[Kabar-Irian] Irian News - 1/18/06 (Part 2 of 2)
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- Suspects may shed light on Indonesia ambush
- Papua puppetry leaves murders unsolved
- Indonesia's stature rises
- Second mining company blasts NY Times over reports
- Freeport-McMoRan net profit surprises
- Payments by Freeport McMoRan Trigger Probe
- Conflicting Versions Of Freeport Graft Story
*****************************
Financial Times (London)
Suspects may shed light on Indonesia ambush
By Shawn Donnan in Jakarta
Published: January 17 2006 02:00
Lawyers have raised fresh questions about the alleged involvement of the
Indonesian military in a 2002 ambush near the world's largest gold and
copper mine that left two American teachers dead and strained relations
between Jakarta and Washington.
Indonesian police last week detained 12 people in connection with the
August 2002 attack near Freeport McMoRan's Grasberg mine in remote Papua
province, including a separatist commander indicted by a US grand jury for
the attack.
Four were freed over the weekend, while the remaining eight were flown on
Saturday to the capital, Jakarta, where they are expected eventually to
stand trial. They have yet to be formally charged.
While US officials have applauded the arrests, the move has also rekindled
speculation over who was really behind the attack on a convoy of Freeport
employees, which some analysts still believe was engineered by the
Indonesian military.
Underlying that view is the military's long history of abuses in Papua -
the scene of a separatist struggle since Jakarta seized control in 1963 -
and its occasionally awkward relationship with Freeport, which pays the
military to provide security at its mine.
The new questions may rally US opponents of a Bush administration move
last year to lift an arms embargo on Jakarta, which is now viewed by the
US as an important ally in the war against terrorism.
The emerging problem for Washington is that a lawyer for Anthonius Wamang,
who was indicted by a federal grand jury in June 2004 and has admitted
taking part in the attack, says he saw three men in military uniforms at
the scene.
The lawyer, Albert Rumbekwan, also claims that ammunition used in the
attack was provided to Mr Wamang by an Indonesian sergeant-major.
Mr Wamang is also said to have strong business links to the military, in
spite of being described in US court documents as an "operational
commander" of the separatist Free Papua Movement.
Claims of this sort are likely to emerge again during the trials of those
arrested - who include a priest and other church activists - and
Indonesian security officials are eager to dismiss them.
Indonesian officials argue that claims of military involvement were
rebutted during a joint investigation by the US Federal Bureau of
Investigations and local police. The country's police chief yesterday
insisted that the band of separatists accused of carrying out the 2002
attack thought they were attacking a military convoy.
"Rights groups here and abroad have no other recourse than [to] throw old
allegations," said another senior security official.
However, it is clear that both Jakarta and Washington know they are
dealing with a sensitive issue.
Susilo Bambang Yudhoyono, Indonesia's president, yesterday met Patsy
Spier, the widow of Rick Spier, one of the Americans killed in the attack.
Mrs Spier, who has been an outspoken proponent of US pressure in the past,
said she believed FBI agents should have a role in the case.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Asia Times Online
January 18,2006
Papua puppetry leaves murders unsolved
By Gary LaMoshi
Denpasar, Bali - The United States and Indonesia have gotten their man in
the ambush killings of two Americans in Papua three years ago. The arrest
of Antonius Wamang, an alleged separatist military commander, is supposed
to quell speculation that the Indonesian military was behind the
shootings. But in this intercontinental production of wayang kulit -
Indonesian shadow puppetry - Wamang may not follow the script.
Wamang has admitted firing shots in the August 31, 2002, attack near
Timika on a road to Freeport-McMoRan's vast Grasberg mining complex in
otherwise remote Papua (see Indonesia's gold standard, Asia Times Online,
September 7, 2002). His lawyer says Wamang told police and others he chose
the site after receiving information that Indonesian troops would be
there, and he intended to attack them.
Instead, he attacked a van full of teachers and other Grasberg employees
returning from a picnic. Three people were killed - an Indonesia teacher
and two Americans, school principal Edwin Burgon and teacher Ricky Lynn
Spier - and 11 others wounded. Wamang was indicted for murder in the US in
June 2004 but eluded security forces and a US Federal Bureau of
Investigation (FBI) team until last week, though Australian television
managed to interview him three months after the indictment.
Masked men
Attacking Westerners would have been unprecedented for the separatist Free
Papua Organization (OPM, for Organisasi Papua Merdeka), which has waged a
low-level insurgency against Indonesian rule for decades in the province
that Indonesia annexed in 1969. According to his lawyer, Wamang told
police interrogators he saw three masked men in military uniforms firing
their weapons at the scene as well. He also repeated his past claim that
he received his ammunition for the attack from a high-ranking soldier.
Of course that makes no sense. Why would the military give bullets to a
militant planning to attack its soldiers? And why would soldiers fire at
employees of a company that acknowledges paying nearly US$20 million from
1998 to 2004 to the military for protection, as well as spending $35
million on housing and equipment for soldiers? It makes sense if this
deadly drama is wayang kulit, where the dalang (puppet master) below the
stage controls the action of the puppets.
In the weeks before the shooting, Freeport McMoRan reportedly proposed
cutting its rich payments to military commanders. Fees for security
services, along with business interests - illegal and otherwise - cover
about 70% of the budget for the military, known by the acronym TNI
(Tentara Nasional Indonesia). It's been a happy coincidence that for
decades low-level insurgencies simmered in Aceh and Papua, where Western
companies have extensive resource-extraction facilities needing
protection. Despite the small numbers of armed militants, the military was
never able to quash these fighters.
If you can't beat 'em, join 'em
Investigative reports link the military and Papuan opposition forces,
particularly in the 1996 rioting that resulted in $3 million worth of
damage at Grasberg and the start of Freeport McMoRan's direct payments to
the military.
>From one end of the archipelago to the other, for various reasons, TNI has
repeatedly encouraged, supplied and supported, sometimes with troops,
militants such as those responsible for the massacres in East Timor and
the sectarian fighting in Ambon and Central Sulawesi that even conspiracy
skeptics such as International Crisis Group director Sidney Jones now
recognize as key to the growth of Islamic terrorism in Indonesia (aee
Terrorism links in Indonesia point to military, Asia Times Online, October
8, 2004).
Government security forces are also believed to smuggle arms to militants.
That's a two-way win: the military makes money on the sales and on the
additional security needed for protection against the fighters. That makes
Wamang's story of bullets and masked men more credible.
But that's not the story that the Indonesian and US governments want for
this wayang kulit tale. On Monday in Jakarta, General Sutanto, chief of
the national police, laid out the script. Wamang and his colleagues
intended to kill soldiers, but they weren't ready to fire when a truck
full of soldiers passed, so they unloaded on the next vehicle, mistaking
the teachers for troops. Most importantly, there is no evidence of TNI
involvement in the attack.
Either the police or Wamang and his lawyer are not telling the truth. Each
side has strong motives for its story, strong enough to lie. A vigorous
criminal prosecution and defense in an open trial before an impartial
judge could determine which story is true. That's not in the script,
though.
Coming to America - not
US officials have spoken about extraditing Wamang for trial in the US, but
that won't happen. The United States and Indonesia have no extradition
treaty. If Indonesia had wanted to let the US have Wamang, or the US had
really wanted him, he'd already be there. FBI agents grabbed Wamang and 11
other men - ironically, luring them out of hiding with a promise they'd be
brought to the US - then turned them over to Indonesian authorities.
There's precedent for Indonesia allowing the US to have a suspect it
wants, specifically al-Qaeda's Omar al Faruq, seized by Indonesia and
handed over to the US in June 2002. That rendition stirred radical
sentiment in Indonesia, the country with the world's largest Muslim
population, where the US-led "war on terrorism" is often portrayed as a
war on Islam. Handing over Wamang would have no such impact because
there's no Islamic link - Papuans are generally animists or Christians -
and the murders resonate more in the US than Indonesia. If Indonesian
authorities were going to let Wamang go, they would have simply told the
FBI to drive him to the airport instead of a police rendezvous.
A trial in Indonesia will avoid a lot of messiness likely in the US,
including close scrutiny of alleged TNI involvement and of Freeport
McMoRan's shameful record not only on payoffs but environmental damage to
formerly pristine wilderness and wetlands. A trial in Indonesia will
follow the script for the conviction of Polycarpus Budihari Priyanto for
the in-flight poisoning of Munir Said Thalib, a leading activist for
military accountability for atrocities (see Arresting decay in Indonesia,
Asia Times Online, July 7, 2005).
An independent investigation uncovered documents from Indonesia's National
Intelligence Agency, an arm of the military, outlining plots to kill
Munir, including poisoning on a commercial flight. It also substantiated
Polycarpus' links to the agency, including cell-phone calls between
Polycarpus and a top intelligence official in the days before Munir's
murder. Yet the trail so far has stopped at Polycarpus and a pair of
hapless flight attendants.
People power Papua-style
To ensure there are no slip-ups, the suspects have already been spirited
to Jakarta, where they will stand trial thousands of kilometers from
Papua. Papuans staged a noisy demonstration in Jayapura, the provincial
capital, after the suspects were moved. More protests are likely during
the trial - Papuans demonstrated peacefully outside the US Consular Agency
in Bali on Wednesday - but protests in Jakarta are unlikely to evolve into
some version of Papuan people power there, the worst fear of Indonesia and
Freeport McMoRan.
Most important, neither side has any reason to seek unpleasant truths
about the murders. Indonesia prefers its story, that OPM killed the
teachers by mistake, as part of its separatist militancy. The
administration of US President George W Bush can cite the arrest and
forthcoming conviction to justify its decision in November to drop its
arms embargo against Indonesia and resume full military ties (see US
'national security' favors Indonesian thugs, Asia Times Online, December
2, 2005).
The last thing the Bush people want is evidence that TNI, now its partner
for America's national-security interests, had anything to do with killing
Americans. If you think the Bush administration wouldn't put American
lives above poorly conceived strategic goals, then you haven't been paying
attention to the invasion and occupation of Iraq.
The US will laud the arrest of Wamang and Indonesia's cooperation in its
catalogue of Indonesia's progress as a democracy. But the case really
shows how little has changed in Indonesia, particularly when it comes to
TNI, and how much has changed in Bush's America - for the worse. Now
America is just another leather puppet on a stick in TNI's wayang kulit.
-- Gary LaMoshi has worked as a broadcast producer and print writer and
editor in the US and Asia. Longtime editor of investor rights advocate
eRaider.com, he's also a contributor to Slate and Salon.com.
-- Copyright 2005 Asia Times Online Ltd.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Christian Science Monitor
January 17, 2006 edition
Indonesia's stature rises
-- Anticipated security pact with Australia underscores how much ties have
warmed.
By Tom McCawley | Correspondent of The Christian Science Monitor
Jakarta, Indonesia – A security pact expected to be signed this year
between Indonesia and Australia will mark a formal end to a six-year rift
over violence in East Timor and signals just how far the world's most
populous Muslim nation has come in relations with its southern neighbor as
well as the United States.
The pact formalizes greater cooperation between Australia and Indonesia
since the 2002 Bali bombing that killed 202 people, the majority of them
Australians. Parallel to that process, a chain of events prompted in part
by the December 2004 tsunami has resulted in closer links with the US,
including the resumption of military ties.
The measures underscore Indonesia's growing stature as an ally in the US
battle against Islamist violence and have drawn comparisons with the
world's second-largest Muslim nation: Pakistan.
"After 9/11, security cooperation with Australia became essential - it's
part of the grand defense strategy of the US," said Kusnanto Anggoro, a
military analyst with Jakarta's Center for Strategic and International
Studies.
In both Indonesia and Pakistan, the US now enjoys friendly ties to
presidents seen as sympathetic to US interests. Both Indonesian President
Susilo Bambang Yudhoyono and President Pervez Musharraf of Pakistan
support a moderate Islam and are seen as bulwarks against violent fringe
groups. Together, they preside over about 356 million Muslims, about a
quarter of the Islamic world.
Critics such as Patrick Leahy (D) of Vermont, argue that Indonesia has
made progress in stemming the human rights violations that first chilled
ties with the West. But, they say, it has not done enough to bring the
military to account for alleged abuses in East Timor.
Others, however, point to Indonesia's political reforms. Unlike President
Musharraf, President Yudhoyono can boast a strong popular mandate and
vibrant democracy. And in November, for example, Indonesian Vice President
Jusuf Kalla took the bold step of showing a video of suicide bombers to
powerful Islamic scholars, triggering a sea change in public opinion.
Mr. Anggoro says the Australia pact would "revive the old security
agreement [of 1995]" between the two countries. Australia has recently
resumed military exercises with Indonesia's Special Forces Kopassus unit,
and Australian police have shared intelligence and resources to help
Indonesia's police track down suspected terrorists.
In the case of the US, the tsunami spurred unprecedented cooperation with
Indonesia's military, says analyst Greg Fealy, a lecturer at the
Australian National University.
US aid to Muslims affected by the tsunami and by Pakistan's October 2005
earthquake also dramatically improved attitudes toward the US, according
to polls sponsored by the Washington-based bipartisan nonprofit group
Terror-Free-Tomorrow.
The Indonesia poll, conducted by the Indonesian Survey Institute in
February last year, concluded that 65 percent of Indonesians had a more
favorable view of the US. A November 2005 poll in Pakistan found similar
results, noting that 79 percent of those with confidence in Osama bin
Laden had a more favorable view of the US after the earthquake.
As a result, analysts say, the Bush administration was able to parlay the
goodwill into lifting an embargo on military exports and foreign military
financing ties with Indonesia on Nov. 22.
A modest $1 million in foreign military financing has been approved for
the Indonesian navy in 2006, compared with $30 million in military grants
for the Philippines. Indonesia's Defense Minister Juwono Sudarsono said
priority would be given to buying spare parts for C-130 transport planes.
Earlier in the year, Washington had been moving toward repairing military
ties. In February, two months after the tsunami, the US resumed IMET, an
education program for Indonesian soldiers, and the sale of nonlethal
military equipment. Later, in May, "the resumption of normal military
relations," said President Bush, "would be in the interest of both
countries."
But a waiver in the State Department's authorization bill to override many
of the restrictions on restoring military ties angered critics.
The State Department cited the "national security interests" as a reason
for the waiver, noting Indonesia plays a strategic role as a "voice of
moderation in the Islamic world." Indonesia also received critical support
from then-Defense Secretary Paul Wolfowitz, a former ambassador to
Indonesia.
Another factor holding back military ties, the fate of two American
teachers murdered in Papua Province in 2002, also saw progress. On Jan.
11, police acted on leads from FBI investigators and arrested 12 suspects.
But much of the source of improvement lies in perceptions of Yudhoyono
himself. A graduate of the IMET program, he has called the US his "second
home." Yudhoyono has supported increased civilian control over the
military, which has dominated Indonesian politics for 40 years. Perhaps
most significant, some 88 percent of Indonesia's electorate voted for him
in the nation's first-ever direct presidential election.
Washington's about face on military ties with Indonesia follows that of
Pakistan in 2001. Soon after 9/11, Musharraf agreed to allow Pakistan to
be used as a base in attacks against Afghanistan's Taliban regime. But
where Yudhoyono has a direct popular mandate, Musharraf rose to power in a
bloodless coup in 1999.
Some of Yudhoyono's domestic political allies warn that the US cannot take
its political support - or popularity within Indonesia - for granted.
Hilman Rasyad, a member of parliament's security and foreign affairs
commission, said that an alliance with the US would be "difficult, even
impossible."
Mr. Rasyad's conservative Islamist Justice and Prosperity (PKS) party
controls only about 8 percent of the vote in the 550-seat parliament, but
stepped in to bolster Yudhoyono. A critical ally, the PKS is one of
several Islam-linked parties in parliament. But even it is ambivalent
about US ties. "Anti-US feeling is spreading for us, even in this party,"
Rasyad says.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Second mining company blasts NY Times over reports
17 Jan 2006 22:23:21 GMT
By Steve James
Reuters
New York, Jan 17 (Reuters) - The chief executive of US mining company
Freeport-McMoRan Copper & Gold accused The New York Times on Tuesday of
"disturbing and provocative misstatements" for criticizing the company's
financial support of the military in Indonesia, where it operates a huge
mine.
Richard Adkerson also acknowledged that as a result of the newspaper
report, the company has received informal inquiries from US government
agencies about its relationship with Indonesian military authorities and
that Freeport was cooperating. The company did not identify the agencies
involved.
During a conference call with Wall Street analysts to discuss
fourth-quarter earnings, Adkerson said The New York Times declined to
publish a letter he wrote responding to a Dec. 27 article charging that
Freeport paid-off local military and police officers and spied on
environmental activists.
He also disputed a New York Times article that said Freeport caused
"breathtaking" environmental damage around its Grasberg mine in
Indonesia's Papua province.
"The New York Times similarly mischaracterized the support we provide for
Indonesian security forces and ignored the practicalities of conducting
business in a remote area."
The company, Adkerson said, has been open about its policy of supporting
local military and police to assist with infrastructure and logistics, and
has publicly revealed that in US Securities and Exchange Commission
filings.
He said company policy adheres to US and British government principles on
human rights and security in an area where armed groups are active.
There was no immediate response from a New York Times spokeswoman on
Adkerson's comments.
His complaint is the second in a year by a leading US executive targeting
The New York Times for stories critical of a mining company's activities
in Indonesia.
At last year's Reuters Mining Summit, Pierre Lassonde, president of
Newmont Mining, the world's largest gold producer, charged that the
Indonesian government bowed to pressure groups and arrested six company
officials because allegations that Newmont had polluted the environment
appeared in The New York Times.
Both Newmont and Freeport-McMoRan have denied causing environmental damage
though mining operations in Indonesia.
In the Dec. 27 report, the newspaper said an investigation it conducted
"revealed a level of contacts and financial support to the military not
fully disclosed by Freeport despite years of requests by shareholders
concerned about potential violations of American law and the company's
relations with a military whose human rights record is so blighted that
the United States severed ties for a dozen years until November."
Adkerson told analysts that the December New York Times article and a
follow-up editorial on Jan. 9 "contained disturbing and provocative
misstatements." He said he responded with a two-page letter, which he said
the newspaper declined to publish because it was too long.
"I wrote a shorter letter on Jan. 12, which has yet to be published," he
said, adding that the original, unpublished letter has been posted on the
company's Web site, www.fcx.com.
"Far from causing 'breathtaking environmental damage,' the area affected
by our mine tailings (waste) can be readily revegetated," the letter said,
adding that the downstream estuary was a "functioning, bio-diverse
ecosystem" containing abundant fish and shrimp.
The letter said Freeport pays more than $1 billion to the Jakarta
government in taxes, royalties and dividends, and has also given more than
$200 million since 1996 to a community development fund in Papua.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Freeport-McMoRan net profit surprises
Tue Jan 17, 2006 3:21 PM ET
By Steve James
Reuters
New York (Reuters) - Freeport-McMoRan Copper & Gold Inc. (FCX.N: Quote,
Profile, Research) , which warned in November that fourth-quarter
production at its vast Indonesian mine was lower than planned, surprised
Wall Street on Tuesday by reporting net profit doubled.
"This reflects our extraordinary performance in December, when we were
able to make up the deficits and meet targets," Chief Executive Officer
Richard Adkerson told Wall Street analysts on a conference call.
"We were able to get access to higher grade ores," he said of the Grasberg
mine in Papua, where full production had been hobbled for some time after
a landslide in late 2003 killed eight workers.
Looking ahead, the New Orleans-based company said it expects sales of
copper and gold to be lower in 2006 than last year -- 1.3 billion pounds
of copper, down from 1.46 billion pounds last year and 1.7 million ounces
of gold, compared with 2.8 million ounces in 2005.
However, mining rates in 2006 are expected to be higher than in 2005,
although lower than previously estimated.
"They certainly had a good quarter, better than expected," said analyst
Victor Flores of HSBC Securities. "They talked us down in November and now
they've talked us back up."
In November the company warned copper production was running about 5
percent below estimates of 480 million pounds, while gold sales were
running 10 percent below the forecast 1.1 million ounces. But production
in December was better than expected, it said, resulting in 473.5 million
pounds of copper production and 1.116 million ounces of gold sales,
Freeport said.
In the fourth quarter of 2004, Freeport's Indonesian mining unit PT
Freeport Indonesia's production was 423.7 million pounds of copper and
629,000 ounces of gold.
Adkerson said the lower production estimates for 2006 were a result of
mining sequencing changes and lower ore-grades at different areas of the
Grasberg pit, but that production would rise in 2007 and in future years.
"It's not impossible for a mining company (to have such a turnaround in
production)," said Flores. "They got a bit nervous in November and warned
the market, but a strong December beat the (Wall Street estimates)
numbers.
"The '06 (production figures) was expected," said Flores.
That comment was reflected on Wall Street, where Freeport stock rose 3.3
percent or $2 to $62.75 on the New York Stock Exchange.
The company posted net profit of $463.2 million, or $2.19 per share,
compared with a year-earlier profit of $212.5 million, or $1.08 per share.
Analysts polled by Reuters Estimates on average expected earnings per
share of $1.76 for the quarter.
-- (additional reporting by Ben Berkowitz)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Payments by Freeport McMoRan Trigger Probe
Wednesday, January 18, 2006
The Associated Press
Jakarta, Indonesia
Payments by U.S. mining company Freeport McMoRan to troops guarding its
massive gold mine in Indonesia have sparked an inquiry by U.S. government
agencies, the company said. The company's shares fell Wednesday after the
news.
New Orleans-based Freeport McMoRan Copper & Gold Inc. has denied breaking
any laws either in Indonesia or in the United States over its payments to
the military, saying it has been transparent about providing support to
troops near its mine in the remote province of West Papua.
But the company said Tuesday in a filing with the U.S. Securities and
Exchange Commission that it "had received informal inquiries from
governmental agencies related to (Freeport's) support of Indonesian
security institutions. (Freeport) is fully cooperating with these
requests."
It did not identify the government agencies involved in the inquiries, nor
their nature.
There has been speculation that the payments might violate the 1977
Foreign Corrupt Practices Act, which bars U.S. companies from bribing
overseas government officials.
Indonesia's anti-corruption agency was hesitant to say Freeport had acted
improperly, reflecting the difficulties foreign corporations face in
navigating the country's rampantly corrupt business environment.
"I don't think Freeport purposely tried to bribe either the police or the
military," said Erry Riyana Hardjamekas, vice president of the Corruption
Eradication Commission. "They needed them, so they invited the military
and police (to help)."
Hardjamekas said the commission had no immediate plans to launch an
investigation into the payments, but would support any probe by U.S.
authorities if asked.
The practice of paying Indonesia's notoriously corrupt and brutal military
has came under renewed scrutiny since a 2002 attack on a convoy of
teachers working at the mine killed two U.S. citizens.
Local and foreign rights groups have alleged soldiers took part in the
attack, allegedly to extort more security payments money from Freeport.
Freeport admits paying millions of dollars a year in security payments in
Papua.
Global Witness, a worldwide anti-corruption body, last year revealed that
the company paid the money directly to senior officers, not via the
government.
Also on Tuesday, Freeport posted a sharp gain in fourth-quarter earnings
that far exceeded analysts' forecasts. For the three months ending Dec.
31, Freeport McMoRan said it earned $463.2 million, or $2.19 per share, on
revenue of $1.49 billion. For the fourth quarter of 2004, the company
reported earnings of $156.8 million, or 85 cents per share, on revenue of
$924.8 million.
Analysts surveyed by Thomson Financial had forecast per-share earnings of
$1.78 for the latest quarter.
Shares of the company fell $2.82, or 4.6 percent, to $58.95 in afternoon
trading on the New York Stock Exchange.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Paras Indonesia (formerly Laksamana)
January, 18 2006 @ 10:24 pm
Conflicting Versions Of Freeport Graft Story
Rival news wire services AFP and Dow Jones have filed highly conflicting
reports on whether Indonesia’s top anti-graft watchdog views payments by
US mining giant Freeport McMoRan to the Indonesian military as a form of
corruption.
Following are the headlines and two lead paragraphs of the articles. First
is the AFP version, then the Dow Jones version:
*****
Mining Company's Payments to Indonesian Military was Graft: Corruption Boss
JAKARTA (AFP): A US mining giant's payments to the Indonesian military in
exchange for security services constituted graft, the head of Indonesia's
anti-corruption commission said Wednesday.
But commission head Erry Riyana Hardjapamekas said the body would not
itself investigate millions of dollars paid out by Freeport-McMoRan for
services at its mine in Papua unless ordered to so by the
attorney-general's office.
Freeport-McMoRan Indonesia Payments Not Graft: Official
JAKARTA (Dow Jones)--Payments made by U.S. mining giant Freeport-McMoRan
Copper & Gold Inc. (FCX) to Indonesian security forces shouldn't be
considered as corruption, the chief of the government's official
anti-corruption watchdog body said Wednesday.
Payments by Freeport-McMoRan to police and military posted around the
company's massive Grasberg gold mine in remote Papua province were
"logical" due to a lack of government financing for effective security,
the chairman of the Corruption Eradication Commission, Erry Riyana
Hardjapamekas, told reporters.
*****
Both reports are wrong in one sense. The head of the Corruption
Eradication Commission (KPK) is Taufiequrachman Ruki. Erry Riyana
Hardjapamekas, who was speaking to reporters at a panel discussion, is one
of KPK’s four deputy chief commissioners.
Pedantry aside, the conflicting stances taken by the two reports, as well
as KPK’s reluctance to go after Freeport and the generals, indicate that
big business and the military seemingly remain immune to President Susilo
Bambang Yudhoyono’s high-profile crackdown on corruption.
The New York Times reported last month that Freeport had paid $20 million
to Indonesian senior security officials and military units between 1998
and 2004. It said the payments were used to build facilities for troops
and to provide cash payments of up to $150,000 to individual military and
police commanders.
Going one up, Freeport chief executive officer Richard Adkerson told
Bloomberg that the company had paid Indonesia about $1 billion since 2004,
including for security at the Grasberg mine.
He said all payments were "fully disclosed" and Freeport spent about $6
million to $7 million annually to guard the mine.
"The amounts we're talking about are not unreasonable. We're not sure
where the amounts came from [that were reported by the New York Times],”
he was quoted as saying.
Adkerson has also provided a written response on Freeport’s website to the
allegations made by the New York Times.
So is paying protection money to crooked members of the under-funded
Indonesian Defense Forces (TNI) a form of corruption?
"The whole thing is corruption," Hardjapamekas was quoted as saying by AFP.
Nevertheless, he acknowledged that providing troops with buildings in the
remote area was "logical" and said any legal action would have to be
initiated by the Attorney General's Office. "If the AG will do that, we
will support it," he said.
Dow Jones opted to quote one of the KPK deputy head’s less critical
statements: "I don't think Freeport purposely tried to bribe either the
police or the military [but] they need them so they invited the military
and police [to help]."
Attorney General's Office spokesman Mashudi Ridwan has said the New York
Times report is being examined to determine whether to further investigate
the case. A decision is expected to be made next week.
Meanwhile, the Associated Press reported that Freeport’s payments to
troops have sparked an inquiry by US government agencies, the company
said.
In a filing on Tuesday with the US Securities and Exchange Commission,
Freeport said it "had received informal inquiries from governmental
agencies related to [Freeport's] support of Indonesian security
institutions. [Freeport] is fully cooperating with these requests."
The payments might be seen as a violation of the 1977 Foreign Corrupt
Practices Act, which prohibits US companies from bribing foreign
government officials.
Freeport’s payments to TNI came under close scrutiny after gunmen in
August 2002 attacked a convoy of teachers from the company’s remote
school, killing two Americans and one Indonesian.
Suspicion quickly fell on the military, with rights groups and seasoned
Indonesia watchers claiming that soldiers were involved in the attack in
an alleged effort to extort more protection money from Freeport and to
discredit Papua’s separatist rebel movement.
TNI denied involvement and later teamed up with the FBI to investigate the
case. The two forces blamed the ambush on an alleged separatist rebel
Antonius Wamang, who was arrested last week. Human rights activists
suspect a cover-up and a total disregard for justice.
A disturbing analysis of the attack and the reasons behind the decision to
blame Wamang is provided by Gary LaMoshi writing in the Asia Times Online.
If it’s true that TNI played a hand in the killings and the US is now
helping to cover that up for the sake of harmonious cooperate and military
relations with resource-rich/anti-terror ally Indonesia, then there’s
little hope for justice.
KABAR IRIAN ("Irian News") www.kabar-irian.com
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