Bambang faults IBRA concerning draft bill process

Bambang faults IBRA concerning draft bill process

JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
will have to drop its plans to submit a controversial draft bill
to the House of Representatives because the process has been
improper, according to Finance Minister Bambang Sudibyo.

Bambang said that based on existing procedures, an initiative
to draft a law must come from his office, then be presented to
the president before being approved by the House.

"If the process is wrong, why should they make the proposal to
the House," Bambang said in response to a query from reporters.

"I have already told Cacuk that he was wrong," he added,
referring to Cacuk Sudarijanto, chairman of IBRA.

The draft bill, which was expected to be proposed to the House
next month, has been controversial for two reasons. First, under
the proposal, IBRA would report directly to the president, rather
than the finance minister. Second, the bill was drafted quietly
without consulting the finance minister.

Placing IBRA beneath the president has raised concern that
IBRA policy could be influenced by the president.

The disagreement between Bambang and Cacuk is seen as further
evidence of a conflict between the finance minister and the
chairman of an agency controlling some Rp 600 trillion worth of
assets, more than half the country's gross domestic product.

Asked if he would impose a sanction on Cacuk, Bambang said:
"Until now, I have not considered giving any sanction."

Cacuk said earlier that the agency drafted the bill because it
is necessary to implement good governance at IBRA as committed by
the government in its letter of intent to the International
Monetary Fund.

"I took the initiative because it's in the interest of the
agency," he said.

But Bambang retorted that the letter of intent didn't call for
introduction of a new law.

"If you want to uphold good corporate governance it must be
done through proper procedures," Bambang said.

Cacuk explained that the Supreme Court has recommended that
government ruling No 17/1999 on IBRA be upgraded into a law which
would help the agency to become more effective and protect it
from being sued by outside parties.

He also said that based on studies made by consulting firm
McKenzie, similar agencies overseas were also directly
responsible to the President.

Cacuk said that McKenzie was appointed by IBRA through a
tender process involving five other firms to provide consultation
to improve governance at the agency.

He said that McKenzie had recommended the formation of an
oversight board to preclude concern over intervention by the
president.

Cacuk said that the seven-member oversight board would be
chaired by the IBRA chairman. While the finance minister, the
coordinating minister for economy, finance and industry, and the
attorney general would be members.

He said that the remaining three "independent" members would
either come from academia or foreign businessmen who had no
interest in IBRA.

"But this is absurd. How can an oversight board be effective
if it is chaired by the IBRA chairman," said noted economist Sri
Mulyani.(rei)