Lembong corruption case a test for Indonesia’s declining democracy

Indonesians suspect former trade minister Tom Lembong’s outspoken criticism of ex president Joko Widodo and close association with his political nemesis Anies Baswedan has made him a target

Tom Lembong, a former Indonesian trade minister, has been indicted in one of the country’s most controversial corruption cases yet. Picture: Simon Dawson/Bloomberg

A former Indonesian trade minister and close ally of failed presidential candidate Anies Baswedan has been indicted in one of the country’s most controversial corruption cases yet, one that government critics say is emblematic of a toxic political revenge culture that targets all opposition.

Thomas Lembong, 53, was arrested and charged last October with corruption and causing unrealised state losses as trade minister in 2015 of Rp400bn ($38.7m) by allowing a private company to import sugar into Indonesia.

The detention of the highly-regarded, Harvard-educated former investment banker, nine days after President Prabowo Subianto’s inauguration, sent shockwaves through Southeast Asia’s financial community and raised suspicions his arrest was intended as a warning to all opposition figures.

The case is now being seen as a potential bellwether for Indonesia’s democratic trajectory under the Prabowo administration.

Prosecutors alleged on Thursday that Mr Lembong “permitted the import of raw sugar for processing into white crystal sugar, even though these companies were only authorised to refine sugar, not to produce white crystal sugar”.

The defendant failed to regulate sugar distribution for stock management and price stabilisation, a role that should have been carried out by SOEs through market operations or subsidised sales,” the prosecutor said.

The case revolves around the contested-allegation that Indonesia had a sugar surplus at the time and that Mr Lembong, by allowing a private company to import 105,000 tonnes of raw sugar, caused huge losses to a state-owned enterprise responsible for maintaining sugar supply and price stability that should have been the ones to profit from the purchases.

Mr Lembong has said there was a shortage at the time and that he consistently consulted former president Joko Widodo on import policy.

The former businessman served as trade minister and then investment board chairman during Mr Widodo’s first term from 2015 to 2019.

But he became an increasingly outspoken critic of Jokowi’s second-term policies, including nickel down-streaming that has led to Chinese dominance of Indonesia’s smelter industry and significant environmental damage even as it has added billions of dollars in exports.

Mr Lembong’s lawyer, Ari Yusuf Amir, told the Central Jakarta corruption court on Thursday the case was “clearly being forced” and that the “public prosecutor is using this to destroy justice”.

“It is unfortunate that the defendant is being accused of corruption, yet the prosecution cannot prove even a single rupiah of misappropriation. The audit did not find any irregularities,” Mr Amir said.

Outside the court, Mr Lembong told reporters he was disappointed with the indictment given the official audit could not explain how any state losses occurred, and the indictment “did not accurately reflect the reality of what occurred at the time”.

“As we have said before, we hope for professionalism and transparency from the Attorney-General’s office,” he said before being led away.

Many Indonesians and Indonesia analysts suspect Mr Lembong’s outspokenness and close association with former Jakarta governor Anies made him a target, particularly as President Prabowo has sought to build a grand coalition of parties that would eliminate all parliamentary opposition to his ambitious political agenda.

With most political parties now inside the government umbrella, Anies has emerged as an important opposition figurehead.

The Jakarta launch last month of a new political movement, with a former Anies campaign spokesman at the helm, is widely seen as the precursor to a political party that can back his 2029 presidential bid.

Indonesia analyst Ian Wilson told The Australian that under President Prabowo, “any opposition would not be looked upon favourably” and that Mr Lembong’s arrest “fits a pattern of someone high profile enough to send a message” about the risks of forming a political opposition while avoiding the unnecessary controversy that would come from arresting Anies himself.

“That is how a lot of people are interpreting this. The question of whether it is coming from Jokowi or Prabowo is almost irrelevant because it’s really a message more broadly from the status quo about the risks of being seen as oppositional,” said Dr Wilson, a principal fellow at Murdoch University’s Indo Pacific Research Centre.

Mr Anies attended the Jakarta court for the first day of Mr Lembong’s trial and told reporters he had “great hopes” that it would deliver justice.