State firms urged to end feudal culture

In a bid to improve professionalism and eradicate corruption, State-Owned Enterprises (SOEs) Minister Dahlan Iskan has called on all state companies to end the feudal culture in their organizations in which power centers around several figures only.

 “A corporation should be run like a corporation not a government institution. The decision-making process has to be fast and efficient; executives can’t intervene in matters not under their authority,” he told a seminar at state oil and gas firm PT Pertamina’s office in Jakarta on Thursday.

Intervention, he argued, was counterproductive for the company’s performance as it could create conflict and misunderstanding with other executives whose authority was overstepped.

Dahlan promised that during his tenure, he would create a conducive climate for state companies to operate like other private companies, and therefore requested all firms to avoid intervention from insiders as well as outsiders, such as political parties.

When he was first appointed by President Susilo Bambang Yudhoyono to replace Mustafa Abubakar as the state-owned enterprises minister, Dahlan said that he would try his best to fortify state companies against political intervention by choosing executives whose integrity had been proven.

 “I will directly replace directors of state companies who intervene too much,” he said at the seminar.

Graft cases at state companies are often the result of political pressure. Critics have said that SEOs would remain sources of money for ruling politicians to finance their election campaigns.

From 2006 to 2011, seven former SOE president directors have ended up in jail for graft. The latest
to be convicted was Eddie Widiono Suwondho, the longest-serving state electricity utility PT PLN president director, from 2001 until 2008. The court sentenced Eddie to five years’ imprisonment on Wednesday.

The remaining six imprisoned SOE bosses are Perum Peruri’s Kusnan Martono, state gas distributor PT PGN’s WMP Simanjuntak, PT Kimia Farma’s Gunawan Pranoto, Bulog’s Widjanarko Puspoyo, Bank Mandiri’s ECW Neloe and PT Jamsostek’s Achmad Djunaidi.