Restructuring specialist Elia Massa Manik, 52, faces the biggest challenge of his career as he takes the helm of state-owned oil and gas giant Pertamina, which has frequently fallen victim to political intervention and rent seeking practices by those close to power.
Probably due to his lack of faith in the company’s internal executives, President Joko “Jokowi” Widodo has appointed relative outsider Elia to lead Pertamina after infighting forced the ouster of the company’s president director, Dwi Soetjipto, in February.
Dwi, former CEO of state cement company PT Semen Indonesia and also a reform specialist, became entangled in an irreconcilable dispute with several of Pertamina’s career executives who had the backing of State-Owned Enterprises (SOE) Minister Rini Soemarno.
Given the infighting that has wracked Pertamina, Elia has to, as a priority draw up policies to get all parties in the dispute to bury the hatchet and build a culture of transparency and good governance.
“Give me some time to learn, then, I promise there will be transparency, which is going to be the foundation for the development of the company’s culture,” Elia said after Pertamina’s general shareholder meeting at the SOE Ministry on Thursday.
“I want everything to be transparent. If there’s a problem in the downstream, for instance, it’s going to be the responsibility of all in the management team.” Born in Medan, North Sumatra, Elia received his bachelor’s degree from Bandung Institute of Technology (ITB) in 1988 and master’s degree from the Asian Institute of Management in the Philippines in 1992.
Since then, Elia has worked at various companies, including consumer goods giant PT Indofood Sukses Makmur, venture capital firm PT Nura Kapital, energy company PT Benakat Oil, paper producer PT Kertas Basuki Rahmat Indonesia, property company PT Jababeka, oil services company PT Elnusa, venture capital company GMT Kapital Asia, state lender Bank Negara Indonesia and state plantation holding company PTPN III.
But it was his assignment as CEO of Elnusa, Pertamina’s publicly listed subsidiary, and PTPN that earned him his credentials as a corporate turnaround specialist. Under his leadership between 2011 and 2014, Elia took Elnusa back into profitability and he did it again for PTPN when he led the company employing more than 132,000 workers from April 2016 until he took over as Pertamina CEO.
“To build a solid team, we should have no vested interests in management. This certainly has to start with myself” Elia said. “I have no affiliation to any political parties. I am always professional. {...}’ve told the shareholders that if I can’t contribute or if l deviate, just tire me.”
A source at the Presidential Palace said that apart from Elia’s track record, his appointment also boded well for the Presidents key confidants; Rini and Coordinating Maritime Minister Luhut Pandjaitan. Elia has previously worked for companies belonging to Rini and Luhut.
It was a discord between Rini and Dwi that actually triggered the infighting in Pertamina. Dwi and his deputy Ahmad Bambang were dismissed over concerns about their lack of teamwork and escalating conflict after Rini promoted Ahmad as deputy and gave him authority similar to that of the president director.
With the company skippered by two captains, what ensued was a breakdown in management. The intervention came amid demands by the President for Pertamina to provide transportation subsidies in order to sell fuel in remote Papua at the same price as in Java, and to sell gas at a loss to help priority industries boost their competitiveness.
Pertamina has estimated that the demands could result in losses of more than Rp 1 trillion (US$ 75 million) annually The policies were enforced as Pertamina faced its biggest gamble in the upstream business: taking over management of the Mahakam Block from a local unit of French Total SA, starting later this year, and the construction of several key refineries at a cost of billions of dollars.
Energy management observer Fahmy Radhi of Yogyakarta based Gadjah Mada University, said reuniting the divided parties was urgently required for the company to be able to punch above its weight.
“Its better for him to keep the current board of directors, embrace and ask them to work together to ensure unity It is easier for Elia to unite the people there because he is an outsider,” Fahmy said
Jakarta Post, Page-1, Friday, March, 17, 2017
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