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03-01-06, 18:45
http://www.guardian.co.uk/indonesia/Story/0,2763,1675232,00.html
Indonesian military admits being paid by US mining firm
John Aglionby in Jakarta
Friday December 30, 2005
The Guardian
Indonesia's military admitted yesterday that officers received payments from a local subsidiary of the American mining giant Freeport-McMoRan to guard its huge Grasberg copper and gold mine in Papua, the western, Indonesian, half of New Guinea island.
The admission comes after a report in the New York Times claimed that Freeport Indonesia paid military and police officers, and several army units £11.7m from 1998 to 2004. Some officers allegedly received tens of thousands of pounds. If they kept any of the money themselves, it would be a criminal offence.
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The scandal might have significant implications for the Anglo-Australian company Rio Tinto, which had a 12% stake in Freeport-McMoRan from 1995 until last year. It still has a 40% share of all deposits discovered in the mine after 1994.
It could also raise concerns for BP, which is developing a multibillion pound gas field in Papua but has yet to engage the military in its site security.
Freeport has admitted to paying the military a couple of million pounds a year since 2001, but always implied this was at the institutional level. Security at the Grasberg mine has been tightened since three Freeport employees were killed by unidentified gunmen in 2002. Local police accused the military of involvement in the attack, but the only person to have been indicted is an alleged separatist.
A military spokesman, Major General Kohirin Suganda, said yesterday the military "as an institution" had never benefited from the Freeport payments. He also claimed that individuals did not enrich themselves, rather that the money was spent on the forces in the field. "We have heard that Freeport provides support such as vehicles, fuel and meals directly to the units in the field," Gen Suganda told the Associated Press. "That's the company's policy. It was not done because we requested it."
Only about a third of Indonesia's armed forces' funding comes from the government and commanders are often expected to help make up the shortfalls.
In a direct contradiction of Gen Suganda's comments, Freeport's vice-president for communications, William Collier, said in a statement: "The support for the government security institutions is provided pursuant to government requests for its legitimate requirements."
Indonesian military admits being paid by US mining firm
John Aglionby in Jakarta
Friday December 30, 2005
The Guardian
Indonesia's military admitted yesterday that officers received payments from a local subsidiary of the American mining giant Freeport-McMoRan to guard its huge Grasberg copper and gold mine in Papua, the western, Indonesian, half of New Guinea island.
The admission comes after a report in the New York Times claimed that Freeport Indonesia paid military and police officers, and several army units £11.7m from 1998 to 2004. Some officers allegedly received tens of thousands of pounds. If they kept any of the money themselves, it would be a criminal offence.
Article continues
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The scandal might have significant implications for the Anglo-Australian company Rio Tinto, which had a 12% stake in Freeport-McMoRan from 1995 until last year. It still has a 40% share of all deposits discovered in the mine after 1994.
It could also raise concerns for BP, which is developing a multibillion pound gas field in Papua but has yet to engage the military in its site security.
Freeport has admitted to paying the military a couple of million pounds a year since 2001, but always implied this was at the institutional level. Security at the Grasberg mine has been tightened since three Freeport employees were killed by unidentified gunmen in 2002. Local police accused the military of involvement in the attack, but the only person to have been indicted is an alleged separatist.
A military spokesman, Major General Kohirin Suganda, said yesterday the military "as an institution" had never benefited from the Freeport payments. He also claimed that individuals did not enrich themselves, rather that the money was spent on the forces in the field. "We have heard that Freeport provides support such as vehicles, fuel and meals directly to the units in the field," Gen Suganda told the Associated Press. "That's the company's policy. It was not done because we requested it."
Only about a third of Indonesia's armed forces' funding comes from the government and commanders are often expected to help make up the shortfalls.
In a direct contradiction of Gen Suganda's comments, Freeport's vice-president for communications, William Collier, said in a statement: "The support for the government security institutions is provided pursuant to government requests for its legitimate requirements."