Pertamina gets new chief

Pertamina gets new chief

Fitri Wulandari, The Jakarta Post, Jakarta

The government has named Ariffi Nawawi as president director
of state-owned oil and gas firm Pertamina to replace Baihaki
Hakim, raising concern among some that the firm, once infamous as
the country's largest den of corruption, could regain that
reputation.

Roes Aryawijaya, deputy to the minister of state-owned
enterprises, said on Wednesday that Pertamina had officially
become a limited liability company and a new board of directors
had been named.

"Pertamina will be led by Ariffi Nawawi. The regulation to
change the company into a limited liability company has been
signed by related ministers," he said.

Ariffi was previously a Pertamina director.

The appointment shocked many oil and gas analysts, as well as
corruption-watchers in the country, as Baihaki is known as a
clean figure, while Ariffi has featured in at least one graft
case involving Pertamina.

There is not as yet any evidence to prove Ariffi's involvement
in the case, but his appointment has prompted questions as to
whether the current administration is serious in stamping out
corruption in the firm or else wants to abuse it again as a cash
cow, just as former President Soeharto's administration did for
several decades.

Baihaki, the former president of PT Caltex Pacific Indonesia,
a subsidiary of American energy giant ChevronTexaco, is lauded by
many parties for his efforts to curb corruption in the firm.

Apart from Nawawi, the government also appointed Hari Purnomo
as new downstream director, Bambang Nugroho as upstream director
and Alfred Adrianus Rahimone as finance director. Hari was
Pertamina's former fuel distribution director, who, in that
position, had good connections with gas station owners.

The government has also named Minister of State Enterprises
Laksamana Sukardi chief commissioner, with Roes Aryawijaya,
Indonesian Bank Restructuring Agency head Syafruddin Temenggung,
director general of budget affairs at the Ministry of Finance
Anshari Ritonga and director general of oil and gas at the
Ministry of Energy and Mineral Resources Iin Arifin Takhyan as
commissioners.

According to Roes, the regulation for the appointment of
Pertamina's new board of directors and commissioners was signed
by President Megawati Soekarnoputri, Laksamana, Minister of
Energy and Mineral Resources Purnomo Yusgiantoro and Minister of
Finance Boediono.

At least one legislator was quick to criticize the reshuffle.

Djusril Djusan, of House of Representatives Commission VIII
for energy and mineral resources, said he was concerned that
Ariffi had been mentioned in Pertamina graft cases.

According to Djusril, Ariffi's name came up in a case related
to the procurement of additives for the Balongan refinery,
Indramayu, West Java. He confirmed that the case was among 11
relating to Pertamina being probed by the House Special Working
Committee on Pertamina.

The committee was set up on Sep. 27, 2001, to probe alleged
corruption at Pertamina in a bid to recover state losses and
eradicate corruption at the company.

In June this year, the committee published a report stating
that the 11 cases could have caused US$1.4 to $1.7 billion in
losses to the state.

"Over the next two years, Pertamina won't become the company
that we might have hoped for -- one that could compete with
international companies," Djusril told The Jakarta Post.

Another commission member, Priyo Budi Santoso, acknowledged
that Ariffi's past history could pose a credibility problem.

However, he said, Ariffi, who is a Pertamina career official,
should be given a chance to prove himself.

"There is no evidence yet that he (Ariffi) was involved in the
case. So, let's just see how he will perform," Priyo told the
Post in a telephone interview.

Meanwhile, Ariffi said he would continue with the programs of
the previous board of directors.

"We shall carry out programs from the previous board of
directors but the focus will be on organization, human resources
and marketing," Ariffi announced.

For marketing, Ariffi said Pertamina would be more consumer-
oriented.

Pertamina would also focus on the petrochemicals industry,
which, he said, should promise more lucrative returns to the
company.