[Kabar-indonesia] 6 of 11: Military Involvement in Criminal Activity

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-6 of 11-

HRW: Indonesian Military's Economic Activities 
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Military Involvement in Criminal Activity

This section considers some of the main areas in which
the military has been implicated in criminal activity.
The presentation here is by no means exhaustive, given
that military personnel have been accused of direct
involvement in a range of criminal enterprises.
Persistent patterns of illegal business activity by
the military, often concentrated in sectors such as
logging and mining, indicate that the problem is
widespread. Across the country, units and commanders,
not just low-ranking soldiers, are commonly
implicated. In a number of cases it can be shown that
their illegal businesses are known to their superiors,
and only very rarely do the authorities act to enforce
the law against these military personnel.286 These
characteristics point to the structural nature of the
problem of illegal military business.

At the same time, it must be acknowledged that some
cases involve relatively isolated incidents by rogue
individuals. Paid assassinations are among the most
extreme examples of economically-motivated criminal
acts by individual soldiers. One case involved the
July 2003 murder-for-hire of a businessman in which
his bodyguard, a moonlighting Kopassus soldier, was
also killed.287 The marines who were convicted in the
killings reportedly confessed that they had been paid
Rp. 2 million ($237) each to commit the murder.288
Another case came to light in early 2005; this time an
army soldier was identified as a suspect in a paid
killing.289

Illegal Logging

Military involvement in forestry operations can
include illegitimate activity by military enterprises,
such as overlogging at concessions owned by military
foundations or processing illegal timber at sawmills
run by military commands.290 The example provided
above (see "Military Investments in East Kalimantan,"
above) offers one illustration of military-owned
businesses that allegedly engaged in illegal logging.
Also, local timber barons rely on regional military
commands to use intimidation and violence to secure
community acquiescence.291 These timber barons benefit
from impunity thanks to their links to the security
forces.292 A timber expert explained that the role of
the military also extends to "providing protection for
timber mafias or transport on military trucks or
helping smuggle logs across the border or extortion—to
seize legal or illegal logs."293

The problem has been best documented with respect to
the remote and conflict-torn regions of Indonesia. For
example, a joint report by the Environmental
Investigation Agency (EIA) and the Indonesian NGO
Telapak spotlighted the pervasive role of the military
"in every aspect of illegal logging" in Papua, where
massive timber smuggling takes place. Two timber
dealers interviewed by the investigators acknowledged
paying dozens of soldiers to look after their illicit
timber interests. The report also drew attention to
alleged acts of military intimidation in support of an
illegal logging operation.294

Prompted by the EIA/Telapak report on Papua, President
Yudhoyono announced a crackdown on rampant illegal
logging that he promised would not spare military
personnel.295 He issued a presidential order against
illegal logging that called on military personnel to
help combat illegal logging.296 A handful of military
personnel were among the hundreds reported to have
been arrested in operations against illegal
logging.297 Campaigners expressed disappointment that,
in the end, many of those arrested were released
without charge and that in most cases they had not
been able to get information about the outcome of
military trials.298 In one prominent case, previously
mentioned, EIA/Telapak first reported to the
authorities in 2003 that a military policeman was
deeply implicated in illegal logging activities in
Papua but no action was taken for two years. After the
EIA/Telapak report was made public, this person was
brought in for questioning, but Telapak researchers
learned that by the end of 2005 he had been
released.299

In addition to undermining the rule of law, military
involvement in illegal forestry activity has been
associated with human rights abuses. In Papua, for
example, communities that dare protest military-backed
logging activities have been accused of being
separatists.300 They also have been directly
victimized by soldiers who seize their timber for
resale, sometimes using violence and intimidation
tactics.301

Racketeering

Protection rackets provide another source of illicit
income to military personnel who are involved.
Military backers reputedly protect drug traffickers,
gambling operations, and prostitution rings.302 As
with other revenue sources, racketeering also is
linked to military abuses. Human Rights Watch received
reports that in 2004 soldiers smashed the windows and
burned the property of those who refused their demands
for protection payments.303

In Medan, North Sumatra, military involvement in crime
is well-organized. Medan residents said that the
protection rackets are regularized, with shop owners
and trucks paying monthly fees and showing stickers
designating which military group or associated gang
supported them.304 A person who for years worked in
Medan's underworld told Human Rights Watch that the
military was deeply involved "[e]verywhere in Medan
where illegal businesses exist," including in
prominent roles as backers of illegal logging and the
drugs trade.305

Military-Police Conflicts

Military engagement in the criminal economy has often
brought soldiers into tension with the police. Welcome
moves to give the police greater responsibility for
internal security have had the unintended side effect
of displacing the military from some of its lucrative
money-making opportunities, including illicit ones.
This trend has aggravated rivalries that at times
flare up into violence. Clashes between the Indonesian
security forces were a regular occurrence in the early
2000s, with at least a dozen incidents from 2001 to
2003.306 In late 2004, a member of the Brimob
("Brigade Mobil" or Mobile Brigade) paramilitary
police commandos was killed and three others were
seriously wounded in an armed brawl with TNI soldiers
in Aceh that was reportedly sparked by competition
over oil palm interests.307

The security forces also can come into conflict with
each other when police, acting in their law
enforcement role, interfere with the economic
interests of soldiers. For example, soldiers and
police clashed in 2002 in West Kalimantan after police
reportedly moved to shut down a TNI-protected gambling
operation.308 That same year a notorious
military-police firefight, detailed below, was sparked
by the arrest of a drug dealer who reputedly had
military backing. In another, more recent example, in
March 2005 a local army unit battled with Brimob
police forces in Papua, reportedly when they attempted
to crack down on illegal logging operations that
implicated a TNI officer.309 As a result, it comes as
no surprise that police officials complain about the
difficulty of acting against the military.310

Example 3: Turf Battle in Binjai, North Sumatra

In September 2002 police in Binjai, North Sumatra
arrested an accused drug dealer who allegedly operated
with military backing. The suspect's associates in the
military sought to have him released and became
enraged when the police refused. What began as a
battle over authority between the police and the
military soon took on more ominous dimensions: In
revenge, the military unit organized an armed assault
on the police station, setting off a shootout that
engulfed the town for hours and terrified the
townspeople. Some fifteen people were killed, most of
them police officers, and at least four civilians were
among the dead. Of the more than sixty people
estimated to have been wounded, twenty-three were
civilians.311
Drug Arrest Triggers Dispute

The dispute that erupted into armed battle was
triggered by an incident in the police station the day
before. A fight broke out when police refused a demand
from a small group of soldiers to release a suspect.
Angry soldiers attacked the police, cutting the ear of
the commanding police officer, and police responded by
firing on the assailants.312 Police then retaliated by
severely beating two of the attackers who had not
managed to flee; their bodies were "covered in
bruises."313

The suspect whose arrest was at the center of the
dispute was a suspected drug dealer reputed to operate
with military backing from Linud 100, an airborne
reserve unit based in Binjai.314 A senior police
officer in the town explained:

The suspect at the time of his arrest was protected by
military personnel. There's a lot of business activity
going on. We know there are military people behind
it.315

A lower-ranking police officer in the town commented
further:

There were individuals from Linud who were doing
illegal activities so there were some problems when
the police would stop their activities, things like
gambling and drugs. The Linud members aren't directly
involved but they back up these activities, provide
protection.316

The Military Revenge Attack

Linud troops waited until the night of the following
day to respond to the incident. Scores of troops in
combat gear launched a major attack against the police
station in the center of town, firing small arms,
rockets, and grenades. They also blocked the entrances
and exits to the town, obstructed access to the local
hospital, and deliberately cut electricity, causing a
blackout. After paramilitary police commandos from the
Brimob barracks a few kilometers away were called in
to help, the Linud soldiers engaged in a firefight
with Brimob along the road then proceeded to attack
the Brimob barracks located near the entrance to
town.317

With the area's police forces scattered, in hiding,
and engaged in a shootout with the military, no one
was left to defend the town's population from the
assault. A young man from Medan was fatally wounded at
about 1 a.m. as he drove into Binjai with a group of
friends. Soldiers who had set up a roadblock stopped
the vehicle and shot the young man in the head.
Eyewitnesses told the victim's family that the bullet
was shot at short range and after those in the car had
identified themselves as civilians.318 Separately, a
restaurant owner traveling by car was killed when the
vehicle was fired on, and two other passengers in the
vehicle sustained gunshot wounds.319 A cigarette
vendor was wounded by a stray bullet and ordered taken
to a military hospital.320 In other incidents, a civil
servant died from a gunshot wound and another person
suffered unidentified wounds.321 As many as
twenty-three civilians sustained injuries in the
attack.322

Police casualties were also high. According to police
sources, eleven policemen (local and Brimob) were
killed and thirty-seven were wounded.323 The TNI
suffered fewer casualties. One soldier died and, by
one count, four Linud personnel were wounded.324

After the Battle

The battle finally came to an end some twelve hours
after it began, when top police and military officers
arrived in Binjai to impose a truce.325 With many
police officers still in hiding, a climate of
lawlessness prevailed for several days and many people
remained too scared to leave homes. Even two years
after the incident, the residents of Binjai remain
disillusioned with the TNI. Several townspeople told
Human Rights Watch that they could no longer trust the
military after troops sworn to defend the security of
the nation had done the exact opposite.

Military and government officials issued strong
statements of condemnation, temporarily shut down the
Linud battalion, and announced that those responsible
would be dishonorably discharged.326 But of the
approximately 350 Linud soldiers that police said were
involved in the attack (about half of the
battalion),327 only twenty soldiers were dismissed and
faced trial. The military prosecution of the twenty
discharged soldiers, all of them of low rank, resulted
in nineteen convictions and prison sentences of five
to thirty months.328 The military court in Medan
declined Human Rights Watch's request for information
about disciplinary action taken in response to the
Binjai incident. Repeated visits to the military
stations in Binjai and Medan also failed to elicit any
information, but indications were that the more senior
officers who oversaw the Linud battalion faced little
consequence. The army transferred the Binjai battalion
commander and five other officers to other locations
and decided not to take immediate action against the
regional military commander.329

Conclusion

The battle in Binjai stands as a particularly
outrageous example of the negative consequences of
military involvement in illicit businesses. There,
troops effectively declared war on the police. The
police in Indonesia have a well-deserved reputation
for corruption, and competition over local spoils has
given rise to numerous armed clashes between the
security forces, but in this case the confrontation
was sparked by an altercation between a few troops and
policemen over a local drug arrest. The issue could
have been resolved without bloodshed, but it exploded
into a major battle because the military unit as a
whole had already lost its integrity. It had learned
to put self-interest above institutional duty, lacked
respect for the rule of law, automatically resorted to
violence to protect its turf and pride, and assumed it
could do so with impunity. This arrogance was a legacy
of the unit's links to the criminal economy. A Binjai
police officer offered a skeptical view on whether the
military had learned any lessons from the experience:
"The military are still involved in backing up illegal
activities so it could happen again."330

Military Corruption

Transparency International has identified Indonesia as
the world's sixth most corrupt country in its annual
survey.331 The group ranked the Indonesian military as
among the most corrupt public institutions in the
country.332 The World Bank defines corruption as "the
use of authority for private gain."333 It includes in
that definition, among other acts, an official's
acceptance, solicitation, or extortion of a bribe.334
Collusion, patronage or nepotism, theft of state
assets, and diversion of state revenues are also
considered to be corruption.335 Indonesian
anti-corruption laws also encompass the abuse of
power, causing financial loss to the state, and
self-enrichment.336

Grand Corruption

Indonesia's history offers many examples of military
corruption on a major scale that involve relatively
senior government officials. Often these relate to the
sorts of collusive business practices and misuse of
foundation funds described elsewhere in this report.
Some other cases relate to individuals who take
advantage of their position to take public funds for
personal use. As one indication, over 100 cases of
financial fraud reportedly were uncovered within the
TNI in 2005.337 In early 2006 an army colonel and a
private citizen were arrested on charges of conspiring
to embezzle as much as $14 million from the army's
housing fund.338

Kickbacks or massive markups on military acquisitions
are another common feature of military corruption.
Minister of Defense Sudarsono has been outspoken on
the need to clean up military procurement. In 1999,
for example, he said military purchases were subject
to markups of 30 percent, causing $90 million in
losses per year.339 A 2003 case of suspected fraud in
the $3.24 million purchase of helicopters by the
Indonesian army reinforced the need for change.340 The
Ministry of Defense has made efforts to centralize
military procurement and enhance oversight but it has
made little headway to date. (For more information,
see the section titled "Procurement" in Part III:
Obstacles to Reform.)

In 2006, Sudarsono emphasized the continued problem of
inflated costs in military purchases. For example, he
said high markups could be attributed in part to the
longstanding practice of retired generals using their
influence to steer military procurement contracts to
favored companies.341 Active-duty senior officers also
have financial ties to arms companies, according to
research by Indonesia Corruption Watch (ICW). In a
2005 report, ICW alleged that state-owned arms company
PT Pindad had paid out large sums to secure contracts
with the military and police, and the watchdog group
suggested that these payments constituted bribes.342

Additional cases have since come to light. In April
2006, for example, Tempo magazine reported that top
Indonesian army officials had diverted some Rp. 20
billion ($2.4 million) of government funds in
mid-2003. In a convoluted transaction, the army took
funds approved for the planned purchase of a
helicopter and, without notifying parliament or the
Ministry of Defense, instead used them to buy a
transport plane. It awarded the contract, without
tender, to one of its usual suppliers. Within days of
receiving the payment, however, that company
transferred the funds to an army official who had been
involved in the army's procurement decision, who in
turn forwarded the money to someone else allegedly
linked to the procurement process. The plane itself
also changed hands mysteriously. Upon delivery in
early 2004, it was handed over to a private aviation
company rather than the army, and that company was
listed as the plane's owner. It made the plane
available for army use but also leased it out for a
fee to politicians who chartered it during the general
election campaign. The whole affair, investigators
believed, may have been an elaborate ruse to defraud
the government of the budgeted funds. Asked about the
matter, the general who was army chief of staff at the
time, Ryamizard Ryacudu, denied that he had authorized
any disbursement of government funds in the case or
that the army had even purchased the transport
plane.343

Many military equipment purchases in Indonesia are
made using alternative financing arrangements, such as
export credit guarantees or counter-trade (barter)
deals, that typically bypass normal procurement
channels and frequently are associated with
corruption.344 The most famous case relates to a 2003
deal to pay for several Russian combat aircraft by
providing palm oil and other commodities, with the
initial down payment being paid out of funds held by a
state-owned bank and the official logistics agency,
Bulog.345 The involvement of several prominent
civilians in that deal serves as a reminder that
military procurement practices in Indonesia invite
abuse by military and non-military personnel alike.346

Petty Corruption

Petty corruption, in contrast to grand corruption,
involves relatively small sums of money and junior
officials seeking personal gain. Many soldiers object
strongly to acts of corruption, but those who do
engage in corruption operate in an environment that
largely tolerates and often encourages such behavior.
An Indonesian expert on security sector reform,
recognizing that Indonesian soldiers are poorly paid,
has argued that "military personnel at all levels have
to survive by finding alternative sources of
subsistence, such as businesses and other economic
activity."347

Acts of petty military corruption have a large
cumulative impact. That has been the case with
soldiers' regular demands for payments. Bribe-taking
is sometimes linked to the military's widespread
involvement in organized criminal behavior, such as
racketeering. One observer described protection
payments as so common that, in effect, they were
"basically an informal tax" on business.348 Military
demands for bribes may add as much as 10-15 percent to
the cost of road and building construction projects in
some areas.349

Some acts of corruption by individual soldiers are
associated with violence. Two soldiers were convicted
of killing the wife of a former mayor of Banda Aceh.
One of the soldiers had accepted a Rp. 42 million
($4,600) bribe to help secure the release of her
vehicle, which had been confiscated as part of a
corruption case against her husband. When the officer
demanded more money, she reported him to the military
police and was murdered in retaliation.350 Later in
2005, a businessman alleged that he was abducted and
tortured by military personnel in an effort to force
him to pay back a loan.351

Predatory Behavior in Crisis Zones

Military corruption takes on a special character in
conflict regions. Military personnel have engaged in
profiteering, by imposing monopolies and charging
excessive fees for transport services or basic
commodities whose distribution the military controls.
A study of military economic activity during unrest in
Poso, Central Sulawesi, found that the military
charged inflated prices to hire out military trucks
and supply fuel via its cooperative and that it also
charged exorbitant illegal levies along roads.352
Similarly, road tolls imposed by the military went up
in Maluku during unrest there.353

In some cases, the military takes advantage of
humanitarian emergencies to loot or otherwise
profiteer. For example, both the military and police
have charged people fleeing communal violence for
transport to safety.354 An armed skirmish broke out in
Sampit, Central Kalimantan, between the military and
police over who was entitled to extract bribes from
the displaced Madurese.355 Military corruption also
arises in Papua, where the problem was expected to
increase in 2006.356 Military corruption was rampant
in Aceh until recently, and additional examples of
corruption in the ranks are addressed here.

Example 4: Acts of Military Corruption in Aceh

The devastation caused by the tsunami of December 26,
2004, and reductions in troop levels in accordance
with a 2005 peace accord have greatly reduced the
military presence in Aceh. The province is also under
far greater scrutiny than was possible during the
armed conflict, when international monitors were
barred from entry. As a result, the economic
activities of the military in Aceh have diminished as
compared to past years when both the military and the
insurgency extracted revenue from the population
through illicit means. The experience of military
profiteering in Aceh remains relevant, however,
because traces of past behavior remain. Moreover, it
offers important lessons about the dangers of
unchecked military opportunism in conflict zones.

The Military's Economic Foothold in Aceh

The military had far ranging economic interests in
Aceh before the tsunami hit. Up through 2004,
military-linked businesses were known to be engaged in
transport, construction, and security services, and to
have run extensive timber operations. Some of the
TNI's business activities were legal and formally
organized, while others were illicit and hidden.357 In
combination, these economic activities made Aceh a
lucrative posting, especially for the officer ranks.
More than one person shared with Human Rights Watch an
adage about serving with the military in Aceh: "You
leave with an M-16 and return with 16 M," referring to
the military-issue rifle and Rp. 16 billion (milyar in
Indonesian, equivalent to $1.76 million, an
exaggerated estimate of the earnings of corrupt
officers).

Corruption-Linked Abuses before the Tsunami

Government troops have taken advantage of civilians in
Aceh to extort, steal, or demand bribes. Human Right
Watch gathered testimonies of people who had
experienced extortion in Aceh after the imposition of
martial law in 2003. In one example, a businessman
complained that he had to leave Aceh because of
military threats in connection with extortion rackets:

Making your way in life in Aceh is difficult. If you
try to make a living, they ask for money. I have a
rice mill. Every day TNI asks for 450 kilograms. They
say, "If you don't give it to us, tonight you'll be
killed." I could have gone on the pilgrimage to Mecca
twenty times by now. But if it's asked, it's given . .
. I couldn't take it anymore. I was asked for Rp. 7
million ($825) and told that if I didn't have it in
three days I would not be safe. (…) I left after two
days––they gave me three, right? I told my three sons
to just go to [withheld], telling them, "If I'm not
here they'll take you."358

A woman from North Aceh described to Human Rights
Watch in 2003 that residents forcibly displaced from
their homes returned to find that the soldiers had
looted their property:

I fled to a refugee camp. When we returned home our
things were gone. Chickens, goats were stolen during
the time we had fled, taken by soldiers who then asked
for Rp. 300,000 ($35) to return our goods to us. Some
people paid, but I was too scared.359

Soldiers also overcharge for needed goods and
services. Speaking to Minority Rights Group
International, a local journalist complained that the
military charged elevated prices for fuel, explaining:
"This petrol is bought from Bireuen. When the military
has a supply to sell, we would not dare buy
elsewhere."360

Civilians also have complained of military demands for
roadside "tolls." For example, a minibus driver from
Central Aceh told Human Rights Watch that he was
constantly stopped at TNI and Brimob checkpoints on
the road:

When I drive the vehicle they stop me for money on the
road. If you don't give it to them, you're beaten. If
you don't have money and try to bargain––"I don't have
ten, here's five"––they won't accept it. If he says
ten it must be ten. You can't bargain with them.361

One traveler who spoke to Minority Rights Group
International described the cumulative effect of
persistent illegal fees: "The villagers in this area
are much poorer because of all this extortion."362

Military personnel in Aceh also have been accused of
illegally expropriating valuable land.363 Troops have
forced people to surrender land for plantations; some
who have refused to go or who have attempted to return
to reclaim their property reportedly have been injured
or killed.364

In the Aftermath of the Tsunami

The tsunami of December 26, 2004, took some 170
thousand lives in Aceh and devastated large parts of
the coast. Members of the state security forces were
among the victims—the armed forces and police together
lost hundreds of personnel, plus buildings, equipment,
and some of their lucrative businesses, notably
fisheries.365 Many soldiers responded admirably to the
tragedy, but there were also incidents that bore
echoes of past patterns of abuse.

In January 2005, for example, Newsweek revealed that
Indonesian military screeners charged displaced
Acehnese the equivalent of up to $80 for a seat on an
evacuation flight.366 These bribes reportedly resulted
in relatively more privileged people, described as
being "well-dressed," getting about half the seats on
the plane, presumably displacing others who could not
afford the payment.367

Human Rights Watch visited Aceh in early 2005 and
heard first-hand accounts of looting by soldiers in
the first days after the tsunami. A foreign
correspondent said, "I saw soldiers looting every day
during the first week when I was here."368 The head of
an Acehnese NGO in Meulaboh reported that soldiers
took advantage of the chaos after the tsunami struck
to loot from gold shops.369

Elsewhere in Aceh, volunteers from a Malaysian group,
the Amal Foundation, said they were forced to pay a
bribe of Rp. 500,000 ($55) to pass through a military
checkpoint in mid-January 2005. Team leader Dr. Lo'Lo'
Ghazali was quoted in the Malaysian media as telling
the Indonesian soldiers that they were taking funds
from the needy:

The money we have were [sic] collected from Malaysians
to be given to the victims in Aceh. If we give you so
much then there would be less for the people who
rightfully deserve it.370

Human Rights Watch's investigation did not find
evidence of a military agenda to exploit the tsunami
tragedy for economic gain. Presumably the intense
scrutiny over tsunami funding, by the Indonesian
public as well as by bilateral and multilateral
donors, helped deter any coordinated diversion of
reconstruction funds for military purposes. As
described by one frequent visitor to Aceh who returned
in the latter half of 2005, "The commanders know the
eyes of the world are upon them."371 The same person
told Human Rights Watch that, to his surprise,
military spending was better managed and subject to
less waste and corruption than before, and that
reports of extortion had decreased significantly. He
attributed the changes in part to the dire
circumstances faced by an institution that had itself
lost many members and infrastructure to the disaster
and that was faced with massive rebuilding of its
own.372

At the same time, individual acts of corruption by
military personnel have continued and contributed to
the hardship faced by survivors. A joint study by the
Aceh Reconstruction Agency and the World Bank in 2005
and 2006 found that illegal road levies charged at
security checkpoints operated by soldiers and other
security officers in Aceh amounted to "a significant
tax on the reconstruction and recovery effort."373 The
study found that the number of military posts declined
after many troops were withdrawn from the province and
international scrutiny increased, but that remaining
security personnel were increasingly forcing trucks to
stop elsewhere along the road to extort the drivers
away from view.374 In 2006 local volunteers expressed
concern that the illegal levies charged at security
checkpoints raised the cost of transporting timber and
other supplies needed for post-tsunami
reconstruction.375 There also have been frequent
reports that some corrupt military business ventures
have survived or been reconstituted. For example, a
person engaged in humanitarian work in West Aceh said
in mid-2005 that local military units were heavily
involved in the illegal timber trade and set their
prices artificially high.376 

for footnotes 72 - 376, go to:
http://hrw.org/reports/2006/indonesia0606/5.htm#_Toc138140639

end/6 of 11... continues...

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