TEMPO.CO, Jakarta - POLEMICS surrounding dual appointments of state-owned enterprises (SOEs) commissioners are heating up again. The Indonesian Ombudsman found that the number of commissioners who were holding dual positions in various SOEs had multiplied. In its latest findings, the watchdog agency reported that during 2019, there were 397 state officials reportedly doubling as SOE commissioners and another 167 in SOE subsidiaries, a marked increase from 222 in the previous year.
Ombudsman's study found indications that those commissioners who were still actively serving in various ministries and non-ministerial institutions - from the military, police force to academic institutions - were also earning double incomes. "The government should have taken swift actions to stop the practice," Amzulian Rifai, Ombudsman's chairman, said during a special interview with Tempo on July 7.
Amzulian, 55, added that the government should begin an immediate evaluation of the practice which not only violates a number of laws but also has the potentials to create a conflict of interest, interfere with corporate governance, and disrupt SOEs' public services. This trend involving public officials at the central level is expected to continue this year. "The implications are far-reaching and the practice can become a precedent for the regional governments," he said.
During the interview with Tempo, Amzulian touched upon various issues, from Ombudsman's findings on dual positions in SOEs, complaints regarding social assistance in response to the Covid-19 pandemic, to the public perception that his agency lacked teeth. The interview was supplemented with the response from Ombudsman's Commissioner Ahmad Alamsyah Saragih who led the investigation into indications of SOE commissioners' dual positions.
How do you see the dual position practice which is still rampant in SOEs?
We are here to foster good governance as trumpeted by the government. We need good corporate governance in SOEs as they are expected to contribute to the state. They are business entities so they should generate profits. But is it possible for them to make profits if they are burdened by bureaucratic hassles which can actually be streamlined? One of them is the dual position practice. We don't want to name names, it's not about who, so no one should get offended.
What has become the problem in the practice?
SOEs ministry's spokesman (Arya Sinulingga) repeatedly said that the government must be present (within SOEs). That's okay to have government elements in SOEs. After all, they are government-owned companies. The only problem is allowing dual positions. Of course, good corporate governance follows universal principles including those governing the recruitment process, the capacity of the candidates, etc. It is stipulated in the Public Service Law that service providers including commissioners must not hold dual positions. The service provider in this case is the government. If we look at the SOE Law, conflict of interest is not allowed. So that already explained, you see.
Do dual positions automatically mean double salaries?
According to Pak Alamsyah's evaluation, yes.
Ombudsman has shed light on the practice since 2017 and reported it to the office of the presidential staff. Were there any follow-ups?
Amzulian: The government should have taken swift actions to stop the practice. I'm sure Ombudsman is not the only side that gave the suggestion. The government should have listened to the feedback from all the parties.
Alamsyah: In 2007, we examined samples from several SOEs to see the proportion of those holding dual positions and found that 222 people had them. We published our findings to the public while waiting for the government's reaction. It indeed created controversy due to different interpretations of the regulations. The presidential staff office that time responded and said it would offer two options, one being a single income system. Even the Corruption Eradication Commission (KPK) highlighted the practice and advised against double incomes. We waited but there hasn't been any more development. We eventually decided to study further and last year we made the issue one of our top priorities.
In the recent findings, Ombudsman reported indications that 397 SOE commissioners were holding dual positions
The data came from the SOEs ministry itself, you see. We didn't poke around. We invited the SOEs ministry and got that number. In every case, we always invite both the complainant and the respondent for clarification.
What solution did Ombudsman offer?
Amzulian: Clearly, it is a fact that there are dual positions and that is the crux of the matter. The ball is in the government's court. For sure, there are problems. Imagine high-level SOE officials acting as commissioners in different sectors which are sometimes not related to their SOEs' fields.
Alamsyah: The government must issue a presidential decree to resolve the clash of regulations. According to the Indonesian Military (TNI) Law, for example, such employment is interpreted as being part of a non-war military operation or a specific assignment. It also says the person must be a non-active officer. The same applies to the national police force. Officers must become non-active if they want to be employed outside the police environment. However, there is also a clause saying that they may also be assigned to other police duties (while they are still active members) which is then interpreted as (a legitimacy to appoint them as SOE commissioners).
Then what's the point of the word "non-active"?
ThePublicServiceLawclearlyprohibitspublicofficials to be appointed as commissioners in central or localgovernment-ownedenterprises. Whydoesthispracticestillexist?
Amzulian: The government doesn't take Ombudsman seriously. There are still many rebellious ministries and institutions. At best, they'd say, "Never mind the Ombudsman recommendations. You don't go to jail if you don't follow them." A state institution's compliance with Ombudsman is reflected in the level of bureaucratic civilization. Should they be threatened with a prison sentence to make them comply?
Alamsyah: Dual positions are forbidden except in certain areas. Well, this certain areas' is now up for wide arrays of interpretations. This is what happens if the interpretation is left to the discretion of each institution. That's why the interpretation should be restricted to prevent contradictions. Since it is already forbidden, a presidential decree is actually unnecessary.
What exactly should the government do?
Ombudsman will give written and official feedback to President Joko Widodo. The President must resolve this inter-ministerial issue.
Read the full interview in Tempo English Magazine