The State-Owned Enterprises Ministry is preparing a regulation aimed at stamping out nepotism in all state-owned companies, in a bid to cut out corruption and mismanagement.
“Nepotism is indeed a bad thing because it affects companies’ management. When people with family ties work at the same company, they are likely to prioritize their own personal interests above the firm’s interest,” said State-Owned Enterprises Minister Dahlan Iskan after a closed-door meeting on Thursday.
Dahlan said the regulation would likely be in the form of an instruction mandating all state-owned companies impose anti-nepotism guidelines. He said such a regulation would, for example, prohibit family members from working in the same state-owned firm.
Dahlan said the regulation would apply to all employees, regardless of whether they were hired legitimately or due to nepotism.
“The strict regulation is aimed to prevent all possibilities of dirty nepotism from happening in state-owned enterprises,” Dahlan said.
He added that he would meet next week with a number of state-owned firms that had already imposed anti-nepotism measures to further discuss the regulation.
“We will learn from them about how they implement the measures, what the obstacles and the benefits are,” he said.
Contacted separately, state-owned cement maker PT Semen Indonesia corporate secretary Agung Wiharto said his firm would fully support the ministry’s plan as it was part of good corporate governance values.
“We are pretty aware of the issue of nepotism, and we already imposed a similar measure as what the ministry is planning in 2010,” he said.
Agung also said before his company started cracking down on nepotism, he saw a number of cases where children of directors at his firm easily climbed the ladder — and not because of their achievements.
He said that since 2010, Semen Indonesia has prohibited married couples and relatives from working at the firm.
Meanwhile, state-owned construction firm PT Wijaya Karya (WIKA) spokesman Natal Agrawan declined to comment before he knew the specifics.
“We will see details of the regulation first, once it has been released,” he said.
Indonesia Corruption Watch (ICW) researcher Ade Irawan said he approved the ministry’s plan, but was pessimistic that the measure would be the best solution to fight nepotism within state-owned enterprises.
“The spirit of the regulation is good, but it could be perceived as violating human rights because for some people, it will prevent them from having a career in state-owned firms. I think the most important thing to do is to have an open and quality recruitment process,” he said.
Ade also said that instead of limiting people’s career options, state-owned enterprises could guarantee competence through a strict recruitment process carried out by independent institutions.
“The firms can also manage their staff members’ work placement to avoid nepotism. For example, when a staff member’s father is a financial director, his son [...] should be placed in another division,” he said.
Ade went on to say that it was common knowledge nepotism still occurred in some state-owned enterprises. Nepotism was very rampant during the era of former president Soeharto.
For example, in 1998, Soeharto appointed his daughter Siti Hardijanti “Tutut” Rukmana the social affairs minister.
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