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Govt expands limitations on SOE execs, commissioners
The new rules seek to prevent conflicts of interest and ensure that leaders of state-owned enterprises (SOEs) are held accountable for losses.
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State-Owned Enterprises (SOEs) Minister Erick Thohir gives a statement on a reshuffle within state-owned electricity company PLN on Jan. 6. (SOEs Ministry/Permana Aji)
P
resident Joko “Jokowi” Widodo has signed a new government regulation that expands previous rules barring executives and commissioners of state-owned enterprises (SOEs) from taking on positions of political leadership, whether in political parties, as lawmakers or as top regional administrators.
The regulation also introduces a provision whereby SOEs’ boards of directors and commissioners can be held personally responsible for company losses.
A previous, 2005 government regulation (PP) had barred SOE leaders from joining the House of Representatives, as well as provincial, regional or city councils, but did not prevent them from running for other forms of regional leadership. The new regulation, officiated on June 8 by Law and Human Rights Minister Yasonna Laoly, expands the restrictions on regional leadership positions.
“Members of [SOE] boards of directors are prohibited from becoming administrators of political parties and/or candidates for the legislature, candidates for regional heads/deputies and/or active regional heads/deputies,” the provision reads.
Further details on the restrictions are to be laid out in a ministerial regulation.
The new rules seek to minimize the chances of conflicts of interest in state firms, considering that 15 percent of all SOE commissioners and executives are politicians, according to 2021 data from Transparency International Indonesia (TII).
Read also: SOEs Ministry seeks Rp 72t 'booster' for state firms in 2022
