Sugiharto pledges to combat corruption in state companies

Sugiharto pledges to combat corruption in state companies

Rendi A. Witular, The Jakarta Post, Jakarta

The newly appointed State Minister of State Enterprises,
Sugiharto, pledged on Thursday to rid the ministry of corrupt
officials and prevent political parties from using state-owned
enterprises (SOEs) as their cash cows.

Sugiharto, a former chief finance officer with publicly listed
oil and gas company PT Medco Energi Internasional, said he would
set up a special team to follow up and investigate reports of
corruption in the ministry and in SOEs during his first 100 days
in office.

"The President has ordered all ministers to institute clean
government in their ministries. As an aide to the President, I
will obey the order by trying to totally eradicate corruption and
collusive practices within the ministry and in SOEs," said
Sugiharto.

Sugiharto also said that he would try to prevent political
parties from trying to use SOEs as their cash cows to finance
political campaign, as had often been the case in the past.

Ever since the time of former president Soeharto's New Order
regime, SOEs have been used as money machines by the country's
political parties. It has long been a common practice for the
parties to get their supporters onto the boards of SOEs, or to
directly ask SOEs to pay some of their community development
funds to the parties in return for allowing the SOE executives to
stay in office, observers have said.

At times when public scrutiny is more intense than usual, the
parties frequently camouflage their fund-raising activities by,
for example, hosting bogus charity events at which the SOEs are
required to make donations. It then transpires later on that the
money did not go to the poor or disadvantaged but into the
pockets of politicians and government officials.

Sugiharto said that in order to help prevent corruption during
his first 100 days in office, the ministry would establish a
complaint box allowing members of the public to report incidences
of corruption involving officials in the ministry or executives
of SOEs.

Meanwhile, economist Faisal Basri said that Sugiharto clearly
had the ability to properly manage the country's SOEs in the
light of his success in turning Medco into a respected local
energy company.

However, Faisal was concerned with Sugiharto's links with the
United Development Party (PPP), saying that this would give rise
to fears of a conflict of interest and the possibility of SOEs
continuing to be used to bankroll the political parties.

"Sugiharto should prove that he has no more links with the PPP
by dismissing corrupt officials and party supporters, such as
those in state oil and gas firm Pertamina, and PT Danereksa,
during his first 100 days in office," said Faisal.

Sugiharto, however, dismissed accusations that he was in the
pocket of the PPP, saying that he had not been involved with the
party for the last three years, and that he was not a member of
the party.

"... I was never a full member of the PPP. I only sat on the
party's advisory council. Moreover, I was appointed as a minister
in my capacity as a professional, not as a member of a political
party," said Soegiharto.

Concerning plans to privatize some SOEs, Sugiharto said that
for the time being he would push ahead with the privatization
plan that had been approved by the House of Representatives.

He explained that his principal focus in his new job would be
to improve the values and performances of SOEs, rather than
selling them off so as to help plug the yawning budget deficit.

"Privatization should not be aimed at raising cash to finance
the state budget, but more at creating good corporate governance
and improving the company's performance. Privatization will be
conducted in a transparent and accountable way," he said.