South Korea's Hyundai Engineering admits paying kickbacks for Indonesia coal plantBusiness | 2 May 2019 2:33 pm
Major Korean builder Hyundai Engineering & Construction has admitted bribing an Indonesian politician for a coal-fired power plant construction project in West Java.
Following repeated Korea Times inquiries, a spokesman at Hyundai's headquarters in Seoul said it gave a large amount of money to Cirebon Regent Sunjaya Purwadisastra through a broker to calm protesting residents in the area over the construction.
"The regent approached us through the broker and offered to resolve the issue," the official said. "For us, it is critical to finish the construction on time; otherwise, we could face a heavy fine. So we gave him money."
According to local media, Sunjaya demanded bribes from Hyundai, which gave him 6.5 billion rupiah (US$460,000) out of a requested 9.5 billion rupiah.
"For a project as big as that, I thought that the district chief should have a share [of the pie]," Sunjaya was quoted in Indonesian as saying.
"Rudiyanto's [a subcontractor] trucks could not enter the area because they were blocked by people who were staging protests. Thanks to our intervention, they were allowed access and he paid us."
Hyundai, one of three main contractors, is building the 1,000 Megawatt Cirebon 2 coal-fired power plant there. Construction began in 2016 with finance from investors including KOMIPO, a subsidiary of the state-run Korea Electric Power Corporation, and is expected to be finished next year.
Sunjaya is standing trial on various corruption allegations, including this case. Indonesia's Corruption Eradication Commission arrested him and three other regional heads in West Java in its sweeping investigation over the past seven months.
A senior official at international watchdog Global Witness (GW) told The Korea Times that the Korean government and companies are risking their reputations by making wrong investments for the Indonesian coal industry, which often makes headlines in corruption cases.
"Not only is coal increasingly risky, climate-destroying and bad for air pollution, there is now a huge and underestimated corruption risk," GW campaigner Adam McGibbon said.