Erick Thohir Supports DPR's Initiation Of Law Revisions To Improve BUMN Performance

Minister of SOEs, Erick Thohir. (Photo: Doc. Ministry of SOEs)

JAKARTA - Minister of SOEs (State-Owned Enterprises) Erick Thohir welcomed the initiation of Commission VI of the DPR to revise Law Number 19 of 2003 concerning State-Owned Enterprises (BUMN). The revision is related to increasing the authority of the Ministry of SOEs in managing and improving the performance of state-owned companies. Especially about finance and State Capital Participation (PMN).

For information, the Revised Law (RUU) concerning Amendments to Law Number 19 of 2003 concerning State-Owned Enterprises has been included in the priority National Legislation Program (Prolegnas) for 2021.

"The revision of the SOE Law is very appropriate, because we can continue to improve the performance of SOEs together. Because it clearly talks about PMN, debt, ownership which really need to be improved," Erick said in a working meeting with Commission VI DPR RI, quoted on Saturday, September 25.

Erick said that in the midst of the digitalization era that demands business processes to be carried out quickly, SOE governance must be able to balance these needs.

"For example, how come it took so long to close (SOEs), restructuring us took 9 months. Even though in the digital era, the dynamics of trying to have an extraordinary acceleration, when yesterday the company was profitable, tomorrow it could immediately lose," he explained.

This means that 9 months is long enough just to focus on one program. Meanwhile, in the open market, private companies are still invading their business.

To become a winner in the open market, said Erick, it is necessary to improve regulations. Because the rules are also the basis for improving the performance of state-owned companies.

SOE Ministry Office/PHOTO: IST

"So, I think the key to the BUMN Law is important because the descendants there are PMNs, and also the performance of the companies that we can do, whether restructuring, merging, or strengthening to become champions," he said.

The company issues bonds for bonuses

In the policy revision, one of which will regulate dividends, Erick said that profit sharing is indeed done because of a truly healthy financial performance, not the result of polish.

However, said Erick, sometimes SOEs polish their financial performance to look healthy, even though they have just added debt.

"Dividends must be carried out according to the company's performance, not from polished books. Sometimes companies issue debt securities for bonuses and bonuses. In our first year (serving at the Ministry of SOEs) we found that," he explained.

According to Erick, the company's move to borrow debt to provide bonuses is very unethical. Therefore, he stressed that such practices should be punished.

"This is something that in my opinion is very unethical. Of course, this is something that should be in the law. This is something that must be guarded," he said.

Explain the provision of PMN

Erick said that through the BUMN Bill, it would further clarify the provision of PMN to state-owned companies. So, he said, only SOEs that really need it will get it, and also adjust the company's capabilities. At the same time to ensure its use is clear.

"Of course PMN with the BUMN Law, we hope that it can be a big map too, that PMN must have a clear context. If it is an assignment then it must be carried out, but if the corporation is not strong, then this must be clear on the funds," he said.

According to Erick, the BUMN Bill also strengthens the role of the BUMN Ministry in taking action against state-owned companies that are in trouble. Such as to take decisions on restructuring, mergers, or even strengthening the company.

With this step, Erick hopes to improve the quality of state-owned companies so that they are more competitive at the global level. Especially now that fewer SOEs are entering the global market, there are only 4 SOEs that survive in the global market.