulation No. 13 of 2016 concerning Procedures for Handling Crime by Corporations need to be understood by BUMN, because the regulation states that corporations – including BUMN – can be subject to criminal sanctions if the corporation benefits from criminal acts, and the corporation does not take adequate steps to prevent corruption. In addition, there is also a BUMN that has been named as a suspect in corruption by the KPK, namely Nindya Karya. At the international level, the B-20 and C-20 have also urged G-20 member countries to raise the standards of anti-corruption programs from BUMN. Therefore, the government should encourage BUMN to show their leadership in efforts to prevent corruption, “said Dadang Trisasongko, Secretary-General of Transparency International Indonesia (TI-Indonesia).

TI-Indonesia has also conducted a study on “Transparency in Corporate Reporting (TRAC): Assessment of BUMN”. The TI-Indonesia study found that there are still many anti-corruption programs of BUMN that do not reach third parties (intermediaries, consultants, advisors) and goods/service providers. Only 15 out of 105 BUMNs oblige goods and service providers to comply with anti-corruption policies. BUMN and BUMN have not implemented a due diligence process on the anti-corruption program of goods and services providers before doing business – as one of the selection mechanisms for providers of goods and services. Then there are only 28 BUMNs whose anti-corruption programs also reach out to third parties. These corruption hotspots — relationships with third parties and providers of goods/services — need to be mitigated by the risk of corruption, and obliged to comply with BUMN anti-corruption programs, and their compliance is actively monitored.

The Ministry of BUMN should also follow the Ministry of Energy and Mineral Resources, which requires companies that apply for permits (IUP / IUPK Exploration, IUPK / IUPK Production Operation, etc.) in the mineral and coal sector to inform the list of final beneficiaries. The Ministry of BUMN should require prospective providers of goods and services participating in the procurement process organized by BUMN to inform the list of final beneficiaries (beneficial owners).

Meliana Lumbantoruan, Program Manager of PWYP Indonesia added, as a group of countries that control 85% of the world economy and at the same time contribute to 82% of global greenhouse gas emissions, the G20 countries have an important responsibility and role to lead global action in reducing greenhouse gas emissions. The Brown to Green Report 2018 published by Climate Transparency still shows that there is a gap between the contributions of G20 countries in achieving the Paris Agreement targets. The G20 countries do not yet have a Nationally Determined Contribution (NDC) target for 2030 which is considered in line with the reduction target, 1.5 ° C, and on the contrary, it is feared that it will lead to an increase in the earth’s temperature of up to 3 ° C.

The performance of the G20 countries is also considered to have decreased, marked by the increasing funding allocation for subsidies for fossil fuels such as coal, oil, and natural gas to US $ 147 billion. In addition, the G20 countries also do not have policies related to carbon taxes, except for France and Canada. However, there are a number of positive developments such as the green economy policy implemented by Argentina, China, Italy, and South Africa or the policies related to emissions in the building sector implemented by the European Union, and the electric car policy implemented by India.

Compared to other G20 countries, Indonesia’s performance has also decreased, marked by Indonesia’s increasing dependence on fossil fuels, particularly coal in the energy sector, increasing subsidy allocations, and the absence of a long-term plan to get out of dependence on coal (coal phase). -out). However, Indonesia’s emissions in the land sector are considered to have improved with the reduction in deforestation rates due to the implementation of peatland policies.

The ICFP civil society group emphasized that President Joko Widodo should be able to take advantage of every commitment made by the G20 countries, be vocal in conveying the conditions and problems faced by Indonesia and other developing countries, and ensuring the commitments made in the forum The G20 also accommodates the interests of developing countries. Thus, the G20 forum can have a positive impact on the development of Indonesia, a developing country, and of course sustainable global development.

 

Contact Person

 

Hamong Santono (081511485137)

Herni Ramdlaningrum (08111110326)

Meliana Lumbantoruan (081361090511)

Ferdian Yazid (081380455524)