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Indonesian General Received Cash Payments

Associated Press
Indonesian General Received Cash Payments
07.25.2005, 07:29 AM

An international watchdog group claimed Monday that the local unit of an American gold-mining company appeared to have paid an Indonesian general accused of rights abuses almost US$250,000 (euro206,000) to protect its mine.

A spokesman in Jakarta for PT Freeport Indonesia, a unit of New Orleans-based Freeport McMoRan Co., denied the accusation made by in a report by Global Witness, a London-based group that monitors natural resource use and human rights.

The spokesman, Siddharta Moersjid, said the company provided support for transport and logistics for Indonesian forces guarding its mine in remote Papua province, but denied paying officers directly.

A military spokesman also denied officers received money directly from Freeport.

In a report called "Paying for Protection," Global Witness said it appeared that PT Freeport Indonesia had paid large sums of money directly to individual military and police officers, not to the Indonesian government or military institutions.

"This should be a red flag in a country like Indonesia," said Diarmid O'Sullivan, a campaigner for the group. "The real troubling question is where did the money go?"

O'Sullivan declined to reveal the source of the allegations, a practice he said was customary for Global Witness, which describes itself on its Web site as working to "highlight the link between the exploitation of natural resources and human rights abuses." But he said the organization "was completely confident" in them.

The report names former Papua military chief Gen. Mahidin Simbolon as apparently receiving US$247,705 (euro205,000) between 2001 and 2003 in payments for unspecified humanitarian projects, military celebrations and for "security services."

Rights groups have accused Simbolon of abuses when he was a commander in Indonesia's former province of East Timor in 1999, where soldiers and militiamen are alleged to have committed crimes against humanity that included at least 1,200 murders.

Indonesian troops in Papua have been accused of rights abuses in putting down a simmering separatist rebellion. In 2002, rogue soldiers were accused of involvement in ambush close to the mine that killed two American school teachers.

Freeport's practices in Papua have concerned some of its shareholders, who fear that the company may be liable at home if soldiers on the company's payroll are found guilty of human rights abuses.

Freeport-McMoran's Grasberg mine in Papua is one of the world's largest gold and copper mines. For the first six months of 2005, the company posted earnings of US$305.6 million (euro252 million) .

Moersjid, the Freeport spokesman, said it was "not true" the company paid officers directly, including to Simbolon.

"We are providing support for logistics and transport and the like, but we are not paying them directly," he said.

An Indonesian military spokesman acknowledged that troops received money if "they were sick or things like that" but that no senior officers received funds directly.

Other foreign companies exploiting Indonesia's natural resources have also been accused of paying army units to protect them, including U.S. energy giant ExxonMobil Corp, which taps natural gas fields in Aceh province.

"The military needs money, and companies need security for their plants," said Rusdi Marpaung, a nongovernmental group focusing on human rights in Aceh. "It is a kind of corrupt symbiosis."

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