T

he ambition of state-owned shipbuilder PT PAL Indonesia (PAL) to become a leading industry player in the region is in question following the arrest of its top officials for alleged graft pertaining to the firm’s export of warships to the Philippines, the first nation to order its warships.

PT PAL exported its first warship to Manila in May last year. The second order of the same type of warship, which was allegedly plagued with graft, is slated for delivery next month.

The Corruption Eradication Commission (KPK) detained PT PAL president director M. Firmansyah Arifin on Friday evening, along with general manager treasury Arif Cahyana. The firm’s director of finance, Saiful Anwar, who has also been named a suspect in the case, is reportedly abroad.

The KPK accused the three of accepting US$25,000 in bribes related to the warship purchase from Manila-based broker agency Ashanti Sales Inc. through middleman Agus Nugroho.

It was the second alleged payment from Ashanti Sales Inc. after the company reportedly wired $163,000 to Firman, Saiful and Arif in December 2016 as part of the total $1.08 million in commitment fees.

The Philippine’s Defense Ministry in 2014 ordered two SSV warships from PAL worth $86.9 million. The agent, AS Inc., which facilitated the purchase, provided 4.75 percent, $4.1 million, of the project as an “agency fee.” Some 1.2 percent of the agency fee was allegedly earmarked for the three suspects.

The KPK was quick to deny the involvement of Philippine officials in the case, saying AshantiSales Inc., a private company, was acting alone.

“We are saddened by this case because it took place as the country is trying to improve its warship industry. The purchase indicates that Indonesia managed to receive trust over the quality of its products from international consumers,” KPK commissioner Basaria Panjaitan said.

Basaria added that KPK investigators would work with law enforcement in the Philippines to solve the case.

A neglected company for decades, PAL resurged in February 2012 after the government appointed a new board of directors and injected a total of Rp 648 billion from the state budget.

PAL, under Firmansyah, managed to win a US$86.9 million contract in an international tender, beating eight other countries to build two warships for the Philippines Navy.

Transparency International Indonesia (TII) secretary-general Dadang Trisasongko said the use of services from middlemen in international trade could inspire corrupt practices, such as kickbacks.

He argued that the Surabaya-based company was not ready to become a warship exporter that strictly prohibits bribery.

“PAL must establish an early warning system that could detect and prevent bribery inside and outside the company. A bribery prevention system could be internal regulations at state-owned companies on anti-facilitation payments with strong internal supervision,” he said.

PAL spokesman Bayu Wicaksono said the bribery case did not hamper the planned delivery of the second SSV to the Philippines.

“Nothing stops [due to the case]. Production will go on,” Bayu said. (mrc)