Corrupt practices rampant in state enterprises: Official

JAKARTA (JP): An official admitted on Thursday what many have long suspected: the practice of corruption, collusion and nepotism is rampant in state enterprises.

Secretary of the Directorate General of State-owned companies of the Ministry of Finance Mantaris Siagian admitted that the institutions were prone to corruption, collusion and nepotism.

"We need to create clean, effective and efficient state enterprises and we need to do it soon," he said.

Other speakers in the event, organized by the Federation of Trade Unions of State Enterprises, the Indonesian Corruption Watch (ICW) and the Partnership for Governance Reform in Indonesia, also revealed the urgency of the situation.

Chief auditor with the Supreme Audit Agency (BPK), Usman Damanik, pointed out that corruption can take place in all production processes, from the procurement of the products until they reach the consumers.

"No good example from superiors, foreign intervention in the enterprises, the lack of law enforcement and the workers' religious faith, just to mention a few, contribute to corruption in state enterprises," he said.

"The government has to appoint directors for state enterprises based on the candidates' professionalism and not on certain interests," Damanik added.

He explained that many audit reports which had shown indications of corruption had been submitted to the Attorney General's Office, especially on banking and mines government deals, but no further action was taken.

ICW coordinator Teten Masduki alleged that there must be a practice of corruption in many companies who complained of losses.

"If there was no corruption, then how come state enterprises like electricity company PT PLN and telephone company PT Telkom suffer losses each year although they don't have competitors?" he remarked.

To eradicate corruption in the enterprises, the workers federation, represented by its chairman Bambang S. Syukur, signed a memorandum of understanding with ICW to work hand-in-hand to create a zero corruption zone in all state enterprises.

The agreement which is valid for one year until July 28, 2002 includes drawing up a concept on how to establish good corporate governance in the enterprises. Its implementation will involve the workers and the general public. (bby)