PwC audit reports on Pertamina area unfair: Martiono<\/p>\n
JAKARTA (JP): The audit reports on Pertamina conducted by
\nindependent auditor PricewaterhouseCoopers (PwC) are unfair, the
\npresident of the state-owned oil and gas company, Martiono
\nHadianto, said on Monday.<\/p>\n
Martiono said the inefficiency reports were unfair because PwC
\nused the world's major multinational oil and gas companies as the
\nappraisal benchmark in its audit.<\/p>\n
\"Multinationals base their operations purely on commercial
\npurposes, while Pertamina does not, because it often carries the
\ngovernment's mission,\" Martiono defended.<\/p>\n
He said by using a standard that was too high the measure of
\nPertamina's inefficiency would certainly be overly exaggerated.<\/p>\n
Larry Lucky, an official of PwC, said using such a high
\nstandard benchmark was logical because most of Pertamina's
\nproduction-sharing partners had used such standards.<\/p>\n
\"If they are using a world class standard, there was no reason
\nfor us not to apply a world class standard to Pertamina,\" Larry
\nsaid.<\/p>\n
\"If Pertamina wants to go global it must be inspired to do
\nthat,\" he added.<\/p>\n
In its audit report, PwC found losses amounting to US$4.69
\nbillion in Pertamina during a coverage period from April 1996 to
\nMarch 1998.<\/p>\n
The report said that $2 billion of Pertamina's losses were
\ncaused by inefficiency, between $1.27 billion and $1.97 billion
\nby lost income opportunities and $721 million by future
\nobligations.<\/p>\n
However, a provisional PwC audit report leaked to the media in
\nJune showed that Pertamina suffered larger combined losses of up
\nto $6.1 billion.<\/p>\n
Larry explained that inefficiency meant how much cost could
\nhave been avoided if Pertamina operated in a more efficient
\nmanner.<\/p>\n
\"The lost income opportunities represented future operational
\ngains Pertamina could have realized by optimizing its operations,
\nprocesses and opportunities,\" Larry added.<\/p>\n
And future obligations are those related to social,
\nenvironmental and other issues in the near future that have to be
\nquickly addressed by the government and Pertamina, Larry said.<\/p>\n
Martiono said, however, that despite the unfairness in the PwC
\naudit report, he would still use it as a reference for
\nPertamina's future efficiency program.<\/p>\n
\"There were still universal aspects in the audit that could be
\nused as a general reference for Pertamina's future efficiency
\nprogram,\" Pertamina said.<\/p>\n
Martiono did not reject the possibility of pursuing legal
\naction against Pertamina employees, who were allegedly involved
\nin the efficiency losses.<\/p>\n
The report divided the inefficiencies into two areas: those
\nthat were controllable by Pertamina and those that were not.<\/p>\n
Uncontrollable inefficiencies are those arising from obstacles
\ncaused by unfavorable government regulations, law or government
\nintervention.<\/p>\n
Martiono said that he would report to the government on such
\nkinds of inefficiencies so there would be some change.<\/p>\n
The 800-page PwC audit report covers over 300 detailed
\nrecommendations for improvement to Pertamina's eight business
\ndivisions, Larry said.<\/p>\n
Larry said these recommendations were mostly based on the
\naudit's qualitative findings, and not the quantitative.<\/p>\n
\"But a lot of people are focusing on the dollar amount of our
\naudit,\" he said.<\/p>\n
\"Not so much the number but why the number. The message (of
\nthe audit report) is what should be done by Pertamina to improve
\nthrough more efficiency,\" he added.<\/p>\n
He also denied the media report that said all the occurring
\nlosses in Pertamina were due to corruption.<\/p>\n
\"The media report that was instigated in the newspapers was
\nmisleading and inaccurate for characterizing all of the losses
\nwere due to corruption,\" he said.<\/p>\n
He repeated that the audit was merely to identify the
\ninefficiencies, lost income opportunities and future obligations
\nof Pertamina.<\/p>\n
\"It was not an investigation of fraud nor a forensic audit. We
\nare looking simply at the operations and how Pertamina manages
\nits risks,\" he said.<\/p>\n
\"The audit's general recommendation was that Pertamina should
\ncontinue its efficiency program, improve asset utilization,
\nreduce operating costs, increase production and enhance the
\ndistribution chain, while improving its information technology
\nfor a better decision-making process,\" Larry said. (udi)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pwc-audit-reports-on-pertamina-area-unfair-martiono-1447893297",
"image": ""
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