Bribery just isn’t what it used to be

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Forestry companies don’t like having to bribe corrupt officials just to be able to operate legally without getting hassled. It is expensive and seems unfair. But giving bribes to evade taxes, avoid required paperwork, or ignore forestry regulations is another story. That cuts costs.

During the Suharto regime in Indonesia forestry companies had to pay huge bribes just to do business; and even then they usually still had to follow most laws. Officials often turned a blind eye when loggers broke rules about managing forests sustainably, but they were relatively serious about collecting taxes and insisting that companies only logged forests assigned to them. The regime was strong enough to look out for its interests.

After the regime collapsed, government became more decentralized – and so did corruption. The Ministry of Forestry found it harder to tell companies what they could and couldn’t do. Local governments started giving their own licenses and many people started logging with no permit at all. In this new context, companies no longer felt obliged to pay enormous bribes – or their taxes.

These days there is little chance of getting jailed or fined for illegal logging or tax evasion. Nonetheless, just to make sure loggers still prefer to give small bribes to district and forestry officials, army officers, and the police than to risk having problems. Bribes are smaller than they used to be and more people probably get a share. Companies pay less. However, the government collects fewer taxes and now all the forests are fair game.

"Illegal Logging, Collusive Corruption, and Fragmented Governments in Kalimantan, Indonesia" by J. Smith, K. Obidzinski, Subarudi, and I Suramenggala describes how this process played out in three districts in eastern Borneo. The International Forestry Review published it in a special issue on illegal logging.

The authors say that such situations often occur when countries abandon authoritarian regimes and become fledging democracies. Total corruption may not increase, but more of it is linked to letting companies break the law for a price, rather than paying bribes to operate legally.

That may make some people long for the return of strong-arm regimes to impose "law and order". Forget it. There is no turning back. The only cure for the corruption associated with emerging democracies is more democracy. Social pressure for political reform can make government institutions more transparent and accountable. Of course, that takes a lot of time and hard work. Still it can be done.

So don’t mourn, organize.

 

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Further reading

To request a free electronic copy of this paper in a pdf file or to send comments or queries to the author you can write Joyotee Smith at: mailto:joysmith@loxinfo.co.th