F

ed up with undue government intervention and pressure from corrupt politicians and a politically well-connected oil import and export cabal, Karen Agustiawan, chief executive officer of state-owned oil company Pertamina, has thrown in the towel, resigning from the lucrative post just a few months after starting her second five-year tenure.

Right from the outset following her appointment in early February 2009 as the first female president director of Pertamina, Karen pledged to reject at any cost any undue political intervention into the corporate governance of the country'€™s largest company. Karen has indeed performed well, succeeding in substantially increasing Pertamina'€™s oil and gas output, booking record high revenues of US$71.1 billion and net profits of $2.7 billion last year. Even more importantly, she has made impressive achievements in the implementation of high standards of governance at the company.

She prepared Pertamina'€™s oil drilling unit to go public through an initial public offering because publicly listed companies, being subject to very stringent disclosure requirements, are usually less vulnerable to political intervention.

But it seems the constant intervention from senior officials and corrupt politicians, combined with the absence of support from President Susilo Bambang Yudhoyono, have proved too much for her to bear without compromising her impeccable integrity and high professional standards.

What this shows is that the government is not really serious about reforming state companies, which have long been seen as cash cows by corrupt officials and politicians. The fact that Pertamina has had seven CEOs over the last 18 years shows how delicate the top position at the firm has been.

The outgoing State-Owned Enterprises Minister Dahlan Iskan, also well-known for his integrity, has supported Karen'€™s reappointment for a second tenure. Dahlan acknowledged the tremendous intervention encountered by Karen, saying '€œshe has several times tendered her resignation, but this time I am no longer able to persuade her not to quit.'€ We believe Dahlan will postpone the selection of Karen'€˜s successor until after the new government begins its term on Oct. 20, given Pertamina'€™s strategic role.

A few days after her appointment, she was ridiculed by a member of the House of Representatives (DPR) from the Indonesian Democratic Party of Struggle (PDI-P), the main sponsor of Joko '€œJokowi'€ Widodo'€™s presidential bid. But Karen did not accept the humiliating remarks, which belittled her competence, and she filed a protest letter with the House leaders. Testimonies at the corruption trial of former chief of the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) Rudi Rubiandini recently showed how brave Karen had been in rejecting demands from senior officials for money from Pertamina.

Pertamina'€™s tussle with the government over the planned increase of the price of liquefied petroleum (LPG) gas in 12-kg cylinders '€” which is legal as this fuel is not subsidized and designed mostly for industrial use and middle-class families- '€” seems to have been the last straw. Without raising the LPG price, Pertamina would lose Rp 6 trillion ($520 million) a year.