Arrest hits Indonesia bid to lure funds
Print Edition
Indonesia’s anti-graft agency arrested the head of the energy regulator to probe allegations he took more than half a million dollars from an oil firm, piling more uncertainty on energy policy in Southeast Asia’s biggest economy.
The arrest is a new blow to Indonesia’s attempts to attract more investment from international energy companies, several of which have threatened to scale back operations due to uncertainty about the investment environment.
The former OPEC member’s oil output is declining, and the country has faced criticism for unclear regulations and complaints about a nationalist stance on resources.
Indonesia’s Corruption Eradication Agency (KPK) caught SKKMigas Chairman Rudi Rubiandini taking US$400,000 in a black brief case and ownership documents for a BMW motorcycle from two people employed by a private company, KPK officials said. An extra US$190,000 was found in the chairman’s residence.
KPK officials refused to name the private firm involved, only giving the initials “KOPL.” SKKMigas spokesman Elan Biantoro said it was an oil company that he was not familiar with.
Finance Minister Chatib Basri said that while the government was committed to zero tolerance of corruption the case did send a “bad signal to investors.”
Some oil company officials were also shocked by the news.
“This industry is already tough to deal with and it shouldn’t be weighed down by this sort of scandal,” said an official at a foreign oil firm with operations in Indonesia.
The oil and gas sector is politically crucial, accounting for about a fifth of Indonesia’s government revenue.
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