Military hands in inadequate report on wealth: BPK
Tony Hotland and Tiarma Siboro, The Jakarta Post, Jakarta
Over Rp 38.8 billion (US$3.85 million) worth of profits from assets of the Indonesian Military (TNI), which were used by third parties, have not been accounted for, according to a Supreme Audit Agency (BPK) report on the central government.
Presented to the House of Representatives last week, the 2004 report also reveals that the Ministry of Defense did not pay any taxes on more than 167,000 hectares of TNI land.
The uncertified land is mostly under control of the Air Force, the defense ministry and the TNI headquarters.
Profits from the use of the TNI assets, the report states, have instead been spent internally by the military without making maximum contributions to the state's finances.
The unreported funds included compensation and profits reaped by the Navy's main cooperatives (Inkopal), the Navy's primary cooperatives (Primkopal), the Navy's central cooperatives (Puskopal) and hospitals run by all the Navy, the Army and the Air Force.
A total of Rp 1.53 billion in profit made by Inkopal was not reported, in addition to Rp 255 million for doctors' housing near one of the Navy's hospitals and Rp 441.9 million in the form of annual fees for administrative and operational costs from PT Trisaha Eka Pradana.
According to Inkopal, by the end of 2004, a total of Rp 28 billion in unreported compensation from the use of state assets by third parties was attributed to the Navy headquarters.
The figure included Rp 20 billion from PT PGE for a five- hectare plot of land for a supermarket project in North Jakarta and Rp 5 billion from PT Trisaha Eka Pradana for a 1.5-hectare site for an automotive center in North Jakarta.
Furthermore, the BPK report reveals unreported profits made by hospitals run by the TNI's three forces in 2004, totaling at least Rp 7.7 billion.
Responding to the report, the Ministry of Defense argued that the funds had not been reported due to technical problems, citing the absence of guidelines on the obligation of deposited profits from the use of TNI assets.
The TNI's dubious reports of their assets have often become problems, while on the other hand, the military has long been complaining about the lack of an adequate defense budget as its main reason for its poor performance.
Now with Law No. 34/2004 on military reforms that allows the government to take over all of TNI's businesses within five years, many hope that more accountable financial management would be introduced into the powerful military.
Ministry of Defense secretary-general Maj. Gen. Sjafrie Sjamsoeddin has said that Sept. 27 was set as the deadline for all military units to submit reports over their respective assets.
In cooperation with four relevant ministries, including the State Ministry of State Enterprises, the defense ministry planned to evaluate all of TNI's business units before giving suggestions to the President on how to handle them.
Sjafrie said his office could not make any moves until the military units sold their assets to certain private companies prior to the Sept. 27 deadline.
The Navy has reportedly released its ownership of several companies, which it claims were unprofitable. Also, the Army's Kartika Eka Pakci Foundation has reportedly sold its 20 percent stake in PT Artha Graha, a private company owned by businessman Tomy Winata.
Sjafrie said that in general, the military enterprises were no longer profitable, especially after the reform movement, which bans servicemen from involvement in businesses.