Local Court of New South Wales CITATION: DPP v Hendra Rahardja [2003] NSWLC 11 JURISDICTION: Criminal PARTIES: Director of Public Prosecution Hendra Rahardja (Defendant) FILE NUMBER: PLACE OF HEARING: Central Local Court Sydney DATE OF DECISION: 09/24/1994 MAGISTRATE: Magsitrate B A Lulham CATCHWORDS: Extradition LEGISLATION CITED: Extradition Act 1988 Zoeller v Republic of Germany (1989( 23FCR 297 United States v Holt 49 FCR 501 CASES CITED: Prabowo v Republic of Indonesia (1995) 61 FCR 258 Fernandez v Government of Singapore (1971) WLR 994 Hempel v Attorney General (1987) 77 ALR 665 REPRESENTATION: Mr Hastings QC & Mr Riley for Indonesia Mr Game SC & Mr Jordan for defendant ORDERS: Order made for the issue of an Extradition Warrant Reasons for Decision 1 In this matter the Republic of Indonesia seeks a determination that Hendra Rahardja is eligible for surrender in relation to extradition offences. 2 The application is made under S.19 of the Extradition Act 1988. 3 Mr Hastings QC and Mr Riley appeared for Indonesia and Mr Game SC and Mr Jordan appeared for the respondent. 4 I heard evidence on 30 August and on 1st and 2nd September. I then adjourned the matter to 17 September to enable a transcript to be obtained and to hear oral submissions. I also received very helpful written submissions from each party. I reserved my decision and adjourned the matter to 24 September 1999 for decision. 5 I am satisfied as to the four matters required to be proved under S.19(1) of the Extradition Act 1988. These matters were not in dispute. 6 The other relevant provisions of S.19 are as follows; 2 "19. (2) For the purposes of subsection (1), the person is only eligible for surrender in relation to an extradition offence for which surrender of the person is sought by the extradition country if: (a) the supporting documents in relation to the offence have been produced to the magistrate; (b) where this Act applies in relation to the extradition country subject to any limitations, conditions, exceptions or qualifications that require the production to the magistrate of any other documents - those documents have been produced to the magistrate; (c) the magistrate is satisfied that, if the conduct of the person constituting the offence in relation to the extradition country, or equivalent conduct, had taken place in the part of Australia where the proceedings are being conducted and at the time at which the extradition request in relation to the person was received, that conduct or that equivalent conduct would have constituted an extradition offence in relation to that part of Australia; and (d) the person does not satisfy the magistrate that there are substantial grounds for believing that there is an extradition objection in relation to the offence. (3) In relation to (2) (a), supporting documents, in relation to an extradition offence, means: (a) if the offence is an offence of which the person is accused - a duly authenticated warrant issued by the extradition country for the arrest of the person for the offence, or a duly authenticated copy of such a warrant; (b) - (c) in any case: (i) a duly authenticated statement in writing setting out a description of, and the penalty applicable in respect of, the offence; and (ii) a duly authenticated statement in writing setting out the conduct constituting the offence. (4) - (5) In the proceedings, the person to whom the proceedings relate is not entitled to adduce, and the magistrate is not entitled to receive, evidence to contradict an allegation that the person has engaged in conduct constituting an extradition offence for which the surrender of the person is sought. (6) Subject to subsection (5), any document that is duly authenticated is admissible in the proceedings. (7) A document that is sought by or on behalf of an extradition country to be admitted in the proceedings is duly authenticated for the purposes of this section if: (a) it purports to be authenticated by the oath or affirmation of a witness or to be sealed with an official or public seal: (i) in any case - of the extradition country or of a Minister, Department of State or Department or officer of the Government, of the extradition country; or (ii) where the extradition country is a colony, territory or protectorate - of the person administering the Government of that country or of any person administering a Department of the Government of that country. (7A) Subsection (7) has effect in spite of any limitation, condition, exception or qualification under subsection 11 (1), (1A) or (3). (8) - (9) - I turn now to the requirements of S.19(2). S.19(2)(a) SUPPORTING DOCUMENTS 7 I am satisfied that the supporting documents as defined in 19 (3) have been produced as follows; 8 19(3)(a) A copy of a warrant for the arrest of the person for extradition offence (see Annexure A1 and A2 to Exhibit 2). 9 19(3)(c) (i) A statement in writing setting out a description of and the penalty applicable in respect of the extradition offence (see Annexures C and E of Exhibit 2). 10 19(3)(c) (ii) A statement in writing setting out the conduct constituting the offence (see Annexure B of Exhibit 2). 11 I am satisfied that the statement tendered sets out the statement of the acts or omissions by virtue of which the offences are alleged to have been committed and complies with the requirement of the section. 12 In a separate judgment given on the second day of the hearing I found the documents sought to be tendered as Exhibit 2 were duly authenticated as required by S.19(7). I set out my reasons in such judgment and I do not repeat them here. I am satisfied the documents were duly authenticated and are properly admissible in these proceedings. S.19(2)(b) TREATY DOCUMENTS 13 This section provides for the documents required by the application of Article 11 of the Treaty to be produced to the Magistrate. I am satisfied the documents required by Article 11 (2)(a) are covered by the production of the documents being Annexures A(1), A(2), B, C and E of Exhibit 2 (see above). The remaining documents required by Article 11(2) (e) and (f) are as follows; Article 11(2)(e) The text of any law relating to the limitation of legal proceedings (see Annexure D of Exhibit 2). Article 11(2)(f) As accurate a description as possible on the person sought together with any other information which may help to establish is identity and nationality - (see Annexure F, Exhibit 2). S.19(2)(C) DUAL CRIMINALITY 14 S.19(2)(C) considered with S.10(3) sets out what is generally referred to as the Dual Criminality requirement. I am satisfied that what is required is not complete identicality of offences but in substance a duality of criminality (see Zoeller v Republic of Germany (1989) 23 FCR at 297 to 300) and in United States v Holt 49 FCR 501. The issue is whether the conduct referred to in the section 19(3)(c)(ii) statement, if committed in New South Wales, would be a criminal offence with a maximum sentence of at least one year's imprisonment. There is no requirement to find an Australian offence which matches or corresponds to the Indonesian offences (see Holt at 504). 15 In substance the respondent is alleged to have caused the Bank of which he was the Principal to lend money to his family companies, which monies were used for his own purposes and in doing so falsified records and breached Indonesian banking law. The allegation is that the respondent received the benefit of approximately 400 to 500 million American Dollars, approximately 540 to 675 million Australian Dollars. 16 I am satisfied on the facts in the S.19(3)(c)(ii) document the defendant would have committed the following offence; Offence: S.1307 of the Corporations Law Penalty: Imprisonment 2 years. 17 As the defendant is alleged to have made false statements to official regulators to whom he was required to report on behalf of the Bank, it would appear he would also have breached in New South Wales the following sections; Offence: S.1308(2) Corporations Law Penalty: Imprisonment 2 years. Offence: S.1309(1) Corporation Law Penalty: Imprisonment 2 years. 18 I am of the view that the conduct referred to in S.19(3)(c)(ii) statement does contain an intention to defraud. 19 The actions alleged against the respondent infer the intent to defraud (see Prabowo v Republic of Indonesia (1995) 61 FCR 258 at pp 272 and 273. 20 I am therefore satisfied the conduct complained of by the respondent would establish the following offences; Offence: S.2326 and S.1317A Corporations Law Penalty: Imprisonment 5 years. Offence: S.158 Crimes Act Penalty: Imprisonment 5 years. Offence: S.175 Crimes Act Penalty: Imprisonment 10 years. 21 I find the conduct alleged would constitute an "Extradition Offence" if committed in New South Wales and S.19(2)(c) is satisfied. Dual Criminality is proved. 22 I am also am required to deal with a further submission put forward by Mr Game SC for the respondent. He submits that in relation to each of the alleged offences the summary of the case (Annexure B to Exhibit 2) sets out conduct amounting to multiple breaches of the law in each case. In New South Wales a charge relying on such breaches and such particulars would be bad for duplicity. Mr Game submits this circumstance renders the statement ineffective for the purposes of S.19(3)(c)(ii). He submits the statement does not comply because it does not set out the conduct constituting the offence but the conduct constituting multiple offences. In New South Wales the prosecution would be put to an election. He submits this has particular relevance when one considers the Specialty Assurance required to be given by the Extradition Country (see S.22(1)(3)(d). 23 I do not accept such submission. For me to do so would require me to investigate and obtain a knowledge of the relevant law in Indonesia. The Act does not require me to do so. I do not have to investigate the applicable law in Indonesia. I do not have to apply Australian legal principles to the S.19(3)(C)(ii) statement setting out the Conduct constituting the Offence. 24 I am satisfied the document Annexure B to Exhibit 2 does comply with the provisions of S.19(3)(C)(ii). S.19(2)(d) EXTRADITION OBJECTION 25 The defendant called four witnesses to satisfy me "that there are substantial grounds for believing that there is an extradition objection in relation to the offence" S.19(2)(d). 26 For the purposes of this case "Extradition Objection" is defined under S.7 to provide that there is an extradition objection if; "on surrender to the extradition country in respect of the extradition offence the person may be prejudiced at his or her trial or punished, detained or restricted in his or her personal liberty by reason of his or her race........" 27 In effect Mr Rahardja must satisfy me that there are substantial grounds for believing he may be prejudiced at his trial by reason of his Chinese ethnicity. 28 I accept the submission of Mr Game SC, Counsel for the respondent, that the inquiry which I am required to make requires speculation on future events as distinct from making findings of fact in relation to events in the past. Therefore, it is inappropriate to apply an inflexible standard, such as the balance of probabilities, and a lesser degree of likelihood is sufficient to establish substantial grounds for the extradition objection. That statement comes from Fernandez v Government of Singapore (1971) Weekly Law Reports p.994. Lord Diplock went on to say; "I would not quarrel with the way in which the test was stated by the Magistrate or with the alternative way in which it was expressed by the divisional Court. "A reasonable chance" "substantial grounds for thinking" and a "serious possibility"". 29 The minimum requirement of the substantial ground is that it is not trivial (Hempel v Attorney General (1987) 77 ALR at p.665). 30 In support of the extradition objection the respondent has adduced evidence from four expert witnesses; Professor Daniel Lev (Lev) Associate Professor Timothy Lindsey (Lindsey) Associate professor Spencer Zifcak (Zifcak) Associate Professor Charles Coppel (Coppel) 31 No objection was taken to the expertise of any of the four witness nor was any objection taken as to relevance. The evidence of the experts is admissible under S.79 of the Evidence Act. 32 The evidence of Professors Lev, Lindsey and Zifcak indicated that for any investigation into the practice of the Indonesian judicial system an anthropological approach was required for two reasons; 1. There is a substantial difference between the relevant statutory provisions and the way the judicial system works in practice, and 2. Judicial decisions and transcripts of proceedings are not readily available. 33 To reach their opinions they had to rely on observations made by them and conversations had by them with people working in the justice system ranging from lawyers and judges to court clerks and police. I am satisfied the evidence presented in this way is admissible. ASSOCIATE PROFESSOR CHARLES COPPEL 34 I have read carefully the evidence of Associate Professor Charles Anthony Coppel. I have read his most impressive Curriculum Vitae. I accept that he is internationally recognised as an authority on the position of the Ethnic Chinese in Indonesia. This has been his field of speciality for the past thirty years. Coppel gave interesting and impressive evidence as to the historical basis for the discrimination against Ethnic Chinese in Indonesia. He likened the position of the Ethnic Chinese during the Soekarno period as being similar to the position of the Jews in Eastern European countries or the position of Indians in East Africa or in Fiji. They were seen as a group having a distinctive middle man position which is on the one hand seen as economically strong, but on the other hand as being politically vulnerable. In the 1950's it was difficult for Ethnic Chinese to obtain certain licences and this led to what has been called the Ali Baba System in which the front man, the indigenous Indonesian known as "Ali", as a kind of stereotypical name, and the Chinese businessman standing behind called "Baba" as the other part of the partnership. He said he believed Ethnic Chinese made up 2.5% of the total population but 90% of the conglomerate. The word "conglomerate" originally referred to large businesses having diverse interests but has come to be associated almost predominantly with businesses operated by Ethnic Chinese. In the 1960's there were restrictions on Chinese festivals and Chinese religious ceremonies and in the 1960's there was a Government process of assimilation whereby Ethnic Chinese were encouraged to change their names to Indonesian ones. The respondent in these proceedings did so in 1966. He discussed the concept of "scapegoating" - wrongly blaming ethic Chinese for any problems experienced by the Government. 35 Coppel made it clear that his speciality did not cover detailed knowledge or examination of the actual legal system. He produced two extracts from a book compiled by Dr Leo Suriodinata in the nature of a "Who's Who" and on page 134 there was an entry for Hendra Rahardja and on page 183 an entry for Eddie Tansil who is the brother of Hendra Rahardja. Professor Coppel gave evidence that Mr Eddie Tansil had been put on trial in relation to a Bank Fraud and gaoled for seventeen years. He was fined 21,000 Singapore Dollars, ordered to pay 350,000,000 Singapore Dollars in compensation to the Bappindo Bank. Coppel gave evidence that subsequently reputably with the assistance of his gaolers and with a blind eye being turned by the Indonesian Government, Eddie Tansil was able to leave gaol and his whereabouts are presently unknown. 36 When asked whether he considered the respondent would receive a fair trial he replied in part; (Transcript 31/8 p.34 & 5). "It would seem to me that if an Ethnic Chinese conglomerate of the kind of Mr Rahardja were to be returned to Indonesia at the moment, it would be seen as a heaven sent opportunity by President Habibie to show that he is vigorously pursuing matters and to deflect attention from (the current Bank Bali scandal) which seems to be much closer to home." ASSOCIATE PROFESSOR TIMOTHY LINDSEY 37 The next witness called on behalf of the respondent was Professor Timothy Lindsey Associate Professor in the Faculty of Law at the University of Melbourne. I have read his impressive Curriculum Vitae. He is fluent in Indonesian. He lectures in Indonesian law in Melbourne and in the Northern Territory. He has advised various Indonesian Government Departments. He has been involved in education training with the Ministry of Justice, the Attorney General's Office, the Supreme Court, Police Force and with other Indonesian legal institutions. He spends travels to Indonesia five or six times per year. He made the following salient points which I accept; 1. To understand Indonesian law one must see how it operates in practice and not rely on what is stated in books. 2. There is no effective separation of powers and indeed the operation of the judiciary under basic law No.14 of 1970 expressly place the Supreme Court under the authority of the Minister of Justice. 3. Judges are reduced to the level of public servants. Their salary, tenure, promotions, locations in which they sit and all other aspects of their careers are ultimately determined by the Ministry of Justice. 4. It is very rare for a Judge to make a decision contrary to Government policy. 5. It is very unusual for a defendant to ever succeed and this is typically the case in matters of commercial crime or fraud. 6. Payment of bribes to judicial officers is routine. 7. The Indonesian judicial system under Soeharto can really best be described as dysfunctional. 8. There is no system of judicial precedent and it is therefore difficult to obtain copies of Court judgments. 38 Professor Lindsey gave evidence in relation to the Eddie Tansil trial. He indicated that Eddie Tansil appealed the term of imprisonment of seventeen years and on appeal it was increased to twenty years and whilst in his view other Indonesian nationals were involved in the scandal they were not tried. 39 When asked if he believed that Hendra Rahardja would receive a fair trial if returned to Indonesia, he said he did not believe he would receive a fair trial and gave the following reasons; 1. Political interference in the trial. 2. Widespread corruption amongst judicial officers. 3. Defendants very rarely win a case involving the State. 4. This is particularly true in the case of an Ethnic Chinese person. 40 He indicated that particularly at present the Habibie Indonesian Government would be anxious to have the respondent Hendra Rahardja returned to Indonesia for trial, as this would take the pressure off the present Bank Bali scandal. 41 When giving details as to what would happen in a criminal trial involving Rahardja, he made reference to the anti subversion trials. He gave the following evidence; (Transcript 31.8.99 p59.60 33 to 35) "Q. Do you believe that there is any chance that Mr Rahardja would receive an acquittal at his trial? A. No I don't. Q. Do you believe that the penalty is likely to be affected by his, that is imposed, is likely to be affected by his Chinese ethnicity? A. Yes It would be politically very convenient for the current Government for a conglomerate to receive a heavy sentence as a way of demonstrating that it is moving against a perceived corruption and in reality the Chinese conglomerate is a soft target in such circumstances." ASSOCIATE PROFESSOR SPENCER MICHAEL ZIFCAK 42 The next expert called on behalf of the respondent was Associate Professor of Law and Legal Studies Spencer Michael Zifcak. I have read his Curriculum Vitae. He has done much impressive work particularly with and for the International Commission of Jurists. He has recently prepared a report entitled "Rulers Law Democracy Judiciary and Liberty in Indonesia". The report has been completed but has not been published as the International Commission of Jurists is awaiting comment from the Indonesian Government. Professor Zifcak indicated he would give his own observations based on that report. He has investigated and observed anti subversion trials in Indonesia since 1997 and prepared a report in 1998. I have read the report which appears as a chapter in a book published by Professor Lindsey. He particularly observed the trials of Dr Muchtar Pakpahan and of Professor Sri Bitang. 43 The chapter entitled "But a Shadow of Justice Political Trials in Indonesia" in Professor Lindsey's book was tendered as Exhibit 9. The report on the Anti Subversion trial in Indonesia dated March 1998 was tendered as Exhibit 10. 44 There can be no doubt that the evidence and reports of Professor Zifcak confirm the evidence given by Professor Lindsey as follows; 1. There is no separation of powers in Indonesia. 2. The judiciary is controlled by, and answerable to, the Minister for Justice. 3. The judiciary is corrupt. 4. The procedures adopted for the hearing of matters are contradictive to accused receiving a fair trial. 5. The Courts and Judges are subservient to the Government. PROFESSOR DANIEL LEV 45 The final witness called on behalf of the respondent was Daniel Lev a retired Professor of Political Science from the University of California in Berkeley. I have read his most impressive Curriculum Vitae. He has studied the political situation in Indonesia for forty years. He lectures in comparative law and has a particular interest in understanding the connection between legal institutions and political institutions and the way in which authority is transferred from one to the other or not. His approach was primarily anthropological. He said he has observed hundreds of trials in Indonesia over the years and has interviewed in the order of four hundred Judges. His evidence was that under any circumstances it is fairly difficult to guarantee a fair trial in Indonesian Courts. He said Ethnic Chinese are quite easily used in effect as sacrificial lambs. The prospects of Mr Rahardja before the Court would be bad. He said his prospects would be considerably improved if he was an indigenous Indonesian. 46 Professor Lev gave similar evidence in relation to the absence of separation of powers, the control of the judiciary by the Government and corruption amongst judicial officers and court attendants. 47 Professor Lev indicated that there is prejudice and discrimination against Ethnic Chinese at an institutionalised level on three bases; 1. It is taken for granted that Ethnic Chinese can easily be extorted. 2. Many Judges have the same prejudice as the general public against Ethnic Chinese who are believed to control the economy and who have made large amounts of money. 3. Any decision against an Ethnic Chinese would be popular in the general community. 48 Professor Lev stated that in Mr Rahardja's case even if the evidence was overwhelmingly in favour of an acquittal, he would doubt very much whether that would be possible. 49 In this summary of the evidence of the experts I have of course only highlighted certain parts of their evidence. Mr Game in his oral submission submitted that I should not seize upon single pieces of evidence from the witnesses but I should look at the combined effect of their evidence. He submitted that because of the nature of the Indonesian legal system and the absence of formal Court reporting it is only possible to obtain an understanding of the position in Indonesian adopting the anthropological approach of the witnesses, particularly Professors Lindsey and Lev. 50 I have already indicated I have no difficulty in making the following findings on the basis of the evidence of the four experts; 1. The justice system in Indonesia is dysfunctional. 2. Corruption is rife amongst judicial officers. 3. The judicial officers are controlled by the Minister of Justice and there is no separate of powers. 4. Governmental interference occurs in most cases. 5. It is extremely rare for a defendant in any case against the State to be successful. 51 However, proof that the Indonesian justice system is in a deplorable state will not, of itself, prove the existence of any extradition objection. I accept that the defendant will not receive a fair trial. The criticisms which Professor Zifcak so clearly and properly made in his article "But a Shadow of Justice Political Trials in Indonesia" will sadly almost certainly apply to any trial which Hendra Rahardja may face. That does not create an extradition objection. The criticisms which Professor Zifcak made apply to each and every trial in Indonesia. 52 The respondent must show that he may be prejudiced at his trial or punished by reason of his race. 53 In my view much of the evidence called on behalf of the respondent was not directed to the all important question of prejudice by reason of race. The evidence of Professor Zifcak did not go to the question of "prejudice on the basis of race" at all. The two articles which were tendered during his evidence do not refer to any problems based on race and indeed refer only to trials of indigenous Indonesians. 54 Professor Coppel gave interesting and informative evidence as to the historical basis for discrimination by the Indonesian Government at various times towards Ethnic Chinese. He discussed concepts such as the "Ali Baba System" "Conglomerates" and "Scapegoating". 55 I am satisfied on his evidence that from time to time there has been institutionalised discrimination against the Ethnic Chinese in Indonesia. I am satisfied there is general hostility and jealously by indigenous Indonesians towards Ethnic Chinese. They are largely resented because they are seen to have been so successful. However Professor Coppel acknowledged that he did not claim to have any particular speciality in Indonesian law and could give no evidence of any past cases in which an Ethnic Chinese was prejudiced because of his race. 56 The two witnesses providing the most support to the respondent's case were Professor Lindsey and Professor Lev. 57 However, even in relation to their evidence there is, in my view, a fundamental problem. Their opinions appeared to be predicated on the following hypothesis; 1. There is hostility towards Ethnic Chinese in Indonesia. 2. Because the Ethic Chinese are so unpopular it is in the Government's political interest to blame or scapegoat Ethic Chinese for particular problems. 3. The Ethnic Chinese are seen as soft targets and vulnerable. 4. The judiciary is corrupt and controlled by the Government. 5. The judiciary knowing the Government's wishes being anxious to please the Government will be prejudiced against Mr Rahardja and he will thus be prejudiced because of his race in any trial in Indonesia. 58 The problem in the argument is that not one of the four witnesses, notwithstanding their undoubted knowledge and expertise, could come up with one case which would support the proposition that an Ethnic Chinese had been prejudiced at his trial because of his race. 59 There is no evidence before me which would allow me to come to the view that Mr Rahardja's brother Eddie Tansil was prejudiced either in relation to his trial or his punishment or his liberty because of his race. Indeed his race did not appear to adversely affect his "escape" from prison at all. 60 If the practice of "scapegoating" Ethnic Chinese is so widespread one would have expected there to have been numerous examples of Chinese Ethnics before the Court and prejudiced because of their race. The respondent's experts could not point to one. 61 There was no evidence from the respondent himself or from any member of his family as to any discrimination suffered by the respondent in his business dealings in Indonesia. 62 I was not impressed with the evidence of Professor Lev. I gained the understanding from his evidence that he was not aware of the amounts involved in the alleged transfer of funds from Mr Rahardja's Bank to his companies and himself. He seemed to have no idea that the amount involved was between 540 to 675 million Australian Dollars. Professor Lev sought to argue that the huge interest of the Indonesian Government and of the angry Indonesians in Mr Rahardja's case was based on the fact that Mr Rahardja is an Ethnic Chinese. I do not accept that evidence. I am of the view that it is the size of the alleged fraud which not unnaturally has created the enormous interest. As Professor Lindsey indicated it is probably the largest corporate fraud in recent Indonesian history. In my view Professor Lev sought to downplay this aspect of the matter. 63 The respondent has not satisfied me that there are substantial grounds for believing that he may be prejudiced at his trial or punished by reason of his race. 64 I indicated previously that I was satisfied in relation to the other matters required to be proved under S.19(2). 65 I therefore determine that Hendra Rahardja is eligible for surrender to the Republic of Indonesia in relation to the Extradition Offences set out in S.19(3)(c)(i) Document. I propose to issue the warrant and make the necessary recordings as required by S.19 of the Extradition Act. I inform Hendra Rahardja that he may, within fifteen (15) days from today's date, seek a review of the order which I am making. He has the right to seek such review under S.21(1) of the Extradition Act 1988. 66 I will sign the necessary warrants and make any further orders which are required. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.