Big capital businesses score promising growth despite economic turbulenceMonday, 29 Oct 2018
The Jakarta Post, p. 1
The 2018 Our Ocean Conference (OOC) kicked off in Bali with growing calls for all of the world’s inhabitants to play a role in protecting the ocean. Hundreds of people with gloves and empty sacks gathered on the morning of Oct. 28 at Kuta Beach to take part in a beach cleanup as part of the OOC events. To demonstrate Indonesia’s commitment to marine protection, similar beach cleanups were held simultaneously on Sunday on about 100 other beaches across the country, which has been ranked the world’s second-biggest plastic waste producer. The main events of the OOC will start on Oct. 29, with Indonesia set to push for a joint effort to create a tracking mechanism for the 663 commitments the OOC participants made during past conferences, particularly those regarding marine protected areas.
Corruption among regional heads increases
Koran Tempo, Headline
Cirebon Regent Sunjaya Purwadi is the 100th regional head to be arrested by the Corruption Eradication Commission (KPK) since the antigraft body was first established in 2002. KPK spokesperson Febri Diansyah said the high number of corrupt regional heads was a result of the high cost of politics in the country, including during regional elections. Furthermore, weaknesses within the Government Internal Oversight Body (APIP) provides leeway for regional heads to resort to corruption. According to Indonesia Corruption Watch (ICW) political corruption division coordinator Donal Fariz, corruption among regional heads often occurred in three areas, namely product and service procurement, trade of administration posts and business permits issuance.
According to Tempo, the majority of regional heads arrested by the KPK were from the Golkar Party and the Indonesian Democratic Party of Struggle (PDI-P). Thirty-seven regional heads from Golkar and 26 regional heads from the PDI-P have been arrested so far this year.
KPK urges govt to evaluate palm oil company
Republika, p. 2
The Corruption Eradication Commission (KPK) arrested seven people on bribery charges involving palm oil company PT Binasawit Abadi Pratama (BAP), a subsidiary of Sinarmas Group, and the Central Kalimantan Legislative Council. According to the KPK, PT BAP, which has operated in Central Kalimantan since 2006, did not have the required commercial land-cultivation permit (HGU) and forest area utilization permits (IPPKH). Following the arrests, the KPK urged the government, particularly the Environment and Forestry Ministry, the Agriculture Ministry and the Agrarian and Spatial Planning Ministry, to further assess and evaluate other palm oil companies that operate near PT BAP. It is suspected that some of the neighboring palm oil companies lack the required permits as well.
Besides the absence of permits, PT BAB also reportedly took part in polluting Sembuluh Lake. According to the KPK, PT BAB disposed of industrial waste into Sembuluh Lake, despite the fact that much of the local residents’ income comes from the lake. PT BAB reportedly bribed several members of the Central Kalimantan Legislative Council pertaining to the company’s waste management.
KPK requests travel ban for House deputy speaker
Media Indonesia, p. 2
The Corruption Eradication Commission (KPK) has requested the directorate general of immigration at the Law and Human Rights Ministry to issue a travel ban for the House of Representative deputy speaker Taufik Kurniawan. The KPK, regardless, has yet to disclose the reason behind its request. Previously, Taufik was implicated in a corruption case surrounding former Kebumen Regent Yahya Fuad and product and service procurement back in 2016. Yahya admitted that he met Taufik several times to discuss Kebumen special allocation funds (DAK), during which Yahya promised to pay Taufik a 5 percent fee if his regency was allocated Rp 100 billion in DAK.
Tug of war for deputy governor post continues
The Jakarta Post, p. 5
Coalition partners Gerindra Party and the Prosperous Justice Party (PKS) have been deadlocked for months over who should fill the vacant Jakarta deputy governor position, with each party wishing to nominate its own members. Gerindra has made it clear that it would not surrender the post, which was left vacant in August when Gerindra politician Sandiaga Uno resigned to run as the vice-presidential candidate, to anyone outside the party. According to Gerindra, Muhammad Taufik has been named a candidate for the post due to his track record, despite his status as a former corruption convict. Meanwhile, the PKS has nominated Ahmad Syaikhu, a former deputy mayor of Bekasi in West Java, and PKS Jakarta executive board secretary Agung Yulianto for the post. The two parties will reportedly meet to discuss the matter in the following week.
Big capital businesses score promising growth despite economic turbulence
Bisnis Indonesia, headline
Fluctuating national economy did not significantly affect big capital business performance. Bank Central Asia, HM Sampoerna, Bank Rakyat Indonesia, Unilever Indonesia, Bank Mandiri, Bank Negara Indonesia and United Tractors reported increasing net income by September, although the number varies. United Tractors and Bank Mandiri scored the highest year-on-year net income growth by 60.82 percent to Rp 9.07 trillion and 11.76 percent to 11.4 trillion, respectively. Market Analyst and Samuel Sekuritas Indonesia research head Andy Ferdinand banking sectors and heavy machineries operator will likely to continue growth next year thanks to the government’s favorable policies, while consumer goods producers are expected to benefit from the upcoming holiday such as Christmas and New Year.
Govt to switch to common tax payers
Bisnis Indonesia, p.1
The Tax Office is seeking to improve tax payment obedience, especially on those who did not join the tax amnesty. Tax Office public relation and counseling director Hestu Yoga Saksama said his office will impose Government Regulation No 36/2017 and Finance Minister Regulation No 165/2017 to target non-complying tax payers. However, Hestu added that the authority will not directly punish non-compliance tax payers but allowing them to revise their listed asset through tax return forms revision, where if the asset were obtained prior to 2015, they could utilize voluntary asset disclosure service and pay its final income tax.
Indonesian economic foundation remains strong: Tahir
Investor Daily, headline
Indonesian conglomerate and Mayapada Group Founder, Dato Sri Tahir said in an interview that Indonesia’s current economy is far better than in 1998. The sixty-six years old businessman explained that business and public trusts towards the government remain high although strong external pressure persists. According to Bank Mayapada data in 2018, no massive rupiah deposit switching into US dollar or dollar withdrawal and transfer abroad. Tahir also said that Indonesia still needs relaxed foreign exchange policy to attract major investments from abroad. He argued, unlike Thailand, Indonesia needs massive foreign funds to fully implement the national development plan that covers areas from Sabang until Merauke. “The idea to revise regulation on foreign exchange traffic is still irrelevant, to reduce current account deficit, export improvement will be much effective and productive.”
Govt cancels geothermal blocks’ auction
Investor Daily, p.9
The government decided to cancel the auction of three geothermal blocks in Maluku, West Nusa Tenggara and Southeast Sulawesi this year due to uncompleted administrative preparations. The Energy and Mineral Resources Ministry’s geothermal director Ida Nurhayatin Finahari explained the cancellation was made after PLN failed to complete a pre-transaction agreement, which serves as developer’s guarantee and recommendation for electricity purchase. Ida said, however, the government is delegating the PLN to develop five new geothermal blocks in Oka Ile Ange, Gunung Sirung, Danau Rantau, Wapsalit and Sumani.
Salim Group dominates water industry
Indonesian conglomerate Salim Group continues to solidify its position in the water industry. Salim Group cooperated with Medco Group to acquire 60 percent of Singapore based energy and clean water company Hyflux Ltd last week. The consortium spent US$560 million, where $400 million were the acquisition cost and $130 million was operational loan. The purchase signified Salim Group domination in national water industry, which has a long history through Moya Holdings in Indonesia that controls water sanitation in Bekasi, Jakarta, Tangerang and Semarang. The group is followed by Adaro Group, Medco Group and PT Nusantara Infrastructure who own multiple clean water processing facilities in Indonesia and abroad.
Conglomerate and government corruption
The Corruption Eradication Commission (KPK) red-handedly caught 10 of Central Kalimantan Regional House of Representatives members and three Sinarmas Agro Resources and Technology employees in a graft transaction on Sunday. They set a bad business practice precedent in Indonesia, after it occurred less than a month from Lippo Group’s incursion with the Bekasi Regional Government for featured project’s permit issuance. Narada Kapital research head Kiswoyo Adi Joe warned investors to monitor whether the case reaches Sinarmas Group high-level executives. “I believe this case will impact only Sinarmas’ sectoral business, unless high-level executives are involved.”