New umrah agency for Indonesia in wake of 848.7 bln rupiah Anniesa Hasibuan First Travel scam
JAKARTA - Indonesia’s Ministry of Religious Affairs will establish a new directorate to improve the monitoring system for umrah travel agencies, Nur Syam, the ministry’s secretary general told Salaam Gateway following news of a major 848.7 billion Indonesian rupiah ($63.6 million) umrah scam.
“Currently there are 500 umrah travel agencies. We want to improve the monitoring system with structural improvements at the ministry. It is currently managed by echelon III officials and starting next year, it will be managed by the directorate of umrah pilgrimage echelon II. This Directorate will study regulations related to umrah and supervise agencies,” he said.
The announcement comes in the wake of a recent case of a travel agency, First Anugerah Karya Wisata (First Travel) that is suspected to have defrauded 58,682 pilgrims. However, according to Syam, the ministry has been consistently monitoring umrah agencies even before news of the First Travel scam broke in early August.
From 2015 to mid-2017 the ministry revoked the licenses of 25 umrah travel agencies due to a range of infringements including not issuing return tickets, being indebted to hotels, and defrauding pilgrims who were consequently unable to depart for umrah. A revocation of a travel agency’s licence comes only after a company does not make good or implement necessary changes following warnings and a suspension of its licence.
BETTER MONITORING, SUPERVISING
Prior to the First Travel scam, the ministry had played a reactive role in cracking down on delinquent umrah agencies, taking action only based on complaints. From next year, the new unit will make regulations, build networks with grassroots-level groups to improve its supervisory capacities and conduct training to help umrah agencies improve their standards of service.
“We are more responsible for the regulation side, minimum service standards, as well as the cost of transport from Indonesia to Saudi Arabian territories, including hospitality, catering, as well as visas or passport issues. We already have the Hajj Fund Body (BPKH) Act and for umrah, it is necessary to study whether we need a special regulation,” said Syam.
INDUSTRY RECOMMENDATIONS
Sham Resfiadi, chairman of the Association of Hajj, Umrah and In Bound Indonesia (Asphurindo), a national haj and umrah industry body, told Salaam Gateway the government needs to formulate policy that will allow the travel industry to operate sustainably and protect consumers at the same time.
"I would suggest that business licences for umrah be valid for life. In order to be fair, the government could implement the maximum sanctions, including revoking licenses if agencies fail to do their part to ensure pilgrims’ safe departure. By being firm against the rogue agencies, good agencies can continue to survive to serve the community, without having to be bothered by bad agencies,” said Resfiadi.
He also recommends the ministry establish strict requirements with national and international standards certifications, which will allow the government to focus on monitoring and not licensing.
Resfiadi further suggests the government study the feasibility of a new guarantee institution for umrah, similar to the independent deposit insurance corporation (LPS) that protects depositors’ funds within the banking sector.
"The establishment of a guarantee institution for umrah can be for the long term vision, but it’s definitely within the purview of the ministry. The important thing to do now is to strengthen the supervision of the ministry because there have been many fraud cases because of a lack of knowledge or experience in financial management of the company. Travel agencies should be left to focus on their core business,” added Resfiadi.
FIRST TRAVEL SCAM
On August 9, police named fashion designer and co-owner of First Travel, Anniesa Hasibuan a suspect in a scam involving 58,682 umrah pilgrims who were defrauded of at least 848.7 billion Indonesian rupiah ($63.6 million).
This amount does not include debts unpaid of 108.7 billion rupiah by First Travel to a number of parties. The company has also not paid airline tickets worth 85 billion rupiah, 24 billion rupiah to three hotels in Mecca and Medina, and 9.7 billion rupiah to providers of visa services.
The company used discount schemes to attract customers, luring would-be pilgrims with payments of 14.3 million rupiah ($1,072) per person from the regular rate of $1,500 to $1,800.
Indonesia’s Center for Financial Transaction Reporting and Analysis Center (PPATK) reported on Aug 28 that some of the funds from the First Travel scam were used for Hasibuan’s other business interests.
PPATK has frozen at least 50 bank accounts belonging to First Travel.
Hasibuan made fashion history when she showed an all-hijab modest fashion collection at New York Fashion Week (NYFW) in September 2016. She was part of NYFW again in February 2017.
($1 = 13,339 Indonesian rupiah)
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