Exclusive: Cutting corruption in Indonesia's courts

By Medha Basu and Nurfilzah Rohaidi

Interview with Aria Suyudi, Coordinator, Judicial Reform Team Office, Supreme Court of the Republic of Indonesia.

The court, that icon of justice, is the last place you should expect to encounter corruption.

In Indonesia, however, there is a “lack of transparency” in the judicial system around the payment of court fees and litigation costs, says Aria Suyudi, Coordinator, Judicial Reform Team Office, Supreme Court of the Republic of Indonesia.

He hopes to address this with an e-payments system, which is planned for completion by the first quarter of this year. “We would like to make sure that in the future, people can pay for these and all other costs associated with the litigation, electronically from multiple channels and banks,” he tells GovInsider on the sidelines of the GovPay summit in Jakarta last week.

Digital paper trails

In Indonesia’s court systems, all fees are paid in advance, and the actual cost of the litigation itself will be determined on the number of the hearings and proceedings, according to Suyudi. Defendants will need to top up these fees if it is necessary.

The problem lies in the manual method. “The value paid by litigants is sometimes much higher than the actual court fees specified in the invoice,” Suyudi says. After the case is finalised and cash payments are made, sometimes court staff pocket the difference, which can be up to S$150 (US$114). Multiply that by roughly 700 cases per court per year, and it adds up very quickly.

The Supreme Court has tried to address this issue in the past, by barring courts from receiving cash payments; court fees had to be settled via bank transfers instead. But this posed another problem: time cost. Litigants would have to travel back and forth from those bank branches simply to make payments, Suyudi points out.

In an effort to make the payment process “more transparent, accountable, and efficient”, his team is working on an e-payments system that will allow litigants to pay their fees using internet banking, SMS, or electronic transfers. The system will create virtual accounts for each individual, only active during the duration of the litigation, Suyudi explains. Litigants may check the balance of their fees, and top up the amount if they need to. Every withdrawal by the court treasury will be recorded and visible.

“Ultimately, this virtual account system will automatically refund the remaining balance when the case is closed, and the account will then be terminated,” he continues.

There has been “slow reform in procedural law” in the country, Suyudi admits, delaying the development of IT systems in the court. In developing this system, he hopes to “navigate the limitation” to provide “strong legal basis for e-filing or electronic forms to be implemented”.

Key priorities

Aside from the court payment system, Suyudi has an immediate focus on two “fundamental problems” in Indonesia: enforcement of contracts, and improving the bankruptcy regime.

The former is a major challenge that businesses face in the country, even though Indonesia has made significant progress in moving up the ranks to 72nd place in the 2018 Ease of Doing Business index. However, without trust in courts to enforce business contracts, Indonesia’s rise on the index will be shunted.

“If business owners have disputes, where do they go? And if they already get their court decisions, how do we enforce those?” Suyudi asks.

Similarly, he wants to work on improving the bankruptcy regime, and ease the process of filing bankruptcy claims. “Indonesia has 260 million citizens, but yet it has only less than 200 bankruptcy filings annually. The figure doesn’t add up,” he remarks.

He also hopes to speed up small claims disputes of less than S$20,000 (US$15,200), so that they are resolved within 35 days and involves a much simpler process, Suyudi adds.

These are major changes, and won’t happen overnight. But as Indonesia’s courts slowly evolve to implement more digital systems, it will mean two very important things - more transparency and openness.