By webadmin on 10:12 pm Jul 03, 2011
Category Archive

Keith Loveard

The word violation has a range of meanings, from the infringement of, say, a local by-law, to far more serious connotations including desecration or even rape. Presumably, it has a similar historical root as the word violence. It assumes a breach of normal standards of behavior.

It is, then, the appropriate word to describe my sense of ethical violation by the behavior of the Indonesian media and, in particular, by daily newspaper Kompas, which up until recently I had considered the standard-bearer for ethical journalism in this country.
In the week beginning May 23, this erstwhile respectable newspaper took it upon itself to launch a campaign against the presence of foreign business interests in Indonesia.  

Campaigning, it must be said, is no new departure for Kompas. Its readers – myself included, a subscriber for many years now – have long come to expect a new campaign theme every Monday. We tolerate this display of activism since often the themes are valid.
Take for instance the revelation one Monday morning last year that Kalimantan was dotted with coal mines that totally ignored any semblance of environmental control.

The reports led to a flying visit by government trouble-shooter Kuntoro Mangkusubroto that brought a crackdown on the issuance of permits. 
On other occasions, the ‘campaign’ theme overshadows the real world and certainly eclipses the traditional role of newspapers in delivering news.

One Monday in March, Kompas’ main story was about the high price of pharmaceuticals. Yet President Susilo Bambang Yudhoyono’s remarkable public admission that the development process had failed because of five separate obstacles was relegated to page two.
The editors of the newspaper appear to have decided that news is no longer what sells newspapers. Instead, they decide upon an editorial position and then ring up academics or commentators who they know will support that position.

This, to me, is not journalism. There is a place for opinion in newspapers, and it is in what are known as the op-ed pages. The front page might also carry opinion, as long as it is clearly marked as such. To parade opinion as news, I would argue, is a form of fraud, and certainly a violation of journalistic ethics.

It is also a dangerous practice from a business perspective. Selling newspapers is hard enough these days without turning away a part of the audience. I have not yet cancelled my subscription to Kompas, but I am certainly considering doing so.
As a journalist of 40 years experience, I believe the editors of the paper have overstepped the grounds of decency in jumping on the economic nationalist bandwagon.

To make matters worse, they published a map on the front page of the edition of May 25 pinpointing natural resources owned by foreign interests. These included PT Newmont Nusa Tenggara, which the map proclaimed as “80% owned by Newmont Corp.”
Any editor worth his or her salt should be aware that the mine is now majority owned by Indonesian interests. After all, it is only a matter of weeks since the decision was made over the final 7% of PT NNT shares to be divested under its contract of work. Foreign interests now own only 49% of the mine, and Newmont Corp. shares that portion with Japan’s Sumitomo. 

Twisting the facts 

That edition also mixed what I would describe as apples and pears by stating that regional autonomy is making the matter worse. It claims that 8,000 mining permits have been issued by local governments, “widening the opportunity for foreigners to control the coal and mineral industries.” It goes on to allege that Chinese and Indian firms are behind many of the small operators in the industry and that, at the current rate of extraction, Indonesia may have to start importing coal in 20 years.

The article does not, conveniently for the sake of its argument, point out that the largest mines – Bukit Asam, Kaltim Prima, Arutmin and Adaro – are all owned by Indonesian entities. Kompas is using its news columns to peddle propaganda.

Not satisfied with using its front page for such a biased hatchet job, it also dedicated the front of its business section with another assault on foreigners, this time those operating in the food sector. It mentions Unilever, Danone, Nestlé and others. It fails to mention Indofood, Wings or any of the many other food companies that are wholly Indonesian.

That was just one edition. As the week wore on, telecommunications and plantations were other areas in which the presence of dreaded foreign investors was deemed to be apparent. Almost apologetically, the Friday edition did quote Coordinating Economics Minister Hatta Rajasa as saying the problem was not really that serious. For Kompas, it appeared to be a case of don’t let the facts get in the way of the propaganda.

Attacks on foreign interests involved in the Indonesian economy are nothing new, of course. The economic nationalists conveniently tend to forget that it was the incompetence and – let’s be blunt – criminality of Indonesian business managers who virtually bankrupted the country in 1997 by making bad and often illegal business decisions, not least breaching the legal lending limits set by Bank Indonesia for inter-group borrowing. The banks collapsed and with them many real sector enterprises.

In my view, it is unreasonable to forget such recent history and attack those who rescued the businesses that had been brought to such a low ebb by the failure of corporate governance.

Most certainly foreign interests saw opportunity in Indonesia and, yes, government regulations allowed them to take a role in Indonesian business. Do the economic nationalists recall, though, the sense of amazement when Carrefour entered Indonesia in the darkest days of the crisis in 1998? Certainly no Indonesian company was prepared to make such a dramatic investment.

Seen from another direction, perhaps newspapers in China protest the presence of the Sinar Mas group in their country, or Brazilian journalists get into a lather about the presence in their country of the Wilmar Group and Sukanto Tanoto’s Royal Golden Eagle Group. Did the journalists of Central Asia protest at the presence of Indonesian entrepreneurs Setiawan Djody and Hashim Djojohadikusumo?

Do British journalists protest over the presence of Putera Sampoerna in the country’s gaming industry?

If they do they are placing themselves, like the editors of Kompas, on the wrong side of history. Globalization, if it means anything, means the freedom to invest beyond your own national boundaries. And, as the examples above demonstrate, plenty of Indonesian companies are doing so and many more are nurturing plans to do so in the future.

Kompas also laments the domination of the oil and gas business by foreign nationals. To be blunt, it is only in recent years that Pertamina has stopped using its revenues to line the pockets of important politicians and got around to putting its profits back into the business.

Indonesia only has itself to blame if up until now it has failed to develop businesses that can compete with major foreign firms in the oil and gas sector, especially when enormous investments are required before any revenue can be realized.

Some limits on foreign investment are essential. Protection is needed for Indonesian companies to develop the momentum with which they too can achieve the scale needed to operate beyond their national boundaries. What is not necessary is to bend the argument and in the process destroy the credibility of the profession of journalism by descending into propaganda.

To reject the presence of foreign capital per se, as Kompas is doing, is self-defeating and short-sighted. Remind me, please, to cancel that subscription.