The alleged corruption case in Pertamina, which has resulted in state losses of up to IDR 193 trillion, has once again highlighted the governance issues within this state-owned enterprise.
Professor Gabriel Lele from UGM’s Faculty of Social and Political Sciences (Fisipol UGM) expressed his view that the current issue is merely the tip of a problem that has persisted for decades.
“Since the 1970s, corruption in Pertamina has continued without any structural reforms that truly improve governance. Each time a scandal arises, the solutions tend to be reactive rather than comprehensive fixes,” he said on Monday (Mar. 17).
One of the fundamental issues in Pertamina’s management is the weakness of oversight.
Professor Lele observed that existing oversight mechanisms, internal through audits and external by the Indonesian House of Representatives (DPR), have not been effective enough in detecting corrupt practices.
Considering the magnitude of the losses, Professor Lele suspects two possibilities: either the oversight failed to detect the corruption, or it was intentionally rendered ineffective.
He stressed that oversight cannot rely solely on internal government mechanisms. Pertamina, as a company monopolizing fuel distribution in Indonesia, should apply greater transparency.
The public only becomes aware of these problems after a scandal breaks out, but the period leading up to it remains opaque.
Therefore, all contracts made, including the parties involved and the transaction values, should be accessible to the public.
This case also illustrates the impact of Pertamina’s monopoly. In many regions, people have no other choice but to use fuel supplied by Pertamina, even though the prices and quality may not be ideal.
Professor Lele suggested that the government should open more space for competitors to enter the energy market.
“But because Pertamina holds a monopoly, the public has no other option, not even to express their dissatisfaction,” he remarked.
Beyond potential damage to vehicles, this scandal is expected to harm the public and erode trust in the government and state-owned enterprises (BUMN) as a whole.
“If Pertamina does not undertake internal reforms soon, this case could affect the investment sector, particularly from foreign investors who certainly consider stability and transparency when investing,” he explained.
As a corrective measure, he emphasized the importance of establishing an oversight mechanism that involves the public, not just internal oversight.
“At the very least, transparency is necessary, and ideally, there would be public participation in overseeing Pertamina’s strategic policies. Without real reform, we will continue to see the same scandals repeat in the future,” he concluded.
Author: Bolivia
Editor: Gusti Grehenson
Post-editor: Afifudin Baliya
Image: Freepik