Conflict of Interest (7)

Before we move on to our main topic, let me tell you:

"Some Boy Scouts from the city were on a camping trip. The mosquitoes were so fierce, the boys had to hide under their blankets to avoid being bitten. Then one of the scouts saw some lightning bugs and said to his friend, 'We might as well give up. They’re coming after us with flashlights.'" 

Public scepticism regarding Universitas Gadjah Mada’s (UGM) statements about President Jokowi’s alumni status can be logically explained through the framework of conflict of interest outlined by Davis & Stark in Conflict of Interest in the Professions (2001). According to the authors, conflict of interest arises when professional or institutional duties clash with personal, political, or organisational incentives, potentially undermining objectivity and ethical responsibility. In the context of UGM, the university’s dual role as an academic authority and a politically connected institution places it in a position where such conflicts are structurally probable.

Firstly, UGM has an ethical obligation to maintain accurate academic records and uphold transparency. However, as an institution with high visibility and numerous high-profile alumni, including the President, it simultaneously faces strong incentives to preserve its reputation, avoid public controversy, and protect institutional authority. Davis & Stark describe this situation as “institutional loyalty conflict,” whereby the interests of the institution may override the impartial application of professional standards. The public’s perception of bias is therefore understandable; if UGM communicates in a manner that appears defensive or selective, citizens may rationally infer that organisational interests are influencing factual disclosure. We can witness the appearance of the UGM Chancellor providing clarification, again and again, only with narrative but without verifiable evidence.

Secondly, the entanglement of universities with political structures heightens the probability of perceived bias. In Indonesia, universities like UGM interact closely with government bodies, which may include funding, regulatory compliance, and recognition in national policy spheres. Such entanglement aligns with Davis & Stark’s notion of structural conflict of interest: the organisation’s obligation to truth and objectivity can be compromised, not necessarily by malicious intent, but through systemic pressures that favour political alignment over independent verification. Public scepticism emerges naturally under these conditions, as observers are aware that statements issued by the university might be influenced by its political and social entanglements rather than purely academic considerations.

Thirdly, bureaucratic inertia and internal governance dynamics reinforce public doubt. Even in the absence of deliberate falsification, the complex hierarchy and procedural opacity within large institutions can delay, obscure, or filter the release of factual information. Davis & Stark note that structural conflict of interest is often subtle: it does not require intentional wrongdoing, but manifests in decisions that may unintentionally prioritise institutional survival over full transparency. The viral controversy around LISA AI and Jokowi’s alleged alumni status is a prime example of how such structural factors, combined with heightened public scrutiny, create fertile ground for doubt and speculation.

In conclusion, from the perspective of Davis & Stark’s theoretical framework, the public’s scepticism towards UGM’s statements is both rational and expected. The intersection of institutional loyalty, political entanglement, and bureaucratic complexity generates conditions in which impartial communication of facts may be compromised. Hence, questioning the reliability of UGM’s statements does not necessarily indicate irrationality or conspiracy-mindedness; rather, it reflects a reasoned response to a situation structurally prone to conflicts of interest.

Conflict of interest, commonly abbreviated as COI, occurs when an individual or institution has competing interests that may compromise their professional judgment or the impartiality of their actions. In the academic context, COI arises when universities, faculty members, or administrative bodies face pressures—political, financial, or reputational—that conflict with their duty to maintain objectivity, transparency, and ethical integrity. Davis & Stark (2001) highlight that structural COI in academic institutions does not necessarily imply intentional wrongdoing; rather, it manifests when institutional priorities inadvertently influence decisions, communications, or the handling of information.

The case of LISA AI, the artificial intelligence system deployed by Universitas Gadjah Mada (UGM), illustrates how such conflicts of interest can surface in practice. AI systems rely on the datasets, programming, and supervision provided by the institution. In an environment where COI exists, these factors may be influenced—consciously or unconsciously—by institutional pressures. For example, if the university has a vested interest in protecting the reputation of high-profile alumni, staff may inadvertently shape datasets, refine prompts, or interpret AI outputs in ways that align with institutional priorities rather than purely objective truth.

Moreover, political entanglements heighten the risk that AI outputs are perceived as biased or controversial. UGM’s position as a prestigious academic institution intertwined with national politics creates systemic pressures for narratives to remain consistent with political expectations. In such a context, even an AI system designed to answer questions factually may produce outputs that are incomplete, ambiguous, or seemingly defensive, simply because the underlying data or oversight reflects the university’s institutional priorities.

Bureaucratic complexity further compounds the issue. Large academic institutions often feature hierarchical decision-making and multi-layered approval processes. In the LISA case, outputs that are released publicly may be filtered or modified through these layers, either intentionally to avoid controversy or unintentionally due to procedural norms. Davis & Stark note that structural COI often manifests subtly: outputs or decisions may appear impartial on the surface but are shaped by underlying institutional incentives.

Finally, public scrutiny magnifies the perception of COI. When a high-profile figure like President Jokowi is involved, citizens naturally examine any statements or AI-generated outputs closely. Any ambiguity, inconsistency, or selective disclosure is interpreted as evidence of bias, reinforcing the perception that institutional interests—rather than objective truth—dictate communication. The LISA AI controversy is therefore a textbook example of how structural conflicts of interest in academia can interact with technology and public perception to create highly contested narratives.

In conclusion, COI in academia is a structural phenomenon that can influence both human and AI-mediated outputs. The LISA case demonstrates that even well-intentioned systems can reflect institutional pressures. Understanding COI, its manifestations, and its effects on perception is essential to evaluating controversies in academic settings, particularly when high-profile stakeholders and politically sensitive issues are involved.

The question is, is UGM in a position of structural conflict of interest? The question of whether Universitas Gadjah Mada (UGM) is in a position of structural conflict of interest requires careful examination from an institutional and political perspective. Conflict of interest, as defined in Conflict of Interest in the Professions (Davis & Stark, 2001), arises when an organisation’s institutional goals are at odds with its professional or ethical duties, particularly when external pressures influence internal decision-making. In the case of UGM, the university serves both as a centre of academic excellence and as a highly visible national institution whose alumni include high-profile political figures, such as the President of Indonesia.

The dual role of UGM as a guardian of academic integrity and a stakeholder in national politics places it in a structurally sensitive position. On the one hand, the university has an ethical duty to maintain objective academic records and uphold the principles of transparency. On the other hand, it has an institutional incentive to protect its reputation, safeguard relationships with government authorities, and maintain influence in national policy networks. These dual incentives can generate what the literature describes as “institutional loyalty conflicts,” where the preservation of organisational prestige may overshadow the impartial dissemination of facts.

Furthermore, the political entanglement of higher education institutions in Indonesia exacerbates the structural conflict of interest. UGM’s relationship with the state is not merely symbolic; it encompasses funding, regulation, and political recognition, which may implicitly pressure the university to align its narratives with national leadership. Such entanglements create a potential environment for biased reporting, selective disclosure of academic records, and cautious communication that prioritises institutional stability over factual transparency.

The viral claims regarding LISA AI and the alleged status of President Jokowi exemplify how these structural pressures manifest in public controversy. Whether the claims are accurate or fabricated, the university’s response—perceived by some as defensive or incomplete—can be interpreted through the lens of structural conflict of interest. According to Davis & Stark, an institution in this position may not intentionally falsify records, but the combination of institutional reputation, political entanglement, and bureaucratic inertia can lead to decisions and communications that obscure the objective truth.

In conclusion, UGM’s position demonstrates several indicators of structural conflict of interest. The intersection of academic duty, institutional reputation, and political entanglement creates a landscape where public scepticism is rational. From a governance and ethics standpoint, it is reasonable for stakeholders to question whether the university’s communications fully reflect objective academic realities, particularly in matters involving high-profile political alumni.

A structural conflict of interest within a university occurs when institutional obligations, incentives, and political relationships intertwine in ways that compromise, or appear to compromise, academic neutrality. If Universitas Gadjah Mada, as one of Indonesia’s most reputable institutions, is perceived to operate under such a conflict, the impact inevitably extends far beyond the confines of its campus.

Public trust forms the moral foundation on which the authority of higher-education institutions rests. When a university with UGM’s national standing is suspected of lacking independence in politically sensitive matters, this trust begins to erode. As trust collapses, the credibility of scholarly judgement—whether relating to academic records, research output, or public statements—becomes vulnerable to doubt.

The erosion of trust does not remain confined to a single university. UGM’s prestige and symbolic status mean that any perceived deviation from impartiality is generalised across the sector. Other institutions, especially those with fewer resources or weaker governance structures, are assumed to be even more susceptible to external influence.

A structural COI also sets a dangerous precedent for governmental or political interference in academia. If a leading institution is perceived to adjust its communication or administrative conduct in response to political sensitivities, it normalises the expectation that academic institutions should align themselves with state narratives rather than objective inquiry.

Such normalisation threatens the independence of academic administration. Even routine matters—such as the verification of student records, oversight of faculty appointments, or evaluation of research projects—come to be viewed through a political lens. What should function as neutral administrative procedures become sites of political signalling.

Over time, this politicisation undermines institutional legitimacy. Degree certificates, research reports, and public statements lose their standing as products of disinterested academic labour. International partners may begin to question the reliability of academic credentials issued by Indonesian institutions, complicating global collaboration and mobility.

The presence of structural COI may also generate organisational behaviours shaped by fear rather than scholarly commitment. University leaders may prioritise political safety over academic integrity, adopting risk-averse approaches to public communication, research approval, and institutional governance.

These pressures can permeate academic culture itself. Scholars may self-censor, avoiding subjects deemed “too sensitive,” not because of explicit censorship but because the institutional environment implicitly discourages open criticism. Such intellectual caution stifles debate, innovation, and the pursuit of truth.

The broader research ecosystem is equally affected. Funding decisions, research priorities, and the dissemination of findings may increasingly reflect political considerations. This shift disrupts the essential logic of scientific inquiry, which depends upon methodological autonomy and a culture that rewards intellectual honesty.

Structural COI also undermines the development of emerging technologies within academia. The controversy surrounding UGM’s LISA AI system illustrates the risk: when data governance and institutional oversight are shaped by political incentives, AI outputs become objects of suspicion rather than tools for advancing knowledge.

A compromised AI ecosystem discourages researchers from pursuing ambitious technological projects within Indonesia’s universities. When public trust in academic technology diminishes, so too does the willingness of policy-makers and private partners to support innovative research, thereby weakening national competitiveness.

The cumulative effect of these dynamics contributes to what scholars describe as “integrity drain.” Talented academics may leave the institution—or the country altogether—in search of environments where scholarly independence is protected. Brain drain, once initiated, becomes a self-reinforcing cycle that drains the intellectual strength of the nation.

Beyond academia, structural COI has profound implications for Indonesia’s democratic health. Universities traditionally serve as guardians of critical inquiry, fostering an informed citizenry capable of questioning authority. When universities lose their autonomy, society loses one of its most vital sources of democratic resilience.

If this condition continues unaddressed, public cynicism toward educational institutions may harden into a broader distrust of expert knowledge. Education risks being treated not as a public good but as a political commodity, eroding the quality of national discourse.

The presence of a structural conflict of interest at UGM, or even the widespread perception of one, threatens to weaken Indonesia’s entire higher-education ecosystem. It imperils academic independence, degrades public faith, constrains technological innovation, and undermines democratic culture. To restore integrity, Indonesia must reinforce governance structures that insulate universities from political pressures, ensuring that higher education remains a domain of truth rather than expedience.

In order to minimise academic conflicts of interest, the reforms suggested by Davis and Stark in Conflict of Interest in the Professions must be understood not as a list of technical fixes, but as a reconfiguration of the moral, institutional, and structural environment in which universities operate. They argue that academic institutions must first recognise that conflicts of interest are not primarily matters of personal virtue or individual wrongdoing, but consequences of institutional arrangements in which incentives and loyalties are misaligned. A university that hopes to preserve its intellectual legitimacy must therefore commit itself to transparent systems of disclosure, so that every financial, political, and institutional relationship that might compromise judgment becomes openly visible. Without this form of structural honesty, no academic environment can credibly claim independence.

The independence of universities also depends upon building robust boundaries between academic decision-making and external political or commercial interests. Davis and Stark insist that a profession loses its integrity the moment it allows the judgement of experts to be subordinated to political pressures or corporate expectations. The academic community must therefore construct what one might call institutional firewalls—organisational barriers that ensure decisions of scholarly consequence are insulated from the demands of governments, sponsors, or other centres of power. These firewalls are not merely bureaucratic devices; they are ethical infrastructures designed to ensure that academic truth is not reshaped by external agendas.

To strengthen the credibility of these boundaries, universities must also reduce their overdependence on external funding streams that shape research outputs. When a university relies too heavily on government contracts or industry partnerships, it becomes structurally vulnerable to the very pressures that generate conflicts of interest. Davis and Stark therefore encourage universities to diversify their sources of support, not to reject external collaboration, but to ensure that no single funding relationship becomes powerful enough to shape the direction of research or distort scholarly inquiry. A financially pluralistic institution is far better able to maintain intellectual independence.

Yet independence is not the only virtue required; oversight must be independent as well. Davis and Stark repeatedly warn that institutions cannot credibly police their own conflicts if the bodies responsible for enforcement remain subordinate to the same leaders whose interests may be implicated. It is therefore essential for universities to establish ethical oversight bodies that are structurally independent from the rectorate or senior leadership. Such bodies may include external scholars, ethicists, and public representatives, thereby ensuring that investigations into conflicts of interest are conducted with impartiality and authority.

Alongside the institutional reforms, universities must confront the problem of role conflict—the situation in which academic leaders or researchers occupy multiple positions that carry divergent loyalties. Davis and Stark emphasise that conflicts of interest often arise not from corruption, but from the ordinary complexities of professional life, in which individuals simultaneously serve as scholars, consultants, advisers, executives, or political actors. Universities should therefore enforce clear limits on the accumulation of roles that create competing obligations, particularly when those roles involve decisions that affect academic judgment or public credibility.

A related challenge lies in the integrity of academic assessments themselves. When universities become concerned with protecting their public image, they may unintentionally skew evaluations, research findings, or public statements to preserve institutional prestige. Davis and Stark remind us that the legitimacy of academic professions depends upon the preservation of professional standards above institutional loyalty. As such, universities must implement peer review processes, independent evaluation panels, and transparent methodological audits to ensure that scholarly assessments are not distorted by reputational concerns.

No reform will succeed if academic voices are silenced. Davis argues persuasively that a profession can only maintain its ethical autonomy when its practitioners are free to speak, critique, and dissent without fear of retaliation. Universities must therefore develop strong protections for academic freedom, ensuring that scholars who raise ethical concerns or challenge institutional decisions are supported rather than punished. Without such safeguards, conflicts of interest will flourish unnoticed because those aware of them will feel unsafe to speak.

For reforms to have a lasting impact, decision-making in universities must be guided not by political strategy or institutional self-preservation but by professional norms. As Stark notes, the authority of a profession rests upon its capacity to make judgments based on disciplinary knowledge rather than external power. Universities must therefore embed procedural frameworks that mandate professional criteria in every decision that affects research, public communication, or the academic standing of individuals. Such frameworks protect both the process and the integrity of academic governance. 

Transparency must complement these standards. Conflicts of interest thrive where institutional opacity prevents public scrutiny. Universities must therefore adopt practices of radical openness, publishing methodological details, decision-making processes, advisory membership lists, and other structural information relevant to potential conflicts. This transparency provides the public with the means to evaluate institutional credibility and reduces the space in which suspicions or misinformation can grow.

Finally, Davis and Stark caution that structural safeguards alone are insufficient unless accompanied by a cultural shift. Universities must cultivate literacy in conflicts of interest among students, scholars, and administrators, ensuring that members of the academic community understand the ethical dimensions of their professional roles. Through training, open discussion, and continuous reflection, the institution can foster a culture in which integrity is not merely enforced but internalised. Only through such a cultural transformation can academic professions hope to maintain the independence upon which their social authority ultimately depends.

[Part 8]
[Part 6]

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Conflict of Interest (6)

If Indonesia is publicly committed to advocating for Palestinian self-determination in the face of Israeli Zionist aggression, then the sudden decision of an Indonesian prominent religious organisation’s chairman to invite a Zionist speaker—especially one he claims as a personal friend—would inevitably provoke a wave of moral bewilderment and political disquiet. Such an act would appear to undermine Indonesia’s long-standing diplomatic stance, not merely as a foreign-policy doctrine but as a moral position rooted in its constitutional ethos of opposing colonialism in all its forms. It would give the unsettling impression that private relationships are being placed above collective national principles, or worse, that an individual’s personal networks are silently reshaping the political and ethical commitments of an entire community.

In the public eye, this gesture would likely be read as a form of soft normalisation, a quiet attempt to smuggle ideological accommodation through the back door under the guise of dialogue or intellectual exchange. It would also raise deeper questions about whether certain elites feel increasingly detached from the sentiments of ordinary Indonesian citizens, whose solidarity with Palestine is one of the most consistently unifying positions in the nation’s contemporary political culture. The chairman may argue that dialogue is necessary or that hearing from “the other side” is intellectually healthy, but at a time of ongoing violence, dispossession, and humanitarian devastation in Gaza, such reasoning would appear unbearably tone-deaf.

The episode would be perceived not simply as a misjudgement but as a symbolic fracture in the moral coherence of national solidarity. It would signal that, even within institutions traditionally expected to uphold ethical clarity, personal loyalties and private ambitions can obscure the larger historical struggle Indonesia claims to champion. In that sense, the controversy would reveal more about the fragility of elite integrity than about geopolitical complexity.

Socially, the incident would accelerate a sense of cognitive dissonance among ordinary Indonesians who have long regarded the Palestinian struggle as an unquestionable moral duty rather than a distant diplomatic issue. It would fracture the shared emotional landscape that unites communities across class, region, and political background. The contradiction between elite behaviour and popular sentiment would fuel discussions in neighbourhood gatherings, religious study circles, and social media timelines, producing a wave of suspicion about whether certain powerholders have begun quietly abandoning the moral compass that has guided Indonesia’s international identity for decades.

Media framing would almost certainly amplify these tensions. Independent outlets would portray the event as a shocking breach of ethical consistency, highlighting how deeply disconnected elite decision-making can become from public conscience. More establishment-leaning media might opt for a softer narrative—perhaps emphasising “dialogue” or “intellectual exchange”—but the unmistakable undercurrent of controversy would still dominate headlines. Social media, on the other hand, would erupt into polarised interpretations: some would denounce the chairman as betraying national solidarity, while others, usually aligned with elite interests, might attempt to normalise the episode with technocratic talking points about “engagement” or “balanced perspectives”.

Across Indonesia’s political spectrum, reactions would likely reveal deeper ideological contours. Islamic organisations with strong pro-Palestinian histories would condemn the move as a moral aberration. Nationalist groups would frame it as a threat to Indonesia’s foundational anti-colonial identity. Progressive activists would interpret it as another example of elite hypocrisy in a political culture increasingly shaped by patronage, convenience, and personal networks. Even conservative factions, which sometimes avoid direct foreign-policy engagement, would find themselves compelled to distance their constituencies from the perceived betrayal.

The implications for the Indonesian President’s diplomatic efforts to champion Palestinian independence would be equally significant. Although the invitation would not represent an official government act, it would create the illusion of internal incoherence, as though parts of Indonesia’s influential civil ecosystem were drifting out of alignment with the President’s foreign-policy moral framework. This perception could weaken Indonesia’s credibility abroad, especially in the eyes of Middle Eastern partners who rely on Indonesia as a steadfast pro-Palestinian voice. Domestically, it might also force the President into the uncomfortable position of having to reiterate or even harden his stance, simply to reassure the public that the nation’s moral direction remains intact. In essence, the controversy would expose how fragile national solidarity becomes when private friendships and elite ego intersect with historical struggles that demand unwavering commitment.

From a political-strategic standpoint, rivals would immediately recognise the chairman’s decision as a ripe opportunity to weaken both his personal legitimacy and the broader moral authority of the organisation he leads. Opposition figures could construct a narrative portraying him as an unreliable custodian of Indonesia’s long-standing solidarity with Palestine, subtly implying that he is vulnerable to foreign ideological influence or driven by egoistic motivations disguised as intellectual openness. Political adversaries would not need to exaggerate; the emotional weight of the issue itself would magnify their criticism. This controversy could thus be weaponised to question not only his judgement but also his loyalty to the values that bind Indonesian society.

In the long term, the organisation he represents would face reputational turbulence. Civil society groups in Indonesia operate on moral capital as much as institutional structure, and once that moral capital is compromised, rebuilding public trust becomes an arduous task. Members may become internally divided, with younger activists demanding accountability while older elites attempt to downplay the incident. Over time, this fracture could erode the organisation’s influence, especially in moments when the nation seeks unified religious or moral leadership. Donors, partner institutions, and community networks might also become hesitant to associate themselves with an organisation perceived as ideologically inconsistent.

As for the Palestinian reaction, it would likely be shaped by a combination of appreciation for Indonesia’s decades-long support and concern about the symbolism of the incident. Palestinian diplomats and civil society figures tend to be acutely aware of how global narratives affect their struggle, so even a small gesture that appears to soften Indonesia’s stance could be received with disappointment. They may respond diplomatically—expressing gratitude for Indonesia’s unwavering support while subtly emphasising the need for continued clarity and solidarity. At the societal level, Palestinian activists and intellectuals might privately question why a country so consistently committed to their cause would permit such an ideologically charged invitation. The incident could thus create a faint, though not irreparable, sense of ambivalence about Indonesia’s moral steadfastness.

Ultimately, the episode would become a multi-layered cautionary tale about the fragility of moral authority in political and religious institutions. It shows how one individual’s personal choices can ripple outward, affecting domestic political alignments, organisational credibility, and even the sentiments of a people engaged in a decades-long fight for liberation.

From the perspective offered by Conflict of Interest in the Professions, the incident involving a religious organisation’s chairman inviting a Zionist speaker fits squarely within the broader definition of conflict of interest that Davis and Stark articulate—namely, situations in which a professional’s personal interests, relationships, or preferences threaten to compromise their role-based obligations. The book emphasises that conflicts of interest are not restricted to business, medicine, or law, but arise in any domain where individuals hold positions of trust, including religious leadership. In such contexts, the public expects decisions to be guided by the institution’s ethical commitments and communal responsibilities, not by personal loyalties or private ideological sympathies.

What makes the chairman’s decision especially problematic, through the lens of Davis and Stark, is that religious figures bear a heightened fiduciary responsibility: they are entrusted with representing the community's moral stance and acting in ways that preserve integrity, solidarity, and doctrinal consistency. When a personal friendship—in this case, with a Zionist speaker — influences a public action that contradicts the organisation’s moral posture and the nation’s political values, it creates a textbook example of what the editors describe as a “role conflict”: a clash between the obligations of the office and the desires of the individual. The book makes clear that even if no tangible corruption occurs, the mere appearance of divided loyalties is sufficient to undermine the institution's legitimacy. And the problem is, there are rumours of alleged money laundering worth Rp. 100 billion.

The invitation thus becomes an ethical breach not because it involves financial misconduct or explicit betrayal but because it introduces ambiguity into a role that demands clarity. Davis and Stark insist that conflicts of interest erode trust precisely by creating uncertainty about whose interests are being served. In this case, the public is forced to wonder whether the chairman is acting as a guardian of communal ethics or as a private individual indulging his personal connections. The resulting confusion is exactly the type of institutional harm Davis and Stark warn about: the weakening of moral authority, the erosion of public confidence, and the possibility that the institution’s mission becomes subtly distorted by individual ambition.

In that sense, the episode is a powerful reminder that religious organisations are no less vulnerable to conflicts of interest than corporations or government agencies. The moral weight they carry, and the symbolic expectations placed upon them, mean that even small deviations can produce large-scale disruptions. The chairman’s decision illustrates how easily the integrity of a faith-based institution can be compromised when personal ties are allowed to override professional and moral duties.

Conflicts of interest have repeatedly shaped historical outcomes by influencing decisions at the highest levels of power. One prominent example is the lead-up to the 2008 global financial crisis. Executives in major financial institutions held personal stakes in high-risk mortgage-backed securities while simultaneously advising or influencing corporate strategy. Their dual commitments—to maximise personal and institutional profit—led to risky lending, opaque financial products, and ultimately a global economic collapse. The crisis reshaped economies worldwide, led to widespread unemployment, and triggered regulatory reforms such as the Dodd-Frank Act in the United States.

Another historical illustration is the Watergate scandal in the United States (1972–1974). Key officials within President Nixon’s administration allowed personal and political loyalties to override legal and ethical duties. Their conflict of interest—between self-preservation, party loyalty, and constitutional responsibility—led to cover-ups and abuses of power. The scandal not only forced the resignation of a U.S. president but also strengthened American institutional checks and oversight mechanisms, reshaping political accountability norms.

In the corporate and political sphere, Enron’s collapse in 2001 demonstrates how conflicts of interest can have national and global implications. Executives who acted as both auditors and consultants to Enron manipulated accounting practices to serve personal gains. This dual role undermined transparency, led to massive investor losses, and contributed to broader regulatory changes like the Sarbanes-Oxley Act, fundamentally altering corporate governance standards worldwide.

Even in scientific history, conflicts of interest have affected global outcomes. For instance, pharmaceutical companies influencing research on harmful drugs—such as early concealment of health risks in the case of Vioxx—delayed regulatory interventions, affected public health decisions, and caused thousands of preventable deaths worldwide.

These examples demonstrate that conflicts of interest are not merely ethical abstractions; they can reshape economies, governance structures, public trust, and even human lives on a global scale. History shows that unchecked dual loyalties and overlapping roles often magnify consequences far beyond the immediate individuals involved.

Conflict of Interest in the Professions presents the financial services sector as one of the most structurally vulnerable arenas for conflicts of interest, because the sector operates on asymmetric information, high-stakes fiduciary duties, and an institutional culture that encourages professionals to navigate pressure from both clients and corporate employers. One of the central arguments in the volume is that financial professionals inhabit roles that frequently combine advisory authority with opportunities for private gain, creating circumstances in which the line between professional judgement and self-interest becomes dangerously thin.

The contributors emphasise that the very architecture of modern finance—ranging from investment banking to auditing, financial analysis, underwriting, and fund management—contains built-in tensions. These tensions arise when professionals owe loyalty to multiple parties: clients seeking impartial advice, firms seeking profit, markets demanding transparency, and regulators imposing prudential rules. According to the book, conflicts of interest in this field seldom appear as explicit wrongdoing; instead they materialise as subtle distortions of judgement, where professionals rationalise decisions that benefit themselves or their firms under the guise of market logic.

The book also explains that financial conflicts are exacerbated by incentive structures that reward short-term gains, such as performance bonuses and client-acquisition targets. These mechanisms, when unchecked, encourage professionals to prioritise personal advancement or corporate revenue at the expense of fiduciary integrity. The essays note that such behaviour can be institutionally normalised, making conflicts harder to detect because the environment itself legitimises ethically questionable practices.

Moreover, several contributions argue that conflicts in financial services are uniquely dangerous due to their systemic consequences. When auditors act as consultants for the same companies they audit, when analysts promote securities they secretly hold, or when investment banks advise clients while trading against their interests, the conflict does not merely harm one party—it destabilises entire markets. The book uses these cases to illustrate how a failure to manage conflicts can erode trust, distort capital allocation, and trigger economic crises, making ethical safeguards essential to financial stability.

The book frames conflicts of interest in financial services not simply as moral lapses but as predictable outcomes of institutional design. It argues that regulation, transparency, and strict separation of roles are necessary, but insufficient on their own; what is required is a professional culture that recognises the corrosive power of divided loyalties and cultivates an ethic of restraint, even when the rules permit otherwise.

The Indonesian financial services sector exemplifies the structural vulnerabilities discussed in Conflict of Interest in the Professions. Institutions such as state-owned banks (Bank BUMN), investment managers, auditors in public accounting firms (KAP), and regulatory authorities like the Financial Services Authority (OJK) operate within a dense web of overlapping roles, loyalties, and incentives that create fertile ground for conflicts of interest.

Firstly, state-owned banks illustrate the role and influence of conflicts. Executives often balance obligations to maximise shareholder value for the government with political expectations from ministries and local officials. The dual pressures—profit versus political or social mandates—can lead to lending decisions that favour connected parties over economic prudence. This echoes Baum’s notion that overlapping commitments create structural ethical tension, where professional judgement may be compromised even without explicit malfeasance.

Secondly, investment managers and fund administrators face commitment conflicts. Many manage funds sourced from both private investors and government-linked entities, creating incentives to prioritise short-term performance to attract or retain capital. Their fiduciary duty to clients may clash with internal revenue targets, performance bonuses, or management directives. The subtle rationalisations to favour organisational or personal gains illustrate the kind of influence conflicts highlighted in the book.

Thirdly, auditors from public accounting firms (KAP) demonstrate one of the most classic conflict scenarios. When they audit the same companies for which they also provide consulting or advisory services, their independence is compromised. Historical cases in Indonesia—such as in Century Bank or Jiwasraya—show how such dual roles can mask financial irregularities. Conflict of Interest in the Professions emphasises that structural incentives, rather than individual moral failings alone, often underpin these lapses.

Finally, regulators such as OJK face their own conflicts of interest. They must enforce prudential regulations, protect investors, and maintain market confidence while also fostering a financial system aligned with national development goals. The need to encourage investment and growth may temper the strict enforcement of rules, producing a tension between regulatory duties and broader economic objectives. Baum’s framework clarifies that these tensions are predictable and systemic: they are built into the institutional architecture rather than arising solely from individual misconduct.

In sum, the Indonesian financial sector exemplifies how professional roles, overlapping loyalties, and incentive structures combine to generate pervasive conflicts of interest. The book’s argument is clear: without structural safeguards, transparency, and an ethical culture that prioritises fiduciary integrity over personal or institutional gain, these conflicts can distort decision-making, threaten market stability, and erode public trust.

One of the contributors, Taylor Cowen, in The Economics of the Critic, examines the role of critics—whether in literature, art, or other cultural fields—from the perspective of economic incentives and conflicts of interest. Cowen argues that critics occupy a unique position in which their judgments carry influence over markets, reputations, and careers, yet their own financial or social incentives may diverge from the public good. In this sense, the work explores how conflicts of interest are inherent in professional criticism.

Cowen highlights several mechanisms by which these conflicts manifest. Critics may have personal relationships with artists, publishers, or galleries that affect their assessments. They may also face pressure to maintain readership or visibility, incentivising positive or sensational reviews that attract attention rather than convey impartial evaluation. Furthermore, critics who rely on speaking engagements, awards, or consultancy work may adjust their opinions to preserve future opportunities. Cowen uses these examples to illustrate the subtle ways in which professional obligations can be compromised by private gain or social pressures.

Crucially, Cowen situates the critic within a market framework: the value of information, reputational capital, and the competitive pressures of the marketplace create structural incentives that often conflict with the ideal of disinterested judgment. The chapter demonstrates that conflict of interest is not simply a matter of moral failing; rather, it emerges predictably from the institutional and economic context in which critics operate. This aligns with the broader theme of Conflict of Interest in the Professions, which stresses the role of structural and systemic factors in generating ethical dilemmas.

Applying Taylor Cowen’s framework from The Economics of the Critic, the Indonesian media landscape exhibits multiple layers of conflicts of interest, as journalists, editors, and media commentators navigate overlapping economic, social, and political incentives. Cowen’s central insight—that professional judgement is often subtly distorted by personal or institutional pressures—is highly relevant to understanding these dynamics.

In Indonesia, media outlets frequently rely on advertising revenue from corporations, government contracts, or influential political figures. This financial dependency creates an inherent conflict: journalists are expected to report objectively, yet their organisations may be pressured to avoid negative coverage of sponsors or stakeholders. Cowen would describe this as a structural incentive problem, in which the market position and revenue goals of the media entity implicitly shape the professional behaviour of individual journalists.

Additionally, individual journalists or commentators may cultivate relationships with public officials, celebrities, or corporate leaders to gain access, exclusive stories, or social visibility. Such connections can compromise impartiality, leading to favourable reporting, soft interviews, or the omission of critical information. Cowen’s analysis suggests that these conflicts are rarely explicit acts of corruption; they emerge naturally from the economic and reputational dependencies embedded in professional roles.

Digital influencers and online media further complicate the landscape. Social media personalities who review films, books, or political events often receive sponsorships, affiliate deals, or invitations to exclusive events. The incentive to maintain audience engagement and commercial partnerships can subtly bias their opinions, echoing Cowen’s argument that the critic’s professional judgement is always intertwined with personal and economic considerations.

Finally, editorial boards may face conflicts between public interest and internal survival. Maintaining readership, avoiding legal disputes, or sustaining operational viability can shape editorial choices in ways that compromise journalistic ethics. Cowen’s framework illustrates that these pressures are systemic rather than purely individual failings, highlighting the structural nature of conflict of interest in media professions.

In conclusion, Cowen’s analysis provides a lens to understand why Indonesian journalism, like other professional fields, is vulnerable to conflicts of interest. The pressures of funding, access, visibility, and organisational survival create predictable tensions between professional duty and private incentives, underscoring the importance of transparency, disclosure, and professional norms to safeguard ethical standards.

[Part 7]
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Conflict of Interest (5)

In Indonesian everyday speech, the term masuk angin refers to a broad physical discomfort that blends mild fatigue, chills, bloating, dizziness, or general unwellness, and it functions less as a medical diagnosis than as a cultural shorthand for feeling “off” in a vague but recognisable way. 

The phrase also carries the cultural implication that exposure to wind, rain, or cold air somehow invades the body and disrupts its balance, a belief that shapes common treatments such as kerokan, warm drinks, or rest, even if modern biomedical understanding would classify the symptoms under minor viral infections, indigestion, or simple fatigue rather than wind entering the body.

In a metaphorical sense, masuk angin can be used to describe a person who has become emotionally unsettled, socially out of balance, or politically vulnerable, as though an invisible draft has slipped into their inner world and disrupted their composure. Indonesians sometimes use it humorously to depict someone who is suddenly sensitive, irritable, or easily offended, as if their emotional “immune system” has dipped and the slightest breeze of criticism or stress has thrown them off. In political commentary, the phrase can even imply that a public figure has been compromised, swayed, or “blown off course” by external pressures, suggesting a subtle erosion of integrity rather than a dramatic fall. In all these usages, masuk angin becomes a compact cultural metaphor for interference from the outside that disturbs what should have remained steady within.

In an ideological sense, masuk angin can serve as a sly critique of someone whose convictions have softened under external influence, as though a gust of fashionable rhetoric or pressure from dominant groups has slipped into their ideological core and muddied what used to be clear. It suggests not a dramatic abandonment of principles, but a quiet cooling—an erosion of firmness caused by subtle drafts of conformity.

In the political sphere, masuk angin often describes the moment when a politician appears to drift from earlier stances due to inducements, pressures, or strategic deals, giving the impression that “the wind” of vested interests has entered their decision-making. It becomes a shorthand for quiet co-optation, suggesting that an actor has been subtly redirected without overt scandal, their public compass skewed by invisible breezes of patronage, fear, or opportunism.

Economically, the metaphor can highlight actors—whether businesses, officials, or institutions—whose integrity or consistency deteriorates when external incentives, market pressures, or illicit financial flows start to penetrate their internal systems. It reflects a cultural intuition that an economy does not collapse suddenly; it “catches a draft” through small vulnerabilities, from minor collusions to uneven regulations, until the equilibrium of fair competition is disturbed. 

Socially, masuk angin can depict a community or individual whose harmony is unsettled by rumours, jealousy, peer pressure, or sudden shifts in status, much like a breeze slipping through the cracks of a house. It captures the idea that social cohesion is delicate, and that even a minor disturbance—gossip, miscommunication, or exclusion—can chill the warmth that once held a group together.

Culturally, the metaphor gestures toward a sense of imbalance that occurs when imported values, rapid modernisation, or external cultural currents disrupt a previously grounded way of life. The phrase conveys the cultural intuition that identity can be unsettled not only by forceful impositions but also by subtle intrusions—shifts in taste, lifestyle, or norms that seep in quietly and unsettle what was once familiar.

There is no exact equivalent in American or British English for masuk angin, because the term combines physical discomfort, folk explanations, and cultural assumptions about wind, cold, and balance. However, there are several phrases that approximate aspects of it, depending on the context:

In general physical terms, one might say “feeling under the weather”, “coming down with something”, or “feeling off”, which convey a vague sense of malaise, fatigue, or mild illness. In slightly more informal or colloquial settings, people could use “a bit run down” or “not feeling oneself”, capturing the sense of being out of balance physically or mentally.

If emphasising the idea of external influence affecting one’s condition—closer to the metaphorical masuk angin—one might use “caught a chill”, “taken in by outside forces”, or even figuratively, “off kilter” or “thrown off balance”, though these are more abstract and less tied to illness.

Overall, the English equivalents capture some aspects of malaise, fatigue, or imbalance, but none fully carry the cultural and folk nuances of masuk angin, particularly the idea of wind or air entering the body and disturbing internal harmony.

There is a subtle but meaningful connection between the metaphorical meaning of masuk angin and the concept of conflict of interest. Metaphorically, masuk angin describes a situation where external influences quietly penetrate an individual’s, group’s, or institution’s internal equilibrium, causing mild but persistent disruption. Similarly, a conflict of interest arises when personal, financial, political, or social incentives intrude upon one’s professional or public responsibilities, subtly redirecting decisions and priorities away from impartiality or integrity. Both concepts share the idea of external forces—whether cultural, social, political, or economic—entering a system and disturbing its proper functioning. In a sense, one could say that masuk angin is the folk-culture equivalent of an early, almost invisible stage of conflict of interest: a slight, creeping disturbance that, if ignored, can escalate into visible imbalance, poor judgment, or compromised outcomes.

There is also a meaningful connection between the metaphorical sense of masuk angin and the notion of profession. In its metaphorical use, masuk angin represents a subtle disruption caused by external influences that disturb an individual’s internal balance or judgment. Similarly, in a professional context, individuals can experience pressures—whether from clients, superiors, market demands, or social expectations—that quietly sway their decisions, ethics, or performance. Just as masuk angin signals a creeping imbalance in the body or emotions, professionals can encounter a creeping imbalance in their duties, values, or integrity, making them vulnerable to errors, compromised judgment, or ethical lapses. The metaphor resonates with professions because it encapsulates the idea that even minor, often invisible external pressures can undermine the proper functioning of one’s professional role.

The metaphorical meaning of masuk angin provides a culturally rich lens through which one can understand the dynamics of conflict of interest within professional settings. Metaphorically, masuk angin describes a subtle intrusion of external forces that disturbs an individual’s internal balance, judgment, or composure. In the professional sphere, this maps closely to situations where external pressures—financial incentives, political influence, client demands, or social expectations—quietly encroach upon a professional’s decision-making or ethical standards. This is precisely what a conflict of interest entails: a scenario in which personal, institutional, or external interests interfere with one’s professional responsibilities, leading to compromised impartiality or integrity.

Viewed together, the metaphor of masuk angin highlights how seemingly minor, almost invisible disturbances can accumulate over time within professions, creating vulnerabilities to ethical lapses or compromised judgments. Just as masuk angin might make a person feel “off” without obvious illness, a professional under the sway of conflicting interests may make decisions that deviate subtly—but significantly—from what fairness, competence, or ethical standards demand. In short, masuk angin becomes a culturally resonant way to conceptualise the early, often unnoticed stages of conflict of interest within any profession: small breaches or pressures that, if unchecked, can erode professional integrity and effectiveness.

The metaphorical meaning of masuk angin offers a subtle and culturally rich lens to understand the dynamics of conflict of interest. Just as masuk angin describes the quiet intrusion of external forces that disrupt an individual’s internal balance, conflict of interest occurs when personal, financial, political, or social pressures seep into a professional or public role, quietly influencing decisions and priorities. The implication is that conflicts of interest often begin subtly, almost imperceptibly, like the first signs of masuk angin, before becoming visible as compromised judgment, ethical lapses, or biased outcomes.

This comparison suggests several practical lessons: first, that vigilance is required to detect early signs of external influence before they grow into serious distortions; second, that institutions and professions must design safeguards, norms, and ethical frameworks to resist such intrusions; and third, that the cultural intuition behind masuk angin—that small, invisible pressures can disturb equilibrium—can enrich our understanding of why conflict of interest is often systemic rather than purely individual. In essence, the concept teaches that minor, creeping disruptions should not be underestimated, because they can ultimately erode integrity and trust in professional or public contexts.

Conflict of Interest in the Professions, edited by Michael Davis and Andrew Stark (2001, Oxford University Press), is a comprehensive exploration of how conflicts of interest manifest across various professional fields. The collection brings together essays from ethicists, legal scholars, and practitioners, providing both theoretical insights and practical analyses. 

The work begins with an introduction that frames the concept of conflict of interest and outlines its relevance in contemporary professional practice. Michael Davis defines conflict of interest as a situation in which a professional’s obligations to one party or role are compromised, or appear to be compromised, by competing personal or external interests. The introduction emphasises that even the perception of a conflict can undermine trust in the professional and the broader institution in which they operate. The book situates the discussion within contemporary professional practice, noting that modern societies rely heavily on specialised professions—from law and medicine to accounting, engineering, journalism, and academia—and that the credibility, reliability, and social authority of these professions depend on their ability to manage or avoid conflicts of interest.

Davis does not offer a single rigid definition but rather suggests a functional understanding: a conflict of interest exists whenever a professional’s duty to act in a certain role might be influenced, or might reasonably be perceived as influenced, by secondary interests that could interfere with impartiality, integrity, or loyalty. The book repeatedly underscores that conflicts are not merely private moral failings but systemic challenges, arising from the intersection of human ambition, organisational structures, and societal expectations. In this sense, recognising, disclosing, and managing conflicts of interest becomes essential for sustaining public trust and ensuring ethical professional practice.

Managing conflicts of interest is not simply a matter of avoiding wrongdoing, but a structured process that safeguards trust, integrity, and accountability in professional practice. The book identifies several key principles. First, recognition and identification: professionals must be aware of potential conflicts in advance and be able to identify situations in which their impartiality might be compromised. Second, disclosure: once a conflict is recognised, it should be openly disclosed to the relevant parties, including clients, employers, or supervisory bodies, so that informed decisions can be made. Third, management or mitigation: the professional or organisation should implement strategies to reduce the impact of the conflict, which can include recusal, independent review, oversight mechanisms, or structural separation of interests. Fourth, prevention: where possible, institutional policies should be designed to prevent conflicts from arising, such as through clear role definitions, codes of conduct, and rules regarding outside activities, financial interests, or gifts.

These principles are interdependent and context-sensitive: what constitutes adequate recognition, disclosure, or mitigation may vary depending on the profession, organisational setting, and societal expectations. Importantly, Davis and other contributors argue that managing conflicts of interest is not only an ethical obligation but also a practical necessity for sustaining public confidence, protecting professional judgment, and maintaining social legitimacy. In other words, conflict management is both a moral and systemic requirement, embedded in professional culture, law, and organisational governance.

The book then examines the issue within the context of law and government, discussing how legal professionals and public officials face and are regulated regarding conflicting obligations. Legal professionals and public officials confront conflicts of interest both as a matter of ethical duty and legal obligation. Lawyers, for instance, must navigate situations where personal, financial, or professional relationships could compromise their duty of loyalty to clients. Courts and bar associations often provide codes of conduct and ethical guidelines that define what constitutes a conflict, require disclosure, and prescribe measures such as recusal or independent oversight when conflicts arise.

For government officials, the book emphasises that conflicting obligations may occur between personal interests, political considerations, and responsibilities to the public. Institutional mechanisms, such as ethics commissions, disclosure requirements, and regulations on outside employment or financial holdings, are designed to prevent and manage such conflicts. Kathleen Clark argues that recognising, reporting, and mitigating conflicts is central to sustaining public trust and avoiding corruption or undue influence. The text stresses that these regulatory frameworks are necessary but not sufficient: they must be complemented by a professional culture that prioritises integrity, transparency, and accountability. In sum, the book presents conflict management in law and government as a combination of legal rules, organisational oversight, and ethical self-regulation, all aimed at maintaining impartiality and trust. 

Subsequent sections extend the discussion to professions operating in business contexts, including journalism, accounting, engineering, and corporate governance, where issues such as independence, loyalty, and self-dealing are prominent. 

According to the book, conflicts of interest in journalism primarily arise when a journalist’s personal, financial, or professional relationships could compromise their objectivity or the perception of their impartiality. Sandra L. Borden and Michael S. Pritchard, in their chapter on journalism, argue that even subtle or potential conflicts can affect editorial decisions, reporting priorities, and public trust. For example, a journalist who owns shares in a company they are reporting on, or who maintains close personal relationships with sources, faces a situation where their judgment might reasonably be questioned.

The book notes that journalistic codes of ethics attempt to mitigate such conflicts through principles of independence, transparency, and disclosure. Editors and media organisations are expected to establish policies that identify potential conflicts, require disclosure, and, when necessary, reassign stories to avoid biased coverage. Importantly, the text emphasises that conflicts in journalism are not always blatant or intentional; even perceived conflicts can erode credibility. Thus, managing these conflicts is essential for maintaining both professional integrity and the public’s confidence in the media.

One of the contributors, Leonard J. Brooks, discusses how conflicts of interest in accounting arise primarily from the dual obligations accountants face: the duty to their clients or employers, and the duty to uphold professional standards and public trust. Conflicts often occur when financial incentives, personal relationships, or business pressures could influence the accountant’s judgment, leading to biased reporting, misrepresentation, or compromised integrity. For example, an auditor who receives substantial fees from a client may feel pressure—or be perceived to feel pressure—to approve financial statements even when irregularities exist. Similarly, accountants who provide both consulting and auditing services to the same client can face conflicting obligations that may compromise objectivity.

The book emphasises that professional codes of conduct, regulatory oversight, and institutional safeguards are intended to manage these conflicts. Disclosure, independence requirements, rotation of auditors, and strict separation between consulting and auditing functions are among the mechanisms used to prevent conflicts from undermining the integrity of financial reporting. Brooks argues that accounting is particularly sensitive to conflicts of interest because the reliability of financial information underpins market stability, investor confidence, and broader economic functioning.

Another contributor, Eric W. Orts, discusses how conflicts of interest frequently arise within corporate governance, particularly among members of boards of directors. Directors have fiduciary duties to act in the best interests of the corporation and its shareholders, but they may simultaneously hold personal, financial, or professional interests that could compromise or appear to compromise their judgment. Examples include situations where a director has business dealings with the corporation, serves on multiple boards with competing interests, or receives personal financial benefits linked to corporate decisions.

The book explains that these conflicts are critical because they can affect strategic decisions, financial reporting, and risk management, potentially undermining shareholder trust and corporate integrity. To address these issues, governance mechanisms such as disclosure requirements, recusal from decision-making, independent board committees, and stringent codes of conduct are recommended. Orts emphasises that managing conflicts in corporate governance is not merely a matter of rule compliance but requires a culture of accountability and transparency to maintain the legitimacy and stability of corporate institutions.

From the perspective of Eric W. Orts, the situation in Indonesia, where many deputy ministers simultaneously hold positions as commissioners or directors in state-owned enterprises (BUMN), presents a textbook example of potential conflicts of interest in corporate governance. Orts emphasises that conflicts arise whenever a director or board member has multiple, overlapping obligations that may compromise impartial decision-making or fiduciary duties. In this case, deputy ministers have dual responsibilities: first, to serve the public interest through their ministerial role, and second, to protect and advance the financial and strategic interests of the enterprises on whose boards they sit.

Orts would likely point out that such dual roles create structural tensions: policy decisions at the ministerial level could affect the financial performance of BUMN, while corporate interests might influence governmental policy priorities. Even if no deliberate wrongdoing occurs, the perception of divided loyalty can erode public trust and invite suspicions of undue influence or self-serving behaviour. According to Orts’s framework, proper management would require measures such as clear disclosure of roles, recusal from decisions where conflicts arise, independent oversight, and possibly the separation of ministerial and corporate duties. Without such mechanisms, both governmental and corporate governance risk being compromised, undermining transparency, accountability, and legitimacy in public administration.

The volume also addresses conflicts in academic work, highlighting the challenges faced by scholars who navigate dual roles or competing commitments, as well as the ethical dilemmas in research funding and fieldwork. In Conflict of Interest in the Professions, the discussion on academia, particularly in the chapter by Robert J. Baum, highlights that academics frequently encounter conflicts of interest because they operate within overlapping spheres of teaching, research, institutional service, and external professional commitments. The book explains that the challenge lies not only in the existence of multiple roles but in the subtle ways these roles may influence one another, sometimes without the academic fully realising the extent of the conflict. For example, a professor who consults for a corporation might unintentionally steer research topics, classroom discussions, or student opportunities toward the interests of the sponsoring entity.

The text emphasises that one of the most persistent ethical dilemmas involves research funding. When external funders—whether corporations, government agencies, or private foundations—support academic work, they may introduce expectations or pressures that can shape methodology, interpretation, or publication of results. Even when funders do not explicitly interfere, the mere dependence on continued funding can create incentives for academics to avoid inconvenient findings, downplay uncertainties, or prioritise funder-friendly outcomes. The book also notes that fieldwork in particular creates ethical tension, as researchers must balance their scholarly objectives against the welfare, autonomy, and expectations of the communities they study. Conflicts arise when academic goals, sponsor interests, and obligations to research subjects pull in different directions.

Baum argues that managing these conflicts requires more than procedural compliance. Universities must insist on transparency, disclosure, and independent ethical review, while academics must cultivate a self-critical awareness of how their commitments influence their judgment. Ultimately, the book frames academic conflict of interest as a fundamental tension between the ideal of intellectual independence and the real-world pressures of professional advancement, institutional expectations, and external sponsorship. 

Robert J. Baum’s framework reveals that academic conflicts of interest arise when the scholar’s roles, commitments, and sources of influence intersect in ways that subtly distort judgement. Applying this framework to the Indonesian context exposes a range of situations in which academic independence is placed under strain.

One of the most visible examples is the relationship between university researchers and corporate funders. In Indonesia, large resource-based industries—such as mining, palm oil, and energy—often sponsor research in engineering, environmental sciences, or agriculture. Baum’s category of commitment conflicts is highly relevant here: when a researcher relies on corporate funding for laboratory equipment, fieldwork, or graduate scholarships, the mere anticipation of future grants can influence choices of research questions, the framing of results, or the willingness to publish findings that challenge the sponsor’s interests. The conflict need not be overt; Baum emphasises that the danger lies in the subtle psychological pull toward outcomes that preserve the relationship, even if the academic believes they remain objective.

Another Indonesian example arises from university–corporate partnerships framed as “innovation ecosystems.” Many universities enter agreements with state-owned enterprises (BUMN) or large private conglomerates for product development, patents, or consultancy work. Baum’s notion of role conflict becomes pronounced when the same academic is simultaneously a lecturer, a university project leader, a paid consultant for the corporation, and a committee member evaluating student theses linked to the corporate partner. The overlapping roles create a situation where the academic’s judgement may be compromised, even without any deliberate wrongdoing, because each role carries expectations that cannot be reconciled without sacrificing impartiality.

Baum’s analysis also illuminates the silent dilemmas faced by academics pursuing promotion. In Indonesia, many lecturers applying for professorship must secure endorsements from government ministries or rely on assessment processes influenced by political networks. This creates a classic influence conflict: an academic who observes misconduct or corruption within the government may choose silence, not out of agreement but because speaking openly could jeopardise their promotion. Baum would argue that such silence is not merely personal cowardice; it is structurally induced by the incentive system surrounding academic advancement, demonstrating how institutional design itself can generate conflict of interest.

A further example involves academics who simultaneously hold roles as policymakers—whether as special staff to ministers, members of expert panels, or commissioners in state institutions. Baum’s concept of role conflict again applies sharply: the academic is torn between the scholarly obligation to produce independent, critical knowledge and the governmental expectation to support, justify, or defend policy. Even when no money changes hands, the dual commitment to the academy and the state produces a tension where neutrality becomes difficult to maintain. Baum highlights that such conflicts derive not from individual moral failure but from the structural impossibility of serving two masters whose demands inherently differ.

Field-based research in Indonesia also creates tensions that Baum would classify as commitment conflicts. When academics conduct research among indigenous communities, rural populations affected by development, or groups with sensitive political conditions, they must balance institutional research goals against obligations to protect the communities they study. Conflict emerges when the university or research sponsor prioritises rapid publication or policy recommendations, while the field community expects confidentiality, respect, or long-term engagement. Baum stresses that these conflicts cannot be solved by simple disclosure; they require deep ethical reflexivity.

Taken together, these Indonesian cases reflect Baum’s central argument: conflict of interest in academia is not a matter of bad intentions but of structural pressures that push scholars into compromising positions. The integrity of academic judgment becomes threatened not by overt corruption, but by dependency, aspiration, and institutional arrangements that blur the boundaries between scholarship, authority, and external influence.

Further, the book investigates conflicts in financial markets, creative industries, and healthcare, illustrating how professional duties, client relationships, and external incentives can generate ethical tensions. We will continue the discussion in the next section. 

[Part 6]
[Part 4]

Bahasa

Conflict of Interest (4)

The controversy surrounding the Morowali airport area, where state authorities such as the police and customs officers were reportedly absent, highlights a troubling historical trajectory in which industrial enclaves were allowed to operate with exceptional autonomy in the pursuit of foreign investment, particularly from China. 

In reality, there is only one political entity that officially calls itself “China”, but the conflict lies in who claims the right to represent it. After the Chinese Civil War ended in 1949, the Communist Party established the People’s Republic of China (PRC) in Beijing, while the defeated Nationalist government retreated to Taiwan and continued to call itself the Republic of China (ROC). Both governments initially claimed to be the legitimate ruler of all China, including the mainland and Taiwan, which created the impression that there were “two Chinas.” Over time, the international community overwhelmingly recognised the People’s Republic of China as the sole representative of China in the United Nations, especially after 1971 when the UN seat previously held by the Republic of China was transferred to the PRC. As a result, the PRC insists on the “One China” principle, asserting that Taiwan is part of China, while Taiwan maintains its own government, military, legal system, and democratic institutions, functioning effectively as a separate state in practice.

Ethnically, the majority of people both in mainland China and in Taiwan are Han Chinese, which means that, from a biological or ethnic perspective, they can be referred to as “Chinese.” In this sense, Taiwanese people are also included under the broader ethnic category of “Chinese.” However, in terms of citizenship, politics, and national identity, Taiwanese people usually identify themselves as Taiwanese. They hold Republic of China (ROC) passports, have their own government, and operate a democratic system that is distinct from that of the People’s Republic of China (PRC). Therefore, in contemporary international discourse, the term Chinese generally refers to citizens of the PRC or people originating from mainland China, whereas Taiwanese refers to the citizens of Taiwan (ROC), who are politically separate from the PRC. While ethnically they are Han Chinese, in terms of nationality and political identity, they are Taiwanese, not “Chinese” in the sense of being citizens of the PRC.

The People’s Republic of China (PRC) was established by the Chinese Communist Party on 1 October 1949 in Beijing, following the end of the Chinese Civil War. The PRC governs mainland China, including Hong Kong and Macau, although the latter two enjoy the status of Special Administrative Regions (SAR). Internationally, when people refer to “China,” they officially mean the PRC. The PRC asserts the “One China” principle, which states that Taiwan is part of its territory, even though in practice the PRC does not exercise governmental control over Taiwan.

The Republic of China (ROC / Taiwan) was the government that previously ruled all of China before losing the Civil War. After 1949, the ROC retreated to the island of Taiwan and continued to operate there. The ROC governs Taiwan, the Penghu Islands, Kinmen, Matsu, and several smaller surrounding islands. It has its own government system, including a president, legislature, judiciary, military, economy, and a modern political democracy.

In terms of terminology, when people generally say “China,” they usually refer to the PRC, as it has been the recognised representative of China at the United Nations and in international diplomacy since 1971. When people say “Taiwan,” they mean the territory governed by the ROC, which is sometimes informally called the “Republic of Taiwan” in popular discourse, although its official name remains the ROC.

In conclusion, China = PRC (People’s Republic of China), officially recognised internationally, while Taiwan = ROC (Republic of China), a de facto independent state with its own government.

Taiwan is not under the control of the People’s Republic of China (PRC). In practice, Taiwan has its own government, the Republic of China (ROC), as well as its own military, legal system, and economy, all of which are entirely separate from Beijing. The PRC claims Taiwan as part of its territory and emphasises the “One China” principle, but this claim is political and diplomatic in nature rather than reflective of the actual governance on the island. In other words, although the PRC officially declares Taiwan as its territory, Taiwan operates de facto as an independent state, and the PRC has no administrative, legislative, or military control over the island.

In contemporary international discourse, the term “China” is more precise and widely recognised than “Tiongkok.” While “Tiongkok” is a historical and traditional transliteration used primarily in older Indonesian texts and classical literature, “China” has become the standard term in diplomacy, international law, and global media. Official documents, treaties, and United Nations resolutions consistently use “China” to refer to the People’s Republic of China (PRC), reflecting the global consensus on its political legitimacy and international recognition.

Moreover, using “China” aligns with contemporary global usage, facilitating clear communication in academic, economic, and political contexts. For instance, in trade agreements, international reporting, or multinational corporate operations, the term “China” is universally understood, whereas “Tiongkok” may create ambiguity for non-Indonesian speakers and does not appear in formal international documents.

Therefore, while “Tiongkok” retains cultural and historical resonance within Indonesia, “China” is more accurate, practical, and internationally recognised in the modern era, ensuring consistency and clarity in global discourse.

Legally and diplomatically, most countries recognise only one China—the People’s Republic of China—while maintaining informal or unofficial relations with Taiwan. However, in practical terms, Taiwan operates independently and does not accept rule from Beijing, which creates a unique situation where one state functions as sovereign without widespread diplomatic recognition. The truth is not that there are two Chinas, but rather that there is one internationally recognised China and one self-governing entity that claims historical continuity, leading to an ongoing dispute over sovereignty and identity.

Now, back to Morowali's problem. The origins of this arrangement can be traced back to the late 2010s, when the Indonesian government formalised large-scale nickel and stainless steel industrial zones in Morowali through cooperation agreements with Chinese state-linked corporations such as Tsingshan Group. These agreements were legitimised through presidential regulations on national strategic projects and special economic zones, which effectively granted corporate actors operational privileges normally reserved for the state, including security management and logistical control.

This process was further reinforced by the state doctrine of accelerating downstream industrialisation, under which foreign investors were granted extensive concessions in exchange for capital inflows and technology transfer. As a result, private security forces and company-controlled access systems emerged as substitutes for formal state presence, creating a hybrid governance structure in which the Indonesian state ceded practical authority to foreign-backed corporate entities. The fact that immigration, customs, and policing functions could reportedly be managed internally by the company signals a profound institutional compromise, blurring the boundary between national sovereignty and commercial dependency.

The implications for Indonesia are far-reaching. In political terms, such arrangements undermine the state’s monopoly on legitimate authority, lending credibility to the characterisation of these zones as “states within a state.” Economically, they deepen structural dependence on foreign capital and supply chains controlled by China, particularly in the global battery and electric vehicle industries. Socially, they risk marginalising local communities and labour, who may find themselves subject not to the Indonesian legal system, but to corporate rules enforced without democratic accountability. In strategic terms, the situation raises concerns about national security, as foreign-linked industrial enclaves with restricted state access could potentially function as geopolitical footholds.

The Morowali Airport case can very plausibly be analysed through the lens of conflict of interest, both at an institutional and a personal level, and it deserves to be examined comprehensively. Historically, the airport is located within a nickel industrial zone largely controlled by foreign investors, particularly Chinese companies, which have been granted extensive concessions by the Indonesian government during the Joko Widodo regime. These concessions include the management of strategic facilities such as the airport, which functionally supports their industrial operations. In this context, a conflict of interest arises when state authorities responsible for security, immigration, and customs are either absent or deliberately weakened, despite the fact that the decision to grant such freedom was made or approved by government officials.

A significant institutional conflict emerges when state bodies such as the police and customs authorities, which are supposed to hold full supervisory power over all airports, see their authority effectively shifted to private entities due to industrial concessions. This situation represents a conflict between the duties of the state and the pressures or incentives offered by investors. On a personal or political level, the conflict of interest becomes more apparent if the officials who approved these concessions receive direct or indirect benefits—such as political support, business advantages, or favourable project arrangements—thereby prioritising personal gain over public interest.

There is also a strategic and geopolitical dimension, as many of the companies involved are linked to Chinese networks, raising the risk that foreign economic and political interests may collide with national sovereignty. In this sense, the conflict of interest operates at the level of national security and strategic policy, where internal government decisions or regulations may be influenced by external agendas.

Therefore, this case is not merely a matter of airport operations, but rather a symbol of the interaction of conflicting interests among the government, foreign investors, and state authorities. An analysis inspired by Dennis F. Thompson, for instance, would highlight the need for transparency, accountability, and effective checks and balances, as the weakening of state oversight creates opportunities for personal or corporate interests to undermine the public good.

It is well documented that the IMIP complex employs a significant number of foreign workers, many of whom are Chinese nationals. Reputable news agencies, company disclosures, and academic reports confirm that thousands of Chinese workers have been brought into the region over recent years to support the nickel-based industrial operations. This context makes it entirely plausible that substantial flows of foreign workers travelled through the airport or transport facilities connected to the industrial park.

From a geopolitical risk standpoint, the possibility that foreign personnel could enter Indonesia through Morowali without proper state oversight raises the alarming prospect of silent influence embedded within critical industrial infrastructure. If such a scenario were to be confirmed, the short-term risk would manifest in heightened public outrage and political instability, as citizens begin to question whether the government still retains full control over its borders and strategic assets. Over time, the risk would shift toward structural dependency, whereby Indonesia’s industrial operations, particularly in the nickel and electric battery sectors, become increasingly reliant on foreign expertise, logistics networks, and capital flows. This reliance could provide a foreign power with leverage capable of shaping Indonesia’s policy decisions, especially regarding maritime disputes, regional security cooperation, and trade alignments. In the most severe long-term scenario, Indonesia could find itself gradually repositioned within the geopolitical sphere of influence of another state, not through military conquest, but through economic entanglement and infrastructural penetration.

The mere fact that an airport—inside a major industrial zone—has operated for years without state monitoring represents a serious governance failure. The potential risks include illegal immigration, smuggling of goods or hazardous materials, labour exploitation, environmental damage, and erosion of state sovereignty. The ambiguity and lack of transparency create fertile ground for misuse or covert operations, which naturally spawns public anxiety.

The debate surrounding Morowali as a so‑called “state within a state” reflects a deeper anxiety about sovereignty rather than the spread of communist ideology. Communism as a global ideology has largely lost its appeal, and China no longer exports communism in the classical sense. Instead, the Chinese Communist Party uses its political framework to maintain state control and secure economic and geopolitical influence, rather than spreading Marxist doctrine.

The decline of communism as a viable global ideology is evident in the way China has transformed itself over the past four decades. Scholarly analyses show that the legitimacy crisis of the late 1970s and 1980s forced the Chinese Communist Party to abandon the idea of exporting revolutionary communism. Instead, the Party embraced market reforms under Deng Xiaoping, creating a hybrid system often described as state capitalism. This system retains the Leninist political monopoly but relies on economic pragmatism rather than ideological evangelism.

Surveys and studies indicate that official socialist ideology resonates mainly with Party officials and those close to power, while ordinary citizens, businesspeople, and students often see it as irrelevant. This demonstrates that communism as a belief system no longer functions as a mass mobilising force. Rather, ideology is instrumentalised as a tool of control, ensuring loyalty within the Party and suppressing dissent, but not as an export commodity.

Analysts such as Minxin Pei argue that China has reverted to a form of neo‑Stalinist rule, where ideology is less about conviction and more about legitimising authoritarian governance. In this sense, the Communist Party does not “sell communism” abroad; it sells economic partnerships, infrastructure projects, and strategic influence. The ideological label of communism is retained domestically to justify one‑party rule, but internationally China’s ambition is to secure control over resources, markets, and political leverage.

Thus, communism today is not a product that China markets to the world. It is a domestic instrument of control, while the real export is economic power and geopolitical influence.

The significant presence of Chinese companies in the nickel and steel industries has created an enclave that appears to operate with limited oversight from Indonesian authorities, particularly in customs and immigration matters. This situation has led to suspicions that China is not only exporting capital but also attempting to project influence in ways that undermine national control. However, it is important to distinguish between economic dominance and ideological penetration. Contemporary China does not export communism in the classical sense; instead, it practises a form of state capitalism that combines market mechanisms with strong government control. The real risk in Morowali lies in economic dependency, weakened state authority, and the emergence of industrial enclaves that function outside the reach of national institutions. 

An enclave is a territory or area that is geographically surrounded by another state or jurisdiction, yet remains under a different authority or administration. It can describe a sovereign territory fully enclosed by another country, or a smaller zone within a state that operates under separate legal, economic, or political control. In modern usage, the term is also applied metaphorically to describe spaces where a foreign group exercises exclusive influence or operates with rules distinct from the surrounding state.

For example, a foreign-controlled industrial zone that manages its own security, immigration, and access, without effective oversight from national authorities, may be described as an enclave because it functions as a semi-autonomous space within a country. The essence of an enclave is separation: legally, administratively, culturally, or operationally, it stands apart from its surrounding environment even though it is physically located within it.

The existence of an enclave within a country poses significant risks to the integrity of the state, especially when the enclave operates under rules, authority, or influence that differ from national governance. The most fundamental danger lies in the erosion of state sovereignty. When a territory inside a nation functions with its own security, immigration controls, or administrative arrangements that bypass national institutions, the state effectively loses authority over part of its own territory. This creates a precedent in which the monopoly of legitimate power—one of the core foundations of a modern state—becomes fragmented.

Another major danger arises from the weakening of territorial cohesion. An enclave can develop into a space where national laws are not applied evenly, leading to legal pluralism that undermines the rule of law. If people or entities inside the enclave enjoy privileges that citizens outside do not, resentment and social divisions may deepen. Over time, the enclave can become culturally or politically detached, fostering parallel identities that challenge national unity.

Enclaves controlled or heavily influenced by foreign actors introduce an additional layer of risk. Such spaces may serve as channels for economic domination, covert political influence, or even military and intelligence activities. When foreign interests establish de facto control over strategic infrastructure—such as ports, airports, or industrial zones—the state may become dependent on external powers for critical functions, thereby compromising its ability to make independent decisions. In extreme cases, an enclave may evolve into a “state within a state,” where national authorities cannot enforce laws, regulate movement, or guarantee security.

Finally, the symbolic danger should not be underestimated. The public perception that parts of a country are no longer governed by national institutions can fuel distrust, nationalism, and political instability. Foreign powers may leverage it to exert pressure or extract concessions. Thus, the presence of an enclave threatens not only the physical and administrative integrity of a state, but also its psychological and political cohesion.

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