INDONESIAN SUPREME COURT RULES DECISIVELY IN FAVOR

UNCLAS JAKARTA 000692 SENSITIVE SIPDIS DEPT FOR EAP, EAP/MTS NSC FOR E.PHU E.O. 12958: N/A TAGS: ECON ID KJUS PGOV SUBJECT: INDONESIAN SUPREME COURT RULES DECISIVELY IN FAVOR OF TIME MAGAZINE REF: A. A) 08 JAKARTA 377 - TIME FILES JUDICIAL REVIEW ¶B. B) 07 JAKARTA 2969 - TIME JUDICIAL REVIEW UPDATE ¶C. C) 07 JAKARTA 2525 - SC DECISION AGAINST TIME ¶1. (SBU) Summary: The Indonesian Supreme Court ruled in favor of TIME magazine in the $110 million TIME-Suharto libel case on April 16. The Supreme Court said there was no violation of the press code of ethics, applying press law as opposed to its August 2007 civil law decision. This Supreme Court decision is the final step in a nearly ten-year legal battle. The Court's decision is a positive marker for press freedom, an improvement in the credibility of the judicial system, and a qualified positive sign for the investment climate. End Summary. TEN-YEAR BATTLE ENDS IN TIME'S FAVOR -------------- ¶2. (SBU) Former President Suharto filed a lawsuit against TIME after a May 1999 TIME front-page story claimed that the Suharto family amassed billions of dollars through corrupt activities. District and appellate courts ruled in TIME's favor in 2000 and 2001, but the Supreme Court ruled in Suharto's favor in August 2007 (reftels). The Court applied civil law and awarded Suharto $110 million on libel charges. The April 16 decision overturned the previous Supreme Court decision on procedural grounds, basing its final decision on press law. POSITIVE STEP FOR PRESS FREEDOM -------------- ¶3. (SBU) The Supreme Court's decision strengthens press freedom in Indonesia, according to media and civil society contacts. The Supreme Court found no violation of the press code of ethics, according to one of the three Supreme Court Justices who decided the judicial review. The Supreme Court's position on press freedom is improving, according to Indonesian weekly TEMPO senior editor Bambang Harimurti. Supreme Court representatives met with Indonesian Press Council leadership two days ago and in December 2008 to discuss press freedom, including the TIME case. The Supreme Court issued an instruction in December 2008 to all courts that Indonesian Press Council members should be expert witnesses in all press-related cases. The December 2008 instruction and April 16 decision bolster the Court's protection of press freedom. CREDIBILITY OF THE COURTS RISING -------------- ¶4. (SBU) The Supreme Court decision is a positive step in improving the credibility of Indonesian courts, according to business and legal contacts. The November 2008 retirement of German Hoediarto - the lead justice in the panel that ruled against Time in August 2007 - may have paved the way for the Supreme Court's final decision. Overall, the Court's credibility is also improving due to institutional reforms (e.g., code of conduct, transparency decree),the retirements of other notorious judges, and the Court's fears of Corruption Eradication Commission investigations. INVESTMENT CLIMATE: THORN REMOVED, BUT STILL SCARRED -------------- -------------- ¶5. (SBU) This decision is a qualified success in improving foreign investors' perceptions of the Indonesian investment climate. Top Indonesian business contacts warned that the decision does not signify a fundamental change as business and political elites still can influence judicial decisions. TIME's prolonged legal battles damaged investors' confidence in the Indonesian judicial system, according to these business contacts. And this final verdict is a welcomed, but much delayed success. HUME