SINGAPORE – A SAFE HAVEN for Sukanto

Singapore has been helping many Indonesian millionaires to dodge tax and keep their money from plantations and forests. This is not new. With the haze and smog, Singapre should be taking the consequence of harboring billions of dollars extracted from the Indonesian environment

This is a report from THE THOUSAND-HEADED SNAKE: FOREST CRIMES, CORRUPTION AND INJUSTICE IN INDONESIA published by the Environmental Investigation Agency in 2007. http://www.eia-international.org.php5-20.dfw1-1.websitetestlink.com/wp-content/uploads/reports135-1.pdf Nothing changes, Sukanto Tanoto is still iving in Singapore, his compant Royal Golden Eagle is based in Singapore .

 

The small island-state of Singapore is a key accomplice in the forest crimes carried out in Indonesia. Money derived from illegal logging is laundered through its secretive banks, its shipping companies carry the timber overseas, and its wood traders sell the stolen goods onto the international market. Indonesian government officials have been critical of the lack of cooperation from their Singaporean counterparts when it comes to anti-money laundering and extradition of fugitives.

A recent study of the Asia Pacific region’s dollar millionaires found that of the 55 000 resident “High Net Worth Individuals” in Singapore, 18 000 are from Indonesia. The whole of Indonesia has only 17 000 millionaires. More rich Indonesians choose to live in Singapore than in their own country for a number of reasons, but an important one is the secrecy of the banking system. The study quotes a banker as saying: “In following Switzerland’s model for banking secrecy, only Luxembourg even begins to come close to Singapore,” adding that the Singaporean government assures client confidentiality for those choosing to bank there.(51)

Assets held by wealthy Indonesians living in Singapore total a staggering US$87 billion, more than Indonesia’s annual state budget for 2006.

While much of this wealth has been derived by legitimate means, a substantial portion comes from crimes carried out in Indonesia. Indonesian officials have recorded cases of at least 200 individuals who owe the state money sheltering in Singapore over the last seven years.(52)

Conscientious banker Andy Xie revealed his personal opinion of Singapore’s financial success in a leaked email sent to colleagues. Wie, former Chief Economist in Asia for Morgan Stanley, wrote: “Actually, Singapore’s success came mostly from being the money laundering centre for corrupt Indonesian businessmen and government officials.”(53)

Predictably efforts to retrieve some of the illicit money stashed away in Singapore often fail. Yunus Husein, chairman of Indonesia’s PPATK, said: “It’s very hard to get information from Singapore. When we asked them to help us (track down) the money, they always say that… it’s not their problem.”(54)

Singapore has robust internal rules under the Prevention of Money Laundering Act of 2002. A central element of the act is the “Know Your Customer” initiative, a legal requirement under which financial institutions are legally required to report suspicious transactions to the authorities. Yet the scheme only applies to transactions linked to serious crime or terrorism, and revenues derived from illegal logging appear to fall outside its scope.

Recently the Indonesian government used the UN Convention Against Corruption to secure the assistance of the United Kingdom in freezing a bank account linked to Tommy Suharto, son of the former Indonesian president. This form of cooperation is not an option when it comes to Singapore, as the country has yet to ratify the convention.

Investigations undertaken by EIA/Telapak reveal that Singaporean banks are preferred for opening letters of credit for numerous deals involving Indonesian logs. In 2004 Hong Kong timber trader Shelman Siu told investigators that most of the payments by Chinese buyers for illegal merbau logs from Papua were made through Singaporean banks.

Analysis of the activities of timber tycoon Abdul Rasyid show that a series of payments for illegal logs flowed into his personal account in Singapore, and the business account of one of his partners. Although Rasyid bought property in Singapore, he did not opt to take out Singaporean Permanent Resident Status, a course of action followed by Ali Jambi. Such a status can be obtained for an investment of around half-a-million US dollars, and proof of an “entrepreneurial background”.

The lack of an extradition treaty between the two neighbours adds to the attractiveness of the island-state for Indonesians fleeing justice. Requests for such a treaty from the Indonesian government date back to the 1970s, with formal negotiations not starting until early 2005. Talks between the two sides have been through nine rounds – usually two or three rounds are sufficient – and still the treaty has not been signed. Singapore’s latest delaying tactic is to insist that the extradition treaty must be signed at the same time as a defence treaty.(55)

Many of the perpetrators of one of the worse financial crimes ever committed found their way to Singapore. The Bank Indonesia Liquidity Assistance scandal took place in the later 1990s, at the height of the regional economic crisis. The central bank gave out US$13.5 billion to 48 of the country’s banks to avoid their collapse. Of these funds 99 per cent were misused by the bank owners, money which was effectively stolen from the state at a time of crisis and hardship for most of the population.(56) Agus Anwar, head of Bank Pelita, was charged with stealing Rp 1.89 trillion (US$210 million) and promptly moved to Singapore, where he obtained citizenship. While Indonesia bears the bulk of the responsibility for failing to arrest suspects before they flee, an extradition between the two neighbours would support the efforts of those trying to reform the justice system in Indonesia.

Another powerful Indonesian tycoon who found refuge in Singapore is Sukanto Tanoto, recently named as Indonesian wealthiest person with family assets of US$2.8 billion.(57) Sukanto was wanted by the police in connection with the failure of Unibank in 2001, a bank he owned which collapsed with Rp 3.9 trillion (US$429 million) in debt. Despite an instruction being issued by the Indonesian government banning him from leaving the country, Sukanto managed to abscond to Singapore.

Sukanto is also owner of the Raja Garuda Mas Group, which includes the Singapore-based pulp and paper company Asia Pacific Resources International Holding Ltd. (APRIL). The company has cleared vast tracts of land in Sumatra to feed its pulp mills, and has been accused on a number of occasions of receiving timber from forests with a high conservation value and from illegal sources inside national parks.(58, 59)

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Sukanto Tanoto’s palace in Margoliouth, Bukit Timah, Singapore.

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