Indonesia’s charity laws in spotlight after Lion Air crash scam | Business and Economy read full article at

Medan, Indonesia – Indonesia’s philanthropy legal guidelines are within the highlight after the top of a Muslim charity was discovered responsible of misappropriating $7.8m from a fund arrange by Boeing for victims of the 2018 Lion Air crash.

Ahyudin, the chairman of the charity Aksi Cepat Tanggap (ACT), was on Tuesday sentenced to three-and-a-half years in jail. Prosecutors had requested for a four-year jail time period for Ahyudin, who like many Indonesians goes by one identify.

Ahyudin had admitted in a media interview shortly after his arrest that the charity repeatedly took a reduce of greater than 13 p.c of donations, fairly than the ten p.c stipulated by Indonesian regulation. He additionally mentioned he obtained a month-to-month wage of greater than $16,000 and admitted to borrowing funds repeatedly from ACT to pay for property, automobiles and furnishings.

Former ACT president Ibnu Khajar was sentenced to a few years in jail, whereas former vice chairman of operations Hariyana Hermain obtained a three-and-a-half-year time period.

The sentences drew a combined response amongst victims and advocates.

Agung Sedayu, a journalist with unbiased Indonesian media outlet Tempo, who broke the story of ACT’s embezzlement following complaints from victims, mentioned he believed the punishments don’t go far sufficient.

“From the beginning, there were indications that Ahyudin would get a light sentence,” Sedayu instructed Al Jazeera.

“There were lots of irregularities with the legal process. Not all the cases of ACT’s alleged fraud were admitted in court and more serious charges related to money laundering were not pursued by the prosecution.”

After Lion Air flight 610 and Ethiopian Airways flight 302 crashed in October 2018 and March 2019, respectively, killing 346 folks mixed, Boeing established a fund as a part of its settlement with the households of the victims.

The flight manoeuvring programs on Boeing’s 737 Max planes, often known as MCAS, were found to have malfunctioned within the case of each crashes.

The fund, which Boeing billed as a approach to “empower families who lost loved ones to support charitable organisations in affected communities”, consisted of $50m, $9.2m of which was entrusted to ACT to hold out neighborhood works in Indonesia.

Boeing’s 737 planes had defective flight manoeuvring programs blamed for 2 deadly crashes in 2018 and 2019 [File: Matt Mills McKnight/Reuters]

ACT’s misappropriation got here to mild after recipients of the fund began to suspect the charity of mishandling the cash.

Neuis Marfuah, whose 23-year-old daughter Vivian Hasna Afifa died within the Lion Air crash, mentioned she had trusted the charity to construct a college in her daughter’s identify.

However when Marfuah visited the positioning of the varsity, she discovered the development work to be of poor high quality and utilizing low cost supplies.

“I hope that this sentence will serve as a deterrent and will show that we all have to be responsible for our actions, not just in this life but also in the next,” Marfuah instructed Al Jazeera, including that she hoped the scandal would function a studying expertise for these concerned.

Bambang, a former ACT worker who requested to be referred to by his first identify, mentioned he was unsurprised by the sentences meted out to the convicted employees.

“I think it was appropriate and normal,” he instructed Al Jazeera.

Bambang mentioned he was undecided how Ahyudin is seen by former members of ACT because the organisation has disbanded.

“But in my opinion, there will still be those who support him and those who don’t,” he mentioned.

Hamid Abidin, a board member of the Indonesia Philanthropy Affiliation, mentioned whereas the convictions point out that regulation enforcement takes the misuse of charitable funds critically, the regulation needs to be up to date to punish such crimes extra severely.

“The legislation used to regulate philanthropic organisations is from 1961 and desperately needs to be revised and upgraded,” Abidin instructed Al Jazeera.

“We also need to push for donor education in Indonesia. Many donors do not know that they have the right to ask where their donations are going or ask for reports about how the money will be used.”

Lion Air Victims
ACT’s misappropriation of funds got here to mild after households of the victims of Lion Air flight 610 started to suspect the charity of wrongdoing [File: Fauzy Chaniago/AP Photo]

Garnadi Walanda Dharmaputra, a lawyer specializing in financial regulation and a founding father of the “Smart Donating” marketing campaign aimed toward instructing the general public how one can higher navigate charitable giving, described the ACT case because the “tip of the iceberg”.

“We know of thousands of other organisations that also misappropriate funds. They may not be as sophisticated as ACT, but the issues are the same,” Dharmaputra instructed Al Jazeera, citing transparency, accountability and good governance as among the predominant challenges when regulating philanthropic organisations in Indonesia.

In its heyday, from 2018 to 2020, ACT was the biggest charitable organisation of its sort in Indonesia, gathering $36m in public donations throughout these two years. In July final yr, Indonesia’s Counter Terrorism Unit introduced that it was investigating the switch of funds by ACT to alleged members of the armed group al-Qaeda, which got here to mild following the Tempo investigation into the misappropriated Boeing funds.

Final yr, the United States Department of the Treasury announced sanctions in opposition to the Indonesian charity World Human Care (WHC) for allegedly elevating and offering funds to hardline teams in Syria beneath the guise of humanitarian support.

In 2021, Indonesian authorities arrested dozens of members of a charitable basis that police mentioned was a entrance for the al-Qaeda-affiliated group that masterminded the Bali bombings in 2002.

Dharmaputra mentioned he’s now lobbying the federal government to replace its decades-old laws, which he believes isn’t match for goal because of the evolving nature of crimes.

“We are on the right path, but I am concerned about how serious we are in Indonesia about the problem of regulating philanthropic organisations,” he mentioned.

“We seem to have come late to this issue, but the ACT case has proved that it is a real problem.”

A consultant for Boeing declined to remark.


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