Corruption is said to be ingrained at all levels in Indonesia. Companies cite demands for irregular fees to obtain required permits or licenses as well as the awarding of government contracts and concessions based on personal relationships, according to the study.

The most corrupt are the police, the legislature, the judicial institutions, and political parties. However, foreign investment is rising in Indonesia but corruption, red tape and an uncertain legal environment pose as major challenges for conducting business in the country.

Many companies are skeptical about concessions offered on government contracts, permits or licences. About 50 per cent of companies report of local level corruption. Companies report that they pay bribes of nearly 40 per cent of their taxes.

Image: Activists display uniforms which they want Indonesians accused of corruption to wear when they appear in court during a protest outside Anti-Corruption Agency in Jakarta. | Photograph: Stringer/Reuters.

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