Indonesia detains Trafigura employee in 285 trillion rupiah graft case

[JAKARTA] Indonesia has detained an employee of Trafigura Group along with seven other suspects in a case involving oil procurement by state-owned Pertamina, widening one of the nation’s largest corruption investigations in recent decades. 

The Indonesian attorney general’s office (AGO) said late Thursday (Jul 11) that it had held eight suspects, and was pursuing another believed to be overseas. They have been accused of alleged irregularities in oil purchases between 2018 and 2023, including actions related to export and import, vessel and terminal leasing, and product compensation arrangements.

The suspects include an employee of commodity trader Trafigura Group who was a business development manager during the period in question. There are also two individuals linked to other private companies, as well as six people who were executives at Pertamina and its subsidiaries at the time, prosecutors said. The AGO identified them only by their initials and job titles.

A spokesperson for Trafigura said that an employee of its Indonesian subsidiary had been cooperating with Indonesian authorities before being named a suspect in the case. The company is providing legal representation while awaiting further details about the allegations. A spokesperson for Pertamina said in a text message that the firm would respect the ongoing legal process and cooperate with authorities. 

Suspects have not been officially charged. The AGO can hold suspects for an initial detention period of 20 days, after which it must file charges, seek an extension or release those held.

Abdul Qohar, a director at the AGO, said at a press briefing that prosecutors estimated state losses from the graft identified in the case at around 285 trillion rupiah (S$22.5 billion). This is up from the 193 trillion rupiah reported in February, after taking into consideration the broader impact on the economy.

The high-profile investigation represents a credibility test for President Prabowo Subianto, who has pledged to crack down on corruption in the country’s sprawling state-owned enterprises. South-east Asia’s largest economy ranks 99th out of 180 countries in Transparency International’s 2024 Corruption Perceptions Index.

AGO spokesperson Harli Siregar said authorities have detained over a dozen executives from Pertamina, its subsidiaries, and trading companies since February as part of a broader probe that has included the questioning of more than 250 witnesses. Prosecutors alleged that detainees had encouraged refineries to import crude and oil products at marked-up prices via opaque trading arrangements.

In May, investigators also asked a number of several Singapore-based oil traders to meet in the city-state for questioning. The island is a storage hub for refined oil products, making it a vital link in the fuel supply chain.

Qohar said the AGO was working with Indonesian legal representatives overseas to track down the final suspect, with a focus on Singapore. “We’ve received information that the individual is there,” he said. “We’re taking all necessary steps to locate and bring him back.” BLOOMBERG