MAC: Mines and Communities

Freeport confirms allowances for military, police in Papua

Published by MAC on 2003-03-16

Freeport confirms allowances for military, police in Papua

The Jakarta Post, Jakarta

March 16, 2003

Tiarma Siboro and Muninggar Sri Saraswati, The Jakarta Post, Jakarta U.S. gold and copper mining company PT Freeport Indonesia confirmed on Saturday that it had paid the Indonesian Military (TNI) protection money totaling US$5.6 million in 2002.

Company spokesman Siddharta Moersjid said money had been paid on an annual basis since the company started operating in Papua in the 1970s.

"But we introduced a comprehensive new approach to security in the area following an incident in Tembagapura in 1996," he said. He was referring to the abduction of 13 local and international researchers, an incident blamed on a separatist group under the leadership of Kelly Kwalik from the Mapnduma area.

Siddharta said money paid in 2002 was up on the $4.7 million paid in 2001.

The support consists of the cost of infrastructure, catered food and dining hall costs, housing, fuel, travel, vehicle repairs, allowances to cover incidental and administrative costs, and community assistance programs conducted by the military and police.

The total capital costs for associated infrastructure for 2002 and 2001 was $500,000 ($400,000 net to PT Freeport Indonesia) and $600,000 ($500,000 net to PT Freeport Indonesia), respectively.

Freeport's data showed the government had last year increased the number of security personnel stationed at the company's mining site from 200 to more than 2,000 soldiers. The force comprised, among other units, coastguard at the port, air force at the airport, riot-control personnel to deal with civil disturbances and both perimeter and on-site security at the mine and the mill.

"Many were shocked when they found out that we (PT Freeport) allocated millions of U.S. dollars to security personnel to guard the company, because they thought that we gave it in cash.

"But it is not like that because we allocated the funds to several posts, of which only a small amount was given to soldiers in cash as allowances," Siddharta told The Jakarta Post.

He said efforts to increase security was due to the government's concern over the mine, which was considered a "national asset".

Two Americans and an Indonesian who worked as teachers for Freeport were killed in an ambush near Timika in August last year. Many have linked the killing to demands for an increase in protection money. Siddharta refused to comment on the incident, which is now under investigation.

Separately, Indonesian Military (TNI) spokesman Maj. Gen. Sjafrie Sjamsoeddin said that only 20 percent of the funds were given as cash allowances to soldiers assigned to protect the 2,800-square-kilometer site. Each of them received Rp 350,000 (S39) per month.

"The funds disbursed by PT Freeport should be seen as supporting funds for soldiers who have to face hardship while carrying out their jobs in remote areas like Timika," he said.

According to TNI standards, a soldier conducting an operation receives Rp 10,000 in daily allowance plus Rp 11,700 for daily meals, Sjafrie said. Sjafrie also revealed that the TNI was paid by ExxonMobile for security in the war-torn province of Aceh.

Asked why the Indonesian government did not directly control the distribution of the funds, Sjafrie said it did not matter because "TNI Headquarters receives annual reports on the disbursement of the funds for the sake of transparency".

The TNI has repeatedly complained about a poor annual budget allocated by the government, which the military claims accounts for 30 percent of the military's needs. The funds, TNI says, are far from enough to cover operations in troubled areas, not to mention to upgrade its equipment.

To fill the gap, the TNI has demanded it maintain its various business interests despite mounting public criticism.

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