AGO to help curb corruption at SOEs
The Jakarta Post, Jakarta
The Office of the State Minister of State Enterprises and the Attorney General's Office are joining forces to fight corruption at state-owned enterprises (SOEs).
State Minister of State Enterprises Laksamana Sukardi and Attorney General MA Rachman signed a memorandum of understanding on Friday pledging a wide-range of cooperation to ensure SOEs are run "professionally".
"In the area of criminal law, the Attorney General's Office will provide information (to the Office of the State Minister of State Enterprises) on actions that appear to be causing losses to the SOEs...," Laksamana's office said in a statement issued after the memorandum of understanding was signed.
The statement added that once there was sufficient evidence a crime had taken place, the Attorney General's Office would take the necessary measures.
Indonesia has some 150 state-owned enterprises, most of which are inefficient, loss-making operations.
Many observers have called the enterprises cash cows for politicians and corrupt bureaucrats, particularly during the rule of former president Soeharto.
According to independent audits published late last year, five large SOEs suffered a combined US$4 billion worth of inefficiencies, potential losses and lost savings from 1995 to 1999.
The five companies are flagship carrier Garuda Indonesia, domestic telecommunications firm PT Telkom, toll road operator PT Jasa Marga, port operator PT Pelabuhan Indonesia II and palm oil plantation firm PT Perkebunan Nusantara IV.
The audits were completed as part of an agreement with the International Monetary Fund, which is providing a multibillion dollar rescue package for the country.
Most observers also believe that corruption is a major problem at most state banks. The government injected about Rp 430 trillion ($43 billion) worth of bonds to bail out domestic banks in the late 1990s, and more than half of that amount went to state banks.
The injection of the bonds was necessary to replace the huge amount of bad loans that had to be transferred to the Indonesian Bank Restructuring Agency to be restructured.
Many analysts have said the huge amount of bad loans at state banks was largely the result of corruption.
The government's privatization program is also part of the effort to boost good corporate governance and curb corruption at state-owned enterprises.
But the privatization program has been challenged by a number of parties, including lawmakers and workers. Some experts believe many of the protests against the program have been sponsored by vested interest groups.