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Govt, Pertamina ex-officials implicated in UK bribery case

Former high-ranking officials at the Energy and Mineral Resources Ministry and state oil and gas firm PT Pertamina are implicated in a US$6

Alfian (The Jakarta Post)
Jakarta
Sat, March 27, 2010

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Govt, Pertamina ex-officials implicated in UK bribery case

F

ormer high-ranking officials at the Energy and Mineral Resources Ministry and state oil and gas firm PT Pertamina are implicated in a US$6.35 million bribery case committed by a UK-based manufacturer and distributor of fuel additives.

The company, Innospec Limited, recently appeared at the Southwark Crown Court and pleaded guilty to bribing officials in order to secure contracts for the supply of a lead-based product, UK government anticorruption body Serious Fraud Office announced recently.

The product, known as tetraethyl lead (TEL), is a lead-based antiknock fuel additive.

The additive can boost the octane value of gasoline. Indonesia initially intended its gas to be lead-free in 1999, but this was not realized until 2006.

Innospec sold the TEL to Pertamina between 2002 and 2006 through its agent PT Soegih Interjaya (PTSI). During this period, the sales of TEL to Indonesia was US$170.17 million.

The agents received $11.7 million for commissions.

The Serious Fraud Office said part of these commissions were used to bribe Pertamina executives and other public officials.

Innospec's parent company, Innospec Inc., is listed in US stock exchange NASDAQ, which means the case is also presided over by US governmental authorities. According to the US District Court for the District of Columbia, Innospec reportedly made illicit payments of about $6.35 billion in total and promised an additional $2.87 million to government officials in Indonesia and Iraq.

A document from the Southwark Crown Court mentioned that former director general for oil and gas Rahmat Sudibyo and former processing director at Pertamina Suroso Armo Martoyo were among those receiving bribes from Innospec.

The PTSI allocated the bribe under the names "Sudibyo fund" and "Suroso fund".

Both Rahmat and Suroso denied the allegation.

"I had nothing to do with this. I ordered imports from TEL to Innospec to stop," Suroso said.

Teten Masduki, secretary-general of the Transparency International Indonesia (TII), urged the Energy and Mineral Resources Ministry and Pertamina's president director Karen Agustiawan to take the case to the Corruption Eradication Commission.

Frenky Simanjuntak, the TII's manager for economic governance, said the case was only the tip of the iceberg.

"We have surveyed 42 oil and gas companies about their transparency.

"Pertamina was found to be a company with a low degree of transparency," he said.

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