[Kabar-Irian] Irian News - 5/20/03
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Tue May 20 19:45:51 MDT 2003
- Military Denies Involvement in Freeport Killings
- International Campaign for Ecological Justice in Indonesia
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Laksamana.net
Military Denies Involvement in Freeport Killings
May 21, 2003 12:06 AM
Laksamana.Net - The Indonesian Defense Forces (TNI) has again denied any
involvement in last August’s murders of three schoolteachers, including two
Americans, near the giant Freeport gold mine in Papua province.
Trikora Regional Military Command chief Major General Nurdin Zainal, who
oversees security in Papua, on Monday (19/5/03) said TNI commander General
Endriartono Sutarto had told him the August 31, 2002, shootings were not
perpetrated by military personnel.
Sutarto therefore called for a renewed investigation into the case to uncover
the killers.
Zainal admitted military investigators have made little progress in their
investigation, despite assistance from the US Federal Bureau of Investigation
(FBI).
An initial police investigation into the killings had implicated members of the
Army’s elite Special Forces (Kopassus), whereas a follow-up joint military and
police inquiry, involving the FBI, has stalled.
Several US senators earlier this month urged President Megawati Sukarnoputri to
make it a national priority to resolve the murders.
The controversy over the killings, has prompted US Congress to delay the
release of the first military training funds to Indonesia since the 1999
carnage in East Timor.
TNI has from the outset denied any involvement in the ambush on the teachers
who worked at Freeport’s international school.
Many analysts and human rights activists believe the killings were an effort to
force Freeport to continue payment of a multi-million dollar “protection fee”
to Indonesian security authorities.
Democrat Senator Patrick Leahy, who was behind the original cutting of funds
under the International Military and Education Training (IMET) program, has
said TNI behaves more like a criminal enterprise than a professional military.
“IMET should be resumed, but not until the TNI cooperates with investigations
of the killings of the Americans and other civilians, and the individuals
responsible are punished," he said.
US Ambassador to Indonesia Ralph Boyce has said several factors were hindering
the resumption of full military ties between Washington and Jakarta, including
the Freeport killings and the trials of officers implicated in the 1999 carnage
in East Timor.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Down to Earth
International Campaign for Ecological Justice in Indonesia
59 Athenlay Road, London SE15 3EN, England.
Email: dte at gn.apc.org
Web: http://dte.gn.apc.org
Newsletter No. 57, May 2003
Military protection funds exposed
The US mining company Freeport McMoRan has been forced to reveal how much
protection money it pays to the Indonesian military and police.
Security forces paid to guard the Freeport/Rio Tinto-owned gold and copper mine
in West Papua, stand accused of involvement in human rights violations,
including extra-judicial killings, disappearances, torture, and rape. These
crimes have not been properly investigated and those responsible have never
been brought to justice.
Campaigners have long been critical of the company's financial relationship
with the Indonesian military, which, in effect, pays the wages of human rights
abusers. Until now, the company has not revealed the level of payments it
makes, but, following a shareholder action by New York City public pension
funds, Freeport has been obliged to say how much it hands over to the security
forces.
Freeport paid a hefty US$5.6 million in 2002 and US$4.7 million in 2001.
According to the company, the money paid for infrastructure, catered food and
dining hall costs, housing, fuel, travel, vehicle repairs, allowances to cover
incidental and administrative costs and community assistance programme
conducted by the military and police. Only ‘a small amount’ was given to
soldiers as cash allowances, the company said. But TNI spokesman Maj-Gen
Sjafrie Sjamsoeddin said as much as 20% of the funds were given as cash
allowances to soldiers assigned to protect Freeport/Rio Tinto's 2,800 sq km
concession, with each receiving $39 per month.
The Free Papua Organisation (OPM) says that, in the light of this information,
it is looking at the possibility of reopening human rights legal action against
Freeport.
The company has been making the payments since it started operations in the
1970s. Security was stepped up following the 1996 kidnapping of Indonesian and
foreign researchers. Last year over 2,000 security personnel were reported to
be deployed at the mine. Last August's killing of three mine employees, the
October 2002 Bali bomb, and, most recently, the US-led invasion of Iraq, has
prompted Freeport and the Indonesian government to tighten security further.
"For $5.6 million a year, soldiers deployed around Freeport may as well call
themselves the Freeport Army"
-- (Jakarta Post Editorial, 20/Mar/2003)
At first, senior members of the Indonesian military denied that Freeport was
paying so much. Armed forces commander Gen Endriartono Sutarto said Freeport
had paid for food and pocket money for one battalion (700-800 men) who guarded
the mine. Papua commander Maj-Gen Simbolon joked that if he'd received that
much money, he would build a grand hotel and special barracks for the troops.
He said his men were paid just Rp 125,000 (US$12.50) per month. But he also
said it was entirely appropriate that Freeport should pay wages to the soldiers
in addition to the pay they received from the armed forces.
National police chief, Gen Da'i Bachtiar admitted that police personnel also
receive monthly allowances from Freeport, saying that the funds were used to
build a station for the rapid-response Brimob (police mobile brigade) in Papua.
The revelations sparked public criticism of the military's business activities.
A defensive Gen Endriartono blamed the low military budget, saying that "the
military will happily leave our businesses once the country is able to provide
us with a sufficient budget." The structural problem of the military budget
(just 25%-30% of the money comes from the state budget) is of course just one
side of the story. Corruption and intimidation are another. According to a
source in the Defence Ministry, "enforcing the law on the military over their
shady businesses is very hard because either the law enforcers - the police and
the prosecutors - are getting cuts from the businesses or they are just too
scared." The new armed forces legislation (see also box, Tangguh article), if
passed, will see this situation becoming worse, with military power further
enhanced.
Rent-seeking
The military's business relationship with the corporate sector invites rent-
seeking behaviour by the military, where security guards may provoke conflict
in order to justify their presence at the site or demand more money. There is
widespread speculation that the killings of Freeport staff at Timika last
August may have been motivated by money and that the killings were carried out
by members of the military to warn Freeport not to reduce security payments.
Meanwhile, it'll be business as usual at the Freeport/Rio Tinto mine. Gen
Endriartono said the military would continue to protect Freeport interests with
or without the company's financial assistance because it is a "vital national
asset”. Whether or not they continued payments, he said, was "up to Freeport,"
he said, "but we would welcome the good will from Freeport." Is this an
invitation that Freeport really can't refuse?
--(Source: AFX Global Ethics Monitor, 14/Feb/03; Jakarta Post
13,16,19&21/Mar/03; Papua Post 17/Mar/03; Radio New Zealand International
18/Mar/03; Straits Times 20/Mar/03; )
Right to Know campaign
A joint report by leading US NGOs has launched a campaign to push American
businesses to disclose information on the environmental, labour and human
rights practices of their overseas operations. A report published by Amnesty
International USA, Earthrights International, Friends of the Earth US, Global
Exchange, Oxfam America and Sierra Club, is called "International Right to
Know; Empowering Communities Through Corporate Transparency”. The report
includes case studies on Freeport, Exxon-Mobil, Newmont and Unocal - all
companies with poor human rights and/or environmental records in Indonesia. The
report is at http://www.irtk.org/irtkreport.pdf
Publish What you Pay Campaign
This campaign is pressing international oil, gas, and mining companies to
publish net taxes, fees, royalties, and other payments to governments in
countries where they operate. The aim is to enable civil society to more
accurately assess the amount of money misappropriated and to lobby for full
transparency in government spending.
The campaign wants to help citizens hold their governments accountable for how
these resource-related funds are managed and distributed. The coalition of more
than 80 NGOs involved in the campaign places the onus on wealthy countries'
governments to require transnational extraction companies to publish this
information. For more information see www.publishwhatyoupay.org.
Indonesian NGOs call for investigation
A joint statement by 11 Indonesian organisations accused multinational
companies of being directly involved in human rights abuses: "The payment of
money by Freeport to the armed forces and the fact that the armed forces have
been able to make use of transnational facilities when violating human rights
and committing violence means that the transnationals are themselves directly
involved in and contribute towards this violence and these abuses." The
statement, which was signed by the environmental NGO WALHI, the indigenous
people's organisation AMAN, the mining advocacy network, JATAM and others,
pointed out that other companies are doing the same thing and could not "hide
behind the armed forces and police" and say they're not involved in violence
and abuses.
The statement calls:
- on the Indonesian parliament to summon Freeport and military leaders to make
a public clarification;
- for an independent investigation to look into unofficial payments by other
transnational companies operating in Indonesia;
- for the national human rights commission (Komnas HAM) to investigate human
rights violations committed close to mining operations and the role of the
companies in these events in the form of payment or provision of facilities;
- for all mining companies to make their financial accounts public;
- for the government immediately to give an account of the use of unofficial
funds to the public.
-- (Joint statement 19/Mar/02, signed by Kontras, Imparsial, JATAM, MPI, WALHI,
ELSAM, AMAN, APM, ICW, YAPPIKA, LSPP, YLBHI)
Rio Tinto blasted on three continents
The world’s largest mining company, Rio Tinto, has faced severe criticism on
human rights, the environment, health & safety and pay & conditions. The
company's dismal record in Indonesia has been spotlighted in a new report by
WALHI, published to coincide with the company's annual general meetings.
Rio Tinto's annual general meetings in London and Perth sparked co-ordinated
protest actions in Indonesia, Australia and Britain. The protesters drew
attention to the British-Australian company's poor social and environmental
record in a long list of countries including Indonesia, the US, Australia,
Britain, Zimbabwe, Papua New Guinea, Canada and Bougainville. Outgoing Rio
Tinto chairman, Sir Robert Wilson told shareholders how 2002 had been the
company's second best earning performance ever with a record cash flow of
nearly US$4,000 million. He attributed this to a consistent strategy of
investing in large-scale, long-life and low cost operations. However, it was
evident from the level of protest at both meetings, that the people affected by
this strategy - local communities and mineworkers - are far from happy with the
impacts.
In Central Sulawesi, where Rio Tinto holds the Poboya gold mining concession,
local communities and NGOs sent a clear message to Rio Tinto's board and
shareholders at the London AGM. A huge 20m x 20m banner saying "Reject Rio
Tinto" illuminated by 200 bamboo torches formed the backdrop to the protest. A
community "camp-out" to mark Earth Day on the night of April 14th discussed
ways to stop gold-mining in the customary forests of Poboya Paneki. The
following morning the protesters held a demonstration outside the provincial
governor's office, demanding that he sign a petition to reject the mine.
The central and provincial governments have already refused to allow mining
within the Poboya-Paneki forest park, but the communities are concerned that
this may change. If the central government caves in to pressure from
international mining companies and changes the law to allow mining in protected
forests, they fear that their area will be up for grabs again. At the April
17th London AGM, Yuyun Indradi of DTE/AMAN asked the Rio Tinto board when the
company would return the Poboya concession to its rightful owners - the
indigenous communities who live there. He drew attention to the demonstration
there two days before and read out part of the community's statement.
Rio Tinto chair, Robert Wilson again denied it has any interest in mining in
Poboya and said the company has not been in the area since 1999. However, Rio
Tinto has signed a ‘farm-in’ agreement allowing Australia’s Newcrest to use the
Poboya concession. It can only sell its interest to Newcrest once mining has
been approved. So Rio Tinto remains responsible for Poboya’s future and has a
clear interest in seeing the ban lifted. (For background see DTE 56:14.)
Another dissident shareholder, Richard Harkinson, drew attention to Rio Tinto's
human rights guidelines for managers and asked how this squared with human
rights violations at the Freeport mine in West Papua, in which the company has
a minority share. He called for an independent review of human rights there,
especially in view of the recent revelations by mine operators, Freeport
McMoRan that it paid millions of dollars to the Indonesian military last year.
In a press release, Friends of the Earth Corporates Campaigner, Ed Matthew,
said that Rio Tinto's environmental and human rights record in Indonesia
is "abysmal", but that "UK company law allows them to get away with it...The
British Government must change company law to ensure the directors of
irresponsible corporations like Rio Tinto are made fully liable and accountable
for their destructive impacts overseas. Only then will they take their
responsibilities seriously."
Around 2,000 workers held a demonstration outside Rio Tinto's Perth AGM on May
1st in support of union representatives from the US, Canada and Australia.
Wayne Holland, a retired worker from Rio Tinto's Kennecott copper facilities in
Utah, USA, protested against the threatened removal of health benefits from
families of employees, including retired workers. He said they would face
misery, sickness and premature death if this threat was carried out and
contrasted the plight of Kennecott families with the future healthcare
prospects of Sir Robert, who is leaving the company with a US$23.8 million
payout.
Robert Wilson has been with Rio Tinto for over thirty years, became chief
executive of Rio Tinto plc in 1991 and executive chairman in 1997. Paul
Skinner, currently managing director for the Shell Group takes over as
chairman. Leigh Clifford, who is also a director of Freeport McMoRan, remains
Rio Tinto’s chief executive.
-- (Source: DTE notes from London AGM, CFMEU Media Release, 1/May/03;
MPI/WALHI/JATAM Press Release 17/Apr/03; Central Sulawesi Earth Day Committee,
Reject Rio Tinto; translation 16/Apr/03; FoE Press Release 17/Apr/03)
New WALHI report on Rio Tinto
After the London AGM, a representative of Friends of the Earth presented
outgoing Rio Tinto chairman Robert Wilson with an appropriate leaving gift.
WALHI's new critique of the company's mining interests in Kalimantan, Sulawesi
and West Papua, Undermining Indonesia: Adverse social and environmental impacts
of Rio Tinto's mining operations in Indonesia, will remind Sir Robert of the
damage Rio Tinto has done in Indonesia under his leadership.
The report covers four Rio Tinto interests in Indonesia: Kelian, Kaltim Prima,
Freeport and Poboya. WALHI says that the PT Kelian Equatorial Mining (PT KEM)
gold mine in East Kalimantan (90% owned by RT) will have dumped 100 million
tonnes of waste rock into the environment by the end of its operations. It
accuses the company of circumventing and violating Indonesian environmental
regulations and highlights concerns over the use of cyanide and acid rock
drainage.
The report also outlines the history of human rights abuses at the Kelian mine,
which includes forced eviction of local people by the military and the police.
At least 444 families were displaced from their settlements without any prior
informed consent. WALHI points out that under an agreement signed by the
community organisation LKMTL and Rio Tinto, the company was supposed to
publicly acknowledge its responsibility for human rights abuses, especially
those related to the violence and sexual abuse of women, including rape. The
company has only put out a press release saying that "KEM states its deep
concern for various sexual abuses done by workers and contractors, and for
grievances and suffering experienced by the victims."
WALHI points to the unjust mine closure procedure, which is not taking
community concerns adequately into account and has failed to provide basic
information to the communities. The company will not restore the 450 hectare
mine pit and dump sites to their original forested condition, claiming
technical difficulties. However, WALHI is convinced that the high cost of
proper reclamation is the deciding factor.
Kaltim Prima
On the Kaltim Prima Coal mine (50% owned by Rio Tinto and 50% by BP - another
company making claims to corporate responsibility), the WALHI report says that
land appropriation has affected 287 local people and that new land disputes are
arising even now. Water quality in the Sangatta River has been deteriorating:
it is clogged with lime used to neutralise acidity and local people are no
longer able to fish in it. The report predicts that another three rivers will
be affected by coal-mining at Kaltim Prima.
The report also covers the Freeport mine in West Papua in which Rio Tinto has a
15% share and 40% share in a planned expansion; and the Poboya mining
concession (90% owned by Rio Tinto) in Central Sulawesi.
Undermining Indonesia's demands to the Indonesian government are:
- a moratorium on new mining operations in Indonesia and a comprehensive review
of the government's policy on extractive industries in Indonesia;
- an independent inspection team to evaluate all mining operations in
Indonesia, especially their environmental, social and human rights records;
- a clean-up, rehabilitation and restoration of mine sites;
- a renegotiation of all mining Contracts of Work already signed by the
government and foreign investors, involving all stakeholders and based on the
principles of transparency and fairness.
And to Rio Tinto:
- a public apology for involvement in human rights abuse and violations;
- the fulfilment of its obligations to all the victims of its operations;
- a clean-up of all its mining operations and areas impacted;
- the disclosure of its contributions given to Indonesia's military and police,
either in the form of money or other facilities [this also relates to the
revelation of Freeport's payments to the military - see first article.]
- make public the company's mine closure plans for all its operations in
Indonesia.
Finally, the WALHI report offers a blunt assessment of the mining industry in
general which cuts through companies' PR claims of 'sustainable mining':
"Extractive industries are unsustainable because they are highly dependent on
the exploitation of non-renewable resources. While being promoted as a big
contributor of revenue to the Indonesian Government, the industries hide their
negative impacts on the livelihoods of millions of Indonesian people and future
generations."
--The full report is on WALHI's website at:
http://www.walhi.or.id/English/reports/riotinto2003.pdf
West Papua / gas
More doubts emerge over BP’s Tangguh project
Two studies commissioned by BP have highlighted serious concerns over the
impact of the planned Tangguh gas project in West Papua.
BP has announced the findings of two studies it commissioned to examine the
potential impacts of the Tangguh gas project in Bintuni Bay, West Papua, on
human rights, local communities and the environment. The questions raised by
the reports and the way in which the information has been managed by BP throw
further doubt on the company's claim that the Tangguh project will be a model
of corporate social responsibility.
The giant Tangguh gas extraction and liquefied natural gas processing (LNG)
project, due to start construction this year, is highly controversial. The
project has caused alarm because it is being developed in a disputed territory
where human rights abuses by the military and police forces are carried out
with impunity. The project is bringing huge changes to local communities and
their way of life, which is largely dependent on the Bay's natural resources.
The development is located in a fragile, forested environment, near the largest
remaining mangrove stands in Southeast Asia.
Human rights impact report
The first study, a human rights impact assessment (HRIA), compiled by former US
State Department official Bennett Freeman and US lawyer Gare Smith, was
presented to BP in April 2002. This is the first time that BP has conducted a
study focused solely on human rights. But the report was not published in full,
despite clear public interest in its findings. BP only put out a 7-page summary
of recommendations. Even then, it took the company ten months to do this. The
summary, plus BP's 21-page response, were only made available in February this
year, despite repeated requests from NGOs.
The HRIA summary recommendations cover many of the concerns that Papuan and
international NGOs have raised. They include the recommendations that BP should:
- Pay a "fair" price for land based on the value of comparable land owned by
subsistence cultures elsewhere in Papua;
- Help local and provincial governments develop guidelines to demarcate the
boundaries of traditional lands;
- Pay restitution for trees felled and for loss of fishing grounds;
- Encourage the central government to guarantee revenues as outlined under
Special Autonomy;
- Establish laws regarding the sale and use of communal land and squatting on
indigenous lands, to limit immigration;
- Establish training courses to challenge existing assumptions regarding racial
superiority/inferiority;
- Give Papuans preference in securing senior positions.
On the issue of human rights and security, the authors recommend that the
company should:
- Urge the highest levels of the Indonesian government to limit TNI (Indonesian
armed forces) and Brimob (special forces police) deployments and, if necessary,
seek support for this position from the US and UK governments;
- Develop a written policy regarding the provision of equipment to state
security forces;
- Use the ICRC (International Committee of the Red Cross) for security force
training;
- Take into account past human rights records of military personnel deployed in
the region, raise specific cases at the highest levels, seek investigations and
accountability for abuses committed in the project area and unimpeded access
for NGOs investigating alleged abuses;
- Provide a local security and human rights "hotline" for emergency use.
BP's lengthy responses to these issues are varied, but they largely consist of
confirmation that the concerns are already being taken care of as recommended
by the report, or are being addressed in a way that is considered more
appropriate. See
http://www.bp.com/location_rep/indonesia/tangguh_project/index.asp for links to
the full response.
TIAP report
The other study is the first report of the Tangguh Independent Advisory Panel
(TIAP) which was established by BP in early 2002 to provide external advice to
BP's senior decision-makers on the non-commercial aspects of the Tangguh
project. Again, there was a long delay (around 6 months) between its completion
and its publication on BP's website in March 2003. It is not clear whether this
report, or the HRIA, has been made available in Indonesian or appropriate
Papuan local languages.
The TIAP is chaired by US Senator George Mitchell and includes Lord Hannay from
the UK, former ambassador Sabam Siagam from Jakarta and the Reverend Herman
Saud from West Papua.
The TIAP report is wider in scope than the HRIA. The issues include community
development, security, training and employment of Papuans and the environment.
The Panel reports that Tangguh is "both welcomed as a new model for
international corporate conduct and feared because of Papua's past experience"
(with Freeport). According to Mitchell, the massive financial benefits outweigh
the problems with Tangguh (Guardian 12/Mar/03).
But the report underplays the high costs to indigenous communities represented
by threats to the environment, livelihoods, social and cultural disruption,
increased tension brought about by increased police and military presence in
the region, and the potential for conflict between communities.
The TIAP report does not address some of the crucial questions raised by DTE in
a meeting with TIAP members in April 2002 (see DTE 53/54:7). These include:
- Land and resource rights and the conflict between Indonesian state law and
adat or customary law. In fact the Panel avoids this crucial issue by stating
that BP's compliance with Indonesian law is outside the scope of the Panel's
inquiry;
- The right of the local communities to reject the project. Neither the TIAP
report nor the HRIA report summary recommendations tackle this fundamental
question. The whole TIAP mission is based on the understanding that the project
will go ahead and that the question is how to do it best, not whether to do it
at all;
- The possible link between Tangguh and the Wasior killings and resulting
terrorising of communities by the Indonesian military/police;
- The likelihood that the presence of the Tangguh project will increase human
rights violations given the long history of appalling human rights abuses in
West Papua, committed by the security forces, which have never been properly
investigated. The only case mentioned is that of independence leader Theys
Eluay, which, the Panel says, was raised by almost everyone they met.
Women ignored
There is no discussion of the particular impacts that the project may have on
women, in either the TIAP report or the HRIA summary. This is a serious flaw.
Recent studies have highlighted the fact that women suffer disproportionately
large negative impacts from extractive industries (see, for example, article on
women and mining, DTE 56).
Security and human rights concerns
There is widespread concern about security at Tangguh because the Indonesian
military have a legal obligation to protect ‘vital national assets’. BP’s plans
for a ground-breaking community-based security set-up, which avoids military or
police guards at the site, has not yet been accepted at central government
level. This is clear from BP’s response to the HRIA report which refers to
the "considerable animosity among some of the various stakeholders" and adds
that reconciling these “sharply diverging opinions” will be neither easy not
straightforward. (p.19).
The TIAP team rates security as possibly "the most difficult and sensitive
issue for BP" (p.20) both because of the military's legal obligation to
protect 'vital national assets' and because the TNI (armed forces) may place
financial demands on BP. The team was told that up to 80% of TNI revenues have
been derived from businesses and protection of facilities (p.20/21). This
confirms what Papuans already know: that military corruption and rent-seeking
behaviour in West Papua is deeply entrenched, and provides a strong economic
motivation to retain a large presence in the territory (see DTE 55:1, for
example, on the military involvement in logging in West Papua and report on
Freeport, this issue.)
BP acknowledges that an increased police presence in the Bintuni Bay area will
be required during the project's construction phase to maintain law and order.
The company says this has already been authorised but not yet carried out. The
company stresses that the police and army has maintained a presence in the area
for decades, so that the project will not introduce security forces into the
area, but rather influence the numbers, locations and roles they will perform.
No figures are given either for existing levels of police and military in the
area or for anticipated increases.
Police role
BP appears to be over-optimistic about the role of the police, which, the
company hopes, will respond better to local priorities under Papua's Special
Autonomy arrangements. This attitude fails to take into account the role of
Brimob, the notoriously brutal police mobile brigade, used by government
authorities and companies to suppress local opposition to projects such as
mines, plantations and logging.
It is true that the reputation of the regular Papuan police force did improve
under the command of Insp.Gen. I Made Mangku Pastika. He was involved in
discussions with civil society leaders on promoting Papua as a ‘Zone of Peace’
and, during the investigations into the August 2002 Freeport murders, voiced
suspicions that the army special forces (Kopassus) were implicated. But Pastika
was replaced as Papua police commander in November 2002. In January this year
his deputy was also transferred out of Papua - a move which is believed to
relate to the police's investigation into the Freeport killings.
Military context
The prospects for the demilitarisation of Papua demanded by Papuan civil
society leaders, don’t look good. In Indonesia as a whole the military's
influence is on the increase (see box).
This spells bad news for West Papuans. Recent military operations in the
central highland area around Wamena have heightened tensions. TNI 'sweeping'
operations have burned down villages and schools and killed villagers'
livestock. The operations are ostensibly in response to a raid in April on a
military post in Wamena during which two officers were killed and another
injured. At least one of the Papuans arrested following the incident has died
after being tortured in detention. There is widespread belief that the military
may have been involved in the original attack in order to provoke conflict.
What does this unstable and unpredictable situation mean for Tangguh?
Increasing military dominance in Jakarta, growing TNI confidence (bolstered by
international support for the post 9/11 'war against terrorism') and continuing
impunity will certainly not help BP's bargaining position when it comes to
negotiating the terms of community-based security at Tangguh.
The TIAP report says that BP should work to accomplish a sound basis for co-
operation on the security-based security concept, if possible, before a final
decision is made to proceed with the whole project. In its response, BP says it
agrees with this recommendation. However, it is very hard to believe that BP
really will consider pulling out of Tangguh, if it can't get the security
arrangements it wants.
Note: The HRIA report was discussed at a 'stakeholder' meeting facilitated by
BP in February, and the TIAP report was launched at public meeting in March.
DTE and Tapol, two of the UK-based NGOs invited to a February workshop to
discuss the report, decided not to attend, after BP declined to release the
full HRIA report and other supporting documents requested.
New concerns
Several concerns have emerged recently which could make it more difficult for
BP to fulfil its commitments at Tangguh. They include:
- The Bali bomb and its aftermath, including recent anti-terrorist legislation.
This could lead to the criminalisation and branding as terrorists of local
people who protest against projects in their areas (see also DTE 56:14)
- The trials of the seven Kopassus soldiers accused of involvement in the
murder of pro-independence leader, Theys Eluay, in which maximum sentences of
three and a half years were handed down by the military court. The TIAP report
refers to the outcome of these trials as "a first test" of the viability of
Special Autonomy (p.10) and Papua's 'new relationship' with Indonesia.
- Increase in military powers: a new military bill will, if passed, increase
the military powers to intervene in domestic security affairs. Critics say the
bill paves the way for a military take-over of the country. Most contentious is
a provision which gives the TNI commander powers to mobilise troops in an
emergency, without a Presidential decision.
- The division of Papua into three provinces, which will stall Special Autonomy
and raises the potential for more tension and conflict in West Papua (see also
main text). Bintuni, where Tangguh is located, has already been declared a new
Kabupaten (district) under separate administrative changes agreed last year.
This also entails boosting levels of military and police along with the setting
up of a new district government apparatus.
Revenues, expectations and the World Bank
One important concern highlighted by the TIAP report is the fact that
the "momentum of expectation" among local people and the "considerable
impatience for tangible benefits" could easily turn into resentment if concrete
results are not seen soon after LNG exports begin. It also points out that
there will be a delay of some years (it could be a decade) between LNG
production start-up and the flow of substantial revenues into Papua. This is
because debt servicing and recovery costs take up most of the earnings in the
first years after production start-up. To address this, TIAP puts forward a
highly controversial idea: that BP should consider the possibility of an
externally-financed line of credit to “bring forward and smooth out the flow of
revenues to Papua from the project”.
According to media reports, the company is already in discussion with the Word
Bank about this. The Bank's chief economist in Jakarta, Bert Hofman, has been
quoted as saying it's a "good idea".
This immediately raises a host of questions. Does the World Bank's record in
Indonesia make it suitable to play such a role? The Bank stands accused of
colluding in massive corruption during the Suharto presidency and has not
answered demands to cancel the resulting 'odious' debt inherited by successive
Indonesian governments. Civil society organisations remain critical too, of the
Bank's capacity to deliver pro-poor development, when it is governed by the
global economic priorities of the US and other rich countries. Under such
circumstances, would a World Bank loan have the desired stabilising effect? Who
would pay for the loan? Would West Papua be expected to foot the bill when it
would be BP that benefited from any increased stability? Also, the loan would
not come directly to the Papuan regional government but, like all World Bank
loans, would go through Jakarta. Would Papua trust Jakarta to manage the loan?
Would it be wise to tie Papua to Jakarta in such a way, when there is a
possibility that West Papua's political status may change?
Revenues
Another crucial question is who would pay back the debt if the project didn’t
live up to expectations? It is by no means certain how many LNG ‘trains’ or
terminals will be built as this depends on gas markets. BP only plans to build
2 trains in the near term but this could be expanded to 8 trains, if the
markets materialise.
It is also by no means assured that the revenue split in favour of Papua is
secure, since Jakarta appears to be determined to undermine Special Autonomy by
splitting Papua into three provinces (see below). Even if Special Autonomy
does survive, Papua gets 70% of revenues for the first twenty five years only,
after which it is reduced to 50%. Since Tangguh has an estimated lifetime of at
least 30 years, this has clear implications for Papua’s future income.
-- (Source: Human Rights Assessment of the Proposed Tangguh LNG Project Summary
of Recommendations and Conclusion, Presented to BP Indonesia April 19, 2002,
Gare A. Smith, Foley, Hoag & Eliot, LLP, Bennett Freeman, Consultant; Human
Rights Assessment of the Proposed Tangguh LNG Project, BP Response February
2003; Tangguh Independent Advisory Panel: First Report on Tangguh LNG Project,
October 2002; Tangguh Independent Advisory Panel BP Response to the first
report on the Tangguh LNG project, September 2002; The documents (minus the
annexes to the TIAP report are linked from
http://www.bp.com/location_rep/indonesia/tangguh_project/index.asp
-- Additional sources: Jakarta Post 2/Nov/02; 14/Jan/03; 20/Feb/03)
Special Autonomy and the 3 provinces split
George Mitchell and his fellow panel members are confident about the
possibilities for Tangguh's success under Special Autonomy, the law passed in
October 2001, which is part of Indonesia's overall decentralisation programme.
Special Autonomy is also supported by the US and European governments as the
best way to solve Papua’s political conflict, despite the fact that many
Papuans see it as just a stepping stone to independence.
However, the Panel does recognises that Special Autonomy's implementation in
West Papua is by no means assured and that it would be unwise for BP to rely on
it.
Recent moves by the Jakarta government to undermine Special Autonomy play out
this concern. In January this year, Megawati issued a Presidential Instruction
to implement a 1999 law which splits Papua into three separate provinces. This
is seen as a deliberate attempt to sabotage autonomy in West Papua because,
according to the Special Autonomy law, any policy affecting Papuans must be
approved by the Papuan People's Assembly (MRP). This body, which is key to the
proper functioning of autonomy, has not yet been set up (due to Jakarta's delay
in issuing the necessary regulation and questioning of its legality.) In fact,
Special Autonomy, supposedly in effect since January 2002 in West Papua, has
not been implemented because the required government regulations have not
materialised.
The Papuan human rights group ELSHAM believes that the division of Papua will
increase Jakarta's exploitation and militarisation of West Papua. Each new
province will have a military command, and there will be more military control
over business operations.
According to one report, Papuans have declared that they will call a referendum
if Jakarta does not revoke the Presidential Instruction. (Cenderawasih Pos,
8/Feb/03, cited in Jakarta Post 19/Feb/03)
-- (Additional sources: Jakarta Post 13/Mar/03; Analysis by Neles Tebay,
received 19/Feb/03; Green Left Weekly 26/Feb/03; Harian Papua Post 27/Feb/03
with comment from Tapol; ELSHAM Papua and AWPA media release 23/Feb/03)
Tangguh Update:
Resettlement: construction of the resettlement village for the families moved
from the project site, started on February 5th. The houses being constructed
for the resettled villagers will use 30 cubic metres of timber each. BP has
said the wood will come from legally licensed producers (but there is
disagreement within Indonesia as to what constitutes "legal" see DTE 56:6 and
DTE 53/54:10).
AMDAL: (Environmental Impact Assessment): the final AMDAL, approved by central
government in October 2002, is now being "socialised" to local NGOs and
communities. BP is asking communities to get involved in implementing the AMDAL
and monitoring the project's progress. WALHI and other organisations state that
the AMDAL is invalid because there had been no legal authority to approve it,
since the environmental agency Bapedal was merged with the environment
minister's office. However, BP argues that the environment minister who
approved the AMDAL did indeed have the legal authority to do so.
Land rights: The land required for the project was in an area classified by the
Indonesian government as ‘production forest’. The land is also claimed by local
communities. According to BP, the process ran as follows: the land was
relinquished to the government by local communities (this was prior to BP's
involvement in the project, when the US company ARCO was in charge), then the
government issued HGU (construction) rights to BP which will last for 30-50
years. The land will then revert to the government. BP told NGOs in West Papua
that the Indonesian government has promised to return the land to the original
adat owners. However, it is not clear whether this commitment is on paper and
how legally binding it is.
Construction of facilities: in April BP announced that a consortium of Kellogg,
Brown and Root (US); JGC Corporation (Japan) and PT Pertafenikki Engineering
(Indonesian-Japanese joint venture) had won the bid for engineering,
procurement and construction for the Tangguh LNG complex, worth around $1.4
billion. Work to upgrade an old airstrip started in November 2002. This will be
used until another airstrip is constructed at the project site.
Water and waste: a desalination plant will be constructed to provide drinking
water at the project site, but not for local communities. Hazardous waste will
be stored and then taken to a suitable disposal facility (at present there is
only one of these in Bogor, West Java). Other waste will be recycled,
incinerated, composted or put in a landfill which will be built at the site.
Gas leaks: BP says that every effort is being made to ensure that leaks from
the 25 km of undersea pipelines do not happen. But how far can this be trusted
when leaks occurred very recently at its Java operations (see DTE 56:11)?
Globally, BP's safety record has also come under scrutiny. Hypothetical
modelling of a leak in the AMDAL shows that the environmental impacts would
be "not severe", but that economic and political impacts would
be "significant".
Impact on forests: As the LNG site is on state 'production forest' land, BP is
required to reforest an area twice as large as the area it is taking. BP says
it is currently in discussion with the forestry department on this.
Shareholdings and financing: In February BP sold 12.5% of its shares in Tangguh
to China's CNOOC for $275 million, leaving BP with 37.2% of the project. In the
Annex to the TIAP report BP notes that $2,250 million of financing is required
for the first 2 gas trains.
LNG sales: Pertamina said in March it was in talks with Japan's Tohoku Electric
Power Co Inc with prospects for the company to buy 2 million tonnes. Tangguh
will also take part in a tender to supply 1.6 million tonnes of LNG to Taiwan.
Tangguh already has a contract to supply 2.6 million tonnes per year to a
planned terminal in Fujian province, China, starting 2007. In 2001, Pertamina
signed a memorandum of understanding with GNPower to supply 1.3 million tonnes
of LNG to the Philippines.
Revenues for Papua: estimates range from US$100m/year by 2016 to US$225m/year
at peak depending on how many LNG 'trains' are constructed.
-- (Reuters 25/Apr/03; 26/Mar/03; Asia Pulse/Antara 1/Apr/03 and others)
Indigenous rights
Indigenous Peoples force suspension of Jakarta aid meeting
Indigenous Peoples walked out of a meeting with the British government aid
agency, DFID, in March, in response to a controversial statement by a senior
Indonesian government forestry official.
Around a hundred people from indigenous groups, local communities and
supporting organisations refused to continue DFID’s second annual Multi-
stakeholder Forestry Programme meeting in Yogyakarta following comments by the
Indonesian forestry ministry's secretary general. In his opening speech,
Wahjudi Wardojo ruled out the possibility of changes in government policy to
allow indigenous peoples to own forest lands. He said this was because of the
experience in Jambi province (Sumatra) where communities had sold their land
within five years of getting ownership. As a result, he said, "the people will
never be landowners." Instead, communities were permitted to use the forests
through the Social Forestry Programme.
The walk-out resulted in DFID deciding to suspend the meeting to allow time for
indigenous groups and the forestry ministry to hold discussions. The meeting
was supposed to be resumed within 40 days, but now is due to be reconvened in
mid-June.
Recognition of the right to own forest lands and resources is a central demand
of indigenous peoples in Indonesia, and of the national indigenous peoples
organisation, AMAN. It is a demand that is widely supported by Indonesian
environmental and human rights NGOs as well as international organisations.
Indonesia's forestry department is resisting recognition of these rights,
although under decentralisation, its authority to do so is being weakened.
While there is a strong reform-minded contingent within the Jakarta ministry,
it remains home to a group of Suharto-era die-hards who are resistant to any
changes which may threaten their authority further.
DFID's support for civil society organisations, including those demanding the
recognition of their land and resource rights, is aimed at supporting reformist
elements within the forestry department,
In a statement the protesting participants said they came to the meeting fully
expecting that the Multi-Stakeholder Forestry Programme would bring about
forestry reform, but were now "disappointed, sad, angry and concerned" after
hearing the secretary general's comment. This, they said, insults the People's
Consultative Assembly (MPR) which has clearly recognised the need to
acknowledge indigenous peoples' rights. (This refers to the decrees passed by
the MPR - Indonesia highest legislative body - in November 2001on Agrarian
Renewal and Natural Resources Management (see DTE 52:3 and this issue, page 15).
The statement also said the secretary-general's statement showed an insulting
attitude to adat (customary law) and traditional knowledge which has long been
proven capable of protecting forests and people's livelihoods.
The groups said there was no point in developing the Multi-Stakeholder
programme if the government was determined to remain isolationist. They
demanded that the forestry department withdraw the statement and, instead,
state that it is prepared to "acknowledge, respect and protect indigenous
peoples' and other communities' rights as promised in the Indonesian
Constitution and MPR decrees.”
-- (Source: Position Statement, indigenous peoples, local communities and
supporting organisations at the second annual meeting of the DFID MSF
Programme, 26/Mar/03)
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