MAC/20: Mines and Communities

Rights Groups Slam BP's Tangguh Project

Published by MAC on 2005-01-10


Rights Groups Slam BP's Tangguh Project

Laksamana.Net

January 10, 2005

A coalition of human rights groups says Anglo-American energy giant BP should scrap its multi-billion dollar liquefied natural gas (LNG) project in Tangguh, Papua province, if it fails to embrace greater transparency and improve the rights of indigenous people.

Construction of the $3 billion Tangguh facility began last year and the project is due to commence production in 2008 with initial annual output of 7 million tons of LNG from two processing trains.

BP is providing its own security for the project because it doesn't want to have to pay big protection fees to guards from the Indonesian Defense Forces (TNI).

Also mindful of its international image, BP doesn't want any soldiers based at Tangguh lest it suffer the fate of other multinationals, such as Freeport and ExxonMobil, which have been accused of complicity in human rights abuses perpetrated by their military guards.

BP has therefore recruited at least 82 guards from local villages for its Community Based Security Program and plans to hire a total of 250 over the coming years when construction work peaks.

The company says the project has also begun recruiting and training Papuan employees to operate and maintain the expected offshore production platforms.

The local government and villagers are expected to receive about $225 million in annual royalties from Tangguh.

BP holds a 37.16% stake in Tangguh, which has proven reserves of 14.4 trillion cubic feet of gas. BP's partners in the project are MI Berau BV (held by Mitsubishi Corporation and INPEX Corporation) with 16.3%; China National Offshore Oil Corporation (CNOOC) with 16.69%; Nippon Oil Exploration Berau with 12.23%; KG Companies (held by Japan National Oil Corporation, Kanematsu Corporation and Overseas Petroleum Corporation) with 10%; and LNG Japan Corporation (held by Nissho Iwai Corporation and Sumitomo Corporation) with 7.4%.

Despite BP's efforts to present a good corporate image at the Tangguh project, the non-government organizations claim the company has failed to establish rigorous and credible human rights monitoring. They also accuse the company of inadequate transparency in dealing with Indonesian authorities.

Following is the NGOs' press statement on human rights at Tangguh, and their letter of concern sent to BP chief executive Lord Browne, and US Senator George Mitchell, who chairs BP's Tangguh Independent Advisory Panel (TIAP).

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