PwC audit finding on Pertamina

PwC audit finding on Pertamina

Please allow me, personally and on behalf of the MOI-MASP
Solidarity Forum, to appeal for an explanation on whether the PwC
Audit Finding on Pertamina (April 1, 1996 to March 31, 1998)
relates to the Mobil Oil MASP program. This is urgent as this
MASP has made many people suffer.

I strongly believe this audit finding does relate to the Mobil
Oil MASP effected in October 1996 for the following reasons:

1. Pertamina's obligation to pay Big Table Severance pay referred
to Pertamina's letter No. R164 dated July 5, 1996, has not to
date been paid by the company to MASP takers.

2. The term "Big Table Severance pay" is a common term at Mobil
Oil as agreed to by Pertamina.

3. In 1995, when "the full funding of the pension fund" was made,
Dapekami's accumulated fund was approximately Rp 90 billion
(US$36 million).

Mobil Oil is the only Oil Contractor approved by the Minister
of Finance to manage the "Defined Pension fund Benefit
(Dapekami)". Unfortunately, this fund was used by the company to
pay Big Table Severance pay. This is evidenced in an affidavit
pertaining to the MASP payment. It was also agreed upon by the
"Head of Pertamina BPPKA, Gatot K. Wiroyudo", as per his letter
No. 4101/L0I00/98-S8 dated July 29, 1998.

Hence, Big Table Severance pay which is a company's
obligation, as stipulated in Pertamina's letter No. R164/L000/96-
S8 dated July 5, 1996, has not to date been paid to MASP takers.
Now the fund has become an audit finding of PWC as Pertamina's
obligation to pay Big Table Severance pay to MASP takers.
4. When a mass termination was effected at Pertamina in
1994/1995, Pertamina no longer had outstanding obligations to its
ex-employees. While a mass termination at ARCO was only effected
in March 1999. During the period from January 1996 to December
1998, Mobil Oil was the only company under Pertamina that had a
mass termination program. And this audit finding of PwC covers
the period from April 1, 1996, through March 31, 1998.

All the above reasons strongly prove that the PwC audit
finding on Pertamina's obligation to pay Big Table Severance pay
to the amount of $36 million consists of outstanding Big Table
Severance pay payable by the company to employees who took the
MASP program in October 1996. The remaining amount represents the
Dapekami fund balance to active members (participants).

Thus, in issuing a report to Pertamina, Mobil Oil has
presented an incorrect report, in other words, by manipulating
data. Whatever the reason is, Mobil Oil as the author of such a
report has committed a crime.

A warning letter from the MOI-MASP Solidarity Forum lawyer to
Mobil Oil dated Sept. 17, 1999, has not to date been responded to
by Mobil Oil. Thus, consistent with legal procedure, this case is
fit for referral to a court as soon as possible, a plan which is
currently in place.

Again, please explain this matter urgently, so that this case
will soon be settled. Delays will have a negative impact on the
image of our country's oil industry.

PAUL D. MUSAK

MOI-MASP Solidarity Forum

Jakarta