The Panama Paper revelation indicates massive practices of tax avoidance, money laundering, and the camouflage of assets resulted from corruption in tax haven countries that involved politicians and high individual level. It strengthens the urge of Beneficial Ownership (BO)- the ultimate beneficiaries-transparency implementation in Indonesia.
Despite of the potential benefit of BO transparency, which is to prevent corruption and money laundering, stakeholders in Indonesia still negatively perceive BO (in investment context), as said Dadang Trisasongko, Executive Director of TI Indonesia in the discussion on Progress and Advocacy Opportunity of Beneficial Ownership, last (27/5) in Jakarta.
“Several parties argue that BO transparency will inhibit investment in Indonesia, because the businessmen will worry to begin their business. In factm BO is not a new thing in this country. There are several regulations about BO, but these are separated in different institutions with varied definition of BO. It becomes a challenge as well as obligation for Indonesia to harmonize those regulations,” said Dadang.
Erika Westenberg, Senior Governance Officer Natural Resources Governance Institute explained the lesson learned of several practices in other countries, which is the presence of legal framework is important to guarantee the success of BO implementation. For Indonesia case, need to map out actors and their roles related to BO policy to create BO principles that must be adhered together, but the threshold are different depends on the needs of each institution.
“However, it is important to consider the momentum to keep the chance of BO transparency implementation. In short term, Indonesia can conduct piloting in corruption prone sector as extractive industry, through EITI framework. While in the long term, BO need to be mainstreamed in other sectors. Sector-based BO policy will only bring sector-based impact and not comprehensive,” added Erika.
In the end of discussion, Maryati Abdullah, National Coordinator of PWYP Indonesia affirmed that Indonesia is known for the thick relation between politicians and businessman, thus it is susceptible to conflict of interest.
Advocacy on BO transparency is important to detect and prevent that. The concrete steps we can take are raise the public awareness on this issue, and keep monitor the EITI process that encourage transparency of BO in extractive industry. We also need to make a case study as a reference for regulation advocacy.