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Indonesian startup CEOs in political hot water

Two presidential staffers, Amartha’s Andi Taufan and Ruangguru’s Belva Devara are facing backlash due to alleged conflicts of interest.

Andi Taufan is founder and CEO of Indonesian fintech lender Amartha and at the same time special staffer of President Joko Widodo. Now he is being publicly criticized for using an official cabinet secretariat letterhead for an initiative led by his company. Taufan mailed a message to all district heads in the country, asking for support to Amartha’s COVID-19 relief program.

In the letter dated April 1, Taufan wrote that Amartha has committed to assisting the village volunteer program against COVID-19—initiated by the ministry of villages, disadvantaged regions, and transmigration—in Java, Sulawesi, and Sumatra. As part of the program, Amartha field staff will raise awareness about the disease and collect data on how many protective equipment kits are needed in public health centers.

The letter drew harsh criticism from activists and politicians, as well as in social networks.

Taufan is considered to have violated office rules. As a special staffer, his task is to provide advice to the president, but he doesn’t have the authority to issue official letters to government agencies or local leaders. He potentially also caused a conflict of interest with his role as CEO of Amartha.

Not long after, Taufan withdrew the letter and apologized publicly. He explained that there were no bad intentions, that he only wanted to do good and move quickly to help prevent the spread of COVID-19 in the villages. Taufan also said that his support for the program is purely based on humanitarian grounds, and at the expense of Amartha and community donations, which can be accounted for transparently.

The president’s staff office told local media that they had reprimanded Taufan, and sent a warning to him not to repeat this mistake. Even so, a wave of criticism has flooded the social network Twitter in the past two days and many netizens have urged Taufan to give up his position as special staff member.

Further adding to the pressure, Indonesia Corruption Watch (ICW) released an official statement that advised Taufan to send an apology letter to all district heads in Indonesia. ICW also suggested the president to immediately evaluate the performance of special staffers, to submit public information about their functions and authority, and to dismiss those with conflicts of interest.

Can a CEO in public office be neutral?

The polemic raises once again questions whether public officials can serve as company CEOs at the same time. Besides Taufan, another special staffer with ties to a big tech company has come under fire. Belva Devara is co-founder and CEO of edtech platform Ruangguru which became a digital platform partner in the newly launched pre-employment card program.

The program aims to provide assistance for citizens seeking to improve their employment skills. Other cooperating tech companies are Tokopedia, Bukalapak, Maubelajarapa, Hacktiv8, G2 Academy, Ovo, and LinkAja, according to the official website. With a budget of IDR 20 trillion (USD 1.2 billion), the program is expected to sign up 5.6 million participants.

Anticipating that Ruangguru’s participation would be questioned, Belva Devara clarified that he had never been involved in the partner selection process for the program. In a thread on his Twitter account, Devara said that the entire technical mechanism and budgeting of the program are carried out independently by the coordinating ministry of economic affairs and the management without anyone’s intervention.

Bevara also emphasized that the program has been planned before he was appointed a special staffer in November 2019. “Although there is no violation of the law, I am ready to back down [from the special staff position] in order to avoid the public’s perception and assumptions. However, the decision to step down is a big one and must be discussed with [people inside] the presidential palace,” he wrote.

It is common for entrepreneurs in Indonesia to enter politics. Being associated with innovation, with a bold and risk-taking approach, businessmen in a public office provide hope of a positive change for the entire nation. Ideally, they should leave their company positions when entering the office, to avoid any possible conflict of interest.

Startup leaders need to be mindful

This was the case for Nadiem Makarim who announced his resignation from Gojek on the day he was appointed minister of education and cultural affairs. But other than ministers, the special staffers don’t have any authority over policies, so they are generally allowed to hold additional positions in institutions or companies.

Nonetheless, their status as “close to the president,” throws a spotlight on the startup leaders, especially in a country where the government has a long history of corruption and nepotism. Their moves will always be scrutinized by the public, which requires them to be particularly careful when taking decisions. As Indonesia Corruption Watch argued, the government needs to be transparent in all of its activities, and that includes the participation of startups in government projects.