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Corruption, mismanagement rampant within SOEs because of lack of oversight: Watchdogs
The importance of SOEs to the country has not been matched by prudent management. A study by anticorruption watchdog Indonesia Corruption Watch (ICW) showed that SOEs ranked fifth among the most corrupt institutions in 2019, causing around Rp 1.3 trillion in state losses.
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The android application of state insurer Jiwasraya is shown on a smartphone on Feb. 14. (JP/Jerry Adiguna)
D
espite the important role the government has bestowed upon state-owned enterprises (SOEs) for driving the country’s economic growth, corruption and mismanagement remain rampant because of a lack of proper oversight.
State-owned insurer PT Jiwasraya, which has made headlines in recent months, is only the most recent example. The company has failed to pay customers trillions of rupiah for matured policies due to financial troubles.
According to the Attorney General’s Office, alleged corruption and investment mismanagement within the company have resulted in Rp 13 trillion (US$910 million) in state losses.
The downfall of the state-owned insurer follows the poor performance of steelmaker PT Krakatau Steel last year, when the company found itself in a dire financial situation, leading to the Corruption Eradication Commission (KPK) naming several directors and a manager graft suspects.
National flag carrier Garuda Indonesia, which saw former president director Ari Askhara dismissed recently after a smuggling scandal of luxurious items, has also been embroiled in a similar ordeal. In 2017, the KPK arrested former president director Emirsyah Satar in connection to an alleged corruption case estimated to have caused around Rp 1.5 billion in state losses.
Corporate watchdog Visi Integritas director Ade Irawan said corruption, especially bribery, remained common among SOE executives.
“If you want SOEs to be instruments of economic growth, the first principle that must be met is anticorruption,” he said.
