Australian Institute of Criminology

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The failure of the legal system in Indonesian financial corruption cases

Australian Institute of Criminology, Merly Khouw
25 September 2003 -

Merly Khouw PhD
Executive Director, Quest Research Pty Ltd


The legal system has been noted as the weakest link in the anti-corruption effort in Indonesia. Results from the 2001 National Survey of Corruption in Indonesia revealed the public's poor perception of the country's legal system. The legal outcomes from recent major financial corruption cases support the assertion for the urgency of legal reform as a corrupt legal system distorts the delivery of punishment and justice. Findings from the National Survey are discussed in light of the Bank Bali scandal and the Manulife insurance cases. The judicial treatment of the two cases was different depending on the identity and political backing of the victims - the government of Indonesia in the former and a Canadian-controlled company in the latter - highlighting the importance of maintaining external monitoring while internal legal reforms are ongoing.

Merly holds a doctorate in Criminology from the University of Pennsylvania. She was formerly a Lecturer at the Chinese University of Hong Kong and a Research Specialist with the Texas Department of Criminal Justice.

She has over 10 years of experience in Indonesia including six years in securities analysis and corporate finance with international banks. Prior to joining Quest Research she was a Senior Vice President at the Indonesian Bank Restructuring Agency for asset tracing, and consultant to the Partnership for Governance Reform in Indonesia on the 2001 National Survey of Corruption.

She was team leader for Indonesia on the Asian Development Bank's study of money laundering in 10 jurisdictions, and examined financial corruption in the Bank Bali and Manulife scandals and the misuse of Bank Indonesia Liquidity Support for the World Bank.

Merly has responsibility for corporate research assignments and anti-money laundering/anti-fraud solutions at Quest Research, a specialist due diligence and screening service headquartered in Hong Kong with offices in China, India, United Arab Emirates and Australia.

No paper available