Disastrous Army Business
In Pasuruan, East Java, a combat engineer battalion is in dispute with its business partner over the management of a gas station. It is time military businesses were put in order.
STORIES of the military doing business should have ended long ago. According to Law No. 34/2004 on the Indonesian Military (TNI), soldiers are forbidden to own or run any kind of business as of five years after the law was enacted. However, rather than returning to the barracks, a number of soldiers are still doing business and even getting involved in disputes with their business partners.
In Pasuruan, East Java, the 10/Jaladri Palaka 2 Engineers Battalion of the Army Strategic Reserves Command together with the Cooperatives Center of the Brawijaya V Area Military Command (Kodam) are involved in a disagreement with a gas station businessman. Following an argument over profit shares, the combat engineer battalion deployed troops to the gas station that it claims was built on its land. Like in a war zone, they installed barbed wire at the location.
The dispute in Pasuruan should be used as an example to remind soldiers of the ban on business by members of the TNI. They are not allowed to go into business because their main responsibility is to defend this nation. The same ban applies to police officers. As well as causing problems for their main responsibility and function, soldiers being involved in business could give rise to a significant moral hazard. They could abuse their power and weapons to put pressure on business partners. In a number of instances, military businesses have given rise to jealousy: business endeavors lead to generals becoming very wealthy while ordinary soldiers live in hardship.
During the New Order regime, TNI businesses led to the rise of crooked tycoons protected by soldiers. Moreover, when a wide-ranging audit of military businesses was conducted at the beginning of the reformasi era, it emerged that many TNI assets had changed hands. Hence, the ban on military business was approved in the parliament.
However, some officers tried to go around this ban. Several soldiers and police officers use cooperatives to keep making profits. In Pasuruan, the Cooperative Center owned by the Brawijaya Kodam holds an operating permit from state oil company Pertamina to buy and sell fuel. It is true that the law allows military to establish cooperatives, but only to provide soldiers related needs. The military and police cooperatives we see now have moved far away from that original provision.
The TNI always uses the pretext that cooperatives are established to improve the welfare of soldiers. The fact is that through these cooperatives, it is only senior officers that benefit. On the ground, TNI cooperatives use improper practices, including threats when there are disputes with business partners.
The TNI commander should take resolute action against these illicit practices. In Pasuruan, generals that have misused their authority should be discharged. Pertamina employees who have handed out fuel distribution concessions to the TNI should also face action. The trade dispute between soldiers and their business partner should be resolved through a civil court.
It is time TNI cooperatives are put in order. Their management must be transparent and the types of business they are allowed to conduct must be restricted. For example, they could be forbidden to offer security services in any guise. If this ban is seen as ineffective, it would not be wrong to completely ban military cooperatives.
The matter of soldiers’ welfare should be returned to the state. The government must reform the bureaucracy in military institutions, including by improving soldiers’ remuneration. Instead of buying hugely expensive weaponry, the TNI budget should be prioritized towards this reform program.
Without resolute action and comprehensive improvements, the Indonesian Military will never be professional. Weak in the face of threats from overseas, soldiers are ironically more aggressive and act like macho men with business rivals who are themselves Indonesian citizens.