To identify problems with the Open Ownership (OO) implementation in a country and improve the Data Standard, we need to understand how the user utilizes the Beneficial Ownership (BO) data, especially users from the closely regulated sector. The problem is, to map that process, we need to be in a certain state, and specifically for Indonesia, we need to pass several steps before achieving that state.
Insight from TI-I (Transparency International – Indonesia), even though the topic has been rolling for years, the awareness level is not high. When they run campaigns, they still have to explain what BO is and why it matters. At the national level, Indonesian companies are at the stage where they know they have to report their beneficiaries and comply with the regulation, but due to the unclear penalty and the discrepancy among different sectors, data from Stranas PK Indonesia (Strategi Nasional Pencegahan Korupsi / National Strategy on Corruption Prevention) shows only 4% out of 200.000 companies have reported.
For those who already know about the BO and want to use it, the government’s data sources are unreliable. Some organizations/corporates (including state corporations) choose to use a third party, a foreign private company that claimed has good intelligence service for collecting valid databases that will only disclose specific data to its client. To get the clean data along with the sharp analysis, the clients need to pay around US$2000 (per one due diligence of a company). Companies who can afford it are perceived as a reasonable price to pay, a better choice than collecting and processing data by themselves.
So, if we want to achieve the desired state and map BO data utilization, things to do are:
- Raise awareness about the issue. We can probably change our approach to users by not emphasizing the Open Ownership term but start with a discussion on how they do their partner companies’ due diligence.
- Improve law/regulation (incl. risk and penalty). In 2019, this BO issue became one of the action focuses on Stranas PK.
- Increase the number of companies that comply.
- Train users on how to use the available BO data.
PS: The writer is a former public policy specialist for national data portal and School of Data fellow for Open Contracting. This note is the English version of her blog post published in hanirosidaini.wordpress.com in 2019.