Govt out to check if picks for state firms measure up

Govt out to check if picks for state firms measure up

JAKARTA (JP): The government said on Monday it would apply fit
and proper tests for prospective appointees to state-owned
companies' boards of directors to ensure they possessed the
integrity and capability to lead the firms.

The deputy minister for control and supervision at the Office
of the State Minister of Investment and State Enterprises
Development, Bacilius Ruru, said the new policy would apply to
all state enterprises under the supervision of his office.

"We will make sure that the future management of state
companies would show integrity and capability," Bacilius said in
a news conference.

He said the government planned to issue a ministerial decree
this week to set the qualification for such jobs, adding that it
would not affect members of the current management of state
companies unless they were subsequently promoted.

Under the policy, he said, the office of the state minister
would set up a special team to evaluate the suitability of
potential candidates.

Bacilius said the team would view candidates' track records in
judging their integrity, especially regarding corruption,
collusion and nepotism.

"For the team to do so, it will need references which at first
may be a statement from the candidate himself," he said.

Members of the public would also be encouraged to report any
alleged wrongdoing by the prospective appointee.

To determine candidates' capabilities, background information
on their education and work experience would be evaluated by the
team.

"If a candidate were to be appointed for a financial position,
the person must at least have an understanding of finance and
related work experience," Bacilius said.

If several candidates are short-listed, they will be asked to
present the programs they would introduce if appointed.

Bacilius, the former chairman of the Capital Market
Supervisory Agency (Bapepam), denied the policy was a ploy to
block outside interference in the appointment of state companies'
presidents.

"What is important is that everyone intending to become
presidents of state companies must undergo this fit and proper
test," he said.

Major state companies such as oil and gas firm Pertamina have
often been targeted by political parties to position their people
in influential positions.

Bacilius said the government, as a majority shareholder in
state companies, intended to increase the companies' value by
applying the fit and proper policy.

There are 157 companies under the state ministry, eight of
which are set for privatization this year, including fertilizer
company PT Pupuk Kaltim, general mining company PT Aneka Tambang
and coal mining company PT Batubara Bukit Asam.

Bacilius said the government expected to raise some Rp 5.9
trillion (US$797 million) from the privatization.

State Minister of Investment and State Enterprises Development
Laksamana Sukardi earlier said that the eight companies were
among the best managed state companies in the country. He said
their sale would be attractive to both local and foreign
investors.

Bacilius said that increasing the value of state companies
required the implementation of good corporate governance based on
the principles of transparency, accountability, objectiveness and
responsibility.

"We therefore decided that fit and proper tests are necessary
in achieving good corporate governance."

Bacilius said his office would also assign a P.O. Box to allow
the public to submit their complaints about the management of
state companies.

Top executives of state companies are often accused of being
overly influenced by affiliated ministers, making them less
transparent in their decisions.

"We're also planning to set up a website, which would pose
information on state companies and investment," he said.

He said the site would be run by a professional company to
keep its content updated and well managed, adding that access to
some information would therefore be subject to a fee.

In achieving transparency and also cost efficiency, the state
ministry planned to require state companies to use e-commerce in
the procurement of services and products.

Bacilius said the government was aware of the huge costs in
undertaking e-commerce investment, but said it could not ignore
its development. (bkm)