The assumption of the importance of financial reward has held back work to eradicate corruption in Indonesia
On 7 October 2019 the Corruption Eradication Commission (KPK) arrested North Lampung regent Agung Ilmu Mangkunegara in a bribery case. This followed a series of arrests of North Lampung Regency officials in the preceding days. In July 2019 the KPK arrested the heads of two other regional governments over alleged corruption. Riau Islands governor Nurdin Basirun and senior officials of his government were brought in for allegations of bribery. Regent Muhammad Tamzil of Kudus Regency is also suspected of receiving graft payments from an associate.
Corruption remains a serious problem and rampant in Indonesia despite the increased numbers of arrests by the KPK in recent years. Data collected in December 2018 showed more than 100 regional heads of government had been investigated by the KPK for alleged corruption. This number does not include KPK corruption cases opened in connection with members of parliament, government officials and private individuals. Following the September 2019 amendment of the bill on the KPK Law, the commission’s surveillance powers, including wiretapping, are now restricted. This has arguably weakened the KPK’s ability to carry out their until-now very effective sting operations. Fighting corruption in Indonesia seems an endless task.
In conversations with the media, Neta S Pane from Indonesian Police Watch emphasises that most of the KPK’s sting operations are triggered by public reports or whistleblowers. Studies on efforts in the fight against corruption consistently tell of misconduct in public office detected when employees decide to speak out.
This makes whistleblowing the most effective strategy against corruption. The fear of being exposed deters misconduct. It also changes the workplace culture if most employees are willing to expose wrongdoing. Fraudulent behaviour is less tolerated. Fear of detection prevents corrupting influences.
Protections offered in most countries give whistleblowers rights under the law and remedies for the harassment that speaking out provokes. Our research published in 2018 on the views of Indonesian public sector workers raises questions about just how useful the rights and remedies available to whistleblowers really are.
Protecting the messenger
Last year President Joko Widodo issued a decree creating a raft of financial packages for whistleblowers. This is expected to provide an incentive leading to significantly more whistleblowing through monetary reward. Presidential Decree 43/2018 states that individuals or communities that provide information to law enforcement regarding allegations of corruption can receive a reward of up to Rp.200 million, or the equivalent of more than A$21,000. In bribery cases the decree stipulates the whistleblower’s reward should total 2 per cent of the amount taken as a bribe and recovered by the state. This 2 per cent reward is capped at Rp.10 million. Compared with the False Claims Act in the US that gives whistleblowers between 15 and 30 per cent of the value of a corrupt asset seizure, the rewards offered by the Indonesian government very low.
Our research looked into rewards offered to whistleblowers in Indonesia. The project aimed to facilitate opportunities for disclosure or whistleblowing in the Indonesian Directorate General of Taxation. Utilising the theory of planned behaviour, this study investigated employees’ intentions to disclose bribery. Over 600 questionnaires were conducted with randomly selected Directorate General of Taxation employees. Online interviews were conducted with selected high-ranking officials.
The results showed that financial incentives can encourage whistleblowing but whatever reward schemes are offered would be useless if protection and organisational support for whistleblowers are absent. Respondents in our research reported that only organisation-wide policies and the actions of high-ranking leaders could provide whistleblowers with sufficient protection and ensure reported misconduct was eventually investigated. The majority of respondents also wanted either the minimum incentive to be increased to 10 per cent of any asset seizure, an increase in their take-home pay, or Rp.100 million – whichever was greater.
Reward by relocation
Looking at protection and organisational support for whistleblowers, our study asked the employees of the Directorate General of Taxation about relocation as a whistleblower protection. The study asked whether relocation to a different workplace should be offered to an employee who blows the whistle on misconduct. Results showed the majority of employees saw being relocated to their hometowns or closer to family as the most attractive reward for whistleblowing. This was more important than any financial incentive.
This study is the first to investigate the reasons for this phenomenon. The results differ from most whistleblowing literature, which draws heavily on a Western culture context. In the US, financial reward is considered the most important motivation to a whistleblower because it compensates for the ostracisation and loss of job opportunities whistleblowers face after disclosing misconduct. Our research suggests that in Indonesia, conversely, the financial incentive comes second to family support. Culture differences might explain this divergence.
Hofstede, known for mapping cultural differences between societies, would describe Indonesian cultural dimensions as collectivist and the cultures of most Western societies as individualist. Such differences play a powerful role in many aspects of a society, including how individuals expect to be rewarded by society for moral behaviour.
Collectivist cultures integrate people from birth onwards into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents all playing vital roles). In-groups continue protecting individuals in exchange for unquestioning loyalty, and in opposition to other in-groups. Illustrating this is mudik, an Indonesian phenomenon that is widely observed. Mudik is a cultural expectation that drives migrants or migrant workers to return to their hometown during or before major holidays. Mudik endures because of a collectivist culture observed by its individuals.
Our research within the Directorate General of Taxation indicates that although most whistleblowers would be perceived as loyal employees with the organisation’s best interests at heart, respondents also believed whistleblowers were perceived as threats to institutions and their colleagues. Most respondents believed that if they disclosed misconduct, colleagues would hate and possibly ostracise them. In collectivist cultures family remains a whistleblower’s most important in-group. Having spoken out against misconduct at work, their other natural in-group can no longer be relied on for support. Offering whistleblowers an opportunity to relocate to their hometown with guaranteed work is a better incentive than financial reward for employees in a collectivist culture.
However, it should be borne in mind that the reward of relocation to a hometown post was suggested by the respondents in our survey of a government agency. This incentive is not an easy fit for private sector employees. And it is these business people who represent the supply-side of bribery cases. For whistleblowers external to government, monetary incentive may still be the most effective way to encourage individuals to disclose misconduct, as long as some witness protection is guaranteed.
Our research suggests that hidden cultural assumptions are at work in the design of rewards for whistleblowers. The assumption of the importance of financial reward has held back work to eradicate corruption in Indonesia. In interviews conducted for our study respondents stressed the importance of guaranteed work and relocation to a hometown post alongside the moral belief in speaking out against misconduct as what creates a culture of whistleblowing.
These findings suggest government should mix monetary incentives with guaranteed work close to family as the reward for whistleblowers. Reward money is still important and can be used by a whistleblower to establish themselves in their hometown, in case they give up a career in government.
‘Place me in my hometown until retirement – even if I have to be the only staff member there’, one respondent suggested. This seems to represent the hidden needs of a whistleblower that is strongly influenced by Indonesia’s unique culture.
Bitra Suyatno (email@example.com) has been working at the Indonesian Finance Ministry since 1998. This article is a part of the author’s doctoral thesis completed at Victoria University. Research was conducted between 2016 and 2017. Read his blog. His posts represent his own views.