Agriculture ministry hit by graft scam in bird flu vaccine supply

Eva C. Komandjaja, The Jakarta Post/Jakarta

Auditors have found massive corruption at the Ministry of Agriculture including a 2004 case relating to the production of bird flu vaccines for infected poultry.

Inspector General at the ministry, Zainal Baharuddin, who submitted the corruption report to the Attorney General's Office (AGO) on Friday for further investigation, said his team had found nine matters at the ministry between 1999 and 2004 that had resulted in losses to the state of some Rp 733 billion (US$73.3 million).

Zainal said that the largest graft case involved pharmaceutical companies inflating the cost of production of bird flu vaccines requested by the Ministry of Agriculture.

According to data from the Ministry, four companies are listed as the producers of the vaccines. They are PT Vaksindo, PT Medion, and government-owned Pusvetma and Balitvet.

"These vaccine producers intentionally lowered the vaccine quality in order to gain more profit from the contract value," Zainal said.

He explained that the vaccines produced by these companies had a low protection level of between 11.8 percent to 28 percent according to reports from poultry farmers in East Java, Central Java, West Java and Bali.

"They (the producers) also failed to meet standards set by the Office Internationale des Epizooties (OIE) in the production of the vaccines including by not using specific pathogen free (SPF) eggs as advised by OIE," Zainal said.

His team suspected that several high-ranking officials at the ministry were also involved in the case including the poultry health director general as well as the head of the food and drugs supervision agency.

Zainal said that his team had calculated around Rp 56.98 billion in state loss. He said that he would hand over the documents and evidence to the AGO for further investigation.

The team's report also alleged corruption in the disbursement of compensation funds for poultry farmers, who were forced by the government to cull their infected chickens in a bid to prevent bird flu from spreading to other parts of the country.

Zainal said that he had received reports from farmers across the country, including farmers from Central Java, that they had not received the funds because the money had been embezzled by administration officials.

The team also uncovered a smuggling case where meat from India, that had not been classified as free of mad cow disease, being labeled as meat imported from Australia and New Zealand to pass inspections in this country.

Other corruption cases are also listed in the report that mostly alleged graft in projects developed by the Ministry to assist farmers in rural areas, such as the Rural Rearing Multiplication Center (RRMC) which is a funding project aimed at indigenous chicken farmers. State losses in this case where predicted to reach around Rp 121.3 billion.