A Reporter’s Blog

The Jakarta Post ,  JAKARTA   |  Tue, 02/17/2009 8:49 AM  |  Headlines

High and dry: Pertamina president director Karen Agustiawan (center) prepares to leave a conference room Monday at the House of Representatives, after legislators abruptly halted a hearing. ANTARA/ISMAR PATRIZKI

A hearing between the House of Representatives’ energy commission and the new management of state oil and gas company PT Pertamina turned sour Monday as lawmakers felt offended by a letter from the company, in their view naively questioning the effectiveness and efficiency of their previous meeting.

Commission VII deputy chairman Sony Keraf ended the meeting while Pertamina president director Karen Agustiawan was still replying to points from lawmakers on Feb 10.

Sony said Pertamina’s corporate secretary Toharso had disgraced the lawmakers by questioning the House’s supervision authorities.

“Nobody, not even the president himself dares to question our authority and rights to question whatever is needed to be asked.”

“Pertamina does not only disgrace the commission, but the whole parliamentary body as well. That’s why we need to know whether Toharsos’s action also represents Pertamina’s board of directors’ view on the previous meeting,” he added.

Toharso wrote to lawmakers on Feb. 13 that Pertamina was very disappointed with the way the lawmakers questioned the capacity of its current president director. He considered the questions had deviated from the initial agenda, thus violating the House internal rules.

Right after Sony terminated the session, Karen promptly packed her things and left the meeting room.

“We’ll answer any questions but not on the deprecatory points. Comparing Pertamina’s president director as similar to a satpam (private security guard) is outrageous,” Karen said, referring to a metaphor by lawmakers in the previous hearing.

“The board of directors know about the letter, and gave approval to send it to the House based on the recommendations from our legal team,” said Karen rushing to her car.

The Feb. 10 meeting was more dominated by mockery than a discussion about Pertamina’s problems and future strategies.

Despite the incident, Toharso, in the job for less than five months, insisted the House would have efficient hearings in the future.

Energy analyst Pri Agung Rakhmanto said the “bullying” Karen received was common practice. She needed to learn the ropes.

“I think there is nothing strange about the incident. What Karen needs to do now is to prove her capacity by delivering excellent performance,” he said.

Perceived widely as a cash cow for ruling politicians, Pertamina bosses often receive out-of-context humiliating remarks from lawmakers during hearings. Sometimes, lawmakers hope to get kickbacks later  if they keep quiet for the next session.

Despite numerous problems plaguing the energy and mining sector, other hearings between related authorities and Commission VII have been regularly far from hostility and more amicable.

The Jakarta Post ,  JAKARTA   |  Thu, 02/05/2009 11:47 AM  |  Business

The tax office is moving ahead with its plan to provide incentives for companies that cover, partly or entirely, their workers’ individual tax liabilities, and could issue a ministerial decree on the matter as early as this week.

Unlike in many countries, most companies in Indonesia cover their workers’ income tax.

Darmin Nasution, the Finance Ministry’s director general for taxation, said the regulation regarding the incentives, which was formulated to ease the burden on companies amid the ongoing financial crisis, would be introduced on Feb. 10 at the latest.

“We are running simulations to calculate tax incentives needed in each sector so that we know the proper allocations,” Darmin said following a hearing with the House of Representatives’ Commission XI on financial affairs.

The incentive will form part of the government’s fiscal stimulus plan totaling Rp 71.3 trillion (US$6.3 billion) launched in anticipation of the impacts of the deepening global economic crisis.

The Finance Ministry said the allocation for the incentive would amount to Rp 6.5 trillion.

Not all businesses will receive the incentive.

Businesses with good records of tax payment, and which are labor and export oriented will be more likely to receive the incentives.

“I cannot tell which sectors will receive the incentive just yet. We are still discussing it,” Darmin said.

The Indonesian Chamber of Commerce and Industry recently suggested the government does not provide such an incentive to labor-intensive industries as most of the companies’ employees there were low-wage workers, whose salaries were mostly below the taxable income threshold.

“On the other hand, if the incentive is aimed at the middle to upper workers, it will not do any good either especially if the companies use the extra money gained from tax cuts to buy imported goods,” University of Gajahmada economist Sri Adiningsih said Wednesday.

The country’s imports rose sharply last year to $128 billion from $74 billion in the previous year, cutting the trade surplus by 80 percent to $8 billion from $40 billion in 2007.

Sri said that other than giving incentives to urge people to consume, the government should also establish an effective way to promote domestic product consumption to cushion the impacts of weakening global trade.

“I am not saying that we should adopt protectionist policies, but there are other things the government can do to promote domestic products,” she said.

“The government can start cutting out the hassle in bureaucratic policies and improving on infrastructure to reduce the cost of production and improve the quality of the domestic products.”. (hdt)