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Analysis: Pertamina's latest fire incident ignites blame game

Jakarta Post - March 15, 2023

Tenggara Strategics, Jakarta – Another year, and it's another blaze for PT Pertamina: on Feb. 3, a fire broke out at the state-owned energy holding company's Plumpang depot in North Jakarta, killing 20 people living in a residential area in the depot's vicinity. The incident has raised several questions, including how a residential area came to be developed so close to the fuel depot, who is to blame for the disaster, and whether the depot or nearby residents should be relocated to prevent the occurrence of similar incidents.

Pertamina's safety standards are now again in the red, not only in terms of facilities risk management, but also in terms of public safety for the surrounding community. The Pertamina Plumpang Depot is located just 28 meters from the closest residential area, so the depot fire quickly spread to nearby homes, with dozens killed or injured before they could flee the blaze.

The cause of the fire at the depot is still under investigation. According to several local residents who witnessed the fire, it had just stopped raining when they heard thunder, followed by a blast and a pungent smell like gasoline, with flames bursting soon after. National Police chief Gen. Listyo Sigit Prabowo suggested that a technical problem might have occurred while filling a fuel tank around that time.

Fuel evaporates easily and the fumes can mix with air, so a lightning strike could have ignited the flammable mixture that formed and caused the blaze. In the last fire at Pertamina's Balongan refinery in 2021, a lightning strike In the aftermath of the fatal fire, several former Jakarta governors from Anies Baswedan to President Joko "Jokowi" Widodo were blamed for failing to relocate residents near the depot to a safer area during their tenures. Meanwhile, Pertamina's directors and commissioners, including president director Nicke Widyawati and president commissioner Basuki Tjahja Purnama, were blamed for failing to ensure the depot's safety. In the end, however, Pertamina business support director Dedi Sunardi took the brunt of the blame and was removed from his position.

State-Owned Enterprises (SOEs) Minister Erick Thohir and Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan have opposing views about relocation possibilities. Luhut says the fuel depot has a strategic role in supplying fuel to Greater Jakarta, which accounts for 20 percent of Pertamina's total fuel distribution, so rather than relocating the facility, the people living around the depot should be relocated.

Erick, on the other hand, has said the government will relocate the Pertamina depot from Plumpang in 2024 to land belonging to state-owned port operator PT Pelabuhan Indonesia (Pelindo). The related construction will take 2 to 2.5 years to complete, so the entire relocation project will need around 3.5 years.

What's more

The public is divided on who should take the blame. Some think Anies should be held responsible for issuing building permits (IMB) for people to build private houses in the depot's vicinity even though they did not have land certificates, which encouraged them to live in such a dangerous area. Others say the President Jokowi is to blame for establishing community units (RWs) in the area and issuing personal identity cards (KTP) to people as being domiciled in local RWs so they had legal residential status.

Still others say that although Basuki had cautioned against people living in the area surrounding the depot, which was supposed to be a buffer zone, he had failed to initiate relocation during his Jakarta governorship. Meanwhile, some people want him to step down as Pertamina president commissioner, since the company had failed to ensure the depot's safety.

Nicke has also been on the end of relentless public calls to step down as Pertamina president director, believing that when the SOEs minister said he would not hesitate to fire anyone found responsible for the incident, Erick was referring to her, but it was Dedi who was dismissed.

What we've heard

A number of sources at Pertamina said the company held simulations showing that the projected cost of relocating the Plumpang depot would be greater than relocating residents from the surrounding buffer zone. However, the State-Owned Enterprises (SOEs) Ministry had never disclosed the cost comparison because relocating the Plumpang residents was not a popular option.

"It could cause resistance from residents, even though they have occupied the land there in an illegal manner," said one Pertamina source.

Plans to relocate the Plumpang depot have existed from the time it was founded in 1974. But like every Jakarta governor since as far back as the 2007 era, SOEs Minister Erick Thohir doesn't dare evict the people who live in the Plumpang depot's designated buffer zone.

Erick's reluctance has given rise to internal rumors at Pertamina. One alleges that the minister doesn't want to move the local residents for fear the unpopular decision could reduce his electability ratings ahead of the 2024 elections, as he is struggling to be nominated for vice president.

A health, safety and environment (HSE) expert in the oil and gas industry said a major fire incident would not have occurred if the buffer zone around the Plumpung depot had been properly secured. He also said that residential areas could easily ignite fumes from evaporating fuel.

"Pipe leaks produce flammable vapors when [fuel fumes] come into contact with heat sources in residential areas," said the expert. Moreover, at the time of the fire, the steam emitting from a leaking pipe was so thick it was spreading into the surrounding neighborhood.

Another source said the suspected pipe leak was due to lack of maintenance and low safety standards at the Plumpang depot, despite the fact that several parts of the facility were connected to a digital monitoring system. Any leaks or damage should have been picked up by the control room, the source said.

They also mentioned that lack of maintenance was an issue at other Pertamina depots and refineries. The results of recent audits for several facilities showed scale on several pipes, which could lead to leaks or high pressure. And while a number of depots and refineries had lightning rods, the equipment sometimes malfunctioned.

The source alleged that Pertamina did not make immediate improvements in response to the audit's findings.

[This content is provided by Tenggara Strategics in collaboration with The Jakarta Post to serve the latest comprehensive and reliable analysis on Indonesia's political and business landscape.]

Source: https://www.thejakartapost.com/opinion/2023/03/15/analysis-pertaminas-latest-fire-incident-ignites-blame-game.htm