Saturday, Dec 31, 2005
International
Indonesian military admits being paid by U.S. mining firm
John Aglionby- © Guardian Newspapers Limited 2004
Jakarta: Indonesia's military admitted on Thursday 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 £11.7 million from 1998 to 2004. Some officers allegedly received tens of thousands of pounds Sterling. If they kept any of the money themselves, it would be a criminal offence.
The scandal might have significant implications for the Anglo-Australian company Rio Tinto, which had a 12 per cent stake in Freeport-McMoRan from 1995 until last year. It still has a 40 per cent share of all deposits discovered in the mine after 1994.
Concerns for British firm
It could also raise concerns for the oil giant British Petroleum, 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 implied this was at the institutional level. Security at the Grasberg mine has been tightened since three Freeport employees were killed by 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 said on Thursday 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. 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.
Copyright © 2005, The Hindu.