Government asked not to deal with corrupt firms

JAKARTA (JP): An anticorruption watchdog body has called on the government not to award new business contracts to businesspeople charged with corruption, collusion and nepotism during former president Soeharto's era.

Teten Masduki, an executive of Indonesian Corruption Watch, said on Tuesday that such a move was necessary to show the government's commitment to eliminate KKN, the local acronym of corruption, collusion and nepotism, and in creating sound business ethics in the future.

"Companies which have been involved in KKN practices are free to make any business deals with other private companies. But don't give them government projects any more," Teten said.

Bank Indonesia (the central bank) is the only institution in the country, which imposes restrictions on those wanting to enter the banking industry, either as owners or executives.

According to Bank Indonesia regulations, businesspeople with crime records are not allowed to own banks or become bank executives.

Teten said the government should also issue a regulation to restrict companies, with bad track records such as those involved in KKN practices, from carrying out government projects.

"Pertamina for instance has to stop giving new contracts to Mohammad Bob Hasan, who is known to have practiced KKN to obtain contracts in the oil and gas industry during Soeharto's era," Teten said.

Bob Hasan could take part in bidding for government projects only if he returned all the money he had illegally collected through KKN practices, Teten said.

The West Natuna natural gas consortium recently awarded the contract for the development of a 650-kilometer underwater natural gas pipeline in the Southeast China Sea to PT McDermott Indonesia. Bob Hassan is one of the company's shareholders.

The pipeline will be used to channel natural gas from the gas fields west of the Natuna islands to Singapore starting from 2001.

The consortium -- which comprises of U.S.-based Conoco and Britain's Premier Oil and Canada's Gulf Resources -- decided to award the project to McDermott after the company offered the lowest bid of US$335 million.

Teten said Pertamina should review the consortium's decision.

The decision must be approved by state oil and gas company Pertamina to become effective.

Sources said on Tuesday that Pertamina's president Martiono Hadianto would approve the consortium's decision within several days.

Teten acknowledged that from a legal point of view, Bob Hasan would remain innocent until a court judged him guilty of practicing unacceptable business practices.

"Everybody knows he is wrong. But legally he is still innocent because we don't see any law enforcement (actions) against him," Teten said. (jsk)