ICW: Alleged Coal Corruption a Critical Alarm for Procurement Contract Transparency

Indonesia Corruption Watch (ICW) has assessed that alleged corruption in the procurement and supply of coal for several coal-fired power plants (PLTUs), which is suspected of leading to electricity supply disruptions in various regions, serves as a serious alarm for the governance of the national electricity sector. Head of the ICW Advocacy Division, Egi Primayogha, stated that the case reveals how vulnerable points for corrupt practices in the energy sector, particularly the coal industry, occur not only in licensing and construction projects but also extend to the fuel supply chain that sustains plant operations. “This case is important because it shows that corruption cases in the coal sector are not only about coal mining permits, exports-imports, or PLTU construction, but also in the fuel supply chain for plant operations,” he told Media Indonesia on Thursday (9/7). ICW is therefore urging law enforcement officials to openly disclose the connection between the alleged corruption and the power outages that occurred in Java, Sumatra, Kalimantan, and Greater Jakarta. “Law enforcement officials should be able to explain further relevant matters, such as which PLTUs received the coal supply,” said Egi. According to Egi, the public has a right to know which PLTUs received the problematic coal supply and how the alleged manipulation of coal quality and volume could disrupt plant operations to the point of affecting the electricity system. “How deviations related to the manipulation of coal quality and volume affected plant operations, and how that could disrupt the electricity system,” he said. Furthermore, ICW believes this alleged case reflects a fundamental problem in the governance of PT PLN (Persero). Egi also questioned the oversight mechanisms the company has implemented to ensure the quality and quantity of coal received by the plants. “Several questions must be answered by PLN, such as how PLN has been ensuring coal quality and quantity, why the alleged manipulation could occur, and how internal supervision, audits, and risk management have been carried out,” he said. ICW also reiterated the importance of information disclosure in the electricity sector, especially regarding fuel procurement contracts and power purchase agreements. Transparency, according to Egi, is a crucial instrument for strengthening public oversight and preventing irregularities from an early stage. “There must be transparency of contracts in the electricity sector, from fuel procurement contracts to power purchase agreements. Contract transparency is important so that the public can oversee contract implementation and detect irregularities early on, including ensuring there are no clauses detrimental to the public,” he stated. On a broader level, ICW views this case as a reminder of the urgency to accelerate the energy transition. High dependence on fossil fuels is considered not only to pose environmental risks but also to open space for repeated corrupt practices. “This case once again demonstrates the necessity of moving away from fossil fuel dependence. The fossil fuel trap only perpetuates corrupt practices. A just energy transition must be carried out immediately,” he concluded.