## _011605 ## Source details **Canonical URL:** [_011605](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2005/_011605.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2005/_011605.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2005/_011605.pdf.json) --- ### Evaluation background and scope - Evaluation undertaken during July 2004 in Jakarta by a team of three persons appointed by the Government of Indonesia, the Government of the Netherlands, and the IMF. - The team interviewed over sixty-six persons from twenty-nine institutions and organizations. - Evaluation period covered: began in 2000 and runs through mid 2004, with six months remaining in the program until the end of 2004. - Phase I: commenced May 2000 and concluded in March 2003. - Phase II: began mid-2003 and will conclude at the end of 2004. - Primary managers/counterparts: IMF, Bappenas, and the Netherlands Embassy in Jakarta. ### Institutional history and context - 1950–early 1959: parliamentary order sustained a capable legal system despite constraints. - 1957–1959: Guided Democracy (1959-1966) led to loss of institutional autonomy and spread of corruption. - 1966–1998 (New Order): leadership vested in the army; judicial independence not restored; private legal profession grew; judicial corruption became deeply embedded. - After mid-1997 crisis and May 1998 resignation of President Suharto: institutional collapse compounded economic problems; elites resisted reforms; legal system integrity vitiated. ### Program: Commercial Courts — rationale, activities, and outcomes - Rationale: - Effective bankruptcy regime essential to recover distressed corporate sector; required statutory reform, capable courts, and knowledgeable receivers. - New commercial courts created in late 1998—first in Jakarta and four more later in major provincial cities. - Phase one preparations included: - Advice on improving the bankruptcy law; training for commercial court and appellate judges (including Supreme Court members); guidelines for receivers; new source materials; Manual of Commercial Court Administration; evaluation program. - Phase two (begun in 2003) emphasized: - Further training including observation tours abroad; refinement of internal organization and administration; integration of ad-hoc commercial judges; improved monitoring and public accountability. - Innovations introduced: - Ad hoc judges (only one ad hoc judge ever assigned; participated in a total of nine or ten cases and issued two dissenting opinions; no ad hoc judges appointed since 2002). - Dissenting opinions: out of 300 bankruptcy decisions, there were only five dissenting opinions (four within the Commercial Courts and one in the Supreme Court). - Publication of court decisions: Program supported internet publication and commissioned reviews; 58 of 300 commentaries posted on the internet. - Time bound procedures: amended bankruptcy law reduced total time (including appeal) to 180 days; MOCCA produced. - Interdepartmental Steering Committee and Needs Assessment (pilot for Jakarta Commercial Court). - Outcomes and findings: - Selection, preparation, and training of judges done quickly but adequately; analysis showed most decisions were soundly based. - Receivers association split and corruption began to seep in. - New commercial courts did not substantially help establish a solid bankruptcy program; number of cases declined substantially (e.g., as of July 20 only 27 bankruptcy cases filed in Jakarta Commercial Court for 2004). - Commercial court judges often called back to general courts, undermining a specialized corps. - Evaluation team conclusion: consensus that commercial courts have not fulfilled their purpose; primary reason: not fully separated from larger judicial system mired in poor ethics and weak professionalism. - Recommendation: - Difficult to justify continued support of the commercial courts program; future funding should derive from Indonesian priorities linked with wider judicial system improvements. ### Program: Supreme Court — rationale, engagement, and Blueprints - Rationale: - Reform of the judicial center (Supreme Court) necessary because improvements there would reinforce the periphery, including commercial courts. - Opportunity and engagement: - 2000: retirement of the chair led to appointment of a non-career judge; Chief Justice was supportive and welcomed assistance. - Phase one (May 2000 to May 2003) activities: - Built on prospect of a new Judicial Commission; supported workshops, seminars, parliamentary negotiations; LeIP/PSHK research produced the Blueprints starting early 2002. - Organized study tours for Supreme Court justices to the Netherlands and the United States. - Blueprints: - Provided approaches to personnel management, financial management, judicial education, and draft proposal for Judicial Commission law. - Produced entirely by Indonesians with Court leadership imprimatur; strong sense of ownership. - Risks and uncertainties: - Retirement over the next two or three years of the Chief Justice and some reform-committed judges renders pace of change uncertain (noted elsewhere as 2-3 years and 2-3 years/2-3 years retirements). - Embedded resistance exists within the Court, but momentum exists to which the Program contributed substantially. - Significance and recommendation: - Program’s work with the Supreme Court likely to have more significant impact on the entire judicial system than other strategies. - Short-term priorities: strong support for implementing the Supreme Court Blueprints; continued support for an implementation team inside the Supreme Court; produce abridged versions of the Blueprints for busy judges and wider public dissemination. - Medium- to long-term: consider assistance for a project implementation office or secretariat; assist development of the new Judicial Commission including a developmental Blueprint; adapt productivity and needs assessment to other judicial institutions; develop a strategy for wider dissemination of reform information. ### Program: Anticorruption — activities, shifts, and assessment - Context: - Pervasive corruption affects every institution in Indonesia; addressing corruption unavoidable but lacked obvious approach. - Phase I activities and challenges: - Supported Joint Investigating Team (JIT) led by a retired Supreme Court justice; assistance to Public Prosecution Office; prepared policy paper on judicial corruption. - JIT met opposition and was dissolved by early 2001; assistance to Public Prosecution Office ended due to lack of action. - Phase II and focused engagement: - Limited assistance to the Commission for the Audit of the Wealth of State Officials (KPKPN); study tour to Thailand with Asia Foundation. - Supported preparations for development of an Anticorruption Court; helped fashion parliamentary strategies and blueprint for the court. - Anticorruption Court created by Parliament in mid-2004. - Observations and conclusions: - Evaluation hampered by limited access to knowledgeable persons. - Anticorruption was not the Program’s primary focus; Phase II created a sharper focus on the Anticorruption Court with Action Plan, Blueprint, activity terms of reference, and managerial support in place. - Final judgment: blueprint approach addresses roots of corruption more effectively than isolated activities; Program helped catalyze and steer the process but results remain limited and enforcement remains to be tested. ### Overall findings — mixed results and momentum - Overall assessment: mixed results; few objectives met with unmitigated success given intractable political and legal conditions, but substantial achievements occurred despite odds. - The Program is widely respected by well informed Indonesians and many interviewees, distinct from general views of the IMF. - Commercial courts: limited success on bankruptcy objectives but introduced potentially significant reforms (dissenting opinions, public access to decisions, public accountability). - Supreme Court: Blueprints are an important and novel achievement. - Anticorruption: useful but limited results; Anticorruption Court barely off the ground and success depends on sustained support in administration and Parliament. - Momentum: judicial reform has gained momentum over the last four years; Program contributed substantially; influence may grow as younger political elites rise. ### Program strengths - Effective Program Advisors: - Resident legal expert and two Resident Advisors received extraordinary respect; together representing approximately eighty years of combined experience in Indonesian law. - Resident Legal Expert’s role seen as critically important and should be retained. - Preference for local consultants: - Program relied upon capable NGO expertise for research, planning, and institutional analyses, strengthening local organizations and fostering local ownership. - Flexibility: - Flexibility of the Program, Netherlands funding, the Netherlands Embassy, and the IMF legal section allowed rapid adaptation and experimentation. - Simple funding procedures: - Flexibility and moderate bureaucratic procedures facilitated use of local expertise given low implementation capacity in Indonesia. ### Program weaknesses and operational shortcomings - Monitoring and consultant reliance: - Divergent team views: two members thought more close monitoring and evaluation of commercial courts was possible and needed; another member considered monitoring adequate. - Concerns two members raised that Program relied too much on a few local consultants and experts; another member disagreed. - Limited publicity: - Program not widely advertised; concentrated in Jakarta and focused on a few institutions. - External constraints beyond Program control: - Legal education and the private legal profession are serious influences on Program efficacy but beyond Program engagement capacity. - Specific operational issues: - Lack of routine measurable monitoring and evaluation (examples: training evaluations not requested; no definitive data on training impact). - Over-reliance on a limited number of local consultants led to delays (e.g., six months original timetable for Blueprints; Blueprints delivered more than one year late; Team of Seven took two years to complete annotations planned for six months). - Insufficient outreach to wider domestic constituency (about 20,000 professional lawyers nationwide highlighted as a missed audience). ### Key exact figures and timeframes (preserved verbatim) - over sixty-six (persons interviewed) - twenty-nine (institutions and organizations interviewed) - 1950–early 1959 - 1957–1959 - 1966–1998 (New Order) - mid 1997 (economic crisis beginning) - May 1998 (President Suharto’s resignation) - late 1998 (new commercial courts created) - Phase I: May 2000 to March 2003 - Phase II: began mid-2003 and will conclude at the end of 2004 - approximately eighty years (combined experience of advisors) - 180 days (time limit in amended bankruptcy law, including appeal) - 300 (bankruptcy decisions reviewed) - five (dissenting opinions in 300 bankruptcy decisions) - one (ad hoc judge called to sit almost two years after opening) - nine or ten (cases in which that ad hoc judge participated) - two (dissenting opinions issued by that ad hoc judge) - 58 of 300 (commentaries posted on the internet) - 27 (bankruptcy cases filed in Jakarta Commercial Court for 2004 as of July 20) - approximately 70% (Commercial Court decisions judged in accordance with or justifiable under the law) - three years (Commercial Court monitoring period) - six months (original timetable for Supreme Court Blueprints) - more than one year late (actual Blueprints delivery) - two years (Team of Seven took to complete annotations planned under a six month schedule) - 2-3 years (chief justice and other key reform supporters scheduled to retire) - about 20,000 (number of professional lawyers throughout Indonesia) - July 2004 (legislation establishing the Judicial Commission passed) - end-2003 (Indonesian Government White Paper issued) ### Recommendations — short, medium, and operational - Short-term (remaining funded term): - Strong support for implementing the Supreme Court Blueprints; continue support for an implementation team working inside the Supreme Court. - Extend reach of Blueprints beyond the Supreme Court to lower courts nationwide. - Support production of abridged versions of the Blueprints for busy judges and wider public dissemination. - Medium- to long-term and institutional support: - Assist development of a project implementation office or secretariat to coordinate donor activity and avoid additional burdens on judges. - Assist development of the new Judicial Commission, including support for preparation of a developmental Blueprint. - Adapt and apply the productivity and needs assessment done for the Jakarta commercial court to other judicial institutions. - Develop a strategy for spreading information about judicial reform more widely in Jakarta and across the country. - Anticorruption strategy: - Continue support for Anticorruption Court implementation only as a clear niche emerges; blueprint approach is preferred over stand-alone quick fixes. - Operational reforms: - Strengthen monitoring and evaluation: institute routine quantitative and qualitative evaluative tools (website hits, user surveys, post-tour questionnaires, training evaluations); consider independent mid-term evaluations. - Reduce over-reliance on a small set of local consultants via competitive contracting. - Increase outreach to a wider domestic constituency (law firms, law faculties, the press, professional associations, business and labor groups). - Spread administrative duties to reduce burden on the Resident Legal Expert; retain knowledgeable program implementers with Indonesian-specific expertise. - Preserve guided flexibility, moderate bureaucracy, localized decision making, and a low public profile while ensuring accountability and procurement soundness. ### Final assessment and outlook - It is "much too soon to assess the end results of the judicial reform Program" given its relatively brief life. - Commercial Courts: did not achieve intended bankruptcy regime outcomes but introduced discrete mechanisms that may seed broader reform. - Supreme Court: Blueprints are a promising Indonesian-owned platform for reform; sustainability depends on implementation capacity, retirements of reform leaders, and political will. - Anticorruption: blueprint approach has structured a framework (Anticorruption Commission, Anticorruption Court, Judicial Commission, and Blueprints) but enforcement and sustained support are required. - Overall: Program has laid significant groundwork for further change that deserves continuing support, contingent on sustained Indonesian ownership, broader structural reforms, and effective implementation and outreach. *Source: _011605 - Executive Summary (https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2005/_011605.pdf)* ### Executive Summary ### _011605 - Executive Summary ### Executive Summary - Executive Summary *Source: _011605 - Executive Summary (https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2005/_011605.pdf)* ### Introduction ### Introduction ### Evaluation background - The evaluation of the IMF/Netherlands Program for legal and judicial reform in Indonesia was undertaken during July 2004 in Jakarta by a team of three persons appointed by the Government of Indonesia, the Government of the Netherlands, and the IMF. - The team interviewed over sixty-six persons from twenty-nine institutions and organizations, including IMF and World Bank personnel, judicial personnel, other government officials, private contractors, non-governmental organizations, and foreign donor organizations. - Members of the evaluation team and the list of interviewees are in appendixes one and two. ### Institutional history - 1950–early 1959: Indonesia’s parliamentary order sustained a capable legal system despite inadequate funds and personnel and post-revolutionary chaos; parliament generated legislation and judicial corps, prosecution, notariat, and private legal profession retained essential skills and integrity. - 1957–1959: Parliamentary government fell apart; President Soekarno assumed increasing responsibility and in 1959 by decree replaced the provisional parliamentary constitution of 1950 with the strong presidential constitution of 1945. Guided Democracy (1959-1966) resulted in rapid loss of institutional autonomy and spread of political engagement and corruption in prosecution and courts. - 1966–1998 (New Order): Leadership and control vested principally in the army; judicial independence was not restored under General Suharto. Private legal profession grew exponentially from the late 1960s, diversifying into litigating advocates and commercial “consulting” or office lawyers. Over about forty years judicial corruption became deeply embedded, often perceived as normal interchange or perquisite. ### Dimensions of the problem - After the economic crisis beginning mid 1997 and President Suharto’s resignation in May 1998, Indonesia faced institutional collapse in addition to economic problems. - Political and administrative elites resisted fundamental reforms that would impose limits on them. - Immediate attention to legal system reform, particularly the courts, was required because their integrity had long been vitiated. ### Program: Commercial Courts - Rationale: - An effective bankruptcy regime was essential to recover a distressed corporate sector; required statutory reform, capable courts, and knowledgeable receivers. - New commercial courts were created in late 1998—the first in Jakarta and four more later in major provincial cities—but importing new judges from outside the judicial corps was prevented by the opposition of the Judges Association, linking the new courts to the existing judiciary. - Phase one preparations included: - Advice on improving the bankruptcy law. - Training programs for commercial court and appellate judges, including members of the Supreme Court. - Information and guidelines for receivers. - New source materials for insolvency professionals. - A new Manual of Commercial Court Administration. - An evaluation program. - Phase two (begun in 2003) emphasized: - Further training including observation tours abroad. - Refinement of internal organization and administration of the commercial courts. - Integration of ad-hoc commercial judges. - Improved monitoring and public accountability. - Outcomes and findings: - Selection, preparation, and training of judges were done quickly but adequately; analysis showed most decisions were soundly based and in some cases more so than the Supreme Court. - Training for receivers led to a new association; however receivers association split and corruption began to seep in. - New commercial courts did not substantially help establish a solid bankruptcy program; number of cases declined substantially. - Commercial court judges were often called back to original general courts, undermining development of a specialized corps. - Positive discrete mechanisms introduced: time bound procedures, dissenting opinions, ad hoc judges, public access to written decisions. - A professional needs assessment applied to the commercial court of Jakarta may prove useful as a model. - Evaluation team conclusion and recommendation: - A consensus of interview sources agreed commercial courts have not fulfilled their purpose: they did neither contribute to an effective bankruptcy regime nor evolve into a competent judicial institution to encourage investor confidence. - Primary reason: new courts were never fully separated from a larger judicial system mired in poor ethics and weak professionalism. - The evaluation team finds it difficult to justify continued support of the commercial courts program and recommends that future funding derive from Indonesian priorities linked with wider judicial system improvements. ### Program: Supreme Court - Rationale: - Reform of the judicial center (Supreme Court) was necessary because improvements there would reinforce the periphery, including commercial courts. - Opportunity and engagement: - 2000: Retirement of the chair of the Supreme Court led to appointment of a non-career judge (an academic) and a few additional non-career judges, creating a small base for reform. - Chief Justice was supportive and welcomed assistance; Program shifted attention to the Supreme Court. - Phase one (May 2000 to May 2003) activities: - Built on prospect of a new Judicial Commission provided for in an amendment to the constitution. - Supported workshops, seminars, and parliamentary negotiations between the Supreme Court and Parliament; legislation was finally promulgated in mid-2004. - Developed a close relationship with the Institute for Judicial Independence (LeIP) of PSHK; LeIP began substantial research in early 2002, producing planning recommendations, the Blueprints. - Supported workshops with the Supreme Court and National Law Commission; organized study tours for Supreme Court justices to the Netherlands and the United States. - Blueprints and ownership: - The Blueprints provided approaches to reforms of personnel management, financial management, judicial education, and a draft proposal for the Judicial Commission law. - Blueprints are reform documents produced entirely by Indonesians with Court leadership imprimatur; strong sense of ownership noted. - Risks and uncertainties: - Retirement over the next two or three years of the Chief Justice and some reform-committed judges renders pace of change uncertain. - A judge detailed to implement Blueprints accepted appointment as Attorney General. - Embedded resistance exists within the Court, but there is momentum to which the Program contributed substantially. - Significance: - Program’s work with the Supreme Court is likely to have more significant impact on the entire judicial system than other strategies. ### Program: Anticorruption - Context: - Pervasive corruption affects every institution in Indonesia; addressing corruption was unavoidable but lacked an obvious approach due to depth and extent. - Early activities and challenges: - Program supported a newly formed Joint Investigating Team (JIT) led by a respected retired Supreme Court justice focused on judicial corruption; provided assistance to the Office of Public Prosecution for public interest bankruptcy issues; prepared a policy paper on judicial corruption. - Little came of initial Phase I: JIT met opposition and by early 2001 was challenged in the Supreme Court and dissolved; assistance to the Office of Public Prosecution ended due to lack of action. - Later, more focused engagement: - Limited assistance to the Commission for the Audit of the Wealth of State Officials (KPKPN), including a study tour to Thailand with the Asia Foundation. - Supported preparations for development of an Anticorruption Court; helped fashion parliamentary strategies and supported development of a blueprint for the court and plans for its programs. - The Anticorruption Court was created by Parliament in mid-2004. - Evaluation observations: - Evaluation of anticorruption work was hampered by limited access to knowledgeable persons. - Anticorruption was not the Program’s primary focus, though its effect on commercial courts was of concern. - Program’s approach became grounded in the Blueprints process emphasizing Indonesian-built institutional foundations. - Through Anticorruption Commission, Anticorruption Court, Judicial Commission and Blueprints, a framework is being structured to institutionalize means of addressing abuse and regulating professionalism. - The evaluation team believes the Program has catalyzed and helped steer this process. ### Evaluation: overall findings - The Program had mixed results: few objectives met with unmitigated success given intractable political and legal conditions, but substantial achievements occurred despite odds. - The Program is widely respected and admired by well informed Indonesians and many interviewees, distinct from general views of the IMF. - Commercial courts: experiments produced limited success on bankruptcy objectives but introduced potentially significant reforms (dissenting opinions, public access to decisions, public accountability). - Supreme Court: Blueprints are an important and novel achievement; they offer a convincing set of approaches to basic reform in organization and management as responsibility for courts transfers from Ministry of Justice to the Supreme Court. - Anticorruption: useful but limited results; Anticorruption Court barely off the ground and success depends on sustained support in administration and Parliament. - Momentum: Judicial reform has gained momentum over the last four years; the Program contributed substantially and influence may grow as younger political elites rise. ### Program strengths - Effective Program Advisors: - Resident legal expert and two Resident Advisors received extraordinary respect and high praise; together representing approximately eighty years of combined experience in Indonesian law. - Their knowledge, seriousness, capability, and program quality were widely acknowledged; the Resident Legal Expert’s role was seen as critically important and should be retained. - Preference for local consultants: - Program relied upon capable NGO expertise for research, planning, and institutional analyses, strengthening local organizations and fostering local ownership. - Relevant government bodies, including the National Planning Council, were intimately involved; Program maintained close working relationships with other donor agencies. - Flexibility: - Flexibility of the Program, Netherlands funding operation, the Netherlands Embassy in Jakarta, and the IMF legal section in Washington allowed rapid adaptation to opportunities and quick support for strategic changes; experimentation was not obstructed. - Program administration efficiency was well regarded by NGO partners, contractors, consultants, and donor agencies. - Simple funding procedures: - Flexibility and moderate bureaucratic procedures in funding mechanics facilitated use of local expertise and local ownership. - Given low implementation capacity in Indonesia—virtually non-existent within the judicial system and weak in other government institutions—complicated funding requirements would hamper local partners. ### Program weaknesses - Divergent team views on monitoring and consultant reliance: - Two team members thought more close monitoring and evaluation of commercial courts was possible and needed; another member considered monitoring adequate given endemic institutional weaknesses. - Two members were concerned Program relied too much on a few local consultants and experts; another member believed the Program had found the best available organizations and supported new research organizations. - Limited publicity: - Program is not widely advertised; concentrated largely in Jakarta and focused on a few institutions, it may not have generated enough information for wider public support. - External constraints beyond Program’s control: - Legal education and the private legal profession are serious influences on Program efficacy but were beyond Program engagement capacity; both limit long-run effectiveness. ### Projections and recommendations - Short-term (remaining funded term) priorities: - Strong support for implementing the Supreme Court Blueprints; continued support for an implementation team working inside the Supreme Court. - Extend the reach of Blueprints beyond the Supreme Court to lower courts nationwide. - Support production of abridged versions of the Blueprints for busy judges and wider public dissemination. - Medium- to long-term priorities and institutional support: - Support for implementation will be long term; where to begin should be considered by the Supreme Court with Program-supported advisers. - Because the Supreme Court lacks management capacity for project implementation, consider assistance for a project implementation office or secretariat to coordinate donor activity and avoid additional burdens on judges. - Assist development of the new Judicial Commission, including support for preparation of a developmental Blueprint. - Adapt and apply the productivity and needs assessment done for the Jakarta commercial court to other judicial institutions. - Develop a strategy for spreading information about judicial reform more widely in Jakarta and across the country, particularly to groups most directly concerned with legal reform. *Source: IMF/Netherlands Program evaluation — Introduction (text provided).* ### Conclusion/Summary ### Conclusion/Summary ### Origins and scope - Beginning in the second half of 1998 the IMF undertook to create new commercial courts to address bankruptcy issues in a failing Indonesian economy. - New commercial courts established: one in Jakarta and four more in the provinces. - In 2001 the IMF/Netherlands program expanded to assist in Supreme Court reform and anticorruption efforts. - Evaluation period: began in 2000 and runs through mid 2004, with six months remaining in the program until the end of 2004. ### Program approach and implementation strengths - The Program developed "sophisticated and sensitive approaches" to extraordinarily difficult institutional problems. - A principal basis of effectiveness: commitment to working closely with and depending upon Indonesian organizations and skills. - Key personnel: Technical Expert and Resident Advisors—three lawyers familiar with and knowledgeable about Indonesian law, history, and society—earned "impressive respect." - Flexibility and support from the Netherlands Government and the IMF legal department were important contributors to program performance. - Advisory work contributed to the establishment by law in 2004 of a new Judicial Commission. - Support included training and related programs in the commercial courts and support for an Indonesian NGO’s development of blueprints for administration, judicial education, and financial management reforms in the Supreme Court. ### Major findings: limitations, setbacks, and institutional context - The new commercial courts "did not fare well" and were "infected by serious institutional weaknesses in the national judiciary at large and within the legal system." - The evaluation team concluded that the initial premise—that the Commercial Courts could function effectively and credibly despite wider systemic problems—was a serious defect. - Weaknesses in Program implementation "ultimately did not affect overall success or failure;" program flaws were "dwarfed by the serious institutional weaknesses in the judiciary." - The commercial courts did not succeed as hoped in the short term; the evaluation team’s sources "by and large agreed that no further support should be given the commercial courts at this time." - The Supreme Court effort faces difficulties of organization, personnel, and staff. - Retirement concerns: retirement within two years of the Chief Justice, who has supported the Program reform effort, and that of two other reform-oriented justices, "may well slow the process of change significantly." - The new anticorruption court and related efforts "have barely begun." - "A great deal depends ... on the commitment of political leadership to legal and judicial reform." ### Evaluation methodology and team - The evaluation team studied all documents relevant to the program that were made available. - Fieldwork: two weeks in Jakarta, from 12 July through 23 July 2004, during which the evaluation team interviewed numerous participants and knowledgeable parties. - Final analysis and report format preparation occurred on the weekend of 24-25 July 2004. - Evaluation team members: Prof. Harkristuti Harkrisnowo (Faculty of Law of the University of Indonesia, appointed by the Government of Indonesia); Patricia Kendall (private legal consultant, appointed by the Government of the Netherlands); Prof. Emeritus Daniel S. Lev (political scientist, University of Washington, appointed by the IMF). ### Overall assessment and forward-looking conclusions - It is "much too soon to assess the end results of the judicial reform Program" given its relatively brief life thus far. - Despite short-term failures of the commercial courts and ongoing challenges at the Supreme Court and anticorruption initiatives, the Program "has laid significant groundwork for further change that deserves continuing support" through: - advisory work on the Judicial Commission (established by law in 2004), - training and related programs in the commercial courts, - support for Indonesian NGO blueprints for Supreme Court reforms, - deep reliance on and cooperation with Indonesian expertise and capacity. *Source: Conclusion/Summary (pages of the IMF/NETHERLANDS PROGRAM EXTERNAL EVALUATION).* ### 10. Appendix Two: List of Persons Interviewed pp. 50-53 ### 10. Appendix Two: List of Persons Interviewed (pp. 50-53) ### Background - Beginning in 1997, at the request of the Government of Indonesia, the IMF provided technical assistance for creating a more effective framework for bankruptcy proceedings. - The Government of the Netherlands agreed to fund a technical assistance subaccount to strengthen the capacity of the judiciary to implement the bankruptcy law. - Direct Indonesian counterpart: National Development Planning Agency (Bappenas). - Principal managers of the Program: IMF, Bappenas, and the Netherlands Embassy in Jakarta. - Program structure: - Phase I: began in May 2000 and concluded in March 2003. - Phase II: began mid-2003 and will conclude at the end of 2004. - Phase I projects (five): - (i) long-term resident expert to assist the Commercial Court Steering Committee; - (ii) two part time resident advisors; - (iii) preparation of written materials (manuals, work standards, court decision commentaries); - (iv) strengthen capacity of Public Prosecutor’s Office and Joint Investigation Team; - (v) assess long term institutional needs of the judiciary and establish a judicial commission. - Phase II components (three): - (i) strengthening judicial supervision and management; - (ii) strengthening Commercial Court performance; - (iii) strengthening anticorruption policies and institutions. - Phase II objective: strengthen legal infrastructure and institutional performance of the judiciary to increase restructuring of private debt, enhance investment, and support sustainable economic growth. - Evaluation coverage: assessment based on written materials and interviews as of late July 2004, prior to conclusion of Phase II. ### Historical Setting of the Problem - Post-1950 parliamentary period: judges were respected and legal institutions functioned reasonably well. - Political changes 1957-1959: replacement of provisional constitution of 1950 by the presidential constitution of 1945 and hyper-centralization of authority undermined institutional autonomy. - Consequences over subsequent decades: - Corruption and malfeasance rose in prosecution and courts. - Practices included prosecutors using preliminary investigation powers to arrest wealthy figures as hostages and offering judges shares for procedural efficiency. - Term used: “judicial mafia.” - 1966 and New Order era: initial reformist group (“Servants of the Law”) dissolved; legal process subordinated to political control; judicial corruption became widespread over the next thirty years. - By the end of the 1990s, judicial structures (courts, prosecution, police) were primary targets for reform; Commercial Courts were a variation on systemic reform challenges. - Program constraint example: early effort to involve Chief Public Prosecution in public interest delinquency cases ended in 2001 when the Public Prosecution did not take up cases. ### The Commercial Courts — Setting and Early Operation - Commercial Courts established in 1998 as part of bankruptcy and debt restructuring plan; initially jurisdiction limited to bankruptcy proceedings. - Context: financial crisis beginning mid-1997 created urgent, high-pressure environment for reform. - Steering Committee for Preparation of the Operation of the Commercial Courts formed in June 1998 (members: Supreme Court, State Secretariat, Ministry of Justice, Bappenas). - New Court began operation in August 1998 in Jakarta. - First three months: thirty one bankruptcy cases filed. - Following year: approximately one hundred cases. - Early weaknesses observed: ineptness among judges, receivers and private lawyers; inconsistencies applying the law; signs of corruption. ### Original Program Goals and Phase II Evolution - Core objective throughout: put in place an effective bankruptcy regime and ensure proper implementation via a competent and objective judiciary, with initial focus on Commercial Courts. - Phase I technical assistance aimed to: - (i) improve operations of the Commercial Courts and related institutions; - (ii) coordinate training and related projects for judiciary (Commercial Courts and Supreme Court); - (iii) prepare legal materials (work standards, codes of ethics, MOCCA, commentaries, guidelines). - Phase II purpose: broaden focus to strengthen legal infrastructure and institutional performance of the judiciary to achieve debt restructuring, enhanced investment, and growth. - Phase II Commercial Court activities emphasized institutional operations: - strategic planning, annual reports, commissioned commentaries, personnel management review, productivity and needs assessment, overseas study tours. - Implementation largely by local consultants under Steering Committee authority with close supervision of Program Advisers. ### Program Problems and Constraints - General finding: Commercial Courts widely perceived as having failed to operate as intended; did not create a competent and objective judiciary to implement an effective bankruptcy regime; little support for contention they restored investor confidence. - Key constraining factors: - Commercial Court judges selected from existing judiciary remained attached to broader judicial system and its promotion/transfer policies. - Weak local commitment: court leaders, powerful business interests, and civil society provided insufficient ownership for Commercial Courts. - Efforts to create separate case management and administration faced resistance and resource constraints; equipment and space needs unmet. - Receivers and private attorneys exhibited weak professional skills and questionable ethics; addressing their conduct exceeded Program capacity. - Program design presumed technical assistance focused on Commercial Courts could effect change without widespread structural reform of general court system. - Result: technical assistance achieved discrete advances but overall impact on Commercial Court functioning was marginal. ### Assessment of Program Quality — Innovations Introduced - Notable procedural and institutional introductions: - Ad hoc judges: intended to bring commercial law expertise and integrity alongside career judges; amended law allowed appointment from an approved list at party request. - Implementation complications: judiciary resisted; ad hoc judges resisted serving until clear procedures existed. - First ad hoc judge called to sit almost two years after Commercial Court opened. - Usage: only one ad hoc judge ever assigned to hear cases; participated in a total of nine or ten cases and issued two dissenting opinions. - No ad hoc judges appointed since 2002; currently none available as initial appointments have expired. - Dissenting opinions: - Prior practice: dissents were closeted and not part of the decision. - Commercial Court adoption permitted public dissenting opinions. - Out of 300 bankruptcy decisions, there were only five dissenting opinions (four within the Commercial Courts and one in the Supreme Court). - Dissenting views were upheld on appeal in the cited cases. - Dissent practice gradually spreading: three dissents in criminal cases outside Commercial Court, Constitutional Court dissents, and dissents institutionalized by Supreme Court law. - Publication of court decisions: - Amended bankruptcy law required written decisions with explicit legal reasoning made available to the public. - Program supported internet publication and commissioned expert reviews of decisions. - Availability of written decisions led to public scrutiny and publicity of egregious decisions. - New Supreme Court law provides for publication. - Time bound procedures: - Amended bankruptcy law reduced total time (including appeal) to 180 days. - Program produced Manual for Commercial Court Administration (MOCCA) to assist stakeholders. - Commercial Courts largely abided by time frames, but Supreme Court later held that lateness bore no legal consequence and exceeded time limit on appeal in a bankruptcy case. - Time bound procedures now exist in Human Rights and Anticorruption Courts. - Interdepartmental Steering Committee: - Intended to gather input outside judiciary and coordinate reform; originally instituted by IMF and later supported by the Program. - Program supported secretariat involving NGOs; Steering Committee evolved into a Joint Steering Committee for Commercial Court and Anticorruption Court. - Performance: slow and inconsistent but became a productive vehicle for stakeholder participation with Program and Bappenas support. - Needs Assessment (productivity and needs): - Pilot assessment of Jakarta Commercial Court conducted in two phases between 2002-2004 by a Jakarta consulting firm. - Findings included: court budget grossly under funded; judges underpaid; court overstaffed. - Specific staffing recommendation: reduce court personnel from seventy-six to twenty-eight. - Assessment also supported calculations for reasonable minimum judicial salaries, annual operations budgets, and average time to handle a bankruptcy case. - Uncertainty about implementation due to budget constraints; unclear how Assessment will be used. - Strategic planning / Blueprints: - First Commercial Courts blueprint produced May 2001 (more a donor matrix than concrete strategic plan). - Blueprint identified five areas: human resources, organizational restructuring, improved infrastructure and facilities, performance assessment, expansion of Commercial Court jurisdiction. - Subsequent Blueprint process for Anticorruption Court produced a more participatory and consensus-based document reflecting Indonesian priorities. - Capacity building / Training: - Heavy emphasis on training judges and receivers; standardized curriculum and professional local trainers. - Lack of evaluative follow-up: Program’s training consultant stated there is no way to know if training had any impact. - Sustainability concerns: Supreme Court training unit lacks professional staff and may not sustain specialized training once Program support ends. - Preparation of legal materials: - MOCCA, guidelines on supervisory judge–receiver relationships, professional work standards for Receivers Association (AKPI), and standardized reporting format for receivers. - Impact on court performance unclear. - AKPI used standards to discipline one member; some receivers left AKPI to form a competing association. - Annotated court decisions / commentaries: - Program commissioned a study (Team of Seven) to review 300 Commercial Court decisions. - Team of Seven reportedly found more than two thirds of the 300 decisions defensible under the law but criticized judges’ basic legal knowledge and competence, especially in Supreme Court bankruptcy decisions. - The commissioned study delivery was long delayed, did not meet terms of reference, and was not published by the Program. - Some commentaries (58 of 300) are posted on the internet. ### Evaluation — Overall Findings and Sustainability Concerns - Overall assessment: mixed. Commercial Courts introduced legal and procedural innovations but failed to function effectively as intended; they succumbed to systemic judicial deficiencies. - Positive contributions: - Introduction of ad hoc judges (limited), dissents, publication of written decisions, and time bound procedures. - Institutional tools created: interdepartmental Steering Committee, a productivity and needs Assessment, and strategic planning blueprints. - These are seen as incremental building blocks for broader judicial reform. - Limitations and risks: - Lack of widespread structural reform in the general court system limited Commercial Courts’ effectiveness. - Weak local ownership and commitment from court decision makers undermine sustainability. - Declining bankruptcy caseload in post-crisis environment reduces perceived need and resource justification for specialized Commercial Court support. - Potential for backsliding on time bound procedures and other advances exists without high level support. - Needs Assessment may serve better as a tool to inform reform debates than as an implementable plan given budget constraints. - Continued training sustainability is doubtful given limited judiciary budget and lack of professional training staff in Supreme Court training unit. - Policy implication from evaluation: - Continued support for Commercial Courts development is unlikely to be effective without stronger commitment from court leadership and broader structural reform of the judiciary. - Innovations introduced by the Program are valuable but insufficient alone; they require follow-through, local ownership, and systemic change to produce sustainable improvements. *Source: Excerpt from "10. Appendix Two: List of Persons Interviewed" (pp. 50–53) of the Program evaluation report, as of late July 2004.* ### Conclusion ### Conclusion ### Commercial Courts — Overall finding - Six years after amendment of the bankruptcy law, Indonesia’s Commercial Courts have not contributed as intended to creating an effective bankruptcy regime. - The Commercial Courts failed to evolve as a competent institution and model court. - Contributing factors to the failure: - Operations of the Commercial Courts remain permeated by long entrenched problems of the entire judicial complex. - Judges and court personnel alone are not at fault; lawyers and receivers also contributed to the Courts’ ineffectiveness. - Indonesians generally lacked sufficient commitment to specialized bankruptcy courts to secure their proper development. - Assistance was grounded on a faulty premise that technical assistance could succeed without wider structural reforms to the judicial system. - Stated objectives were overly ambitious and not realistically achievable. - Notable Program contributions despite limits: - Introduced discrete mechanisms to strengthen transparency and accountability that have taken root and sprouted in other courts. - Seeded a process for reform that opened the judiciary to outside input and, under a more reform-minded Chief Justice, grew into the Blueprints process. - On balance, these are sound contributions and it is doubtful much more could have been achieved. ### The Supreme Court — Setting - From 1998 it was clear that for Commercial Courts to render effective service, the core judiciary must become a focus of reform. - Creation of the Commercial Courts was an emergency stopgap; sustaining them required restoration of competence and integrity of the judiciary generally. - The Supreme Court’s composition included many justices whose careers developed during the New Order years when judicial authority and integrity had lost meaning. - Opportunity for change emerged in 2001: - During the short-lived presidency of Abdurrachman Wahid the chair of the Supreme Court retired and Bagir Manan, a non-career judge, was chosen to replace him. - A few more non-career justices were appointed, a small minority among forty plus members of the Court at the time, providing potentially useful support for change. - New Chief Justice expressed enthusiastic commitment to a reform agenda. ### Program Goals and Activities - Primary purpose: assist strategically in restoring institutional capacity and efficacy of the Supreme Court with implications for the whole judiciary, recognizing slow timelines. - Program adapted after May 2001: - Shifted attention from Commercial Courts to the Supreme Court and anti-corruption issues. - Flexible funding allowed budget adaptation when new conditions encouraged changes of course. - Phase I (May 2000 to May 2003): - Increased meetings in the Supreme Court after May 2001. - Program supported establishment of a Judicial Commission through workshops, seminars, and negotiations; statute promulgated in mid-2004. - Research beginning March 2002 by LeIP/PSHK provided data and analysis for the sectoral judicial planning known as the Blueprints. - Phase II (beginning June 2003): - Workshops to encourage Parliamentary attention to the Judicial Commission. - Assistance to the Supreme Court via workshops with Supreme Court and National Law Commission participation. - Study tours for Supreme Court justices to the Netherlands and the United States. - Publication of Supreme Court Blueprints. - Contracted placement of two persons familiar with the Blueprints in the Court to assist implementation. ### Program Problems - Two constricting influences within the Program: - IMF Program’s principal charge was the Commercial Courts; expansion to the Supreme Court had to be justified against that initial economic purpose. - Program may have been strategically too confined to Jakarta and to a narrowly defined judicial order. - Fundamental difficulties embedded in the Supreme Court’s structure, administration, and history: - Limited support beyond the Chief Justice and a few non-career appointees; resistance or nonchalance among the rest hindered reform. - Justices committed to reform had continuing judicial responsibilities that divided their attention. - The liaison justice left to become Chief Public Prosecutor, removing a key reform figure; the Chief Justice is due to retire within the next two years with no assurance of a similarly committed successor. - Transfer of full authority over the judicial hierarchy to the Supreme Court under the “one roof” principle complicated recruitment, organization, management, and selection reforms. - Practical problems with implementation of the Blueprints: - Outside consultants placed in the Court had limited impact because justices were busy or uninterested. - Sustainability of implemented measures has yet to be demonstrated. ### Assessment of Program Quality — Strengths and weaknesses - Program Leadership: - Resident Expert and two Resident Advisers together share as much as eighty years of relevant experience; sources praised their skills, direction, and decision making. - Local Expertise: - Close collaboration with PSHK/LeIP was strategically significant and accounts for key measures of success, notably the Supreme Court Blueprints. - Expert Assistance: - Placement of consultants in the Supreme Court to assist with Blueprints is an important breakthrough; ultimate effectiveness depends on justices’ amenability. - Judicial Commission: - A Judicial Commission has been approved, statute promulgated, and members soon to be selected; its influence and handling of expected resistance remain to be assessed. - Adoption of Innovations: - Innovations from the Commercial Courts may become permanent, but certainty is lacking. - Dissenting opinions are now validated in law but are not yet common. - Supreme Court decisions are not yet as readily available as they were in the 1950s. - Appointment of non-career judges has not firmly held its own. - Observation Tours: - Doubts exist about the utility of observation tours abroad; a more rigorous assessment of purposes, participant selection, and expected outcomes is needed. - Needs Assessment: - The useful needs assessment of the Commercial Courts by PT Nagadi Ekasakti might be extended to the Supreme Court and routinely to other judicial institutions. - Support for young MAPPI team work on Supreme Court career patterns should be encouraged as a means to strengthen legal researchers and analysts. - Supreme Court Management: - Question raised whether the Court should prioritize being a Court rather than a management team; drafters of the Blueprint anticipated justices would likely oppose outsourcing court management. - Information Strategy: - Program lacks an adequate strategy for making reform information widely and consistently available in Jakarta and the provinces. - Knowledge of the reform effort appears concentrated in Jakarta among relatively few participants. - Regular reporting to law firms, major newspapers, NGOs, law journals, and law faculties is essential to build an audience and generate pressure for institutional change. ### Evaluation — Blueprints and sustainability - LeIP produced five Blueprints published in the second half of 2003: - One on overall reform of the Supreme Court (supported by the Asia Foundation funded by USAID and the Partnership for Governance Reform). - Four supported by the Program on: financial management, personnel management, permanent judicial education, and a draft statute on the proposed Judicial Commission. - Blueprints are well researched, thoughtfully presented, and viewed as the single most impressive and promising step toward reconstruction of the Supreme Court and lower civil courts. - Sustainability depends on the Supreme Court’s capacity and willingness to implement the Blueprints: - The Chief Justice has insisted the entire Court orient to the Blueprints, but concern exists about the willingness of all fifty-one Supreme Court justices to read, study, or implement the plans. - The outside assistance meant to implement the Blueprints has not worked out well because justices were often busy, uninterested, or key liaison personnel left the Court. - Chief Justice and one or two key personnel are due to retire during the next two years with no obvious succession strategy guaranteeing commitment to the Blueprints. - Outlook: - Too early to render judgment; at best the odds are roughly even that deep reform will occur, reconstructing the Supreme Court and promoting change down the judicial line. - The Judicial Commission, once fully constituted, may be significant, particularly by influencing selection of justices, but it remains in formation. - Empowerment of judicial institutions will depend on willing accommodation by political leadership during a period of unpredictable political transformation. - Change ignited by the Program and its partners is likely to continue, driven partly by internal momentum but primarily by pressure from younger generation reform NGOs, the press, and public demand for better institutions; specialized courts such as the Constitutional Court may add pressure. - Resistance from within the courts and from political leadership that may not benefit from institutional reform should not be underestimated. ### Unaddressed systemic problems and final recommendations - Two systemic problems beyond the Program’s reach, yet integral to judicial reform: - Legal education: - Law faculties and libraries throughout the country require repair; they are primary sources of judges, prosecutors, notaries, and private lawyers. - Attention to law schools is expensive and difficult; if the IMF/Netherlands Program cannot address it, the Program might encourage other support for law schools. - Private legal profession: - Now divided among seven or eight organizations, many of which may not know their membership, collect dues, publish journals, or apply codes of ethics. - The legal profession faces accusations of corruption similar to prosecutors and judges. - A new statute promulgated in 2002 calls for unification within two years, but little progress has been made. - PSHK has developed an unpublished substantial paper (blueprint) addressing the profession, which may deserve attention. - Suggestions for remaining Program actions (final six months): - Many sources suggested remaining funds be devoted to implementation of the Blueprints, though it is unclear what additional activities beyond maintaining outside advisors would be effective given prior implementation problems. - Alternatively, remaining funds and energy might be better spent spreading information about the Supreme Court program and related reform efforts to a larger audience to build wider awareness and pressure for reform. *Italic: Source — _011605 - Conclusion* ### Conclusion ### Conclusion ### Overall assessment - Given the seriousness of the institutional problems and the short time the IMF/Netherlands Program has had to deal with the Commercial Courts, the Supreme Court, and corruption issues, it is far too soon to pronounce a secure view of its achievements. - The basic goal at program onset was to establish Commercial Courts meant to serve a narrowly defined economic purpose; had the Program stopped there it would have amounted to an unquestionable failure. - The Program moved on to the Supreme Court when possible, broadening its purpose toward creating effective judicial institutions or initiating a pattern of institutional reform toward that end. - The most optimistic assessment is that a platform for further change has been created, in which a coalition of participant reform oriented organizations, mainly local, may prove increasingly effective in accelerating the process of change. ### Anticorruption — Setting - Corruption throughout Indonesia’s judicial system is widespread; the Program’s anticorruption involvement stemmed from the need to tackle judicial corruption as it affected the Commercial Courts. - Clean, well functioning Commercial Courts were considered a key ingredient to restoring Indonesia’s macroeconomic health during the Asian financial crisis. - Early Commercial Court decisions raised the specter of improper influence; Program attempts to counter this included: - advocating for appointment of ad hoc judges with authority to issue dissenting opinions; - fostering and disseminating written commentaries on court decisions; - monitoring of court sessions; - support for the Joint Investigating Team (JIT). - Program Advisors regarded judicial corruption as a key impediment to reform of the Commercial Courts and the judiciary overall. - Anticorruption activities were constrained: they were not a major emphasis of the technical assistance Program and did not garner significant resources; other donors and multilaterals were active in the sector; governance issues were not central to the IMF’s macroeconomic stabilization focus. - Phase I lacked a clear cohesive strategy for anticorruption; Phase II carved out a well-defined niche directing assistance to development of the Anticorruption Court. - Evaluation of Phase I anticorruption activities relied primarily on information from the Resident Technical Assistance Team (Legal Expert and Advisors) due to unavailability of other knowledgeable participants. ### Program goals and activities — Phase I - Stated purpose: strengthen capacity of individuals and institutions charged with implementing the bankruptcy law; component directed to anticorruption efforts. - Original Phase I activities: - (i) support for the JIT with emphasis on investigating judicial corruption complaints; - (ii) assistance to the Public Prosecutor’s Office in pursuing public interest bankruptcy prosecutions; - (iii) preparation of a policy paper on judicial corruption. - Outcomes: - Efforts to support the JIT and the Public Prosecution Office did not materialize as planned. - The policy paper on judicial corruption was completed. - The Program assisted the Public Prosecution Office in developing materials and training prosecutors on public interest bankruptcy cases, but no cases were filed and further assistance was deemed unwarranted. - The JIT, created as an external expert team within the Public Prosecution Office, was dissolved in March 2001 after facing opposition; the Program funded an audit of JIT internal operations and supported research producing a draft law on the anticorruption court. - When the JIT disbanded in July 2002, the Program shifted assistance to the Commission for the Audit of the Wealth of State Officials (KPKPN) and co-sponsored a study tour to Thailand with the Asia Foundation; no further activities were taken with the KPKPN because legislation folded KPKPN into the new anticorruption commission. ### Program goals and activities — Phase II - Phase II anticorruption component aims at strengthening anticorruption policies and institutions. - Stated goal: assist the Joint Steering Committee to establish an independent, merit based, professional, well resourced, transparent, accountable, effective and respected Anticorruption Court. - Primary Phase II activities: - (i) completion of an action plan for establishment of the Anticorruption Court; - (ii) development of a blueprint for the Anticorruption Court; - (iii) preparation of a terms of reference template for implementing programs under the Blueprint; - (iv) strengthening managerial capacity of the Joint Steering Committee; - (v) assisting in defining the relationship between the Anticorruption Court and the Anticorruption Commission/KPKPN. - Progress to date: - All activities relating to establishment of the Anticorruption Court (Action Plan, Blueprint, activity terms of reference) are in place. - As the evaluation team concluded its mission in Jakarta, the selection of judges was being finalized and a donors meeting was being planned to discuss implementation of the Blueprint. - Activities to strengthen managerial capacity of the Joint Steering Committee have been ongoing. - No assistance has yet been provided to define the relationship between the Anticorruption Court and the Anticorruption Commission/KPKPN, though the Anticorruption Commission informed the evaluators it submitted a proposal for assistance in merging the KPKPN into the Anticorruption Commission. ### Program problems - Judicial corruption problems are vast; tackling small portions alongside Commercial Court strengthening was unlikely to have much impact. - Powerful vested interests continued to oppose enforcement efforts. - The post-dissolution audit of the JIT cited absence of commitment and active opposition from key institutions including the judiciary, Ministry of Justice, Ministry of Religious Affairs, Public Prosecution Office, portions of Parliament and private sector lawyers. - Political will to address corruption did not exist in many quarters. - Efforts to assist the Public Prosecution Office and the JIT were risky because both depended on cooperation from the Attorney General and a bureaucracy resistant to reform. - Phase I anticorruption activities evolved into a sequence of activities without clear linkages, in part due to initial Program design that treated components as stand-alone projects with separate budgets and terms of reference; this “stove pipe” arrangement impeded flexible reallocation of funds when circumstances changed. ### Assessment of program quality — specific components - Public Prosecution Office: - No qualitative information was obtained concerning the Program’s assistance for prosecution of bankruptcy cases. - JIT: - The Program salvaged useful activity from the JIT by producing materials in support of a draft law for establishment of the Anticorruption Court. - The JIT audit had less apparent value for strengthening performance but provided information to teams working to establish the Anticorruption Commission. - KPKPN Study Tour: - The study tour to Thailand does not seem to have produced much of value; KPKPN’s uncertain future as part of the Anticorruption Commission complicated ongoing assistance. - Judicial Corruption Paper: - The study, prepared by the Resident Legal Expert, was widely shared with donors, law reformers and Indonesian officials and used as input for World Bank policy documents and a UN report on judicial independence. - It was not clear how the study fit into Phase I or what specific contributions it made to wider Program goals; evaluators suspect it helped shape Phase II and the shift toward addressing courts’ structural deficiencies. - Anticorruption Court Blueprint: - Planning was joined with the existing Commercial Court Steering Committee, enabling use of an established vehicle more reliable than the Public Prosecution Office. - The Joint Steering Committee facilitated wide stakeholder participation; the Blueprint benefited from lessons learned in setting up the Commercial Court. ### Evaluation and lessons learned - The JIT lacked a real base of support, institutional constituency, and a secure legal foundation; it was predicated on a presidential decree and vulnerable to challenge and dissolution. - In contrast, the Anticorruption Court blueprint process was anchored by a supportive chief justice, a core constituency of court leaders, and formation grounded in a decree of the People’s Consultative Assembly; however, enforcement has not yet begun, which will test political support. - The failure of initial assistance opportunities highlights the unpredictability of a shifting political environment and the impact of weak institutions and personnel changes. - Flexibility and maneuverability in project design are necessary to cope with evolving conditions; Phase II project design reflects this adjustment. - Phase II’s sharper focus, narrower range, better-connected activities, and loosened budgeting strictures make assistance to the Anticorruption Court a useful contribution to comprehensive systemic reform. - The blueprint approach addresses roots of corruption more effectively than isolated activities. - Quick fixes like the JIT are unlikely to be sustainable; developing consensus and building constituencies through step-by-step processes is essential. ### Final conclusion on anticorruption progress - Concern over judicial corruption pervaded the Program; a focused approach emerged only with the blueprint process begun at the end of Phase I and continued in Phase II. - The blueprint approach emphasizes laying a foundation for comprehensive institutional development constructed by Indonesians and was employed in producing the Anticorruption Court Blueprint and other Blueprints. - Corruption in the courts remains a significant problem; a framework is being structured through the Anticorruption Commission, the Anticorruption Court, the Judicial Commission and the Blueprints to institutionalize means of addressing abuses and regulating professionalism. - The Resident Technical Assistance Team served as catalyzers for the process and the Program helped steer it in the right direction. ### Cross-cutting themes — Effectiveness of technical assistance - General conclusions on technical assistance patterns and practices: - Recipients generally preferred local consultants, experts and trainers over foreigners less familiar with Indonesia because local consultants integrate material into the Indonesian experience and navigate institutional politics more effectively. - Foreign consultants and experts were useful when introducing new concepts and practices unfamiliar to the Indonesian legal community, especially for building new institutions or thoroughly rebuilding existing ones. - Presenting practices as common outside Indonesia or as standard international practice helped convince reluctant judiciary members. - Short-term foreign expertise is most effective when used in conjunction with and in support of local consultants. - Trade-offs exist: limited local expertise and risk of inward-looking tendencies from lack of exposure to other systems. - Overall, the Program appeared to employ a proper mix of foreign and local technical assistance; foreign assistance should not be the first resort but can be a strategic, selective investment. ### Cross-cutting themes — Long-term and ongoing technical assistance - Resident Legal Expert and Resident Advisors: - The full-time Resident Legal Expert and two part-time Resident Advisors were essential to day-to-day Program direction and implementation and were credited for engendering an overall positive impression of the Program across funding counterparts, NGOs, donor agencies, government officials and judges. - The Program team benefited from active Bappenas counterparts, notably the Director of Law and Human Rights, praised for skillful efforts to keep things moving on the Indonesian side. - Training: - Training Commercial Court judges has been an ongoing Program activity since 1998. - Assessing training effectiveness faces two perspectives: - (i) quality of material and absorption by participants — objective testing lacking, but widespread perception persists that Commercial Court judges are unknowledgeable or confused, raising concerns about competence and susceptibility to corruption; - (ii) whether training produces sounder judicial decisions — public opinion suggests limited improvement, though two Program-funded studies exist (references noted in source). - More objective data is needed to adequately assess training effectiveness. *Source: _011605 - Conclusion* ### conclusions in an interview with team members. ### conclusions in an interview with team members. ### Training and Judicial Capacity Findings - Two separate assessments attempted a more structured analysis of the competency and integrity of Commercial Court decisions and both concluded that approximately 70% of the decisions were in accordance with or justifiable under the law. - Both assessments found bankruptcy decisions rendered by the Supreme Court more problematic than rulings by the lower court. - Training likely had some beneficial impact, though studies were not focused on the role of training in decision making and are not definitive verdicts on the effectiveness of the Program’s training regimen. - The benefit of training is compromised by routine transfers of Commercial Court judges, creating continuous training needs. - Considering the steady decline of bankruptcy case filings, it is doubtful whether continued training of Commercial Court judges is the best use of resources. - Continuous education/training: Program introduced a cohesive continuing education concept using knowledgeable local trainers rather than current or retired judges and visiting internationals; little can be said about the impact of the training itself. ### Technical Assistance: Study Tours and Operations - Study tours produced mixed results: some participants gained new insights; selection of participants (when left to the Supreme Court) sometimes excluded lower court judges and those in charge of relevant research issues. - No clear evidence on how knowledge from study tours was applied; a conscious attempt to use study tours for wider purposes may have had some benefit. - Mixing stakeholders on study tours reportedly yielded intangible benefits for the Supreme Court and its young NGO consultant; some trips (e.g., Commission on State Officials Wealth Disclosure (KPKPN)) produced little value. - At least two study tours were co-sponsored by the Asia Foundation (with USAID funding), encouraging cooperative donor efforts. - Program administrative operations and procedures received generally high marks; minor complaints about funding issues and bureaucratic delays did not amount to serious problems. - Significant burdens fell on the Resident Legal Expert, who served both as manager and chief technical advisor; spreading administrative duties among additional staff could alleviate implementation pressures. ### Program Achievements - Ownership of a Court Reform Agenda: Blueprint process produced an Indonesian-designed strategic plan for development of the Supreme Court, creating local buy-in from court leadership and civil society. - Blueprints Process: Indonesian NGOs provided research capacity and facilitated an iterative, inclusive workshop and interview process to build consensus; Blueprints produced a foundation for sustainable next steps. - The Indonesian Government issued a White Paper, end-2003, outlining plans upon graduation from IMF financial assistance and identified blueprints for both the Commercial and Anticorruption Courts as indicators of commitment to structural reform. - The Danish government committed to funding a blueprints process for development of the Human Rights Court; replicating the process for lower courts is being discussed. - Interdepartmental Steering Committees: Establishment of the Commercial Court Steering Committee created an ongoing structure for interdepartmental cooperation and, when expanded to include the Anticorruption Court, allowed wider participation including civil society representatives. - Judicial Commission: Program assisted debate and preparation of materials for a draft law; legislation establishing the Judicial Commission passed in July 2004. - Ad Hoc Judges: Concept considered positive; Commercial Court experiment with ad hoc judges helped acquaint legal community and decision makers with the alternative; Human Rights and Anticorruption Courts use ad hoc judges with different appointment procedures. - Dissenting Opinions: Use in Commercial Courts helped normalize public dissents; dissents were codified in the new Supreme Court law though still rarely used. - Publication of Court Decisions: Program supported online publication and encouraged written commentaries; amended bankruptcy law required decisions be in writing and publicly available; publication is now provided in the Supreme Court law though accessibility has been slow. - Time Bound Procedures: Commercial Courts’ adherence to time bound procedures was viewed favorably; Program assistance to MOCCA preparation was useful though the Supreme Court undermined enforceability of procedural deadlines; Human Rights and Anticorruption Courts’ legislation provides specific procedural timeframes. - Needs Assessment Pilot Project: Needs and productivity analysis piloted in the Jakarta Commercial Court is an important beginning to data-based institutional planning; risk exists that the study will not advance beyond the pilot stage. ### Program Weaknesses and Operational Shortcomings - Program was asked to achieve unrealistic objectives and would have benefited from more concrete achievable targets. - Lack of Monitoring and Evaluation: - Program weak in monitoring and evaluation; more could have been done even recognizing challenges in quantifying justice sector strengthening. - Measurable elements not routinely evaluated included number of hits on websites posting Program materials, surveys of Commercial Court users, post study tour questionnaires, and objective training evaluations. - Training organizers stated the Program did not request training evaluations. - Program commissioned surveys of bankruptcy receivers and developed published guidelines, but it does not appear survey information fed back into the Program or that guidelines’ effects were determined. - The Commercial Court was monitored for three years; problems identified were given to the Steering Committee, but it is unclear if information was used or if audits assessed how issues were addressed. - Internal reporting relied on progress indicators more than evaluative tools; an independent mid-term evaluation may have been beneficial. - Over Reliance on Certain Local Consultants and Experts: - Program relied heavily on a limited number of local consultants and organizations, creating risks of overcommitment and delayed outputs. - Examples: Supreme Court Blueprints were more than one year late (originally to take six months); the Team of Seven took two years to complete annotations planned under a six month schedule and had problems meeting terms of reference. - Recommendation that more competitive procurement could develop local capacity and avoid cozy relationships that damage reputation and productivity. - Insufficient Engagement of a Wider Constituency: - Program lacked a strategy for informing and generating support among groups likely to favor legal reform (beyond Jakarta circles). - Potential constituencies include professional lawyers (about 20,000 throughout Indonesia), other professionals, businessmen, labor organizations, and reform-oriented groups. - Recommendation to develop consistent means of supplying periodical reports on Program developments to law firms, law faculties, the press, professional associations, and business and labor groups. ### Key Exact Figures and Timeframes - approximately 70% (Commercial Court decisions judged in accordance with or justifiable under the law) - end-2003 (Indonesian Government White Paper issued) - July 2004 (legislation establishing the Judicial Commission passed) - three years (Commercial Court monitoring period) - six months (original timetable for Supreme Court Blueprints) - more than one year late (actual Blueprints delivery) - two years (Team of Seven took to complete critical annotations planned under a six month schedule) - 2-3 years (chief justice and other key reform supporters scheduled to retire) - about 20,000 (number of professional lawyers throughout Indonesia) ### Recommendations for Future Strategies — Substantive Components - Implementing the Blueprints: - Continued attention to and support for the Blueprints implementation process is recommended. - Provide shortened versions or executive summaries of the Blueprints for implementation advisors and judges, as the original Blueprints are an overwhelming read. - Provide professional assistance to current implementation advisors who are not “change management” experts; an experienced team is required for project management and implementation. - Avoid tolerating a long planning process; momentum is needed, particularly given leadership retirements over the next 2-3 years. - Spread reform to lower and provincial courts using the Blueprints as the underpinning for devolving reform outside Jakarta. - Judicial Commission “Blueprint”: - Consider assisting development of the Judicial Commission under the newly enacted law. - Help shape the Commission’s role, structure and duties and develop a development blueprint to shore up the Commission’s role as an effective check on the judiciary. - Anticorruption Court Blueprint: - At this point, no strong case for further Program involvement; other donors are active in anticorruption and the Program has not been anticorruption’s strong suit. - Do not rule out targeted involvement if a specific niche is apparent. - Commercial Court Blueprint: - Widely perceived as having failed to perform adequately; little utility in singling out Commercial Courts as a core focus in a future program. - Sustainability issues and declining bankruptcy case filings make it hard to justify resources for a specialized bankruptcy court; Commercial Court judges now hear general jurisdiction cases raising questions about need and commitment to a specialized court. ### Operational and Cross-Cutting Recommendations - Strengthen monitoring and evaluation practices: - Institute routine quantitative and qualitative evaluative tools (website hits, user surveys, post-tour questionnaires, training evaluations). - Consider regular feedback loops and possible independent mid-term evaluations. - Seek advice from monitoring and evaluation specialists on appropriate assessment tools. - Reduce over-reliance on a small set of local consultants: - Use competitive contracting to improve timeliness, meet terms of reference, and broaden local capacity development. - Increase outreach to a wider domestic constituency: - Develop a communications strategy to supply periodical reports to law firms, law faculties, the press, professional associations, and business and labor groups to build broader support for legal and judicial reform. - Consider staffing adjustments: - Spread administrative duties to reduce the burden on the Resident Legal Expert; reconsider lean staffing patterns for future phases. *Source: conclusions in an interview with team members.* ### Introduction, p.1. ### Introduction, p.1 ### Commercial Courts assessment and strategic conclusions - As of July 20, only 27 bankruptcy cases had been filed in the Jakarta Commercial Court for 2004. - Commercial Court jurisdiction has expanded to include intellectual property disputes; the role of Commercial Courts in handling these and/or other types of cases is beyond the scope of this evaluation. - Momentum for general court reform appeared stronger than momentum for reforming the Commercial Courts at the time of the evaluation. - Institutional observations: - Institutional capacity within the courts is described as thin. - The number of reform minded individuals is low. - Self management burdens and the Blueprints impose high demands. - Civil society priorities are rooted in combating corruption, including judicial corruption; activist energy is likely to be directed toward establishing the Judicial Commission and Anticorruption Court rather than improving the Commercial Courts. - Sustainability, reform capacity, local priorities and ownership counsel rethinking the Commercial Courts’ role in a future program. - The Supreme Court has recently taken greater interest in the Steering Committee; the Steering Committee has shown signs of increased vigor. - Program Advisors and some observers view the Commercial Courts as a useful laboratory for testing reforms and initiating controversial ideas; however, impetus for interventions should come from Indonesians rather than a donor supported program. - Recommendation: Commercial Court initiatives, if any, should be part of wider reform efforts identified by the overall Blueprints implementation process rather than the hub of reform. ### Commercial Court Needs Assessment - The Needs Assessment is complex and many faceted and is not particularly applicable in its present form. - The evaluation team could not gauge the level of support or interest within the Supreme Court or Steering Committee for furthering the Needs Assessment. - Recommendation: A future program should consider integrating a simplified version of the Needs Assessment into the court reform agenda by refining its methodology and expanding its application to other courts. - The Needs Assessment can be used in conjunction with implementing the Financial Management Blueprint to weave together and further current Program activities. ### Operations components and features for a future program - General principle: substantive areas targeted may matter less than structuring a facility that operates effectively; poorly conceived assistance projects routinely fail regardless of substantive topic. - Strong support was expressed for continuing the existing Program as implemented by the current long term Resident Advisors, managed by the IMF, and supported by the Dutch. - Recommendation: Preserve program elements that contributed to the Program’s successes and positive reception among Indonesians. Key operational features highlighted: - Guided Flexibility: - Need for a program design permitting flexibility within well-defined strategic parameters. - Contextual uncertainties noted: Indonesia’s political situation stabilized but fragile; this year’s elections spawned coalition building and new uncertainties; key reform minded court leaders, including the chief justice, face mandatory retirement. - Major institutional changes imminent with transfer of management authority to the Supreme Court under the “one roof” system and the Blueprints; newly developing judicial bodies (Constitutional Court, Judicial Commission, Anticorruption Court) further alter the judicial landscape. - Recommendation: Balance flexibility with concrete, achievable objectives. - Moderate Bureaucracy: - Minimizing “red tape” facilitates flexibility, responsiveness and local participation. - Both assistance recipients and providers found the Program’s bureaucratic process generally reasonable and timely. - Resident Advisors spoke favorably about the relative simplicity of bureaucratic requirements and responsiveness of IMF and Dutch counterparts. - Caveat: Minimizing bureaucracy must be tempered by accountability and sound procurement practices. - Recommendation: Limit administrative procedures needed to implement activities to maintain productive working relationships with local consultants whose capacities are stretched. - Localized Decision Making: - Formalize local decision making authority to maintain local focus. - Washington and The Hague set broad policy outlines but accorded high degree of deference to the technical team on the ground. - Limiting involvement of distant headquarters helps ground the focus in Indonesian reform needs rather than broader political agendas. - Recommendation: Clearly delineate decision making responsibilities delegated to the program and consider a separate stand alone office to support local priorities. - Maintain a Low Profile: - Downplaying foreign involvement promotes consensus and boosts local acceptance. - Neither the IMF nor the Dutch overtly publicized their involvement; the Resident Team maintained a low profile. - This contributed to high acceptance among Indonesians (especially within the Supreme Court) and helped forge consensus. - Knowledgeable Program Implementers: - Retain appropriate personnel with a high degree of Indonesian specific knowledge and experience to build credibility and local acceptance. - The success of a future program depends on who runs it; retaining similarly qualified technical advisors is essential. - Preference for Local Consultants: - Use foreign experts strategically to augment local providers. - Preference for local consultants listed as a key factor in structuring an effective technical assistance program. ### Background, program phases, and objectives - Post-1997 Asian Economic Crisis context: IMF and Government of Indonesia agreed on a program to restore macroeconomic stability and address structural weaknesses including bank restructuring, corporate restructuring, deregulation, privatization, and improved governance. - Corporate restructuring required an effective framework for financial restructuring and an efficient bankruptcy regime; authorities recognized the Bankruptcy Law needed predictable and impartial application and that perception of pervasive judicial corruption had to be addressed. - Since 1997, IMF-supported programs included a strong legal reform component for effective corporate restructuring; IMF’s Legal Department provided significant technical assistance. - Phase I: - Commenced May 2000. - Focus areas included assistance in operation of the Commercial Court and coordination of capacity enhancement projects (work standards, code of ethics for receivers and insolvency professionals); assistance to Attorney General’s Office in designing procedures, training for corruption cases and bankruptcy suits, and a study on judicial corruption (commenced September 2000); assistance to the judiciary in assessing institutional needs in the context of designing and establishing a judicial commission, with particular focus on operation and supervision of the Commercial Court (commenced January 2002). - Phase II: - Began on May 16, 2003, with additional funding from the Netherlands. - Principal objective: strengthen the legal infrastructure and institutional performance of the judiciary to increase restructuring of private debt, enhance investment, and foster sustainable economic growth. - Program components: Strengthening Judicial Supervision and Management; Strengthening Commercial Court Performance; Strengthening Anti-Corruption Policies and Institutions. - Phase II will run until December 2004. ### Evaluation terms of reference, tasks, and logistics - Evaluation purpose: examine results to date and assist the Steering Committee for the Development of the Commercial Court, other relevant Indonesian authorities, the Embassy of the Netherlands in Indonesia, and the IMF to determine best strategies for continued implementation of the law reform agenda. - Specific evaluation tasks: - i) Review the quality, timeliness and relevance of inputs, activities, and outputs. - ii) Assess effectiveness of technical assistance, including short and long term outcomes, sustainability, and integration into Indonesia’s overall law reform program. - iii) Outline achievements and lessons learned. - iv) Identify problems (internal and external to the TA provided) that have arisen. - v) Make recommendations to resolve such problems. - vi) Make recommendations on what should be done in the final months of Phase II and after completion of Phase II in December 2004. - Evaluation process and assistance: - The evaluation team will be assisted by the IMF’s experts in Indonesia and shall meet with relevant government officials, officials of the judiciary, representatives of the legal profession, NGOs, business community, civil society, IMF resident representative, officials of the Embassy of the Netherlands in Indonesia, and other relevant donor and technical assistance providers. - Documentation access: The evaluation team will be given access to IMF project documents; progress reports; review documents; documents prepared with program support; and other relevant documents. - Evaluation team composition: - The evaluation will be undertaken by three independent experts. - The Government of Indonesia, the Embassy of the Netherlands in Indonesia, and the IMF will each nominate an expert. - The IMF-nominated expert will be the team leader. - Timing and output: - The evaluation will take place in July 2004 over a period of two weeks. - Output: an evaluation report with findings, lessons, and recommendations prepared in English. - A draft report will be submitted to the Government of Indonesia, the Embassy of the Netherlands in Indonesia, and the IMF three weeks after completion of the in-country visit. - Comments will be submitted to the evaluation team within two weeks after which the report will be finalized. - Once completed, the report will be made available to the IMF's Executive Board for its information, and, subject to the Executive Board’s approval, the report will be published on the IMF’s public website. *Source: Introduction, p.1 (external evaluation materials for Indonesia: Technical Assistance in Law Reform Supported by the Netherlands Technical Assistance Subaccount).* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2005/_011605.pdf_