The Importance of

Beneficial Owners Information

for the Public
Mouna Wasef
Publish What You Pay (PWYP) Indonesia
Oct 28, 2022
 Outline
1. Background.
2. Why is BO information important?
3. What can the public do to improve the quality of BO information?
4. Conclusion.
 Background
• Community participation is guaranteed by law.
• Investigation and pioneering research in 2012/2013 on natural resource control and
authoritarianism (ICW & PWYP).
o Business and political relations,
o PEPs.
• Stepping forward.
o Information dispute in KIP,
o Website: ahu.go.id/pencarian/profilpemilikmanfaat.
 Why is BO information important
for the public?
• Transparency is fundamental.
• Community involvement in identifying BO:
o the situation of a corporation in the area,
o verifying the truth of the BO data,
o identify illicit activities and flag concerns to
government officials.
• Journalists can use the data to support investigations
exposing corruption.
o Panama Papers (2016);
o Paradise Papers (2017);
o Pandora Papers (2021).
The extensive area of oil palm plantations
in Indonesia often triggers vertical conflicts
with local communities or indigenous
peoples. Sawit Watch (2020) noted that
around 52% of the 1,052 tenure conflicts
occurred between palm oil companies and
communities. Therefore, exploring the
information on who is the real BO of the
palm oil corporation will help the
community to decide who to deal with in
resolving their conflict or place the BO of
the corporation as well as a co-defendant.
 Why is BO information important
for the public? (2)
• Oversight and accountability.
• Investigating financial/corruption crime.
• Verifying data through use.
• Deterring misuse of legal entity.
 Why is BO information important
for the public? (3)
• Analyze every data and information found.
o E.g.: no corporate group controls more than 100,000 hectares of land,
o who should be responsible for a legal case.
• Assessing connections with Politically Exposed Persons (PEP).
o give the public an idea of the form of control by the corporation,
o looking at the policies and powers that the PEPs may control,
o potential for state capture,
✓ oversee the management of Indonesia’s natural resources.
 Why is BO information important
for the public? (4)
• PEPs identification model.
o Coalruption: Elit Politik Dalam Pusaran
Batu Bara (Bersihkan Indonesia
Coalition).
✓ The report shows a number of PEPs
at coal companies. The PEPs play
great roles in passing the Mineral
and Coal Law, a law that favors coal
owners or contract holders.
 Why is BO information important
for the public? (5)
• The following are reports from civil
society organizations that look at
the position of BO of corporations
and PEPs:
o The Macau Money Machine:
Profit Shifting and Tax Leakage
in Indonesia’s Pulp Export;
o Batu Bara dan Ancaman
Korupsi;
o Tapi Buka Dulu Topengmu:
Analisis Struktur Kepemilikan
dan Kepengurusan
Perusahaan Pemasok Kayu
Asia Pulp and Paper (APP) di
Indonesia.
BO and procurement of goods and services
● Governments worldwide spend US$ 13 trillion or a
maximum of 10-30% of global GDP on public goods and
services each year (Open Contracting Partnership).
● In Indonesia in 2021, LKPP noted that the expenditure for
procuring goods and services reached Rp1,214 trillion or
around 52.1% of the total State Expenditure Revenue
Budget (APBN).
● 57% of corruption cases related to bribery to secure public
procurement contracts (OECD). In Indonesia, 70% of
corruption cases are related to procurement (KPK).
Source: ICW (2022)
BO and procurement of goods and services (2)
• Help verify the qualifications of business actors.
• Encouraging competition and participation in the market for government procurement.
o BO data can help analyze the level of market concentration and competition for market
opportunities.
• Help identify potential fraud and corruption in procurement due to:
o Indicates a potential conflict of interest,
o Shows the potential for conspiracy (one of the modes of corruption in procurement is
borrowing flags, especially in emergency procurement).
• Makes it easier to identify blacklisted companies with other companies that have the same
BO.
• Opening opportunities for community groups to monitor and verify data.

Source: ICW (2022)

 What can the public do to improve the quality
of BO information?
• Investigations of the BO register
will improve data verification and
quality assurance.
 Conclusion
• The publicly accessible BO information can give the public the chance to monitor the governance of the
companies operating in their area.
• Publishing BO information does not represent a personal security threat; rather, security risks are part of a
broader problem that is not triggered by more information being publicly available.
• The BO transparency is one of a check and balances mechanism between the government, private sectors,
and the public.
• Public disclosure and scrutiny of information on how companies are managed, including data on contracts
and BO, can strengthen governance and the rule of law and support anti-corruption efforts.
• Publication of beneficial ownership information is a fundamental issue for civil society organizations that
work to combat tax evasion and corruption. It is the first and possibly the only way to begin investigating and
make authorities accountable when combatting these crimes.
• Making registers public allows citizens and other stakeholders to examine, scrutinize, and cross-check
information and flag suspicious activity, especially where such illicit behavior might span multiple
jurisdictions.
Terima kasih