Shocking Arrest Underscores Endemic Corruption in Indonesia’s Energy Sector

Rudi Rubiandini was considered a clean man in a corrupt industry, until authorities arrested him and accused him of taking $700,000 in bribes

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Rudi Rubiandini appears in front of journalists after intensive examination by Corruption Eradication Commission after being arrested on suspicion of bribery in Jakarta, Indonesia, Aug. 14, 2013.
Agung Kuncahya B / ZUMAPRESS

Rudi Rubiandini appears in front of journalists in Jakarta on Aug. 14, 2013, following examination by the Corruption Eradication Commission after being arrested on suspicion of bribery

Indonesia has been stunned and saddened by the arrest of Rudi Rubiandini, chief of the country’s top oil-and-gas regulator, SKK Migas, on corruption charges. In a country plagued with graft, Rubiandini had been seen as a clean and upstanding figure — a respected academic and technocrat who had pledged to fight corruption in Indonesia’s lucrative energy sector.

Rubiandini, who took over SKK Migas in January following a brief stint as Deputy Energy Minister, is accused of taking $700,000 in bribes from an oil-trading company; the sum is a record high among the cases pursued by Indonesia’s Corruption Eradication Commission (KPK). In a late-evening swoop Tuesday, KPK investigators  seized stacks of U.S. and Singaporean banknotes and a BMW motorcycle from his home; they also arrested a man who allegedly handed the money and the motorcycle to Rubiandini and an executive of Kernel Oil, a Singapore-based company.

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“I didn’t commit an act of corruption,” Rubiandini told reporters on Wednesday, before he was transported to a KPK detention center. “But [what I did] seems to be categorized as [accepting a] gratuity.” President Susilo Bambang Yudhoyono has temporarily suspended Rubiandini from his post.

Rubiandini is a mining expert who was twice named best lecturer at the prestigious Bandung Institute of Technology and won kudos earlier this year when he pledged to crack down on contractors that illegally traded or sold their exploration licenses. The oil-and-gas sector, which contributes 20% to 30% of Indonesia’s income, has a long history of corruption. In the past few years, the KPK has been investigating graft cases involving energy bosses such as Rachmat Sudibyo, a retired director general of oil and gas at the Energy Ministry, and Suroso Atmomartoyo, a former director of refining at the state oil-and-gas company Pertamina. Both men deny any wrongdoing.

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“There is a corrupt system [in the oil-and-gas industry], and the KPK needs to investigate down to the roots, especially the so-called oil mafia,” says Metta Dharmasaputra, a business researcher and former investigative journalist, referring to oil traders and companies that wield an outsize influence in Indonesia’s oil-and-gas industry.

Since its establishment in 2003, the KPK, modeled after Hong Kong’s highly successful Independent Commission Against Corruption, has prosecuted almost 100 government officials, lawmakers and others. But fighting bribery in the oil industry will be an uphill battle, given the entrenched nature of graft in the energy sector. Rubiandini’s case, Metta says, “is just the tip of the iceberg.”

MORE: How Corruption Is Holding Asia Back

13 comments
Oishiimaru
Oishiimaru

Indonesia is one of the most corrupt countries in the world. ...and it's Islamic, to boot!

The film 'The Act of Killing' is highly recommended for those wanting to know what kind of place we're dealing with here. 

MonicaCMesa
MonicaCMesa

How to earn 300 us dollar per day its unbelievable but its work Hope to see you around here more often.== >w­w­w.B­a­r­2­9.ℂ­o­m

kistantoaja
kistantoaja

It's amazing corruption in Indonesia

malatii
malatii

This guy must have copied Thaksin Shinnawat (fugitive former Thai prime minister)'s practice of "I do no wrong. It is the law that is in the wrong." It is just happened that this guy could not flee to Dubai and take asylum there on time (before he got arrest).