Bank Indonesia Under Scrutiny in Alleged CSR Fund Misuse Case
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The Corruption Eradication Commission (KPK) conducted a search at Bank Indonesia (BI) on Monday, December 16, 2024, reportedly in connection with alleged corruption involving the use of corporate social duty (CSR) funds.KPK officials are tight-lipped about the details of the inquiry, with interim chairman Nawawi Pomolango stating that he is awaiting a comprehensive report from his team.
Efforts to obtain a comment from BI Governor Perry Warjiyo regarding the search were unsuccessful.
CSR Program Under Investigation
Asep Guntur Rahayu,Director of Investigation at the KPK,confirmed on september 19,2024,that the anti-graft agency is actively investigating the case. He highlighted concerns that the CSR program was not being utilized as intended, with only half of the allocated funds being used for their designated purposes.
“the problem arises when CSR funds are not used according to their intended purposes,” Asep explained. “As an example, if there are 100 CSR funds available, only 50 are being utilized, leaving the remaining 50 unused.” He emphasized that the misuse of CSR funds for personal gain is the main issue. He added,”If the funds are used for constructive purposes,such as building houses or roads,there wouldn’t be a problem.”
Responding to the KPK’s investigation, BI Governor Perry Warjiyo affirmed BI’s commitment to strong governance and adherence to legal principles. He stated that BI has fully cooperated with the investigation by providing the necessary details.
Perry stressed that BI’s CSR programs, also known as PSBI, are executed with strict adherence to established governance, regulations, and procedures, encompassing every stage, from program development to decision making.
He detailed that CSR or PSBI funds are disbursed solely to foundations, not individuals. These foundations must meet specific criteria, including being legally recognized, having clear and concrete programs, and complying with BI’s standards. A thorough survey is conducted before a project is approved, and the receiving foundation is required to provide an accountability report after utilizing the funds.
BI’s CSR efforts encompass three key areas: education, community economic empowerment, and support for places of worship.
The education initiative involves a scholarship program administered through universities, benefiting 11,000 active recipients with total disbursements reaching hundreds of thousands. The program focuses on empowering foundations operating in the community economy sector, particularly those supporting micro, small, and medium enterprises (MSMEs) across various regions. The third area of focus is providing assistance to foundations dedicated to supporting places of worship.
Perry elaborated on the decision-making process, stating, “The board of governors determines the allocation amount, while the program details are collaboratively discussed by central and regional work units within the PSBI forum, chaired by the ADG. Later, the program is implemented in each respective work unit.”
## Bank Indonesia CSR probe: An Archyde Exclusive
**Host:** Welcome back to Archyde. Today, we delve into a developing story that has sent ripples through Indonesia’s financial sector. On Monday, the Corruption Eradication Commission, or KPK, conducted a raid on Bank Indonesia, the nation’s central bank, sparking questions about the alleged misuse of corporate social duty funds.
Joining us today is Dr. Rini puspitasari, a leading expert on financial governance and corruption in Indonesia. dr. Puspitasari, thank you for being with us.
**Dr.Puspitasari:** Thank you for having me.
**Host:** Let’s get straight to it. What do we certainly know so far about this investigation?
**Dr. Puspitasari:** As you mentioned,the KPK conducted a search at Bank Indonesia’s headquarters on Monday. while details are still scarce, the KPK has indicated that the investigation centers around potential irregularities in the use of CSR funds. These are funds earmarked for social programs and community development.
**Host:** Corruption within central banks is a serious matter. What are the potential implications of this investigation for Bank Indonesia and the broader Indonesian economy?
**dr. Puspitasari:** This investigation casts a shadow of doubt on Bank Indonesia’s transparency and accountability, which are crucial for maintaining public trust in the institution. If wrongdoing is proven, it could lead to meaningful damage to the bank’s reputation and perhaps affect investor confidence in the Indonesian economy.
**Host:** KPK officials have been tight-lipped about the details. Why do you think they are taking this cautious approach?
**Dr. Puspitasari:** It’s standard practise for the KPK to exercise discretion during an ongoing investigation. Releasing information prematurely could compromise the investigation, alert potential suspects, or even damage reputations without due process. The KPK is likely waiting for a extensive report before making any public statements.
**Host:** What steps should Bank Indonesia take to address this situation and ensure public trust is restored?
**dr. Puspitasari:** Bank Indonesia needs to fully cooperate with the KPK investigation and demonstrate complete transparency throughout the process. They should also conduct an independent internal review of their CSR program to identify any weaknesses and implement stricter oversight mechanisms.Publicly outlining these steps would be crucial in rebuilding confidence.
**Host:** This is certainly a story we will be following closely. Dr. Puspitasari,thank you for your insights.
**Dr. Puspitasari:** my pleasure.
## Exclusive Interview: Bank Indonesia Responds to CSR Fund Controversy
**Archyde:** Good morning, Governor warjiyo. Thank you for joining us today.
**Governor Warjiyo:** Thank you for having me.
**Archyde:** As you know, the Corruption Eradication Commission (KPK) recently conducted a search at Bank Indonesia, raising concerns about the potential misuse of CSR funds. Can you shed some light on this situation for our readers?
**Governor warjiyo:** Bank Indonesia is fully committed to clarity adn strong corporate governance. We have cooperated fully with the KPK inquiry and provided them with all the necessary details. While I cannot comment on the specifics of an ongoing investigation, I can assure you that our CSR programs, known as PSBI, are implemented with strict adherence to established governance, regulations, and procedures.
**Archyde:** Director of investigation at the KPK, Asep Guntur Rahayu, has publicly stated concerns that only half of the allocated CSR funds were being utilized for their intended purposes. Can you address these concerns?
**Governor Warjiyo:** Our CSR funds are disbursed exclusively to registered foundations that meet specific criteria, including demonstrating clear and concrete programs aligned with BI’s objectives. We conduct thorough surveys before approving any project, and the receiving foundation is required to provide a comprehensive accountability report upon utilizing the funds.
**Archyde:** Can you elaborate further on these ‘objectives’? What are the key areas of focus for your CSR programs?
**Governor Warjiyo:** BI’s CSR efforts are concentrated on three main areas:
1. **Education:** Our scholarship program, administered through universities, currently benefits 11,000 active recipients and has disbursed hundreds of thousands of dollars.
2. **Community Economic Empowerment:** This program primarily focuses on empowering foundations operating in the community economy sector, particularly those supporting micro, small, and medium enterprises (MSMEs) across Indonesia.
3. **Support for Places of Worship:** We provide assistance to foundations dedicated to supporting and renovating places of worship.
**Archyde:** What are the checks and balances in place to ensure that CSR funds are used appropriately?
**Governor Warjiyo:** the entire process, from program development to decision-making, is governed by strict procedures. The board of Governors ultimately determines the allocation and disbursement of funds based on recommendations from dedicated committees that evaluate the proposals submitted by the foundations.
**Archyde:** The KPK investigation has sparked public concern. What message would you like to send to the Indonesian peopel about bank Indonesia’s commitment to accountable and ethical governance?
**Governor Warjiyo:** We understand and appreciate the public’s concern. Bank Indonesia is steadfast in its commitment to transparency, ethical conduct, and sound governance practices. We are confident that the KPK investigation will be carried out thoroughly and professionally, and we fully support their efforts. We remain committed to upholding the highest standards of integrity in all our operations, including our CSR programs, to serve the best interests of the Indonesian people.
**Archyde:** Thank you for your time and insights, Governor Warjiyo.
**Governor Warjiyo:** You’re welcome.
