As Ahok takes reins at Indonesia’s state energy giant Pertamina, a corruption case lingers

The ex-Jakarta governor has been tasked with reducing crude oil imports and weeding out graft at the company

But experts say an ongoing corruption case involving former CEO Karen Agustiawan shows how challenging it is to make business decisions at state-owned enterprises

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An employee of Indonesia’s state-owned oil company Pertamina walks past oil drums at the company’s main depot in north Jakarta. Photo: Reuters

Published: 9:00am, 12 Dec 2019Updated: 9:32am, 12 Dec 2019

Indonesian state energy firm Pertamina’s most senior leader, former Jakarta governor Basuki Tjahaja Purnama, earlier this week called on officials at Indonesia’s state-owned enterprises to be role models in fighting graft.

Purnama, also known as Ahok, was named president commissioner of Pertamina in late October, a move analysts say was made to reduce Indonesia’s crude oil imports and boost reforms in the company.

But an ongoing graft case involving the firm’s ex-CEO Karen Agustiawan, the first woman to run a SOE in Indonesia, shows the challenges inherent in running these firms that play a major role in Southeast Asia’s largest economy.

Graft is a persistent problem in Indonesia’s business sector but in the case of Agustiawan, who was in charge of Pertamina from 2009 to 2014, there are industry players and analysts who maintain that she simply made a bad business decision.

In June this year, Agustiawan was sentenced to eight years in prison and fined 1 billion rupiah (US$71,400) by Jakarta’s corruption court. According to the presiding judge, she had violated investment procedures and caused state losses amounting to 568 billion rupiah (US$40.5 million).