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Making Pertamina holding company needs no new law, expert insists
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The Pertamina logo is displayed on the state-owned energy giant's offices in Jakarta. (Courtesy of http://pertaminalubricants.com//-)
T
he State-Owned Enterprise (SOE) Ministry’s plan to make Pertamina a holding company for state-owned energy firms is in line with international standard practices and thus necessitates no new laws or revisions to existing laws, a law expert says.
University of Indonesia international law expert Hikmahanto Juwana said establishing a holding company for SOEs in the energy sector was a common restructuring process to upscale corporate performance, aiming for stronger financial capacity and better efficiency.
Hikmahanto pointed out that the Singaporean and Malaysian governments had created "super-holding" companies at ministry level, as well as sub-holding companies at the SOE level. Indonesia recently created holding companies for SOEs in the cement and fertilizer businesses.
“As establishing holding companies is a normal practice, a government regulation [PP] is enough to serve as the legal basis, unless the government wants to create a super-holding company at the ministry level, in which case a specific law would be needed,” he said in a press statement in Jakarta on Friday.
Amid chronic chaos in the management of oil and gas, Hikmahanto continued, the establishment of Pertamina as a holding company was needed to ensure integrated energy management.
He argued as such that worrying about the creation of holding companies among SOEs was excessive. In the end, it is the government and the public who enjoy the benefit in the form of bigger dividends and lower fuel prices, he said. (ags)
