LAKSAMANA.Net, September 3, 2002 02:08 PM
What Is Happening At Freeport?
September 3, 2002 02:08 PM, By Dr Denise Leith
Laksamana.Net - Dr. Denise Leith is the author of The Politics of Power: Freeport in
Suharto's Indonesia, due for release by the University of Hawaii Press in October
2002. This article appears on Laksmana.net with the author's permission.
Kelly Kwalik of the OPM has denied that the nationalist group is responsible for the
killing and wounding of Freeport employees on the company road from Tembagapura
on Saturday. John Rumbiak, the supervisor of ELS-HAM, who met with Kwalik on the
25 August stated in Sydney today that, "Most of the guerrilla leaders throughout the
entire province are now in a position of reforming peaceful movement for their political
demands." He, along with many other observers of West Papuan and Indonesian
politics, believe that it was TNI who were responsible for the killings of the Freeport
employees.
This is not the first time a Freeport employee has been shot and killed on the road
leading from Tembagapura. On 8 November, 1994 a Papuan flagman working for
Freeport, Gordan Rumaropen, was shot dead while driving along the access road. The
shooting, which the military and the company blamed on the OPM, saw Freeport
requesting a greater military presence in the area and resulted in an expanded military
operation which led to well documented human rights violations against the
indigenous peoples living within and around the concession area. However, the
shooting has remained a point of some contention.
An employee of a Freeport subcontractor, who was also shot in the same area only
minutes after the killing of Mr Rumaropen, believes he saw who shot at him and also
killed Mr Rumaropen. A short time after hearing the original gunshot this person saw
an Indonesian soldier disappear into the bushes and seconds later was shot in the leg
himself. He then drove past the area where, unbeknownst to him, Mr Rumaropen was
lying dead. The position, which was usually isolated, was surrounded by Indonesian
soldiers. It was, he believes, the Indonesian military who shot him and killed Mr
Rumaropen.
Given the similarities of the two incidents and the recognized modus operandi of TNI
was it possible that TNI was responsible for the deaths this weekend, and if so, why
would the Indonesian military want to attack Freeport? The general response from
those who blame the military has been that TNI is using its usual tactic of
manufacturing an 'incident' to justify an increase in its presence and actions against
the traditional peoples who have steadfastly maintained their peaceful demands for
independence. But could there be another reason?
In response to the meltdown of Enron and WorldCom, and to counter investor anger,
the Bush administration pushed a bill through the American senate and congress
which demanded greater corporate accountability. Passed into law on the 26 July, the
Corporate Fraud Act required American companies to file certifications by the 14
August declaring that their financial accounts were true and accurate. Under this
legislation CEOs and chief financial officers are now to be held personally responsible
for the accuracy of such disclosures.
For years Freeport has turned a blind eye to the pilfering of Freeport property by the
military with such practices generally being considered part of the cost of military
protection. In 1991 Emmy Hafild, from the Indonesian environmental non-government
organization WALHI, claimed that the military commander of the area boasted to her
that Freeport directly supported military operations and helped pay military salaries. A
number of reports have also claimed that Freeport pays $11 million dollars annually
into a communal fund for the military which is reputedly topped up on request by
negotiation. At the same time it has been claimed that local soldiers are paid a
monthly salary-bonus, which in 2001 was estimated to be approximately Rp400,000.
While the Freeport-McMoRan annual reports boasts substantial payments to the
traditional landowners by listing the millions it pays towards development, is it fair and
reasonable, or even legal, for Freeport to claim kudos for such policies without
offsetting this figure with what it may be paying the military: the perpetrator of human
rights against the same people the company purports to assist? Moreover, in this new
era of corporate responsibility foreshadowed by the Corporate Fraud Law, are such
accounting practices legal? Could it be that this new legislation has finally forced
Freeport to sever its financially and morally questionable ties with TNI?
Although Freeport has strenuously denied that it pays military wages the readiness of
the company's executives to deposit cash into the private bank accounts of the
military undermines any such assertion. In response to a telephone call from a man
identifying himself as the West Papuan police chief, in February 2001 it was reported
that Freeport executive Prihadi Santoso (government and external relations) instructed
his secretary to deposit $10,000 into the private bank account as requested.
It was only later, when the caller was found to be a hoax, did Prihadi inform Jakarta
police of the fraud. Although the incident was reported by the Indonesian press no one
seemed to be interested in questioning the appropriateness of a senior Freeport
executive paying money directly to someone who identified himself over the phone as
an Indonesian police chief - such payments, it would appear, are common practice.
While in the past Freeport may have been willing to fund the military and turn a
blind-eye to its illegal activities, immediately after filing certifications under the
Corporate Fraud Law it appears that the company may have changed its corporate
policy. While for decades Freeport has allowed the military to pilfer from it, according
to Dr Benny Giay, Rector of Walter College in Jayapura and chairman of the West
Papuan Reconciliation Task Force, two weeks ago it was reported in the local
newspaper, the Cenderawasih Pos, that Freeport had accused members of the
Indonesian military of stealing company property. Moreover, on Saturday, the same
day as the killings on the road from Tembagapura, Dr Giay says he was informed by a
Freeport manager that Lexi Linturan (head of Freeport Security), had been threatened
several times by TNI over the previous two weeks because he had discontinued some,
or all, of the company's payments to this institution. Just over two weeks ago the
Corporate Fraud Law came into force.
If this scenario is correct could the military have attacked Freeport employees on
Saturday to force the company to resume payments and withdraw its charges against
its personnel? This would not be the first time TNI threatened the company by using
violence. In March 1996, shortly after the release of the Australian Council For
Overseas Aid report which accused Freeport security, in collusion with the Indonesian
military, of killing indigenous people in the company's concession area, the company
strenuously denied all involvement and attempted to distance itself from TNI. In
response the military took control of, if not orchestrated, violent riots in Timika which
saw the direct targeting of Freeport infrastructure. Endeavoring to formulate another
response to what the company had come to see as a troublesome and potentially
damaging relationship with TNI, Freeport then offered the institution incentives to
choose separation and reform. According to one source the military requested $100
million but settled for $35 million from Freeport with the company agreeing to supply
the military with its own transport vehicles, build barracks and help in the construction
of its own naval base. By supplying the military with separate infrastructure Freeport
hoped to define clear physical parameters between itself and TNI in the eyes of the
traditional peoples and its detractors, it also hoped to lessen resentment of the
company from within the military.
Could it be that the ramifications of the Corporate Fraud Law forced a change in
company policy two weeks ago and did this change lead to the Indonesian military
killing Freeport employees on the road from Tembagapura on Saturday? If this is the
case what will happen if other American companies operating in Indonesia also decide
to take this opportunity to discontinue the burdensome payments to TNI? Moreover,
how will the Indonesian military and the regime in Jakarta cope with the loss of
corporate funding which helps keep the discredited institution afloat and the disparate
Republic together?
[The Politics of Power: Freeport in Suharto's Indonesia, which describes the complex
power relationships between the company, the Jakarta elite, the Indonesian military,
the traditional landowners, and non-government human rights and environmental
organizations, is due for release by the University of Hawaii Press in October 2002.]
Contact Dr Denise Leith via email at: djleith@hotmail.com
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