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.