State-Owned Corporations (BUMN)

State-Owned Corporations (BUMN)

The companies belong to the corporations. All activities undergone by the companies belong to the corporations activity. In the previous it has been explained that the companies are the place where the services and the production processes are undergone. Therefore, the production process is undergone inside the environment of the corporations which owns them. For instance, PT Tirta Kencana has a company in a form of a soft drink factory. The production process of soft drinks undergone in the factory has the meaning that it is undergone inside the environment of PT Tirta Kenca. It is obvious that the corporation is a place where the production process is undergone.

What is the relationship between the corporations and the agents of economy? Do you know what the agents of economy are? The government, the private companies, and the cooperatives are the first agents within the 
Indonesian economy. They take a part in establishing the corporations. They invest capitals in various kinds of corporations. These corporations has played important role in many production processes to gain the social welfare’s. Therefore, the kinds of corporations can be determined by their capital owners which called the three agents of economy.
In managing the branches of production and the natural resources controlled by the nation, the government establishes the State-Owned Corporations (BUMN). It is a corporation the capital of which is derived from the national assets.

Forms of State-Owned corporations

According to the description above, the main characteristic of the state companies are their capitals derived from the national assets. Thus state-Owned Corporations has three forms of companies. Every single company has its own characteristics.

Public Companies

It is one of the forms of the state-owned corporations. You should study this description to understand what 
public companies are.

a. Definition of Public Companies
It is the state companies the purpose of which is providing services for public interest.

b. Characteristics of Public Companies
They have certain characteristics as the following:
  1. providing services for public interest is the main purpose;
  2. having legal status;
  3. mostly concerning in vital service;
  4. led by the board of directors;
  5. its employees statuses are the state companies workers.
  1. Perum perhutani runs some activities dealt with the forest managing.
  2. Perum Pegadaian which was used to be in a form of a bureau companies turned into public companies. Their charge is in mortgage service.

Incorporated Companies

The state-owned corporations have this form of companies the most. You should study this description to understand the characteristics of the incorporated companies.
a. Definition of Incorporated Companies
They are a form of the state companies which manage a certain production field and the purpose of which is to earn profits.
b. Characteristics of Incorporated Companies
Their characteristics are as the following:
  1. having a form of Incorporated or Limited Companies (PT);
  2. the purpose is to earn profits;
  3. obtaining no facilities from the government;
  4. led by the board of directors;
  5. their employee’s statuses are the private companies workers;
  6. their shareholder is the government.
  1. PT Pupuk Sriwijaya runs fertilizers production business.
  2. PT Bio Farma runs vaccine production business.
  3. PT Pos Indonesia runs post business services.
  4. PT Garuda Indonesia runs flight business.

The state-owned companies that have been ‘go public’ are PT Aneka Tambang Tbk, PT Bank BNI Tbk, PT Bank Mandiri Tbk, and PT Telkom Tbk. However, most of the state companies are incorporated companies today.
Beside those forms of state companies, there are also the Regional-Owned Corporations (BUMD) which are owned by the regional governments. These companies derive most of their capitals from the regional assets.
The regional governments authority in managing the The Regional-Owned Corporations is stated in the Government Regulation No. 25/2000 (Peraturan Pemerintah No. 25 Tahun 2000) concerning the Government Authorities and the Provincial Authorities as The Autonomous Regions.
The characteristics of the Regional-Owned Corporations are as the following:
  1. being built based on the regional regulations;
  2. being led by the directors who are promoted by the boards of regions with the House of Representative’s considering;
  3. the directors tenure is within four year;
  4. the purpose of which is collecting the regional incomes to support the regional developments.
  1. the Municipal Waterworks (PDAM);
  2. the Regional Transportation Companies;
  3. the Regional Parking Companies.

The Role of the State-Owned Companies

There are some important roles of the state-owned corporations as the follows.
  1. As the manager of primary branches production and of the natural resources owned by the state for the purpose of producing goods and services for the social welfare’s.
  2. As the employers.

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