Indonesia’s parliament speaker quit his post Wednesday over allegations he tried to extort a stake from a US mining giant, in one of the country’s biggest political scandals in years.
Setya Novanto was recorded demanding shares in the Indonesian unit of Freeport-McMoRan in exchange for extending the miner’s right to operate in the country, claiming the the stake would be divided between President Joko Widodo and the vice president.
The case sparked a political storm when the recording emerged several weeks ago, and has gripped Indonesia with a cast of colourful characters, including a spy-turned-company executive and a politically-connected businessman dubbed “the gasoline godfather”.
Novanto had tried to hang on to the powerful speaker post despite mounting pressure, but finally opted to step down late Wednesday as a parliamentary ethics council investigating the case was wrapping up its probe.
“It is with sincerity that I tender my resignation, I hope this is in the interest of the nation, the state and the people of Indonesia,” said his resignation letter, which was handed to the council.
The move came during the last stage of the council’s investigation, when most of its members had found him guilty of a “moderate ethics violation”, and the body appeared poised to strip him of his job anyway.
The head of the council said that Novanto’s resignation meant the investigation had ended.
Despite quitting as speaker, he will remain a lawmaker.
Business uncertainty
Widodo and Vice President Jusuf Kalla have vehemently denied the claim that they ordered Novanto to demand the stake.
Kalla, who had called for Novanto to quit, welcomed his resignation.
“I think it’s good, although a little late — he should have quit last week,” he told Kompas newspaper.
Even in one of the world’s most corrupt countries, Novanto’s blatant attempt to extort a major foreign firm has proved shocking and analysts say it highlights the continued uncertainty for overseas investors trying to do business in Southeast Asia’s biggest economy.
The controversy erupted several weeks ago when the energy minister handed a recording of Novanto allegedly demanding 20 percent of shares in Freeport’s Indonesian unit to the ethics council.
The council heard evidence from several people, with key testimony provided by the head of Freeport’s Indonesian unit, Maroef Sjamsuddin.
Sjamsuddin — the former deputy chief of Indonesia’s national spy agency — described how he used his mobile phone to secretly record Novanto demanding the shares in a June meeting.
Also at the meeting was Muhammad Reza Chalid, a businessman involved in the fuel import industry, who was implicated in the attempt to extort Freeport.
He has disappeared in recent days and failed to answer a summons to testify to the ethics council.
Freeport, which operates one of the one of the world’s biggest gold and copper mines in Indonesia, remains locked in negotiations about extending its contract in the country, which expires in 2021.
Novanto has courted controversy before, and he received a warning from the ethics council after he appeared during a September visit to the US with presidential hopeful Donald Trump, and said that Indonesians valued him “highly”.
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