Most SOE commissioners inexperienced: Survey
JAKARTA (JP): More than 95 percent of commissioners at state- owned enterprises (SOE) are either senior government officials or military personal, according to a survey released here on Thursday.
The survey, published by business research company Business Intelligence Report (BIRO), said that most SOE commissioners did not have business backgrounds.
BIRO's director of research and business development Beni Sindhunata said the lack of professionalism on the part of the commissioners had indirectly contributed to the poor performances of most SOEs.
He said the government's tradition of recruiting senior government officials and military personnel brought more harm than good to SOEs.
"State-owned enterprises need to have good corporate governance. All commissioners must be appointed only after fit and proper tests," he said at the survey's launching.
The survey was based on research conducted over the last two months on 124 SOEs operating in the industrial sectors, excluding banking and finance.
The survey also found that the performance of SOEs had declined dramatically; none of them have obtained a "very healthy" rating since 1998.
Beni said the decline in SOE performances was very much related to the way the board of directors and commissioners managed their concerns.
He said most commissioners failed to contribute their time to the companies since many of them were still active in their original jobs, let alone offer management or technical advises.
He said in order to improve SOE efficiency the size of the board of commissioners must be squeezed from the average of four or five people per board at present to only two: one from the government and a professional.
The survey also shows there are currently nearly 500 people hired as commissioners, including chief commissioners, at SOEs. These commissioners are paid an average monthly salary of between Rp 4 million (US$479) and Rp 5 million.
SOEs active in communications, forestry and plantations, finance, trade and industry and public works have the most commissioners.
Beni said the government must seriously reform the management and operations of SOEs so they are prepared to enter the impending free-trade era.
He said the government must be considerate in its privatization program so as not to sacrifice the companies' assets for the sake of bringing in cash to its coffers.
"The government is pretty demanding with its privatization plan. I don't think it will be able to meet the target sales, it's unrealistic for the time being. It had better be revised," he said.
The government is expecting to raise some Rp 6.5 trillion from the sales of 10 firms -- general mining company PT Aneka Tambang, airport operator PT Angkasa Pura II, coal mining company PT Bukit Asam, plantation companies PT Perkebunan Nusantara III and IV, fertilizer producer PT Pupuk Kaltim and pharmaceutical manufacturers PT Indo Farma and PT Kimia Farma, surveyor firm PT Sucofindo and trading company PT Kerta Niaga -- during the April- December 2000 fiscal year.
If the proceeds from the sales of shares in the ten companies are not satisfactory, the government has prepared another stand- by list of nine state-owned enterprises, compromising of telephone operators PT Telkom and PT Indosat, retail store PT Sarinah, hotel management company JIHD, mining company PT Tambang Timah, strategic industry holding BPIS, PUSRI as well as hotel and office operators PT Wisma Nusantara and PT Perhotelan dan Perkantoran Indonesia. (cst)