“Snake Oil Futures”

There is good news for expatriates married to Indonesian citizens. On Thursday 28th October 2016 the constitutional court ruled that the need for a prenuptial agreement (which, of course, has to be made before marriage) to allow Indonesian citizens in mixed marriages to own property is unconstitutional.

What this means as that Indonesians already married to foreigners but who do not have a prenuptial agreement can now make a contract separating ownership and this will allow the Indonesian to own property. Note that the contract is necessary to nullify local laws that state that in a marriage all assets are of shared ownership. This is good news for those who married an Indonesian and bought property without realising they needed a prenuptial agreement. Our thanks go to the wonderful people of PerCa (the mixed marriage organisation) for fighting and winning this battle (see www.percaindonesia.com).

It is, however, important to note that there is no change to the law that says foreigners cannot own land in Indonesia and that nominee ownership arrangements to get around this law are considered illegal.

In the meantime did you know there’s a booming market for snakes. World production of snakes has increased 300% in the last four years and, as my financial adviser says, I should be getting into snake futures.

They do have to be Chinese water snakes of course, rich in omega 3 acids. The oil of the Chinese water snake helps reduce inflammation and is good for treating arthritis, aches and pains. Enterprising people are finding new uses for snake oil everyday, it really is an incredibly adaptable product and the army of snake oil salespersons grows everyday.

But beware, as we all have known since time immemorial, snake oil is never quite what it seems. There simply aren’t enough Chinese water snakes on the planet. In America they solved this problem by using Rattlesnakes (which are not rich in omega 3 acids) which, in 1917, lead to the famous case of Clark Stanley, the Rattlesnake King, whose snake oil was checked by the government and found to contain about as much snake oil as is found in the excretia of the average Kintamani dog. Snakeoil salesman Stanley went into the history books as the world’s most famous “grifter”. Beware of people bearing grifts.

In spite of the fact that Mr Stanley was exposed in public snake oil seems to be in heavier demand than ever before. We come across it everyday of our lives.

The island of Sumbawa used to be famous for its high quality honey until one day some smart arsed grifter started mixing sugar with water and managed to shoot not only himself but the whole industry in the foot.

We all know about Indonesian bootleg liquor made from mosquito repellant, paint stripper, bayclean, rat poo and/or any other equally delicious ingredient to make a product that manages to kill 20 or 30 people at a time.

These peddlers of serpentine turpentine are, however, mere amateurs.

An embarrassing case in the news recently resulted in many hospitals and hundreds of children receiving totally ineffective vaccinations. A syndicate had operated for over ten years producing fake vaccines made from antibiotics and saline solution packaged in stolen vials with forged labels to reproduce expensive imported vaccines purporting to protect against tetanus, whooping cough, diphtheria and hepatitis B. It is known that at least 28 healthcare facilities around the country were targeted (including in Jakarta and Bali).

In recent months a highly enterprising character, one Dimas Kanjeng Taat Pribadi, was caught by the police and stands accused of swindling. It is said that he has a magic bag and if you put your money or gold into the bag it magically multiplies in value, he has a box that converts play money into real money and he can draw gold out of the ground. It seems hard to believe but thousands of people (including some highly educated ones) believed in the magic bag and handed over huge amounts of money. He operated for more than 8 years and no one knows how much money he managed to swindle but many people have said they handed over hundreds of billions of Rupiah. Greed and snake oil form a potent mix.

At a more local level we have to be constantly on our guard. We all know about the dubious characters carrying “official” letters that come and inspect our gas regulators, tell us they are no good and sell us a new one that never seems to work very well.

Then there are the people who pose as representatives from the local banjar and knock on our doors asking for payments. When people enter our premises we need to have our wits about us. If they are not people we know, people we have an established relationship with, we need to check who they are and what their business is. Ask questions and be observant.

There have been reports of people posing as policemen to gain access to premises or to demand payments. Note that policemen can only enter your premises if you give them permission.

When we are having houses or businesses built or maintained we must constantly look out for the charlatans. It is often difficult to keep track of the many tricks that are played, there is always a new angle, a new form of snake oil.

The simple task of mixing concrete is a typical example. Adding soil to the sand to save money, using less cement in the mix (cement is expensive), reducing the size of the reinforcing steel and throwing in some soft, cheap rock to replace the good stuff. Adding lots of water to make it easier to pour. These behaviours make the concrete a lot weaker.

So, to avoid these problems, we order premixed concrete in a transit mixer only to find that on the journey between the batch plant and your house the driver has taken a detour, sold off a quarter of the truckload on the side, then made up the difference by adding water. Instead of 5 cubic metres of good stiff concrete you end up with 3.5 cubic metres of suspiciously runny stuff.

Bricks that are not fired properly, wood that is of a cheaper species or is not seasoned, paint that has been mixed with water or blended with cheaper paint, tiles that are second quality, stainless steel that mysteriously rusts, the snake oil list goes on and on.

Of all the scams that have and are still being perpetrated on a daily basis probably the worst for ordinary people are those regarding property. Transactions that, at the end of the day, turn out to be not what they seemed. Over the past two decades probably thousands of people have handed over large sums of money to buy property under nominee ownership arrangements. Now, with financial monitoring, the proverbial chickens are on their way home for a jolly good roosting session. Sadly many good honest people are finding themselves with problems while the snake oil salesmen who talked them into such deals are long gone with big fat wallets.

So how do we protect ourselves:

It is always a good trick to ask a person’s name and write it down. If in doubt take a photograph of them and observe their reaction. Here are some more steps we can take:

  • Don’trush into things.
  • Check out the people you are dealing with, if an Indonesian get a copy of their KTP (identity card), if a foreigner get a copy of their Kitas and work permit. No document – no deal.
  • Bevery wary of lawyers, accountants and tax agents – there are lots of good ones but also lots of bad ones who have spent their lives learning how to work dodgy systems. Check that they are qualified and licensed.
  • Beforehanding over money go to a notary and make a legal agreement, this applies to any reasonable amount including land or property purchase, lease agreements and any deposits for either.
  • Beware of oily statements that have a snake like smell and would be hard to confirm or seem a bit too good to be true such as “morning price” or “no commission”.
  • Ifdealing with a company make sure they exist, I know two Indonesians who gave $20,000 to the well known fraudulent international gold mining syndicate.
  • Use reputable brands and check that they are markedwith the brand name.
  • Build ongoing relationships, if people are not doing the right thing you will find out over time.
  • Donot hand over money unless you are sure the goods or service will be delivered. Paying by credit card rather than cash can provide you with a certain amount of protection.
  • Carry out due diligence on assets to be acquired.

Let’s face it snake oil represents a far better investment than land these days the price of which is plummeting across Bali. Falls of 25% to 30% are being reported and recently 4 are of land in Renon that cost Rp. 900 million per are only 18 months ago was sold for Rp. 500 million an are.

With the noose tightening on nominee ownership, a tax amnesty heralding far closer scrutiny of assets and financial dealings and increasing restrictions on the issuing of Kitas’s buyers are becoming fewer and farther between.


Phil Wilson

Previous “Fixed Abode” articles can be found subject indexed on our website at www.mrfixitbali.com. Opinions expressed are those of Phil Wilson. He can be contacted through the website or the office on 0361 288 789 or 08123 847 852. 


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