By Karishma Vaswani
BBC News, Jakarta
Indonesia's army used to be one of the region's most powerful
Indonesia's military business reforms are totally inadequate and have failed to dismantle the armed forces' business empire, Human Rights Watch says.
US-based group alleges that many of the military's businesses have been implicated in human rights abuses - charges the Indonesian army denies.
The military was stripped of its once significant political powers after Indonesia became a democracy.
It was also meant to cede management of its businesses by 2009.
Indonesia's army used to be one of the most powerful in South East Asia.
Under the "dwifungsi" (dual function) concept of former Indonesian President Suharto's government, soldiers were not only entrusted with defending the state, but played an active role in politics and business.
All of this changed when Indonesia became a democracy, and the army's influence in political spheres has been waning.
Under the terms of a 2004 law, it was also expected to divest management of its military businesses by 2009.
The Human Rights Watch report says that has not happened, with the army still running businesses worth millions of dollars.
The rights watchdog goes on to say this hinders military accountability.
It also alleges that many of the businesses owned by the army are corrupt and have committed human rights abuses.
But the Indonesian military says this is not true.
Military spokesman Sagoeom Tamboen told the BBC that military reform was ongoing.
Most of the businesses owned by the armed forces are now under the management of a government agency that will decide what to do them by the end of this year, he said.
However, independent analysts say it is not that simple, and that the reform laws are too vague to be of much use until the government comes up with a firm and detailed plan that will clearly outline how the military's old businesses will be managed and controlled.