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