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Jakarta Post

Ministry to crack down on nepotism in state companies

  • Khoirul Amin

    The Jakarta Post

Jakarta   /   Fri, July 4, 2014   /  12:16 pm

The State-Owned Enterprises Ministry is preparing a regulation aimed at stamping out nepotism in all state-owned companies, in a bid to cut out corruption and mismanagement.

'€œNepotism is indeed a bad thing because it affects companies'€™ management. When people with family ties work at the same company, they are likely to prioritize their own personal interests above the firm'€™s interest,'€ said State-Owned Enterprises Minister Dahlan Iskan after a closed-door meeting on Thursday.

Dahlan said the regulation would likely be in the form of an instruction mandating all state-owned companies impose anti-nepotism guidelines. He said such a regulation would, for example, prohibit family members from working in the same state-owned firm.

Dahlan said the regulation would apply to all employees, regardless of whether they were hired legitimately or due to nepotism.

'€œThe strict regulation is aimed to prevent all possibilities of dirty nepotism from happening in state-owned enterprises,'€ Dahlan said.

He added that he would meet next week with a number of state-owned firms that had already imposed anti-nepotism measures to further discuss the regulation.

'€œWe will learn from them about how they implement the measures, what the obstacles and the benefits are,'€ he said.

Contacted separately, state-owned cement maker PT Semen Indonesia corporate secretary Agung Wiharto said his firm would fully support the ministry'€™s plan as it was part of good corporate governance values.

'€œWe are pretty aware of the issue of nepotism, and we already imposed a similar measure as what the ministry is planning in 2010,'€ he said.

Agung also said before his company started cracking down on nepotism, he saw a number of cases where children of directors at his firm easily climbed the ladder '€” and not because of their achievements.

He said that since 2010, Semen Indonesia has prohibited married couples and relatives from working at the firm.

Meanwhile, state-owned construction firm PT Wijaya Karya (WIKA) spokesman Natal Agrawan declined to comment before he knew the specifics.

'€œWe will see details of the regulation first, once it has been released,'€ he said.

Indonesia Corruption Watch (ICW) researcher Ade Irawan said he approved the ministry'€™s plan, but was pessimistic that the measure would be the best solution to fight nepotism within state-owned enterprises.

'€œThe spirit of the regulation is good, but it could be perceived as violating human rights because for some people, it will prevent them from having a career in state-owned firms. I think the most important thing to do is to have an open and quality recruitment process,'€ he said.

Ade also said that instead of limiting people'€™s career options, state-owned enterprises could guarantee competence through a strict recruitment process carried out by independent institutions.

'€œThe firms can also manage their staff members'€™ work placement to avoid nepotism. For example, when a staff member'€™s father is a financial director, his son [...] should be placed in another division,'€ he said.

Ade went on to say that it was common knowledge nepotism still occurred in some state-owned enterprises. Nepotism was very rampant during the era of former president Soeharto.

For example, in 1998, Soeharto appointed his daughter Siti Hardijanti '€œTutut'€ Rukmana the social affairs minister.

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