Indonesia County Report

GOVERNANCE, ORGANIZATIONAL EFFECTIVENESS AND THE NON- PROFIT SECTOR

Indonesia County Report

Rustam Ibrahim, Abdi Suryaningati, Tom Malik

The collapse of President Soeharto’s authoritarian New Order regime in May 1998, and the ensuing transition towards democracy, has brought about many changes in Indonesia, including a tremendous growth in civil society organizations (CSOs).  During the past five years the number of CSOs throughout Indonesia has increased substantially. It is no exaggeration to describe the recent developments as the rising era of civil society in Indonesia.

Several developments illustrate this phenomenon:

·         The number of nongovernmental organizations (NGOs)[1]--the most visible and vocal subset of CSOs-- was in the thousands during New Order era, and has increased to the tens of thousands[2].

·         Prior to 1998, there was only one labor organization which was acknowledged and controlled by the government; now there are no less than 40 national labor organizations, not less than 300 local labor unions and more than 10,000 labor associations at the corporate level.

·         Social-religious groups, research institutions, study groups and think tanks have also developed significantly.

Although the change in political climate from an authoritarian government to a more democratic one is a dominant factor in the growth of civil society in Indonesia, the effect of the prolonged economic crisis and foreign donor policies are also important factors. There are at least five factors that have contributed to the rapid growth of NGOs in particular:

·         Restoration of people’s basic freedoms--such as freedom to organize, assemble and express opinion--without fears of oppression from the government.

·         Changes in government policies--especially as a result of pressure from donor institutions to involve NGOs in governmental programs--particularly in relation to poverty alleviation.

·         Increased funding from Overseas Donor Agencies (ODAs) in areas related to the acceleration of the democratization process (e.g., legal reform, anti-corruption, good governance, civic education, etc.)

·         Increased opportunities for funding from the private sector for community development programs, due to increased attention to corporate social responsibility (CSR).

·         Increased unemployment among the educated young in urban areas has led more to see NGO work as a viable alternative for employment.[3]

 

THE HISTORY OF NGOS AND THEIR FUNCTIONS

As mentioned above, there are various kinds of civil society organizations in Indonesia: religious organizations, mass-based organizations, unions, ethnic-based organizations, community-based organizations, NGOs, professional associations, and politically affiliated organizations.  It is almost impossible to capture the diversity of the nonprofit sector or civil society organizations in Indonesia within this paper.  Therefore, this paper will focus specifically on NGOs and their role in the nonprofit sector in Indonesia.

NGOs[4] began to be recognized in Indonesia in the 1970s in line with the development activities carried out by the New Order Government.  Although the government, with substantial foreign help, was able to maintain high economic growth of 7~8% per year, the widespread poverty and lack of community participation in development activities created room for NGOs to play a role in community-based social and economic activities.  These NGOs (known as “Development  NGOs”) were involved in a wide variety of fields, either as a complementary provider or as an agent of government programs that could not reach the lowest strata of society.  Their programs covered health services, nutrition, clean water and sanitation, family planning, non-formal education, applied technology, micro credit, small enterprises, informal sector joint ventures, cooperatives, etc. 

In the 1980s, NGOs active in environmental protection and preservation began to emerge as a response to Law No. 4/1982 on Environmental Management.  During this decade, organizations known as “Advocacy NGOs” began to take shape.  These NGOs carried out advocacy activities in the areas of environmental degradation, such as the pollution of air, sea and land; and destruction of the forests and other natural resources due to development and industrialization, rapid population growth, and poorly planned transmigration programs.

In the 1990s, in line with the growing global attention to human rights protection and democratization, Indonesia also saw the emergence of NGOs advocating human rights and democratization. These NGOs focused on restoration of the people’s civil and political rights, protests against gross human rights violations by the state and demand for political liberalization and democratization.  They also began to advocate against abuses of social and economic rights, such as rights to land and natural resources, indigenous peoples (adat) rights, women’s rights, and gender equality

The fall of the New Order regime and the ensuing democratization process in Indonesia led to the emergence of discourse on good governance, accountability and transparency of public institutions. NGOs that were active in monitoring the activities of state institutions and other political institutions emerged and became known as watchdog organizations.  Starting with the heavy involvement of NGOs in the 1999 Election Watch, now almost all aspects of state institutions are being watched by NGOs.  The Indonesian people recognize various organizations such as Corruption Watch, Parliament/Legislative Watch, Government Watch, Judicial Watch, Police/Military Watch, and Government Budget Watch. What is still missing however is an organization that monitors the NGOs themselves.  It has been suggested by several NGOs concerned with the issue of accountability to involve the media, such as the Independent Journalist Alliance, to act as an NGO Watch.

To engage more effectively in promoting just public policies, Indonesian NGOs have also grouped themselves in a number of coalitions to carry out advocacy to change, influence and/or draft new laws. Examples of such coalitions are the NGO Coalition for Foundation Law, the NGO Coalition for Public Freedom to Information Law, the NGO Coalition for New Constitution, and the NGO Coalition for the Participatory Law-Making Bill.

Some Indonesian NGOs are also taking an active part in global civil society discourse, protesting against what they call neo-liberalism and economic globalization sponsored by the International Monetary Fund, the World Bank and the World Trade Organization. They believe that the free trade and privatization promoted by these organizations will inflict losses on the people of the third world.  Some NGOs are demanding a waiver of Indonesia’s debt to the World Bank, claiming that the funds were misappropriated by the state apparatus; and they are asking that the Indonesian government stop applying for new loans.

CHANGE IN RELATIONS BETWEEN GOVERNMENT, PRIVATE SECTOR AND CIVIL SOCIETY

 

Government Perceptions

In line with the ongoing democratization process, perceptions of the government, private sector and donors about the existence and role of civil society in general and NGOs in particular have changed.[5]  In general, the government no longer sees NGOs as anti-government or as the opposition. Except for the very vocal and front-line NGOs working on human rights violations and environmental issues (including land-tenure issues), the government does intervene with NGO activities.  Some circles of the government see the existence of NGOs as a reflection of the basic freedom of society, and view them as a form of community participation in solving the issues facing society, as well as in carrying out social control of the government.  The government sees the need to create a new division of roles among stakeholders (government, private sector and NGOs) by giving opportunities to independent community initiatives, as well as encouraging them to actively participate in government programs.  It is expected that a stronger, more democratic, and more dynamic community will emerge through improved community capacity in solving their own problems.[6]  In other words, some circles within the government consider NGOs as organizations with a commitment to serving the interests of the people, and see them as building self-reliance, playing an important function in government control, as well as providing alternatives to government policies.

NGOs are also viewed as a partner to the government in the implementation of programs and as one of the stakeholders in development.  Although they function as government partners, NGOs do not necessarily have to agree with government policies or programs and may submit critical opinions, propose alternative programs and more rational public policies with better targets.  Though this view is still somewhat rhetorical and has not become a real commitment formulated in any government policy, it has nevertheless indicated that there is change in government perception towards NGO existence and roles.

However, the government still has difficulty developing effective partnerships with NGOs.  This is particularly due to the fact that the rapid growth of NGOs has not been accompanied by the creation of an umbrella organization to represent NGO interests in dealing with the government.  For the government, therefore, it is difficult to obtain inputs or to develop accords widely supported by NGO community.

The government believes that in the present transition to democracy, the NGO community should consolidate internally to strengthen its own capacity, because both the government and NGOs have equal potential to be corrupt and lose focus in the absence of a code of ethics, accountability mechanisms and transparent control.  That is why the government appreciates NGO efforts in promoting good nonprofit governance, and in improving professionalism, transparency and accountability.  The government also sees the need for a forum of NGOs to create NGO accountability in carrying out their functions. [7]

 

Private Sector Perceptions

The private sector on the other hand views NGOs as institutions with a capacity to influence corporate missions and motivate corporations to develop and improve their performance in corporate social responsibility (CSR).  NGOs can motivate changes in corporations’ approach towards its social function from a charity-based to a community-empowerment approach.  NGOs are also viewed as being closer to the grass-roots community, and therefore, have the potential to collaborate with corporations in developing better community development programs.

In the past, relations between the private sector and civil society were full of conflict, but due to the change in political climate and NGO pressures, the private sector’s perception towards NGOs has changed.  Companies are more willing to collaborate with civil society based on the community development concept.  A number of multinational corporations, directly or indirectly through their community relations department or corporate foundations have begun to provide assistance for surrounding communities through programs in community health, clean water and sanitation, agriculture, and the development of small scale enterprises, all in collaboration with NGOs. These kinds of relationships were almost unheard of in the past.

Meanwhile, donor agencies consider that in general NGOs are committed to economic, social and political change.  NGOs are viewed as alternative institutions with the ability to provide public services and at the same time control government power.  There are at least four important reasons why donor agencies are willing to collaborate with NGOs.  First, donor agencies very much support effective and efficient services and NGOs are sometimes considered to be more effective and efficient than the government in terms of funds utilization.  Secondly, in addition to community development programs, NGOs also help to develop social and political infrastructure by advocating for people’s benefits.  Thirdly, NGOs support civil society development by striving for democracy and human rights.  Finally, NGOs support efforts towards policy change. [8]

 

NGO Perceptions

Unfortunately, there has been little change in the perception of NGOs themselves toward the government and private sector.  Some NGOs still think that there has been no significant change in the government.  NGOs still feel that the government is corrupt, inefficient, non-transparent and non-participatory.  Changes in government policies in legal, economic and political fields are not supported by concrete evidence. Nevertheless NGOs admit that there is a change in government attitude towards NGOs in the form of recognition of their existence and activities.

Also, some NGOs still view the private sector as being ignorant of society’s needs.  They feel that corporate social responsibility efforts are conducted more in the interests of the company itself than for the community.  NGOs still consider corporations as not transparent, abusive of human rights, and damaging to the environment.  NGO collaborations with the corporate sector still produce pro and contra divisions among NGOs.  NGOs initiate actions such as market boycotts, class action lawsuits against corporations that inflict losses to communities, and try to act as a check on the power of the stock market.[9]  In terms of donors, NGOs consider ODAs to be project oriented and uninterested in NGO capacity building, and think that they often provide assistance only to big and well known NGOs without any clear criteria.

CRITICISMS OF NGOS

 

Mercy Corps Assessment

Although there are many positive aspects of collaboration with NGOs, donors also see a number of weaknesses, especially in relation to NGO transparency, accountability and legitimacy.  Mercy Corps,[10] a nongovernmental institution based in Edinburgh (UK) and Portland, Oregon (USA) who has been assisting a number of Indonesian NGOs in microfinance programs, made an assessment on the principles of participation, transparency and accountability among its local NGO partners, the results of which are discussed below. Mercy Corps also discovered that several attributes of their local NGO partners represent the general conditions of NGOs in Indonesia. 

 

Organizational Structure and Leadership

There is no division between the board and executives in several NGOs.  In several of the organizations, one person, usually the founder of the NGO, dominates its leadership.  He usually simultaneously holds the positions of chairman and executive director.  If there are any other board members, they are usually also involved in program implementation.  In addition, a majority of NGOs indicate that the staff are not sufficiently involved in decisionmaking process.

 

Community Participation

Several NGOs never ask for input from their intended beneficiaries.  Others do not involve the community in the selection and planning of activities or only informally consult community leaders when planning a project.  Often NGOs plan their programs and activities only on the basis of what they feel is best for the community--an indication of a top-down interventionist approach.

 

Accountability and Transparency

Most NGOs still do not have the mechanisms, procedures and capacity in place to be accountable to the public for their programs and activities, as well as for the funds they receive.  Some NGOs do not have clear documentation and information systems for their programs; some do not have transparent financial and accounting procedures.  Some NGOs never issue a program or financial report for public information.

 

Measurement Parameters of Success

A majority of NGOs do not have any criteria or parameters to track program achievements.

 

Other Areas for Improvement

Other donors[11] see that there are at least four important areas for improvement among Indonesian NGOs.  First and foremost is internal governance. This includes decisionmaking processes, division of roles between the board and executives, establishment of accountability mechanisms to constituents, as well as issues related to clear vision, mission and objectives.  The second area to be addressed is accountability, both to the government and the public.  So far NGOs only attempt to be accountable to donor agencies in the form of narrative and financial report on projects.  Third, NGOs need to improve external relations with other NGOs and with the public or its beneficiaries.  If an NGO is working directly with the underprivileged then it needs to understand how it can really empower them so that they are stronger and more critical.  For advocacy NGOs, networking and alliance development with other NGOs is very important so that activities at village levels can be promoted to the national level.  The fourth area needing improvement among NGOs is management, including strategic planning, program development, financial and human resources management.  Donors will eventually evaluate NGOs based on the four factors above, i.e., technical capability, legitimacy, accountability and transparency.

NGOs are also not free from criticism from the government and private sector circles.  The government feels that the rapid growth NGOs are still lacking in good organization and management.  Many NGOs do not have an office or a clear address, and their programmatic foci change and develop based on the possibility of receiving government projects.  The private sector considers that many NGOs are unprofessional in carrying out their functions and that their focus changes based on the availability of funding.  Many proposals submitted to companies are not based on the NGO’s competency.  Several NGOs shift their activities from income generating activities to environmental issues, reproductive health, women’s rights, and conflict resolution depending on the possibility of funding. [12]

RESPONSES FROM GOVERNMENT – STATE REGULATIONS FOR NGOs

In Indonesia, two kinds of legal entities are recognized as non-profit entities: foundations (yayasan) and associations (perkumpulan).

 

Yayasan

Yayasan began to be recognized as legal entities during the Dutch colonial era (1870) as non-membership organizations. Most follow the European legal system, while some adhere to other legal systems such as wakaf (donations or grants under Islamic law).  Prior to the ratification of Law No. 16/2001 on Foundations, all forms of yayasan in Indonesia were based solely on societal norms and Supreme Court jurisprudence.  The legal status of a yayasan is actually based only on the agreements and aspirations of the founders and then developed into legal practice.  The purpose and agreement for establishing a yayasan is then authenticated by a public notary act, registered in the district court and announced in the State Gazette.  Normally the objective of a yayasan is social, religious, educational or humanitarian in nature.  Unfortunately however, there was no limitation to the activities that a yayasan could implement, so many yayasans were used as profit making entities for the founders.

The Yayasan Law

In line with the demand for good governance in Indonesia after the fall of President Soeharto, and in response to pressure from the International Monetary Fund (IMF)[13], the government of Indonesia submitted a draft Yayasan Law to the parliament in 2000.  The basic aim of the law is to promote transparency and accountability in yayasan governance.

The notes on the draft law stated that:

“Facts indicate the tendency of some members of society to establish yayasan to take shelter behind the legal status of yayasan which are used not only to develop social, religious, humanitarian activities but also to accumulate wealth for the founders, board members and supervisors.  Along with this tendency, a number of problems have emerged in relation to yayasan activities that are not in line with the purpose and objectives stipulated in its Articles of Association and the suspicion that yayasans have been used to accommodate illegally gotten wealth of founders or other parties.” 

Yayasans founded by former President Soeharto to obtain donations from conglomerates; yayasans established by the military to shelter their businesses for the benefit of the military; and hospitals and universities that raise public funds for the benefit of their founders are some examples of the misuse of the yayasan legal entity.

During the drafting of the new law, several NGOs formed a coalition to provide input on the Bill on Yayasan that was being prepared by the government.  The coalition carried out advocacy activities through a number of press releases, newspaper articles and public hearings with the parliament.  This coalition also formulated a position paper on the yayasan bill based on four fundamental arguments that the bill: a) could be used to restrict the public’s freedom to organize; b) maintained the spirit of government as the source of rights as opposed to facilitator and protector of civil rights; c) still strongly accommodated the yayasan’s business interests; and d) assumed that all yayasans were similar in nature.  The coalition then advocated for basic principles that should be adhered to within the bill, including freedom to organize, independence, transparency, accountability, and non-profit orientation. From those basic principles, the coalition put forth the eight demands below. They asked that the bill:

·         Adhere all articles that regulate accountability and transparency mechanisms for yayasan.

·         Include additional articles regarding sanctions towards yayasans that fail to comply to the proposed law.

·         Impose the law on exisiting yayasans as opposed to only yayasans established after the law is passed.  This way, the new law will achieve its purpose of preventing abuse of the yayasan entity for business purposes.

·         Reduce government involvement in the setting up of yayasans by promoting the Notary Public as the independent body responsible for the yayasan registration process; or by creating another mechanism for registration through local government bodies as opposed to direct registration through the Ministry of Justice and Human Rights.

·         Reduce rigidity regarding a yayasan’s internal governance and limit it to division of functions between the board and the executive, as well as, the existence of a body within a yayasan that can enter into agreement with third parties.

·         Include articles regarding incentives that can be given to yayasan activists and/or peoples and companies that give donations to yayasan, for example through tax deduction mechanisms.

·         Eliminate the “rubber-article” that gives the government authority to dissolve a yayasan when it is considered “violating public order or decency.”  In the past, the unclear and subjective terms were used by the New Order regime to eliminate/dissolve vocal pro-democratic organizations.

·         Restrict the yayasans’ scope of work purely to serve social and humanitarian purposes

The coalition was not successful in pushing through all of its eight demands, but it did succeed in including the first four demands.

The Yayasan Bill was then ratified as Law No. 16/2001.  This law could be considered as an important breakthrough for good governance of the nonprofit sector in Indonesia, as it provided assurance and legal certainty, as well as restored the yayasan’s function as a non-profit institution with social, religious and humanitarian goals.  Although Law No. 16/2001 has not been fully implemented, this law will have a wide impact on the nonprofit sector in Indonesia, including NGOs, as 95% of them use yayasan (foundation) as their legal entities.

The law provides that a yayasan is defined as a legal entity with separated assets aimed at achieving certain goals in social, religious and humanitarian fields and does not have members (Article 1).  The law also stipulates that a yayasan must have three organs (Article 2), much like that of a limited liability company.  The organs are pembina (Board of Developers or Patrons), pengawas (Board of Supervisors) and pengurus (Board of Management).  It appears that the role of the Board of Developers is equivalent to that of shareholders in a limited liability company, the Board of Supervisors is equivalent to the Board of Commissioners and the Board of Management is equivalent to the Board of Directors.  Patrons are not allowed to hold double positions in the Board of Management and/or Supervisors (Article 29) and the authority of the patrons is specified in Article 28 as follows: (a) decision on revision of the organization’s Articles of Association; (b) appointment and dismissal of members of the Board of Management and Board of Supervisors; (c) general policy based on the Articles of Association; (d) approval of annual plan and budget; (e) merger or dissolution of the organization.

The second organ of a yayasan is the Board of Management (pengurus).  According to law, the Board of Management is responsible for the governing and management of the yayasan, is fully responsible for the management of the yayasan’s objectives and interests and has the authority to represent the yayasan in or out of court (Article 35 Clause 1).  The Board of Management must at least consist of a chairperson, a secretary and a treasurer.

The third organ is the Board of Supervisors (pengawas), which has the function of supervising and providing advice to the Board of Management in undertaking activities of the organization.  A yayasan should have at least one supervisor.

Both Board of Management and Board of Supervisor members are appointed by the Board of Developers for a period of five years and may be re-appointed for one additional term.  The Board of Supervisors has the authority to dismiss management based on solid justifications; however, the Board of Developers may accept or overrule the decision within seven days.

A fundamental difference--probably to differentiate it from the Corporate Law--is in Article 5,which stipulates that the assets of a yayasan (cash, goods, or other assets) are not allowed to be transferred or distributed directly or indirectly to the various boards, employees or parties related to the yayasan.  In addition, members of the various boards are not allowed to receive salary or honorarium.  This has created strong arguments and protests from the yayasan community, especially from Board of Management members who are responsible for the day-to-day operations of a yayasan.

It is believed that the government plans to revise Law No. 16 so as to allow members of the Board of Management to receive a salary or honorarium when they are directly and fully employed by the yayasan in accordance with the yayasan’s procedures.  In the case where the Board of Management does not have direct control but instead appoints an Executing Board, the rules applicable to the Board of Developers and Supervisors will also apply to the Board of Management.

The government also regulates the business activities of yayasan. Yayasan are allowed to establish a business entity or invest in a business entity that is in line with the objectives of the yayasan.  However, there are additional stipulations within the law: a) the total business investment must not exceed 25% of the yayasan’s assets (Article 7 Clause 2); b) the proceeds from the business must not be distributed to members of the various boards (Article 3 Clause 2); and c) members of the three boards are prohibited from holding positions of management in the business entity (Article 7 Clause 3).

On accountability mechanisms and transparency of a yayasan, the regulations are as follows:

·         The yayasan is obligated to issue annual program and financial reports, by at least placing an announcement in the notice board of the yayasan’s office (Article 52 Clause 1).

·         A yayasan receiving funding from the state, overseas donors or other parties in the amount of Rp.500 million (approximately US$55,000) or more or having an assets outside wakaf of Rp.20 billion (approximately US$2.2 million) is obligated to publish its financial report in an Indonesian language newspaper (Article 52 Clause 2).

·         A yayasan receiving funding equal to or more than Rp. 500 million or having assets amounting to Rp. 20 billion must be audited by a public accountant (Article 52 Clause 3).

·         Annual financial reports of a yayasan must be prepared based on the Indonesian Standard of Accountancy (Article 52 Clause 5).

The Yayasan Law will unquestionably have a wide impact on the NGO existence in Indonesia.  In the past, it was relatively easy to establish a yayasan. Two or three people could easily establish a yayasan through a public notary act and become a legal entity.  For NGOs, the yayasan legal entity has allowed NGOs to avoid dealing with governmental institutions in order to become a legal entity, whereas establishing a legal entity as an association required a recommendation from the government.  However, with the promulgation of the Yayasan Law, many NGOs appear to have not yet adhered to the provisions of the law.  Nevertheless, the new law has brought the issues of NGO transparency and accountability to the forefront. [14]

Perkumpulan (Association)

As mentioned above, the other form of legal entity is the perkumpulan (association), which is established by a number of people to serve the interests of its members or the public. Different from yayasan, which is a non-membership organization, perkumpulan is established on the basis of memberships or a group of people with a common social service objective and not for profit making purposes. The legal entity of association is obtained through approval from the Minister of Justice and is published in the appendix of the State Gazette. 

With the promulgation of Law No. 16/2001, a number of NGOs--particularly organizations active in social movements and dependent on a broad member base--have begun to reconsider their legal status, i.e., to remain a yayasan or become a perkumpulan.  This has been the case with NGOs involved in the women’s movement, consumer protection, the environment, and human rights.

RESPONSES FROM CIVIL SOCIETY

The rapid growth of CSOs and the increasing discourse on good governance have actually caused anxiety among the NGO community in Indonesia.  Although it has had positive impacts on the democratization process, the explosive growth of new NGOs during the last five years has also created problems of quantity versus quality. Some even question the growth as too far, too fast[15].  Many organizations that call themselves NGOs and were established after the fall of Soeharto have questionable objectives, and some of them have been involved in malpractice, and have thus affected NGOs in general[16].  The reputation of Indonesian NGOs has suffered because of a number of NGOs who misappropriated funds entrusted to them by donor agencies and the government. These include NGOs that sold subsidized rice destined for the poor; NGOs established by government officials, corporations and individuals for the purpose of gaining access to development projects; NGOs established by political activists to mobilize funds and support to gain political power; as well as NGOs acting as debt collectors or specializing in mobilizing mobs for hire.

This wrongdoing has caused some NGOs to reconsider the basic principles of NGO existence.  People are asking questions such as,  “What is an NGO?  Why does it exist and what are the bases for its legitimacy?  How can NGOs be accountable to their constituents and stakeholders and  how can this accountability mechanism be established?”

Discussions surrounding these questions have been attempted through a number of workshops and seminars conducted in 2002 with support from various donor agencies[17].  In 2002 at least 12 seminars were held to discuss NGO accountability and transparency:

·         “Improvement of Indonesian NGOs’ Accountability and Transparency: Creating Synergy” seminar organized by PIRAC (Public Interest Research and Advocacy Center) in Jakarta from September 4 to 5, 2002 with 30 participant NGOs;

·         Workshop on “Indonesia’s Third Sector: Governance for Accountability and Performance”, organized by CECT, Trisakti University, Jakarta, September 12-13 with 25 participants;

·         Workshop on “Improvement of NGOs Quality through Accreditation and Certification”, organized by Satunama Foundation, November 4 – 6 in Yogyakarta with 50 participants;

·         Eight seminars with the topic “Developing Strong and Healthy, Democratic, Transparent and Accountable NGOs: Multisided Perspective”, organized by LP3ES in collaboration with local NGOs in 8 provincial capitals (Jakarta, Pakanbaru, Palembang, Solo, Surabaya, Banjarmasin, Makassar and Mataram). These seminars were held between May and August 2002 and each one was attended by 50 to 75 participants, mostly from NGOs.

·         National workshop on “Advocacy, Community Empowering and Accountability: Between NGOs’ Rights and Obligations”, organized by LP3ES, PIRAC and SAWARUNG with financial help from the Ford Foundation and Partnership for Governance Reform on February 9-11, 2003 with 50 participants.

National Workshop Outcomes

The national workshop, which also included foreign participants, covered issues of NGO legitimacy and accountability in the most comprehensive way.  The workshop covered mapping of all sources of NGO legitimacy and existence, NGO constituents and stakeholders, various accountability mechanisms, applications of principles of NGO internal governance; and developed an action plan to improve NGO integrity and credibility. Some of the important conclusions gathered from the national workshop were as follows: [18]

Indicators for and Sources of NGO Legitimacy

There are three indicators to measure whether an NGO has legitimacy.  First is recognition, i.e., the NGO is recognized by the government or other parties involved in the policy making process.  The second is justification in that the NGO activities are accepted and appreciated by society through moral support and acknowledgement.  Third, support whereby the NGO receives assistance in the form of funds and in-kind donations from society.

There are three bases of NGO legitimacy, i.e. moral, legal and social.  Moral legitimacy relates to what an NGO does and the moral values it promotes such as justice, equality, solidarity, and participation.  In addition, the basic NGO principles of altruism and volunteerism are recognized by society as moral strength and selflessness.

Legal legitimacy or legal-formal legitimacy is the recognition of the NGO’s existence by the state, as well as state support in the form of regulations that create a favorable environment for the NGO to carry out its mission.  The Yayasan Law, for instance, serves as a guideline for NGOs and provides it with the legal recognition that it deserves.

Social legitimacy is the recognition and appreciation of the value of the NGO to society. Social legitimacy is reflected through the support received by an NGO, either material (cash, services, goods, etc.) or immaterial (information, statement of support, etc.).  Social legitimacy is considered as the highest among the three forms of legitimacy.  Legal-formal legitimacy, however, remains important to be able to sign contracts, to solicit projects, open a bank account, etc.

 Accountability and its Instruments

Accountability should not be viewed only as technical programmatic and finance management responsibilities.  Accountability involves the more substantial issue of active participation and consultation with constituents and stakeholders in the decisionmaking process.  There are three important dimensions of accountability: access, participation and control.  Access is not only related to information but should also include adequate room for constituents to actively participate in NGO activities, such as the development of the NGO’s vision, mission and strategic programs; as well as some control over the NGO that claims to defend their rights or to act on their behalf.

There are at least six instruments that may be used to implement accountability:  regular reporting, public audit, members/board of trustees meetings, public consultation mechanism, responses to public complaints, and public opinion surveys or polling.

Internal governance

NGO internal governance should be built in line with the NGO’s values.  Good internal governance will enable the NGO to develop its organizational instruments and to effectively utilize its resources and further maintain its accountability.

Among the most important instruments is a Board of Trustees/Board of Directors that can act as a guardian for moral integrity, control the implementation of the organizational mission and provide general policy for the organization.  The Board of Trustees or Board of Directors must be separate from the executives in order to create a mechanism of checks and balances.  Discourse also emerged as to the need for NGOs to have standard operating procedures (SOP) to be used as a reference for internal and external relations.

Follow-up

The National NGO Workshop unveiled a number of issues that need to be addressed, including:

Sharing information throughout regions by organizing a series of regional workshops with a similar theme to enable wider involvement of NGO communities.

Improving internal governance:  Every Indonesian NGO needs to reflect upon its own existence, values, vision, mission and program; clarify its constituents; and strengthen organizational capacity to achieve accountability.

Increasing public access:  Indonesian NGOs need to be more transparent and inform the public regarding their activities and funding sources.

Continuing initiatives for certification and development of common code of ethics: A number of NGOs have taken steps to develop a common code of ethics, as well as to establish an umbrella organization to implement and supervise the code of ethics.  Other NGOs plan to develop a program and institution for NGO certification.  These initiatives need to be followed up by preparing a code of ethics at the national level through a national-level umbrella organization.

 

Two perspectives on NGO Good Governance

The First Perspective

As indicated above, it is clear that there are two perspectives used by NGOs in viewing NGO principles of good governance. The first perspective emphasizes that NGOs should be established with ideal objectives, namely the manifestation of the spirits of philanthropy and altruism and caring for other people or humanity.  NGO programs or activities should be based on ideal values that are described in the organization’s vision, mission and strategic objectives.  These moral values should also be formalized as a code of ethics to guide the NGO in determining what is right or wrong, good or bad.  Establishing a code of ethics is necessary for the NGO to regulate itself.  Aside from embracing and practicing the chosen moral values and principles, the NGO should also be able to promote those values and principles to its constituents and stakeholders, such as the government, donors, the private sector, community groups and society at-large.  By conducting regular promotion of its mission and values, it is expected that the NGO will become well-known and respected, and therefore, have easier access to resources.

The other element of this perspective concerns NGO accreditation and certification.  In this view, certification is intended as a tool to help improve NGO quality by using parameters to evaluate the health of an NGO.  In a certification program, there are at least five elements: a) vision, mission and goals of the NGO; b) internal governance; c) administrative and financial management; d) operational programs; and e) legitimacy, by developing indicators and means of verification.  With the initiatives toward a certification program, it is hoped that support from the international donor communities as well as government, private sector and society will further increase.  The government, for instance, may draft a tax law that provides incentives for individual and public contribution to NGOs or a law that will motivate growth of the nonprofit sector.  

The Second Perspective

The second perspective holds that NGO accountability should be directed mainly to those who are called constituents or members, beneficiaries, primary stakeholders, target groups and society at-large, rather than standard accountability to the government or donors, which is technical in nature.  This approach emphasizes NGOs’ accountability to those they represent or the people they work with.  In order to improve accountability, NGOs need to involve members/constituents/beneficiaries in important decisionmaking processes related to their interests by positioning them as subjects, not as objects.  An accountability mechanism being developed, among others, is constituent involvement in the formulation of NGO vision and mission, program planning, monitoring, and evaluation of projects/programs, as well as maximum access to information on NGO activities.  Wider public involvement may be mobilized through public opinion polls and need assessments.  According to this view, the ideal form and legal status for an NGO in the future is that of a broad-based membership organization and not the present non-membership organization in the form of a yayasan or foundation.

In this perspective, NGO accountability is connected to the source of its legitimacy.  The degree of legitimacy that needs to be achieved by an NGO is not only legal/formal legitimacy as provided by laws that recognizes NGO existence or support from donors, but more importantly social legitimacy. This means whether the NGO’s existence is being recognized, its actions supported (including by financial aid), and whether it is protected from irresponsible acts by the state/government.

This perspective views formal accountability mechanisms--such as a code of ethics or certification system--as merely a technical solution to the question of accountability that often fails to reflect the values embraced by the concerned NGO, and one that will only be useful in maintaining good relations between the NGO and donors or with the government.  This view even claims that codes of ethics or certification systems are neo-liberalist instruments to serve the interests of the government and international capitalism.  In this perspective, the important roles of NGOs/CSOs are actually to control the state and the market while at the same time working in the interests of the grassroots community.

INNOVATIVE PROGRAMS/RESPONSES

As indicated earlier, many networks have been established among NGOs.  These networks are established for various purposes.  Some are established to campaign for certain issues, some are ad hoc in nature.  Bonds among network members are informal, and the network serves as a forum for discussion without any hierarchy or clear rights and responsibilities from its members.  Memberships are usually very loose.

However, there is still no umbrella organization for NGOs in Indonesia.  Such umbrellas can function as a representative in promoting the existence and the interests of NGOs to outside parties and serve internal capacity building purposes for its members.  The absence of such an organization may be related to the traumatic history of Indonesian NGOs, who always tried to avoid unity to avoid being coopted by the New Order authoritarian regime or used as a political vehicle by opportunistic NGO leaders.

During the last few years, however, a number of influential NGOs have begun to take initiative on the issue of NGO governance.

Preparation of NGO Code of Ethics by the Agency for Research, Education, Economic and Social Development (LP3ES)

Since 2002, LP3ES, a well known national NGO, has taken the initiative to prepare and implement a code of ethics and to establish an NGO association or umbrella organization, particularly for NGOs that are working in community-based social and economic development.

The preparation of the code of ethics and the establishment of the NGO association has been carried out through a number of meetings, seminars and workshops with the NGO community and involving stakeholders such as the government and private sector. The program has been organized in eight provincial capitals (Riau, South Sumatra, Jakarta, Central Java, East Java, West Nusa Tenggara, South Kalimantan and South Sulawesi) in Indonesia, involving at least 500 NGOs. 

One of the activities carried out under the program was a series of seminars in the capitals of the above provinces with the topic “Developing Strong and Healthy, Democratic, Transparent and Accountable NGOs: Multi-stakeholder Perspectives”. In each of the seminars, government officials, private sector people and donors were invited to present their views on the issue of NGO accountability and transparency. Three speakers from the Philippines were also invited (representatives from CODE-NGO and the Philippine Council for NGO Certification). They contributed their experiences in developing NGO umbrella organization/networks, preparing codes of ethics and improving NGO internal governance.

The program eventually managed to formulate a written code of ethics. The code, which was signed by 252 NGOs, contains matters related to integrity, accountability and transparency, independence, anti-violence, gender equality, and financial management, including accountability to external parties such as beneficiaries, government, donors, other NGOs and the public at large. There are a number of points in the code of ethics that may be considered important to improve NGOs’ accountability and transparency as nonprofit organizations, including: a) an NGO is not established for the purpose of profit making for its founders; b) an NGO is not established in the interests of its founders but is intended to serve the people and humanity; c) all information related to its mission, membership, activities and financing are basically of public nature and is therefore available to the public; d) an NGO utilizes bookkeeping and financial systems that are in accordance with acceptable accounting standards.

In addition to the code of ethics, the NGO community also agreed to establish regional associations of NGOs, which are responsible for the implementation of the code of ethics, and to help NGOs in their capacity building. Future challenges for the NGOs which have accepted the code of ethics is how to apply it consistently in each organization and sanction those in violation, so it will not become merely an on-paper agreement.

NGO Certification Program

The Satunama Foundation, an NGO that is active in education, training and management consultancy, is launching a program called “Certification of Indonesian NGOs”. The program is intended to improve NGO public accountability and management performance in order to strengthen partners’ trust in NGOs and to make NGOs capable of serving their advocated groups well.

The program began with a national seminar and workshop in Yogyakarta in November 2002, and it was attended by 50 NGOs with five or more years experience in various provinces in Indonesia. The workshop then produced a task force consisting of 12 NGO leaders to formulate future work programs and preparation of instruments required for a certification program. During preparation of the instruments, the program received valuable inputs from the Philippine Council for NGO Certification (PCNC).

The task force held its first meeting on November 18-22, 2002 in Yogyakarta, resulting in the formulation of the certification program vision (“the establishment of democratic, responsible, transparent, sustainable, trustworthy NGOs supported by the society”) and mission statement (“to help NGOs to be more ethical and responsible, to achieve good performance levels, gain better access to resources and be widely accepted by the society”).

For the next three years (2003-2005) the task force has planned to conduct a series of activities, that include: a) establishment of solid instruments, procedures and certification standards; b) public campaign for NGO certification; c) establishment of an NGO Certification Agency; d) advocacy campaigns for tax law reform and laws for the nonprofit sector; and e) a program design for NGO capacity building and implementation of various types of necessary technical assistance.

Three teams have so far been formed: 1) a team for advocacy to the government, private sector and donors for the creation of tax law reform; 2) a team that will disseminate ideas and mobilize support from NGOs towards the program; and 3) a team that will formulate instruments for the certification program. It is recognized that future central issue of the program will be NGO accountability and transparency and certification is one of the instruments which will be developed.

Civil Society Index

YAPPIKA, an NGO alliance for civil society and democracy, implemented a program starting in 2000 to assess the health of Indonesian civil society using the CIVICUS Index on Civil Society.[19]  The objectives of the assessment include increasing the knowledge and understanding of the status of civil society in Indonesia, empowering civil society stakeholders through dialog and networking, and providing civil society with tools to analyze sector-wide strengths and weaknesses, as well as to develop strategies to foster positive social change.

YAPPIKA organized participatory dialogues involving a wide spectrum of civil society organizations, as well as a number of key stakeholders, such as government officials, local parliament members, and representatives from the private sector. The dialogue was conducted through a number of workshops in several provinces and involved more than 400 CSOs from all over Indonesia. [20] In this workshop, the definition of civil society was debated, the CIVICUS analytical tools were reviewed, and a number of indicators were formulated and analyzed by participants to assess the level of CSO health. There were five dimensions analyzed: 1) the political, social-economic context as the external environment in which civil society operates; 2) the scope of CSOs, including the breadth and depth of citizen participation within civil society, its inter-relations and resources; 3) values, norms and behaviors being promoted by CSOs; 4) the relations of CSOs with the state and the market; and 5) CSO contributions to the solutions of social, political and economic issues confronted by its nation. The result of the provincial Civil Society Index exercises was then discussed in a national seminar/workshop, resulting in a report on the the status of Indonesian civil society and common strategies to increase CSO performance over the next five to ten years.

HAPSARI Women’s Association: Process towards social legitimacy

In 1990, four women from Sukasari Village, Kabupaten Deli Serdang, 60 kilometers from Medan, established a working group called “Village Women Working Group”. Each individual in the group began to interact with individuals and groups of women in their village and with groups from other villages to jointly develop a women’s organization to strive for gender justice and equality. The method of work was through “critical education” in the form of discussions to break the silence and to build awareness. Ideas about gender justice were disseminated to village communities through agriculture programs managed by women or through the community radio station.

In 1997, in order to obtain legal-formal legitimacy, especially in relation to the government and to enable them to gain access to donor assistance, this working group transformed itself into a yayasan. They invited a number of outsiders (men and women) who were concerned about gender equality to sit on the Board of Trustees.

In 1998 the HAPSARI Foundation carried out strategic planning to formulate the vision, mission and goals of the organization. 15 persons attended from the Board of Trustees, Executive Board, representatives from its beneficiaries, and a number of NGOs that have working relations with HAPSARI. With its status as a foundation, HAPSARI has obtained its formal-legal legitimacy to move more freely within village communities and began to receive assistance from donor agencies.

Meanwhile, the women’s groups nurtured by HAPSARI established an independent women’s organization with the support from HAPSARI. In 1999 a Free Women’s Association or SPI was established with 721women members from the lower strata such as farm workers, plantation workers, fishermen and small vendors. SPI was then divided into five districts/Kabupaten based working areas in North Sumatra (Deli Serdang, Labuhan Batu, Simalungun and Langkat), each being independent from the other. HAPSARI Foundation provided funds and moral support to these local SPIs to function effectively.

In September 2001, SPI organized its first congress. The congress is the highest institution that formulates vision and mission for the organization, as well as acts as an accountability and reflection mechanism for its members. It was agreed in this congress that each Kabupaten level organization was allowed to have its own structure and management, relatively independent of one another.

In November 2002 HAPSARI organized a meeting to discuss monitoring, evaluation, maintaining accountability and reorganization. The meeting produced a new organizational design and structure. Besides members of Board of Trustees, SPI Deli Serdang, SPI Langkat, SPI Labuhan Batu and SPI Simalungun all attended the meeting. The attendees then decided that HAPSARI should dissolve itself and become the secretariat for a Federation of Independent Women of North Sumatra. This federation will function as an umbrella organization of the women’s organizations mentioned above. The HAPSARI experience may become an example of how a non-membership NGO in the form of a yayasan can dissolve itself to become a broad-based membership organization and obtain better social legitimacy.

CHALLENGES FOR THE CIVIL SOCIETY SECTOR

There are three main challenges to be confronted by NGOs in Indonesia. First, reformulation of NGO positions vis a vis the state (government) and various other sectors in the society. With the emergence of democracy, power is no longer centralized but distributed among new power centers such as parliament, political parties, and judicial institutions. Therefore, NGOs have expanded their strong criticism and opposition to include all institutions in power. The stance taken by some NGOs who consider themselves watchdog organizations towards all state institutions has turned them into common enemies. Accusations against NGOs remain, but now are made by political parties instead of the government. NGOs are still branded as agents of foreign interests and traders of poverty, especially due to the fact that there have been corrupt practices among NGOs themselves. Politicians have started to ask questions regarding NGO legitimacy and how much they really represent their constituents.

The situation seems to be unfavorable for the future development of NGOs without a breakthrough on relations and interactions with government and other sectors in the society. There is a need for a genuine two-way dialogue with the government and private sector to develop trust, as well as a common cause. This means bringing changes towards a better Indonesia through the process of lobbying and negotiations, and not only through strong advocacy or street rallies.

The second challenge is to minimize NGO reliance on foreign donors and the third is how to develop public trust towards NGOs by developing legitimacy, accountability and transparency. The second and third challenges are probably best illustrated through recent cases related to the Indonesia Legal Aid Foundation (YLBHI). YLBHI has been one of the outstanding NGO in the fields of law, democracy and human rights for the past thirty years. This organization is in the middle of a severe financial crisis. Two major donors plan to stop their assistance to YLBHI. The decision has had a  huge impact on YLBHI and they have decided to reduce their activities and to rationalize their staff. The reasons for the cessation of aid to YLBHI are related to internal governance issues, particularly the internal conflicts between the board of trustees and executives during the last couple of years.

The above illustration provides an example of the financial reality of Indonesian NGOs. Most NGOs in Indonesia depend highly on foreign donor agencies so that when the support is suddenly stopped it affects programs and even the NGO’s own existence. This suggests the need for Indonesian NGOs to raise their own funding from domestic sources such as from the public, government and private sector.

In order to gain public trust, however, Indonesian NGOs need to improve their governance, especially in relation to the issues of legitimacy and accountability. It is important for the NGOs to prove their capacity to deliver intended services to the community so that their existence can be socially recognized and supported.

ANNEX

List of Participants to Focus Group Discussions

Cemara Hotel Jakarta, 9^th April 2003

PRIVATE SECTOR

1.         Ms. Ditta Amorhorseya

            Corporate Affairs Head, Citibank

2.         Mr. Deddy Afidick & Ms. Luciana Ferrero

            Community Relations Advisor, Exxon Mobil

           

3.         Mr. Soegiono Dharmatjipto & Ms. Suprianti

            Bogasari

           

4.         Mr. Tom Malik

            Deputy Director Community Relations, PT. Rio Tinto Indonesia

5.         Ms. Ade Ichromi

            General Manager, Unilever Peduli Foundation

           

NGO

1.         Ms. Geni Achnas & Ms. Darwina Widjayanti

            Executive Director, Yayasan Tifa

2.         Mr. Hamid Abidin

            PIRAC

3.         Ms. Susanti Sitorus

            Yayasan Kehati

4.         Ms. Abdi Suryaningati

            YAPPIKA

5.         Mr. Rustam Ibrahim & Mr. Ison Basuni

            LP3ES

           

6.         Mr.  Eryanto

            Pusat Studi Hukum dan Kebijakan (Center for Law and Policies Studies)

Puri Imprerium Office Plaza

7.         Mr.  Muchtar Abbas

            Yayasan Mitra Usaha

8.         Mr. Paulus R. Mahulette

            LBH Jakarta (Legal Aid Foundation Jakarta)

9.         Mr.  Riza Primahendra

            Bina Swadaya

GOVERNMENT

1.         Ms. Made  Kamimi  & Mr. Iwan Sukresno SH

            Department of Justice and Human Rights

           

2.         Mr.  Freddy & Mr. Tonizar

Directorate General of Tax

REFERENCES

1.           Budianta, Eka. “Respons Sosial Perusahaan dan Keswadayaan Publik” (“Corporate Social Responses and Public Self-Reliant”).  Paper presented on the “Seminar on the Development of Strong and Healthy NGOs, Democratic, Transparent and Accountable: Multistakeholders Perspectives”  (Membangun NGO yang Sehat dan Kuat, Demokratis, Transparan dan Akuntabel).   Banjarmasin (South Kalimantan), 14  May   2002. A series of seminar with the same themes was held by LP3ES in eight big cities in Indonesia around May till July 2002.

2.           Damayanti, Rolly Aruna. “Membangun NGO yang Sehat dan Kuat, Transparan dan Akuntabel: Perspektif Donor” (To Develop Strong and Healthy NGOs, Democratic, Transparent and Accountable: Donor Perspective). Paper presented on the “Seminar on the Development of Strong and Healthy NGOs, Democratic, Transparent and Accountable: Multistakeholders Perspectives.”   Palembang (South Sumatera): 9 July 2002.

3.           Indonesian NGOs Code of Ethics.

4.           Ibrahim, Rustam. “Mengapa NGO Membutuhkan Kode Etik” (“Why NGOs Need Code of Ethics”).  Position Paper prepared for the Program for Formulation and Implementation of NGO Code of Ethics and Formation of NGOs Umbrella Organization (Program Penyusunan dan Pemberlakuan  Kode Etik dan Pembentukan Asosiasi LSM).  Jakarta: 2002.

5.           Ibrahim, Rustam. “Membangun Hubungan yang Sehat, Produktif dan Setara antara Pemerintah, Swasta dan NGO” (“To Develop Healthy, Productive and Equal Relationship between the Government, Private Sector and NGOs. Paper presented for the Series of the Seminar on the Development of Strong and Healthy NGOs, Democratic, Transparent and Accountable: Multistakeholders Perspectives.

6.           Law Number 16/2001  on Foundation (Yayasan).

7.           Malik. Tom. “Pola Kemitraan dalam  Program Pengembangan Masyarakat Rio Tinto (Partnership Patterns in the  Rio Tinto Community Development Programme). Paper presented for  the “Seminar on the Development of Strong and Healthy NGOs, Democratic, Transparent and Accountable: Multistakeholders Perspectives.” Pekanbaru: 16 May 2002.

8.           McCarthy, Paul. “A Thousand Flowers Blooming: Indonesian Civil Society in the Post-New Order Era.” Paper prepared by Civil Society Consultant of the World Bank Office in Indonesia, Ottawa/Jakarta: March 2002.

9.           Report of the Civil Society Assessment Program: Implementing the Index on Civil Society. Jakarta: YAPPIKA (Civil Society Alliance for Democracy), 2002.

10.       Report of the National Workshop on Advocacy, People Empowerment and Accountability: Between Rights and Responsibilities of NGOs.  (Laporan Lokakarya Advokasi, Pemberdayaan Rakyat dan Akuntabilitas: Antara Hak dan Tanggungjawab NGO. Jakarta, 9-11 January 2003.

11.       Report of the Workshop on the Development of Indonesian NGO Accountability and Transparency: Developing Synergy  (Laporan Lokakarya Peningkatan Akuntabilitas dan Transparansi NGO Indonesia: Membangun Sinergi. Held by PIRAC (Public Interest Research and Advocacy Center), Jakarta, 4-5 September 2002.

12.       Report of the Workshop on Increasing Quality of NGOs with Accreditation and Sertification (Laporan Lokakarya Peningkatan Kualitas NGO melalui Akreditasi dan Sertifikasi. Held by Satunama Foundation. Yogyakarta: 4-6 November 2002.

13.       Rochman. Meuthia Gani. Needs Assesment of Advocacy NGOs in a New Indonesia: Report to the Governance and Civil Society Program of the Ford Foundation. Jakarta, 2002.

14.       Rooney. Greg. “Membangun NGO yang Sehat dan Kuat, Demokratis, Transparan dan Akuntabel: Perspektif Donor.” (To Develop Strong and Healthy NGOs, Democratic, Transparent and Accountable: Donor Perspective). Paper presented on the “Seminar on the Development of Strong and Healthy NGOs, Democratic, Transparent and Accountable: Multistakeholders Perspectives.” Banjarmasin: (South Kalimantan), 14 May 2002.

15.       Sociology Laboratory, Faculty of Social Sciences University of Indonesia in cooperation with National Democratic Institute (NDI). Dinamika Koalisi Ornop (The Dynamic of NGO Coalitions). A Research Report. Jakarta: August 2002.

16.       Tulung. Freddy H. “Membangun NGO yang Kuat, Demokratis dan Transparan: Perspektif Pemerintah” (To Develop Strong, Democratic, and Transparent NGOs: Government  Perspective). Paper presented for  the “Seminar on the Development of Strong and Healthy NGOs, Democratic, Transparent and Accountable: Multistakeholders Perspectives.”  Jakarta, 17 July 2002.

17.       Zailani. Lely. “Membangun Perjuangan Terorganisir, Keadilan untuk Semua. Pengalaman Membangun Proses Kolektif Perempuan Pedesaan (The  Development of Organized Efforts: Justice for All: The Experience of Developing Collective Process of Rural Women. Paper presented in the National Workshop on Advocacy, People Empowerment and Accountability: Between Rights and Responsibilities of NGOs. Jakarta, 9-11 January 2003.

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[1] In Indonesia, the term NGO means organizations that focus their activities toward social and economic empowerment through poverty alleviation programs and policy changes through advocacy programs.  The terms CSO is conceptually wider than NGO; CSO also includes the academic community such as student organizations, universities and research agencies that function as think tanks, the media (independent newspapers, radio and television), community organization, social religious organizations and labor unions.  This paper mostly refers to NGOs.

[2] There are no accurate data on the exact number of CSOs in Indonesia however the current number is estimated to be close to 100,000 organizations.

[3] See also Paul McCarthy, “A Thousand Flowers Blooming: Indonesian Civil Society in the Post-New Order Era”, paper prepared by Civil Society Consultant of the World Bank Office in Indonesia, Ottawa/Jakarta, March 2002.

[4] During Soeharto’s rule, Indonesian NGOs began to use the name of Lembaga Swadaya Masyarakat (LSM) which means "self-reliant community development institution.”  The term NGO term was often interpreted as (especially by the government) as an Anti-government institution or against the establishment.  This was especially related to the New Order regime policy not to give room for any opposition. LSM is still commonly used now though some have changed to OrNop which is the literal translation of NGO.

[5]  The opinions were expressed for instance in a number of seminars on “Developing Strong, Healthy, Democratic, Transparent and Accountable NGOs: Multi Side Perspective” which were held in eight provincial capitals in Indonesia from May to July 2002.  Speakers from the government, private sector and Donor Agencies were invited to present their views on NGO roles.  The seminars were organized by LP3ES, a national NGO based in Jakarta.

[6]  Freddy H. Tulung (Director Politics, Communications and Information, BAPPENAS): “Developing a Strong, Democratic and Transparent NGO: Government Notes”, a paper presented in a one day seminar “Developing Strong, Healthy, Democratic, Transparent and Accountable NGOs: Multisided Perspectives: Government Record”, Jakarta, 17 July 2002

[7]  Ibid

[8] See paper presented by Greg Rooney, Civil Society Program Advisor with ACCESS AusAid who represented Donor Agencies’ perspectives in a seminar entitled “Developing Healthy and Strong, Democratic, Transparent and Accountable NGOs: Multisided Perspective, Banjarmasin, 14 May 2002.

[9] Recommendation of Workshop for Health Index of Civil Society in Indonesia organized by YAPPIKA, a civil society alliance for democracy.

[10] Rolly Aruna Damayanti, Program Officer with Mercy Corps in Indonesia, in a paper presented to represent donor perspectives in the seminar for “Developing Strong and Healthy, Democratic, Transparent and Accountable NGOs: Multisided Perspectives”, Palembang, 9 July 2002

[11] Greg Rooney

[12]  See Eka Budiana, “Corporate Social Response and Public Self Reliance”,  a paper presented in a seminar “Developing Strong and Healthy, Democratic, Transparent and Accountable NGOs: Multisided Perspective”, Banjarmasin, May 14, 2002

[13]  Immediately after the beginning of the monetary and economic crisis in Indonesia at the end of 1997, Indonesia again invited IMF to come and provide help to stabilize its monetary system and economy.

[14]  Sociology Lab., Faculty of Social and Political Science, University of Indonesia in collaboration with the National Democratic Institute (NDI), Dinamika Koalisi Ornop, Research Report, Jakarta, August 2002 page 15-16

[15]  Paul McCarthy, op.cit.

[16]  Meuthia Ganie-Rochman, Needs Assessment of Advocacy NGOs in a New Indonesia, Report to the Governance and Civil Society of the Ford Foundation, Jakarta, 2000

[17]  Among Donor Agencies interested in the issues of rights and obligations, transparency and accountability of NGOs are Ford Foundation, Partnership for Governance Reform and Tifa Foundation.

[18]  The conclusions are taken from the Report on Advocacy Workshop for Community Empowerment and Accountability: Between Rights and Responsibility of NGOs, Jakarta, 9-11 January 2003

[19]  CIVICUS is an international non-profit organization which is active in civil society development in numerous countries and carries out advocacy for monitoring of civil society. Memberships of CIVICUS consist of CSOs and individuals from many countries of the world.

[20]  There were six workshops organized, in Yogyakarta for Java Region, Palembang for Sumatra, Pontianak for Kalimantan and in Makassar for Sulawesi and Jakarta for Jakarta, Bogor and Bekasi. Each workshop was attended by around 70 participants.