http://www.thejakartaglobe.com/home/changing-of-the-guard-at-pertamina/359754
Feb. 19, 2010 Yessar Rossendar Changing of the Guard at Pertamina Indonesian State Enterprises Minister Mustafa Abubakar on Friday retained Karen Agustiawan as the head of a new board of directors for PT Pertamina and tasked the state-owned oil and gas company with boosting output to help the country meet its rising fuel needs. The vice presidential position was scrapped in the new lineup and several new members, mostly from within the company, now sit on the board. A new directorship to handle investment planning and risk management was also created. "We hope that the new board of directors under Karen will be more solid and able to adapt to the demands of the industry," Mustafa said after the board's inauguration on Friday. He said the new board should prioritize three programs, all aimed at increasing energy production. It should find as many new fields as possible, acquire existing ones and rejuvenate Pertamina's refineries and downstream infrastructure. Pertamina's former finance director, Ferederick Siahaan, is the new director in charge of investment planning and risk management. Karen said the position was needed to support the company's operations with well-managed investment and risk management. "We will make many acquisitions, especially in the upstream sector," she said. Mustafa said he was confident that under Ferederick, "Pertamina's investment will not be misplanned in the future." He said the new director would function like the government's National Development Planning Agency (Bappenas). Fabby Tumiwa, the executive director of the Institute for Essential Services Reform, saw the establishment of the new director position as a positive sign, because previously the work had only been handled by a unit in Pertamina and not at the board level. "With a higher position to handle the task, I think Pertamina's investments will be better," Fabby said. The company filled the previously vacant upstream director position with Bagus Setiardja, who was formerly the president director of subsidiary PT Pertamina Hulu Energy. The previously combined general and human resources directorship has been separated, with Rukmi Hadihartini as director for human resources and Waluyo as general resources director. Edi Setianto becomes director for processing, replacing Rukmi, while Djaelani Sutomo, the president director of another Pertamina subsidiary, PT Pertamina Tongkang, is now director for marketing and business. Ferederick's former position as finance director was filled by an outside appointee - M Afdal Bahaudin, previously the president director of insurer PT Tugu Pratama Indonesia. The position of president commissioner and one of the regular commissioner positions remain unfilled. "It is our plan to prioritize and assign the board of directors first, but we will appoint the people for the positions as soon as possible," Mustafa said. Fabby said the position of president commissioner should be filled by someone who understands the oil and gas industry, has good integrity and who does not have any conflicts of interest. "Pertamina is a company that handles trillions of rupiah, so the position is crucial," Fabby said ++++ http://www.thejakartaglobe.com/business/reforming-state-enterprises-a-chat-with-minister-mustafa-abubakar/359689 February 19, 2010 Muhammad Al Azhari Reforming State Enterprises: A Chat With Minister Mustafa Abubakar State-owned enterprises play a prominent role in the economy. At the end of last year, 141 SOEs controlled assets worth Rp 2,150 trillion ($230 billion) - a figure equivalent to almost half of the country's GDP. The government plans to consolidate the SOEs as part of its plan to improve their performance. State-Owned Enterprises Minister Mustafa Abubakar visited the Jakarta Globe recently to talk about the how the plan was progressing. What's your strategy to improve SOE performance? First, I am mapping their strength. This is an ongoing process, which I've taken over from the previous minister Sofyan Djalil. Once the mapping is done, I will try to come up with a way to group SOEs which are in the same sectors under holding companies. We will then implement a right-sizing program, to match the size of the SOEs to the field they are in to increase efficiency and maximize profit. We will also select some SOEs which we feel are the most appropriate ones to partially-list. How many SOEs would you like to list in the next five years? I can't tell you that yet, but we do aim to list more SOEs. We are reviewing things at the moment. How is the plan to consolidate the state-owned banks going? We have four state-owned banks. Under Bank Indonesia's "single presence" policy, the number of banks [owned by one owner] must be reduced to one. We acknowledge this but we also see a need to retain differentiation in various banking sectors. PT Bank Mandiri and PT Bank Negara Indonesia are strong in the corporate sector, while PT Bank Rakyat Indonesia is bigger in the small to medium-sized enterprises market. PT Bank Tabungan Negara is more focused on mortgage lending. We have asked Bank Indonesia to give us a chance to review the concept of the single presence policy for state lenders. How will you do this? I have requested a two-year delay for state-owned banks to adhere to the policy. We need to get together with Bank Indonesia and the Finance Ministry to discuss if the policy should apply to state lenders and what some alternate solutions might be. But I hope it won't take as long as two years to do this. How are plans to create SOE holding companies in other sectors going? The first sector we are looking at is the fertilizer sector. There are five state-owned fertilizer companies that will be integrated under Pusri [PT Pupuk Sriwijaya ], which will be a holding company. We haven't gotten into the details of how we will create the holding company yet. I think Pusri will continue to be an operating company but it will also become an umbrella company for the other firms. It will perform roles like marketing and investment plans for all of the companies so they only have to focus on production and distribution. In the cement sector it will probably be similar. We aim to put three state-owned cement firms under PT Semen Gresik. What about in agri-business? We will group companies according to the commodities they produce, so there will be SOEs for palm oil, rubber, sugar, tea etc. We may have just five or six companies. The advantage is they will become more specialized and focussed on their particular commodity. In the forestry sector we have five state-owned companies and we definitely see a need to consolidate them. What are some of the obstacles to consolidating the SOEs? We have to be very careful not to fall afoul of the Business Competition Supervisory Commission [KPPU]. We don't want to be accused of setting up monopolies. However, at present many of our SOEs compete with one another and it is usually unhealthy competition. This is the challenge. We also need to pay attention to how the new companies will be taxed. That's why we need to cooperate closely with the Directorate General of Taxation. There are also concerns that by restructuring under holding companies, management will become too bureaucratic. However, we don't have to follow current practice in Indonesia. Instead, we plan to learn from the best practice in developed countries. [Non-text portions of this message have been removed]
