JAKARTA (JP): One cannot help but applaud the agenda Minister

JAKARTA (JP): One cannot help but applaud the agenda Minister
Purnomo has set for himself and for his Ministry. His agenda,
which he described in The Jakarta Post of Aug. 21, will require
an all out effort for the Ministry. Restructuring both the state
oil firm Pertamina and the electricity company PLN, and to
provide the direction needed by these two important state
enterprises is a full time job in itself. One significant
contribution he could make would be to help provide the legal
framework to realize his five goals and select the right people
to manage the job. Selecting the right people will be the key to
success.

We agree; but many are on the sidelines, watching which "right
people" these will be.

The Minister was quoted as referring to Tan Sri Datuk Seri
Azizan Zainal Abidin of Malaysia's Petronas as an example of a
Chief Commissioner who devotes his full time for Petronas.

From close observation of Petronas' experience, we can testify
that Minister Purnomo is totally correct in that observation. He
is also correct in pointing out that a Commissioner of Pertamina
should not have to be a minister. In our system, however, as
dictated by the Law no. 8 1971, certain ministers, including the
minister of energy and mineral resources, are appointed ,ex
officio, as Pertamina commissioners. With the enormous work load
carried by those ministers they cannot be expected to devote much
of their valuable time to Pertamina.

Minister Purnomo was asked about preventing past practices of
corruption, collusion and nepotism (KKN), to which he answered
that improvements in both the system and operation through the
new law on oil and gas may prevent KKN. He said this is because
the new law is expected to introduce competition both in the
upstream and in the downstream sector, while increased
competition will tighten loopholes for KKN potential.

While this is basically correct, we also need to make sure
that the legal framework replacing the present one also removes
the legal basis which makes KKN possible. These are not limited
to the government's cumbersome tendering rules, which is now also
applicable to the investor community, despite the fact that
production sharing contracts projects are not financed by the
state budget. These are relics from the past created by the New
Order government to create sources of funds which now need to be
erased.

Minister Purnomo's comments go to the heart of the question of
what is good corporate governance. This is a favorite jargon
among the elite and a lot of lip service has been paid to it.Yet
when it comes to applying the concept we fail to act.

One important ingredient of good corporate governance is the
ability to select the right people for commissioners. In
Pertamina's case it indeed does not have to be a minister, but a
professional, someone with broad industry background, and with
integrity and credibility.

In countries with a more advanced outlook towards business, a
board of directors may be the equivalent to our board of
commissioners. The individual selected is often a chief executive
officer of an unrelated industry but nevertheless selected in the
expectation that he or she can bring wisdom in dealings related
to many management issues that come to the attention of the
Board. It is that wisdom that counts that comes from years of
experience in the trenches.

Other commissioners may not hail from industry circles at all
but could be selected from the education sector; some may even
come from the government.

What is important is that it should be a full time job. A
major company like Pertamina or PLN deserves that kind of
attention. Yet law no. 8 1971 shows that the selection of
Pertamina commissioners contradicts good corporate governance.
Because, even if better candidates are available for the job of a
Pertamina Board of Commissioners (DKPP), we miss out on the
opportunity to elect them for office for reasons that the legal
framework prohibits us from doing so. This is sad but true.

No wonder that efforts are afoot to change the legal
framework. Under the proposed new law on oil and gas, now being
discussed in the legislature, Pertamina would revert to becoming
a "regular" state enterprise (Persero) and the selection of
commissioners would have to be viewed in the light of regulations
dealing with state enterprises in general, where a general
meeting of shareholders, among other things, may determine who is
appointed commissioner. This would appear to be a better process,
as long as the criteria for being elected commissioner is correct
-- and this is where we often go astray and end up appointing
friends of friends of friends.

At the government's behest, a committee was formed called the
"National Committee on Corporate Governance". This Committee,
earlier this year, issued a Code of Good Corporate Governance.
The Code mentions both experience and good character to be
requirements for being elected a commissioner by a general
meeting of shareholders.

Minister Purnomo's remarks makes us believe that he is
searching in the right direction.

The writer is a retired president and CEO of the Arco Indonesia
oil company, and is now senior advisor at the law firm Kartini
Muljadi SH & Rekan. He lectures at several business schools in
Jakarta.

2. 4Australia -- Time for Australia to rethink who it lets in?

1 x 42 36pt Optima Bold

Time for Australia to rethink who it lets in

By Martin Woollacott

LONDON: The faint radio-telephone message that reached the
Kuala Lumpur office of the UN High Commissioner for Refugees in
early November 1978 was dramatic. The captain of the Hai Hong, a
Panamanian-registered freighter passing through Indonesian
waters, told Kuala Lumpur that when his ship had stopped off
Vietnam with engine trouble a few days earlier, it had been
suddenly surrounded by a flotilla of little craft, crammed with
refugees. He had no option but to take the refugees aboard --
more than 2,000 of them -- and now requested assistance.

The captain's message marked a new phase in one of the gravest
of modern refugee crises. Since the end of the Vietnam and
Cambodian wars in 1975, refugees had been coming out of
Indochina, including many, soon named boat people, who had set
off from the Vietnamese coast in small vessels. The flow had
already strained the capacity of neighboring south-east Asian
countries.

Western countries, meanwhile, seemed to feel that the
relatively small number of boat people that they had accepted was
more than enough. What the Hai Hong represented was the
commercialization and politicization of the refugee flow, and
therefore a great increase in its volume. The Vietnamese
government wanted to get rid of "bad elements", particularly
middle-class ethnic Chinese, at a time when Sino-Vietnamese
relations were souring. (Indeed, the two countries would soon be
at war.) In an unholy and never admitted alliance with
unscrupulous south-east Asian businessmen and shippers, they
started moving people out in a big and systematic way. Those who
left paid twice, once to Vietnamese officials and then again to
the smugglers.

The Hai Hong, rather like the MV Tampa this week, ended up
anchored offshore, its sick and thirsty passengers waiting and
suffering, while a number of countries argued about their fate.
It soon emerged that the captain's story was a lie. The refugees
had been ferried to the ship at Vung Tau under armed guard; the
Hai Hong's owners were engaged in a lucrative criminal operation.

Australia had initially said that it would accept the refugees
if Malaysia would take them temporarily. But once the seedy
details came out, the Australian minister of immigration,
sounding not unlike his successor today, issued a "strong warning
that we shall not accept cases involving subterfuge". In the end
the people on the Hai Hong did get ashore, all were resettled,
and many, including some of the crooks, made it to Western
countries.

It was the right thing to do on humanitarian grounds, but it
set a precedent. The ships kept coming, the numbers kept leaping
upward. Naval and coast guard vessels tried to bounce the ships
out of their waters and on to the next country, towing them out
to the high seas, refueling and reprovisioning them. The crews,
and sometimes the refugees, became adept at evading patrol craft
and at tricks such as holing their vessels or smashing their
engines so as to capsize at just the right moment.

Overland refugees, mainly from Cambodia, also increased, and
Thailand began marching them back, like several other countries
breaking the principle that genuine refugees cannot be forcibly
returned to their country of origin. The British in Hong Kong,
which ended up with more refugees than any other destination,
started an undercover anti-smuggling operation. It was several
years before a combination of diplomatic efforts to persuade the
Vietnamese to replace the trade with "orderly departures", anti-
smuggling measures, and a more generous reception policy by
Western countries, led to a significant lessening of the problem.

The legacy of that era lingers on. The last of the Hong Kong
camps in which the refugees were detained only closed this year,
two decades after the flow was at its height. The arrival by boat
of illegal immigrants from a wide variety of countries has become
a commonplace in every ocean. In the last 12 months, 4,141 people
in 54 boats arrived in Australia without authority. If the
Indochina refugee crisis is a thing of the past, there are many
as bad, or worse, at the beginning of the new century.

Together with African emergencies, Afghanistan is at the top
of the list. As a proportion of its population, Afghanistan has
probably lost more refugees than any other society. Most are in
Iran and Pakistan, but an increasing number are managing to reach
destinations further afield. The situation has some similarities
to that in south-east Asia in the 70s, in that neighboring
countries have taken immense numbers, more distant countries
relatively few, and people-smuggling is increasing.

Just as in the past, the distinctions between economic,
family, refugee, and illegal migration break down under such
pressures. The little ripples of this human disaster that have
reached south-east Asia and Australia so far are not at all
comparable in scale with the earlier crisis. But they evoke
memories of it and set off reflexes. In those days there was
alarm at what Philip Knightly called "an old Australian nightmare
come true -- Asians landing on Australia's sparsely inhabited
northern coastline". Yet by 1982, the country had taken in 65,000
Indochinese refugees and their arrival had merged with the
revolution in Australian immigration which consigned the white
Australia policy to the dustbin.

But the thing was done without much public consultation or
discussion. The rewriting of Australia's identity, of which the
shift in immigration policy was a big part, left substantial
parts of the population bewildered and resentful. Anti-immigrant
attitudes survive, as the brief but spectacular showing of
Pauline Hanson's One Nation party demonstrated. More important,
however, may be another factor, which is Australia's
determination, as a country which has often felt put upon,
manipulated, and managed from outside, to control its affairs as
fully as possible. Control of the nature of immigration has been
as much a feature of the multi-cultural epoch as of the white
Australia period. The message is still that "we choose who
comes".

The "we" who choose obviously now includes large numbers of
recent migrants, including the boat people and their children.
According to various polls, there is a high proportion of
Australians who are, so far, against admitting those on board the
Tampa. This suggests that it is simplistic to think that racism
is the main factor in the maintenance of Australia's hard policy
on illegal arrivals. It is more, perhaps, that Australians crave
a degree of control that is no longer possible in a disturbed and
mobile world.

It is a world in which distance is less of a defense than it
used to be. An Afghan representing the anti-Taliban Northern
Alliance in Australia reminded a journalist this week that he had
previously warned that, if the international community did
nothing, "One day our problem in Afghanistan will become so big,
it will become your problem". It is a message to which not only
Australians should pay heed.

-- Guardian News Service