Pertamina told to take action against corruption

JAKARTA (JP): State oil and gas company Pertamina should take firm action against 159 of its contractors and suppliers allegedly involved in corruption, collusion and nepotism, the secretary-general of the Ministry of Mines and Energy said on Friday.

"The public has been waiting for concrete progress in the legal resolution of these issues," Djoko Darmono told Antara.

In a related development, spokesman for Pertamina's Foreign Contractors Management Body (BPPKA) Sidick Nitikusuma said that the review of contracts allegedly procured through graft -- known locally by the acronym KKN -- was nearly completed.

He said BPPKA was preparing measures to follow up on conclusions of the review.

Measures include the revision of contracts and dismissal of Pertamina employees found involved in KKN practices.

Djoko said the public wanted the legal measures against those allegedly involved in KKN to be legally processed in a transparent way.

He wondered whether rumors that Pertamina extended working contracts with 83 of the 159 contractors implicated in graft were true.

"However, if the companies are proven free of KKN, there is no reason at all for not extending their contracts," he said.

Commenting on the government's plan to announce results of the PriceWaterhouseCoopers (PwC) audit of Pertamina early next week, Djoko said "the audit report should clearly define whatever inefficiency was discovered by the auditors".

A summary of the audit report leaked in early July estimated that Pertamina lost about US$6.1 billion from inefficiency and corruption in 1997 and 1998. However, the auditor later revised downward the estimated losses to $4 billion.

Djoko said PwC should explain why it decided to lower the estimated losses and what kinds of inefficiency and corruption inflicted such major losses on Pertamina.

"Such explanations are necessary to enable the public to get a better understanding of the problem and the reason why the government had to assign an independent auditor to audit Pertamina," he added.

Minister of Development Supervision and State Administrative Reform Hartarto was quoted by Bisnis Indonesia daily on Thursday as saying the auditor made mistakes in its audit and corrections were made after further discussion.

Hartarto denied the corrections were made under government pressures but said PwC itself discovered errors in its audit. (06)