Indonesia energy regulator chief detained in graft crackdown

Agents of the Indonesia’s anti-graft agency Corruption Eradication Commission display bundles of US and Singapore dollars seized after a raid on the residence of Rudi Rubiandini, head of SKK Migas, Indonesia’s energy regulator.

AFP/JakartaThe head of Indonesia’s energy regulator has been detained for allegedly accepting almost $600,000 in bribes, officials said yesterday, in a case that could deter foreign investors. Rudi Rubiandini was arrested at his Jakarta home on Tuesday night with stacks of US and Singapore dollars in a black bag and small boxes, said the anti-graft agency, the Corruption Eradication Commission (KPK). Analysts said the case could deter foreign firms from entering an already difficult business environment, dealing a blow to Southeast Asia’s top economy as it tries to attract more investment and raise falling oil output. Anti-graft detectives swooped on the 51-year-old, head of upstream oil and gas regulator SKK Migas, after trailing a man who delivered $400,000 in cash and a BMW motorbike to his home on Tuesday. The individual, whose identity was not disclosed, was a middleman, officials said. He had collected the cash from another man who worked for a Singapore-based oil trading firm. Almost $200,000 more, believed to be bribe money, was found in Rubiandini’s house. Some $200,000 was also found in the middleman’s house. The sum uncovered was “one of the biggest the KPK has ever confiscated in a bust”, said Bambang Widjojanto, a senior official at the agency. All three men have been arrested and named as suspects yesterday in the case after hours of questioning. Energy and Mineral Resources Minister Jero Wacik said he was “shocked” at the news but insisted the case would not hurt Indonesia’s investment climate, while SKK Migas said operations were normal despite the arrest. As the upstream oil and gas regulator, SKK Migas deals with the search, recovery and production of crude oil and natural gas. Martin Hughes, director of consultancy Business Risk Indonesia, warned: “In the short term, things might be strained and tumultuous in the department. We might see delays, like in the releasing of permits for example, and that might cause nervousness among investors.” Transparency International last year ranked Indonesia 118th out of 176 countries on its annual index, which rates the least to the most corrupt states.