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Sudirman Said : We need to change how we do business

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1 December 2015 14:44 WIB

Energy and Mineral Resources Minister Sudirman Said. TEMPO/Aditia Noviansyah

TEMPO.CO, Jakarta - Two steps taken by Energy and Mineral Resources Minister Sudirman Said on irregularities in Indonesia's energy sector have propelled him into the public limelight. The first move was his dissolution of Pertamina Energy Trading Ltd. (Petral) and having it audited. The results have now been submitted to the Corruption Eradication Commission (KPK). Last week, the KPK began its investigation on Petral, a subsidiary company of state-owned oil and gas company Pertamina. 

Hardly was the Petral case resolved when Sudirman made another sensational news. He reported House of Representatives (DPR) Speaker Setya Novanto to the House ethics committee. The reason is that Setya misrepresented President Joko Widodo and Vice President Jusuf Kalla in the process of extending the contract of work of mining giant Freeport Indonesia. 

Sudirman is under intense pressure from the media to clarify his bold steps in exposing the two major cases. "I have been accused of all kinds of things, even that I myself am part of the oil mafia," said a beleaguered Sudirman. On Thursday last week, the minister met with Tempo reporters Tulus Wijanarko, Tito Sianipar, Gustidha Budiartie and Ayu Primasandi at his official residence in South Jakarta. The interview took place early in the morning before he flew to Cilacap, Central Java, to launch the Residual Catalytic Cracking project. 

What's the background on the audit and investigation of Petral?

On October 26, 2014, one day before the new cabinet was announced, I met the President for the first time. He shared with me his concerns about the energy sector, illegal mining, old refineries and the oil and gas mafia. He asked how we could solve all those issues. Where was the inefficiency? With the rent seekers who always seem to get abnormally high (profits) and make extra money that enables them to co-opt and control.

That was the initial discussion. Then came the question: What should we do with Petral? There were two choices: to liquidate it or to regulate it anew. In practice, however, it wasn't easy to change a culture and reform a network that had grown big and powerful. In April or May of this year, we decided to dismantle Petral and audit it. Then we would tidy it up, including Pertamina's management if we found any legal violations.

I reported two or three times to the President on the Petral audit. When the final report was ready, I returned to him again. The last time was on Friday, November 13, after I came back from the Middle East, at which time I explained in detail the contents (of the audit). He then said that Pertamina internally had to be pushed into carrying reforms, and if there were legal violations, they should be reported to the law enforcers. In this regard, his choice was the KPK.

Who was present at the November 13 meeting?

In the President's office, there were just the two of us. Talking about Petral is nothing new with him. It was like repeating the discussion, but the emphasis at that time was the fact that the issue was now contained in a formal document, which we must ensure that it got processed properly. This was particularly the case if it became a legal problem and we should be ready (to face the consequences).

So, has the audit been submitted to the KPK?

I have not been formally summoned and there has been no communication yet, but since this has already become a public issue, it seems that the KPK has requested Pertamina for the report. The audit has been submitted and it seems the KPK is doing its own analysis.

Why did the audit specifically cover Petral's performance during the 2012-2014 period? 

The audit was not aimed at covering the entire year. We were looking for patterns that applied to transactions as well as anomalies and deviations. A professional auditor doesn't need to cover 10 years to find a pattern. At first, the plan was to cover two years, 2013 and 2014. But further discussions indicated that in 2012, there could have been policies that led to those deviations. So, okay, we covered 2012 as well.

Why not go back further to cover the period when Ari Soemarno was Pertamina CEO from 2006 to 2009?

The cost of an investigative audit would be expensive if we went back for a long period of time. The analysis would only need samples from one or two years because the pattern remains the same. There have been questions on why it didn't cover the time I was there (as senior vice president of Integrated Supply Chain-Ed.). In fact, at that time, I was initiating internal reforms. It was at that time that Pertamina's advertisements on oil tenders were stopped.

At that time, for three days in a row, I met Ibu Karen Agustiawan (Pertamina CEO) five times because I was being offered the position of human resources director, as SPI head of corporate planning, asset management and others. I replied, "Ibu, if I'm being offered all these positions, it means I am not really good." What it meant was that I was expected to quickly step aside. (Karen Agustiawan could not be contacted by Tempo to confirm this statement, as of this magazine's printing.-Ed.) These series of events are not fiction. I experienced them. Today, I'm trying to initiate the same reforms and getting the same reaction.

What do you mean? Do you feel you will lose your job as energy and mineral resources minister? 

I don't feel it but that's what the media is reporting. Even before I was sworn in, there were already rumors I would be reshuffled.

When you were senior vice president of Integrated Supply Chain (ISC), what were your objectives?

My objective was to reform the system and the institution. This meant that the structure had to be rearranged, the business process cleaned up and I had to do something about the personnel. We needed to change the culture on how we do business. My approach is people, culture and structure. That's what I did at the ISC. Besides selecting people, I also brought in consultants, reviewed the vendors' qualifications and announced that vendors had to re-register with the ministry. That message was aimed at business people who seriously wanted to be given another chance. We also hired an independent auditor to review the requirements they submitted. We announced it and we prepared to advertise it, but suddenly everything stopped. First the ads and the announcement were stopped, then came the rumor that I was about to be fired.

Did you get the impression that Petral was allowed to carry out their business?

According to this audit, it was not just a matter of allowing it to happen. It was done by design. Interestingly, the one person whom I wanted to identify and kick out but failed to do so, instead got promoted not long after I resigned. Petral was made the sole purchasing arm.

Did the name of Mohammad Riza Chalid appear in the audit?

That can only happen when the law enforcers start to process the case. But the audit does mention the involvement of some names as well as certain companies that have been documented as being owned by 'that person'. There are four companies that continue to revolve around the business. In fact, a number of big traders admit to having been worried that if they didn't go through that network, they wouldn't get any of the business. It's all in the audit report. (*)

Read the full interview in this week's edition of Tempo English Magazine



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