Pertamina pledges to root out corrupt, collusive practices
Pertamina pledges to root out corrupt, collusive practices
JAKARTA (JP): State oil and gas company Pertamina pledged
yesterday to rid its business operations of cronyism, collusion
and nepotism.
Pertamina president Soegianto said yesterday the company was
currently collecting information about all the companies which
had obtained contracts from Pertamina thanks to connections with
former president Soeharto.
He said the measure was being taken on the instructions of
Minister of Mines and Energy Kuntoro Mangkusubroto's, who asked
Pertamina to review all of its contracts with shipping and
trading companies in an effort to free the company of corruption
and collusion.
Soeharto's children and cronies enjoyed exclusive rights over
a number of business activities associated with Pertamina,
including the import and shipping of fuel and crude oil.
Soegianto said companies involved would be reported to the
government, which would later decide if the people involved
should be banned from doing further business with Pertamina.
"If they want to continue business with Pertamina, they should
follow fair and sound practices. But I doubt if they will want to
continue," Soegianto said at a one-day seminar on oil and
electricity organized by the Management Students' Society from
University of Indonesia's faculty of economics.
Under Soeharto's government, Pertamina were for decades
obliged to buy imported fuel and crude oil from Perta Oil
Marketing Ltd and Permindo Trading Oil Co Ltd.
Pertamina has a 30 percent stake in Penta, while the remaining
70 percent is owned by Soeharto's youngest son Hutomo Mandala
Putra, alias Tommy.
Pertamina also holds a 35 percent stake in Permindo, however
the remaining 65 percent is owned by Bambang Trihatmodjo,
Soeharto's second son; Sudwikatmono, Soeharto's cousin; Nirwan
Bakrie; and Roosano Barack.
Tommy also ships fuel, LNG, and crude oil for Pertamina
through his publicly listed company Humpuss Intermoda
Transportasi.
The company said in its 1997 annual report that Pertamina
chartered nine tankers from the company to transport crude oil,
and a further three tankers to ship liquefied natural gas (LNG)
to export markets. The charter period for the tankers ranged from
ten to 12 years.
Informed sources at Pertamina said that Bambang had also been
granted the exclusive right to arrange financing for the
development of all LNG plants in the country.
Soegianto said the elimination of collusion, cronyism and
nepotism would improve Pertamina's efficiency.
He also said Pertamina would close its marketing offices in
London, Singapore, and Houston later this year to further improve
efficiency, but its marketing office in Tokyo would remain open
because Japan was the largest market for Indonesian crude oil.
Soegianto acknowledged that Pertamina had given the five
ministers from the 1993/1998 cabinet who served as company
commissioners -- the Minister of Mines and Energy, the State
Minister for National Development Planning, the State Minister
for Research and Technology, the Minister of Finance, and the
Minister/State Secretary -- Rp 1 billion (US$100,000) each for
undertaking Pertamina-related activities.
"Let the commissioners judge if these payments are still
necessary," Soegianto said.
Paiton
In a related development, East Java provincial authorities
announced yesterday that they would review all projects in the
province which involved Soeharto's children.
"We shall have to judge if they are still capable of carrying
out these projects. Otherwise, we shall give the projects to
other investors," East Java governor Basofi Sudirman was quoted
by Antara as having said.
"Anyhow, which investors are capable of seeing through big
projects during the current difficult situation?" Basofi asked.
Soeharto's family are involved in projects worth billions of
dollars in the province. Bambang and Soeharto's brother
Probosutedjo own refinery projects in Situbondo and Probolinggo,
both of which are in planning stages.
Bambang and his partners are also developing a 1,220 Megawatt
(MW) coal-fired power plant in Paiton, and a toll road linking
the Waru-Wonokromo-Juanda areas in East Surabaya. He is also
developing a gas pipeline network from Pagerungan island in
Madura to Surabaya and Sidoarjo.
Soeharto's daughter Siti Hardiyanti Rukmana, also known as
Tutut, is behind the planned toll road linking the Waru-Juanda-
Perak areas in East Surabaya, while the former presidents
youngest son Tommy owns the Umbulan drinking water project. (jsk)