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ASIET NetNews Number 37 - September 28-October 4, 1998
East TimorIrian Jaya group calls for mass rally Hundreds of farmers and workers protest
Labour issuesIntellectuals form pro-referendum group Rebel leader vows to keep fighting Guerrillas say autonomy offer may be a start
Human rights/lawConstruction workers launch union
News & issuesFive arrested in Irian for separatist activities Radio station gags pro-reform talk show Clampdown overshadows dissident's return
Environment/healthSuharto had prior knowledge of coup Tempo to relaunch after four-year hiatus Sultan installed as Yogyakarta governor Habibie faces reform dilemma Protesters could face life imprisonment Jakarta gives nod to PDI congress Anti-Communists stage mass rallies Moslem group rallies in support of Habibie Rebels, Indonesia agree on ceasefire Justice Party launches Jakarta chapter Investigation launched into Bob Hasan Dissident urges freeze of Suharto's assets Rais hints at a coalition government Troops on alert ahead of coup anniversary Proposed law on demonstrations dumped Freeport and the first family
Arms/armed forcesTwo wounded as farmers protest pollution Food crisis may result in lower IQs
InternationalABRI fights to regain honour Survey reveals ABRI's poor public image Four killed in clash
Economy and investmentChina urges action over violence
Court gives investors the jitters Bank recapitalisation program launched
| Democratic struggle |
Jakarta -- A group in the remote Indonesian province of Irian Jaya has called for a mass rally in support of independence from Indonesia, the official Antara news agency said Monday.
Antara said that leaflets circulating in Jayapura, the main town of Irian Jaya, called for a peaceful rally at the Mandala open sports stadium in Jayapura on October 2. The leaflets signed by its "action coordinator", Sem Yaru, said the rally would be attended by government offifials, religious and tribal leaders as well as many public figures. The leaflets said the rally will become an official platform for a dialogue between the government and tribal leaders on the demand for independence for the state of Papua.
The leaflets, according to Antara, appeared to claim that the church was in support of the rally, but the agency also quoted the head of the Irian Jaya Synod of Christian Churches, Herman Saud, as denying support. In a statement published by Antara, Saud said that the synod reminded its flock not to be incited and take part in demonstrations, arson, looting, the raising of the Free Western Papua flag and calls for independence from the Republic of Indonesia. The statement labelled the circulating leaflets as political engineering to legitimise the political aims of irresponsible parties.
Jakarta -- Separate groups of farmers and workers demonstrated in the western Indonesian city of Medan on Tuesday over land appropriation and wages, the Suara Pembaruan evening daily said.
Some 500 farmers went to the local parliament in the North Sumatra provincial capital of Medan to reclaim land rights from a private firm they claimed had forced them into giving up the land.
The paper said posters carried by the farmers from the North Sumatra provincial town of Labuhan Batu read: "The people are hungry," "We need food" and "We want our land back." The farmers claimed the firm had used the military to force them into clearing off their land.
In another demonstration, around 150 striking workers from a plastics factory protested for a wage hike. "We will stay on strike until the company meets our demands," one worker was quoted as saying by the evening paper. It added neither group of protestors had managed to meet with local officials.
| East Timor |
Jakarta -- A group of university graduates in the troubled territory of East Timor have set up a forum advocating a referendum on self determination for the former Portuguese colony, reports said here Monday. A ceremony inaugurating the Forum of Pro-Referendum Graduates and for the Development of Timor Leste (Forsarepetil) in the East Timorese capital of Dili on Sunday was attended by some 300 university graduates, students and other civilians, the official Antara news agency said. "This forum demands the unconditional release of all Timor Leste (East Timor) political prisoners and detainees, both in and outside Timor Leste and including Kay Rala Xanana Gusmao," a declaration issued by the group said.
Xanana, the head of the East Timorese pro-independence movement, is currently serving a 20-year jail sentence in Jakarta on charges of plotting against the state and illegal possession of weapons.
"Besides, (the forum) calls for a halt to all form of violence in Timor Leste and the immediate disbanding of paramilitary groups such as Gardapaksi, Makikit, Saka and Halilintar," the declaration added. The four groups are sponsored by the military and recruit local youths. The groups, some of them armed by the Indonesian military, have been accused of repression against pro-independence sympathisers there. The Kompas daily quoted the head of the Indonesian military command in East Timor, Colonel Tono Suratman as saying in Dili on Saturday the authorities will disband the groups and take back all weaponry lent to them.
Fransisco Barreto, one of the founders of the Forum said the new forum had a membership of some 700 university graduates. At the head of the forum was Domingos de Sousa, an official of the culture and education office in East Timor who is an in-law of Gusmao.
Benyamin Cortereal, a linguistics professor at the Timor Timur University, was appointed secretary general, while Gusmao and exiled East Timorese pro-independence activist and Nobel Laureate Jose Ramos Horta were both appointed as advisors to the forum.
Lisbon -- A leader of East Timor's guerillas said Tuesday that the armed struggle for independence would continue because Indonesia has refused to negotiate an end to Jakarta's rule in the half-island territory.
"We've no other choice than to keep on fighting," Taur Matan Ruak said in an interview broadcast on Portuguese state radio RDP. "We've have several times stated our willingness to negotiate a solution with the Indonesians, without pre-conditions... but (Indonesian President) Habibie has never made himself available," Ruak said in Portuguese by phone from East Timor.
Habibie has offered to grant some autonomy to East Timor and to release imprisoned rebel leader Xanana Gusmao in exchange for international recognition of the region as Indonesia's 27th province. Gusmao's release was a "fundamental" first step in negotiating a lasting solution for the territory, Ruak said, adding that autonomy would be only an interim solution on the road to full independence.
The United Nations is brokering ongoing talks between Lisbon and Jakarta on East Timor. The next meeting is scheduled for New York on Oct. 6. Portugal insists that a referendum be held in East Timor on the territory's future.
Lisbon -- East Timor guerrilla chief Taur Matan Ruak said on Tuesday that Indonesia's offer of autonomy could be a basis for talks but offered no ultimate solution to the future of the disputed territory.
"I accept (autonomy) but not as a final solution," Matan Ruak said in an interview with Portuguese state radio RDP- Internacional from his mountain hideout in Timor.
The first condition for any lasting settlement was the release of the resistance movement's charismatic figurehead, Xanana Gusmao, the guerrilla chief captured and jailed in 1992. "Without the freeing of Gusmao, nothing will change. There will be no progress," Matan Ruak said.
Many international leaders, including UN Secretary-General Kofi Annan, who helped broker the "agreement to talk" between Jakarta and Lisbon, have urged Indonesia to free Gusmao as a goodwill gesture.
But Matan Ruak gave no hint that the guerrillas were ready to call a ceasefire while talks between Indonesia and Portugal went on. "We are going to continue the fight until Indonesia feels that this problem has got to be resolved," he said.
Indonesia has proposed a degree of self-rule for the mainly Roman Catholic territory of some 800,000 people. But economic and foreign policy would remain in the hands of Jakarta. Portugal has agreed to discuss the proposal but without withdrawing its backing for the resistance movement's demand a referendum be held in the territory about East Timor's future.
| Labour issues |
Jakarta -- Some 100 Indonesian workers Tuesday held a rally to mark the launch of their Digging and Construction Labor Union (IKAPERGABIN).
"Stop perpetuating poverty. Use conglomerates money to better our fate. Stop slavery and opression," said some posters carried by the workers who gathered at a park.
"IKAPERGABIN is formed on the realization that the backwardness and oppression of (labourers), factory and construction workers are caused by social, economic and political opression in which the people are always victimized," the union said in a statement.
It said the union was officialy set up on July 21, and its membership was also open to building maintenance workers and domestic labourers. It is to campaign for more government- sponsored crash programs in agriculture, animal husbandry and public services, and pledged to provide legal assistance and training to better the skills of members. The union pledged to be independent and vowed to "humanize the lives of digging and construction workers, and housemaids."
| Human rights/law |
Jakarta -- Police in the remote Indonesian province of Irian Jaya arrested five men including two officials and a priest for suspected separatism, including calling for a pro-independence rally, a report said Thursday.
The police in Jayapura, the main town of Irian Jaya, arrested a man identified as Sem Yaru on Monday for calling on people to join a mass pro-independence rally in Jayapura planned for Friday, the Suara Pembaruan daily said.
On Wednesday, police also arrested Don Flassy, secretary of the Irian Jaya provincial development planning board, priest Ansanay, Lauren Mahuwe, a member of the Jayapura district administration staff, and a fourth man identified only as Barnabas Yufuwai, the daily said.
Suara Pembaruan quoted local police officers as saying that the four were suspected of planning to hold a meeting of the Independent Western Papua Committee.
Jayapura Police Chief Lieutenant Colonel Pieter Silooy told the daily that Flassy had sent invitations for the meeting, using the committee's letterhead. Leaflets calling for a peaceful rally at the Mandala open sports stadium in Jayapura on October 2, had been circulating in Jayapura for days.
The leaflets, signed by the group's "action coordinator", Sem Yaru, said the rally would be attended by government officials, religious and tribal leaders as well as many public figures. The leaflets claimed that the rally would become an official platform for a dialogue between the government and tribal leaders on the demand for independence for the state of Papua.
Jakarta -- The owner of a private Indonesian radio station has closed down a popular pro-reform radio talk show and fired the six staff operating the program, a human rights lawyer said Thursday.
"There was an element of self-censorship here, the radio closed down the talks show program and we know security authorities had been threatening the radio for quite some time over that program," said rights lawyer Munir.
The owner of the radio station, Safari FM, halted its "Wacana Jakarta" (Expression of Jakarta) late afternoon talk-show program, without notice and dismissed the six staff manning and operating the program, said Munir, who is from the Indonesian Legal Aid Institute.
The program, managed by program director Nor Pud Binarto, had discussed topical issues including press freedom, the role of the military, racial tensions and other issues considered sensitive under the regime of former president Suharto.
It blossomed after the fall of former president Suharto on May 21, and had a series of guest hosts, including vocal pro-reform activists. It also conducted live discussions with call-in listeners.
"The radio program had also provided air time for groups like us," Munir said referring to Kontras, a group fighting for the return of missing political activists and the rights of their families. Kontras has been active in pressuring the armed forces, which has admitted involvement in the kidnappings, to take action against military personnel involved in the disappearance of activists.
Some 24 activists have gone missing since the start of the year. Nine have resurfaced, speaking of being kidnapped and tortured. One was found dead and 14 are still missing.
Munir said his group would protest the dismissals of the six staff, and the closure of the program. "It is also a case of the public's right to information, which was ignored, and we will make a case of this too," Munir added. Munir could not yet say when he will meet the owner of Safari FM.
Jakarta -- A long-time critic of former president Suharto was allowed to return to Indonesia Sunday but the euphoria was overshadowed by fears of a new clampdown on dissent after police tried to break up a human rights seminar.
George Aditjondro returned to a hero's welcome for a week's visit after three years in Australia, where he had fled after being put on the police wanted list for slandering Suharto. "My plans are to assess, also to absorb the sense of freedom and the sense of democracy which is now so strong in the young people of Indonesia," the 52-year-old professor said. He was speaking to journalists after being engulfed by a group of some 35 East Timorese, who swarmed around him and triumphantly lifted him from the floor of the airport.
But leading human rights figures warned of a possible return to authoritarianism after police on Saturday marched unannounced into a seminar entitled "Unity in Diversity" and demanded it close down since no police permit had been granted. After an hour of negotiations involving the national police chief it was allowed to proceed, participants told AFP. "This is the worst thing to happen in the reform era," one participant quoted one of the organizers -- the chairman of the Institute for Human Rights Studies, Abdul Hakim Garuda Nusantara -- as saying. "Whether one realizes it or not, a return of authoritarianism is still possible."
Marzuki Darusman, the deputy head of the government-funded National Commission on Human Rights, told newspapers later. Darusman said he had to speak with national police chief Lieutenant General Rusmanhadi before the seminar was allowed to proceed. A jubilant Aditjondro said that while he was in Indonesia he would launch his new book, "The two peaks of corruption, collusion and nepotism in the new order regime: from Suharto to Habibie." President B.J. Habibie, a Suharto protege, was handed the presidency by Suharto when he stepped down May 21.
Aditjondro, now a teacher of the sociology of corruption at Australia's Newcastle University, is well known in Jakarta for his research -- disseminated on the Internet -- into both the wealth of Suharto and Habibie.
He said he would return to Australia after attending a regional human rights seminar at the invitation of the Indonesian Legal Aid Institute. He would also visit East Timorese rebel leader Xanana Gusmao in prison and see his family in the Javanese city of Yogyakarta. "Let us say 'viva' to the university students' movement," he said, adding that he owed his return to their determination not to allow Suharto, who stepped down amid massive demonstrations May 21, run for a seventh term as president.
Aditjondro, who was dismissed from Java's Staya Wacana University in 1995 when he was put on the police wanted list, also slammed the current Habibie government inquiry into Suharto's wealth as "cosmetic". "What we see now is that the whole Habibie government, from the president on to the attorney general, is being puppeted by Suharto," he said. "Suharto should be investigated by the police, which would mean to give him a letter of summation accusing or suspecting him as a suspect for having broken the laws of corruptions. "What is going on now is just theater," he added.
| News & issues |
Jakarta -- The Japanese-born wife of Indonesia's first president Sukarno has accused former president Suharto of having prior knowledge of the 1965 coup attempt and doing nothing to prevent it, a report said Thursday
"Suharto knew about it," Ratna Sari Dewi Sukarno, born Naoko Nemoto, told the Jakarta Post in an interview coinciding with the anniversary of the failed 1965 coup. Dewi said Suharto -- then head of the army's strategic command -- had been fully informed about the planned assassination of six top generals on the night of September 30, 1965, as part of a plot to topple Sukarno. Despite having the information Suharto had done nothing to stop the move, said Dewi, who married Indonesia's first president Sukarno in 1962 as his fifth wife.
The Jakarta Post also quoted former Colonel Abdul Latief, 73, who has been jailed for decades for his role in the coup, as saying that he had personally informed Suharto about the plan to kidnap the generals a few days before it happened. "Suharto gave a cool response to my report... Suharto knew precisely of the plan," Latief told the Jakarta Post from Jakarta Cipinang prison.
Dewi pointed out that it was very strange that during the coup attempt the rebels did not target Suharto, who in his position was the second highest ranking officer in the army.
Soldiers, led by several officers taking part in the coup, kidnapped six generals from their homes on the night of September 30, 1965. They also shot dead the infant daughter and an adjutant of another general who escaped the kidnap attempt. The bodies of the six men were later found in a disused well in Lubang Buaya, East Jakarta.
Suharto, who led the military's counter coup campaign and later rose to the presidency, accused the then powerful Indonesian Communist Party (PKI) of being behind the uprising. The PKI was banned in March 1966 and a purge of suspected communists and supporters left hundreds of thousands dead and millions imprisoned.
Dewi, who was in Indonesia when the coup took place, said her husband was at the time confused about the situation. She refuted Suharto's allegations that her husband also knew of the coup attempt.
With Suharto's resignation on May 21, there has been mounting clamour for a review of the 1965 incident to discover what really happened. During his 32 year rule, Suharto and his government have always maintained the Beijing-backed PKI was behind the coup.
Jakarta -- Staff at Tempo, Indonesia's leading weekly news magazine when it was banned by the government of former president Suharto in 1994, announced Sunday they would return the publication to the newsstands this week.
"Our trick to get readers ...we aim to become some sort of clearing house for news," Tempo deputy chief editor Bambang Harymurti told a press conference announcing the relaunching of the magazine.
Tempo would hit the newsstands on Tuesday. Harymurti said that since the new era of press freedom enjoyed by the nation since the fall of Suharto on May 21, the flood of news and information supplied by the media, including through the Internet, had left a lot of people confused. "Which news is true? We will try to explain it (to readers)," Harymurti said, adding that the new Tempo will have "depth and comprehensiveness."
Tempo had a circulation of some 180,000 copies when the Suharto government closed it down on June 21, 1994, citing vague "substantive" editorial reasons.
Tempo's chief editor Gunawan Mohamad said that until know, the precise reason for the 1994 ban remained unknown, but he speculated that the final blow might have been a report critical of the purchase by the government of 39 old East German navy vessels. The ships were ordered by Suharto's handpicked successor, President B.J. Habibie, whose government has allowed Tempo to reopen. Two other major weekly publications were also closed down at the same time as Tempo but with the government citing "administrative" reasons.
Tempo general manager Fikri Jufri, a former deputy chief editor of Tempo, said that some 130,000 copies will be printed for its first edition. Gunawan said he was not worried about the possibility that the burst of press freedom currently enjoyed by the country may be short-lived. "We do not care whether the government is committed to (press) freedom, we have to make the government commit itself to (press) freedom," Mohamad said. Jufri said the magazine's path to republishing had so far been smooth and that feedback from the government and the public had been encouraging. Most of the editorial staff will be old faces who had been active in the magazine before the ban.
Gunawan said that the new Tempo will still "be like the old magazine" but with an emphasis on sharp analytical pieces and on investigative reporting. "The biggest hindrance so far is our own ambition to make it the best," Harymurti said. Gunawan said the closure of the magazine in 1994 had turned it into some kind of legend and that "we will have to compete with our own shadow." A mock copy of the new magazine distributed at the press conference showed little noticeable difference from the old version in form and content, except for the cover layout.
But the cover set the tone. It depicted a blown-up drawing of a US one dollar bill, but with the face of Suharto under the white wig instead of George Washington. The words, "Why Suharto is making a challenge", were splashed in yellow letters, referring to the veteran leader's challenge thrown to his detractors, to prove that he has amassed a fortune during his 32-year tenure as president. "There is no intention of revenge," Gunawan said.
An investment of up to six billion rupiah (slightly more than half a million dollars) was needed to put the magazine back on track, Jufri said, adding that the stakes in the magazine were owned by three foundations and one company. The foundation grouping the alumni of the old Tempo and the Jaya Raya foundation which owned shares in the old Tempo each held a 30 percent stake. The rest was split between a foundation gathering the current employees of the magazine and a company, PT Grafiti Press, also a stakeholder in the old Tempo.
Jakarta -- Indonesian Home Minister Syarwan Hamid on Saturday installed the head of an ancient local royal family as the governor of Yogyakarta, the first governor in the country to be spontaneously elected, newspaper reports said.
Hamengkubuwono X (the 10th), the Sultan of Yogyakarta, was elected by acclaim in August during a mass rally held by the territory of some 10,000 people. The government in Jakarta at first ruled the spontaneous appointment as against the law, which led to protests and defiance in the city, which is known as the cultural heart of Java and which has special autonomous status. Public leaders and officials then threatened to hold a referendum to support the appointment.
The special status of Yogyakarta was awarded by presidential decree in 1950 for its role in the struggle for independence from the Dutch colonial authorities. Under the decree, issued by then president Sukarno, Sultan Hamengkubuwono IX, the head of Yogyakarta's main royal house and father of the current sultan, was named the first governor of the territory.
But a 1974 decree by the government of former president Suharto stipulated that all governors in the country should be chosen by the local parliament from a list of five central government- approved candidates.
Hamid later backed down and agreed to legitimise the appointment as all five factions of the local parliament gave the sultan their support. "There should have been five (candidates) but it turns out that all five of them are the same (candidate), so be it... we agree on the sole candidate and we will legitimise it," Hamid said.
The popular Sultan whose 18th century palace dominates the city, has retained moral authority there. A pro-reform figure and a member of the country's highest legislative body, the People's Consultative Assembly, he is the eldest of 16 sons of Sultan Hamengkubuwono IX, who served once as Suharto's vice president.
Jakarta -- The conflicting political pressures of post-Suharto Indonesia have left President B.J. Habibie teetering on a tightrope -- too much reform could topple his precarious government, but so could too little.
Buffeted by the demands of reformist protesters, populist politicians and powerful vested interests seeking to block change, Habibie is maintaining the appearance of reform momentum while doing as little as possible in practice, analysts say.
Progress in democratising Indonesia and giving greater autonomy to restive provinces could further undermine the fragile authority of the Habibie regime, and risks provoking a backlash from the ruling elite whose interests are threatened. But failure to press ahead with reform will inflame unrest as pro-reform protests and separatist pressures gather steam.
Given Habibie's weakness, analysts say, the pace of reform may be dictated not by the president but by whichever pressure group proves to be the strongest in Indonesia's political maelstrom. "Unfortunately Habibie is not really in control of events," said Muhammad Hikam, political analyst at the Indonesian Institute of Sciences. "What you will have is further stagnation of reforms. The appearance of reform is a political concession to the people and also, more importantly, to the international community, especially donor countries and institutions. But there is no real movement."
Jakarta has sent conflicting signals on reform since the resignation of former President Suharto in May amid a savage economic downturn, mass protests against his rule and an explosion of rioting in Jakarta that left almost 1,200 dead. It has pushed forward with attempts to ease separatist unrest in the former Portuguese colony of East Timor, the staunchly Moslem province of Aceh and the eastern territory of Irian Jaya. Indonesia announced last week Irian Jaya's military operations status had been revoked after a ceasefire agreed with separatist rebels. Aceh's military status was revoked in August.
Indonesia and Portugal also begin in-depth talks this week at the United Nations on Habibie's proposals to give significant autonomy to disputed East Timor, which Indonesia annexed in 1976.
But despite these signs of softening, Indonesia has said it will take a tough line against pro-independence protests and arrest protesters who raise separatist flags.
Political reform moves have also appeared contradictory. Parliament last week began debating draft political laws that Habibie has promised will make a more democratic Indonesia. The laws allow the setting up of new parties and cut the number of unelected armed forces representatives in parliament.
But in tandem with the new political laws, the government aims to introduce rules limiting the right to demonstrate. Last week it gave up an attempt to pass the law through a decree bypassing usual parliamentary channels, amid complaints by legislators about the way it was being introduced. But the government immediately said it would submit a new, almost identical bill to parliament. Analysts say the government's reform moves are more a result of its weakness than of a genuine desire to promote change. Eager to present a better international image and prevent an upsurge in unrest, the government appears committed to settling separatist disputes, and particularly to resolve the East Timor issue, long a running sore in Jakarta's foreign relations.
But many in the ruling elite are worried that too many concessions could lead the multi-ethnic and multi-religious country to unravel as regions exploit the centre's weakness. "Promises of broad-ranging autonomy for East Timor have helped to improve President Habibie's international reputation. However, they also risk opening up a Pandora's box which could ultimately threaten the unity of the state," the Political and Economic Risk Consultancy (PERC) said in its latest report on Indonesia.
Habibie faces a similar dilemma in his political reforms and efforts against corruption. Too little action will fan the flames of unrest, but too much threatens powerful interest groups.
The clearest example, analysts say, is an official probe into Suharto's wealth. They say Habibie was forced to pay lip service to a probe to appease public opinion, but will not want to see any real progress as ministers who served under Suharto -- including Habibie -- could be implicated in any corruption uncovered.
"The political situation remains highly unstable, with a weak government moving only reluctantly in the direction of reform," PERC said. "The lack of a strong movement towards reform risks pitting the government against demonstrators in a way that could trigger more ugly clashes with security forces."
Hikam said he expected Habibie's government to limp on until elections scheduled for next year, with little clear agenda, merely reacting to pressures from competing interest groups. "There is no clear and united agenda. This is a government without real control of different factions among the elite and the people," he said. "The government has no real intention to reform. It will just be reacting to developments and pressure."
Jakarta -- In its sternest warning yet, the Indonesian government said Wednesday that protesters who threaten its existence could be sentenced to life imprisonment under a harsh anti-subversion law enacted by ex-President Suharto.
"Indonesia does not want to see its government overthrown by demonstrations and riots as happened in the past to the two regimes of President Sukarno and President Suharto," Justice Minister Muladi said after a five-hour Cabinet meeting with President B.J. Habibie. The marathon meeting was dominated by security concerns following a rise in anti-government protests.
Wednesday was the 33rd anniversary of an attempted communist coup against the government of Sukarno. The military, led by then Maj. Gen. Suharto, crushed the rebellion after six other generals were murdered. A storm of protest that followed led to Suharto taking power from Sukarno.
Suharto ruled for 32 authoritarian years until a wave of unrest forced him to quit in May this year amid the worst economic crisis in decades. Suharto enacted a tough anti-subversion law in 1973 and used it used repeatedly to stamp out dissent. His successor, Habibie has been plagued by a new wave of protest over soaring food prices and mass unemployment. Food shortages have triggered looting and lawlessness in some areas.
Muladi said the current sporadic unrest has not been strong enough to threaten the government, which has promised democratic reform. "But I have to warn protesters not to go much further. It might lead to a situation in which there is a systematic plan and movement to overthrow the government," he said.
Jakarta -- Indonesian authorities have approved in principle an opposition party congress held by popular politician Megawati Sukarnoputri in Bali next week, police chief Lieutenant General Rusmanhadi said Wednesday.
"In principle, a permit for a congress of the PDI Perjuangan is approved," Rusmanhadi said after a cabinet meeting on political and security affairs presided over by President B.J. Habibie. Rusmanhadi however, said that Megawati had yet to file a demand for a permit.
PDI Perjuangan (Struggle) is the name of the faction of the Indonesian Democracy Party (PDI) led by Megawati which is separate from the state-recognised PDI faction under the leadership of Budi Harjono. Megawati was ousted from the PDI leadership in 1996 in a faction based "coup" orchestrated by the then-Suharto government. The move sparked massive rioting in Jakarta which left at least four dead.
The government, continuing the policy of the previous Suharto administration, does not recognise Megawati's PDI faction as representing the party. However, Habibie's government has offered recognition if Megawati's PDI uses a new name. Megawati and her faction have said a name change can only be made by a national congress.
Megawati said Monday that she and her faction planned to go ahead with the congress scheduled for October 8-11 in the resort island of Bali despite the absence of government recognition for her party or a permit for the congress.
Armed Forces Chief General Wiranto said Tuesday that Jakarta would have no objection to the holding of the congress if Megawati and her faction can guarantee that the congress will not lead to unrest.
He said the authorities were concerned that unrest in Bali may affect tourism there. Bali has been relatively untouched by the unrest that has flared intermittently in other parts of Indonesia since the mid-May riots that saw Suhrato resign and thousands of foreigners and ethnic Chinese flee the country.
The resort island has become one of the country's main hopes in the drive to boost tourism revenues to offset falling receipts from other crisis-hit sectors.
Jakarta -- Thousands of Indonesians rallied on Wednesday, the 33rd anniversary of an attempted communist coup, warning that communism was still alive and responsible for riots and looting plaguing the country.
They echoed recent warnings from the military that communists, frequently used as bogey-men during the Suharto regime, could be stirring the growing unrest that has come with Indonesia's worst economic crisis in more than 30 years.
"Now communism secretly comes inside us. Even Islamic students have been infiltrated and pressured by their seniors in school to hold demonstrations," Husni Thamrin, a leader of the Islamic Forum for Justice and the Constitution told a crowd of several thousand outside Jakarta's largest mosque.
The forum is a loose organisation of about 80 small Islamic groups. The rally was held to mark the September 30, 1965, anniversary of an alleged coup attempt by the Indonesian communist party -- then the third largest in the world.
The attempt was crushed by then general Suharto who subsequently rose to president, a position he held until May this year when he was forced to step down amid growing social and economic chaos.
In a statement, to be presented later to parliament, the group supported the transfer of power in May from then President Suharto to his Vice-President B.J. Habibie. It also rejected allegations of mass rapes during rioting that ravaged Jakarta in May. "That issue very much discredits Indonesian Moslems. There is no factual and authentic evidence yet," it said.
Human rights groups say 168 women were victims of systematic rape during the riots, aimed primarily at ethnic Chinese, the country's most economically successful minority and frequently the target of violence. The majority of ethnic Chinese are Christians in a country where about 80 percent of the 200 million population is Moslem -- the world's largest Moslem population.
Another estimated 3,000 people protested outside the local parliament building in the north Sumatran city of Medan, backing the government's efforts to eradicate communism. "Recent demonstrations that have flared into looting and riots have been infiltrated by members of PKI (Indonesian Communist Party)," said Amran Y.S., member of an anti-communist student movement established after the 1965 coup attempt.
In 1966, the Suharto government launched a ferocious anti- communist witch-hunt, in which at least 500,000 people are estimated to have been killed. The Suharto regime, during its 32-year iron rule, frequently accused its critics of being backed by communists.
In a small demonstration in Indonesia's second city of Surabaya, about 200 left-wing protesters demanded the end of the military's dual function, which gives it a socio-political role as well as defence.
[In a separate report on the same day Associatd Press quoted a rally organizer, Abdul Kadir, as saying "We want to show the public that we have to be careful about the latent danger of communism. Today's situation is similar to the situation in the 1960s". The report said that troops and police were deployed across the capital amid rumors of anti-government protests - James Balowski.]
Jakarta -- Over 2,000 Indonesian Moslems gathered at Jakarta's main Istiqlal Mosque here on Wednesday in what they said was a show of support for President B.J. Habibie and his reform programs.
The gathering was jointly organised by the Indonesian Council of Moslem Scholars, the country's highest authority on Islam, and the Moslem Forum of the Upholders of Justice and the Constitution (Furkon). "Furkon judges, observes and studied that the national leadership succession on May 21, 1998 from president H.M. Suharto to Prof. Dr. Ing. Baharuddin Jusuf Habibie is legal and constitutional," said a written statement issued by Furkon.
In the statement, entitled "Statement of Stance of Indonesian Moslems," Furkon claimed to be "a representation of Indonesian Moslems" and expressed support for the political agenda set up by the government of Habibie.
Furkon also firmly rejected any move to set up a transitional authority to take over power from Habibie in line with scores of student demonstrations in recent weeks. The gathering heard a sermon by popular Moslem preacher Zaenuddin M.Z and ended their a three-hour rally with noon prayers.
Jakarta -- Separatist guerrillas and the military in the Indonesian province of Irian Jaya have agreed on an immediate ceasefire, the official Antara news agency on Wednesday quoted a local military chief as saying.
Major General Amir Sembiring, commander of the Trikora military region, was quoted as saying the ceasefire had been agreed on Tuesday following a proposal from the Free Papua Movement (OPM). "The agreement was reached following a proposal made by (OPM) military chief Mathias Wenda in a formal letter handed to me by three couriers of the group," Sembiring was quoted as saying.
The OPM also proposed talks with the military, Antara said. It did not say if there were any conditions attached to the ceasefire.
"I thanked (Wenda) for his idea on the ceasefire and for a dialogue. I also guaranteed the safety of every (OPM) member visiting Irian Jaya and proposed a private meeting with Wenda prior to a formal dialogue," Sembiring was quoted as saying.
OPM members would be able to travel freely in Irian Jaya as long as they did not carry weapons and wore civilian clothes, Antara said.
Jakarta -- About 15,000 Moslem youths packed the Senayan Sports Hall on Sunday for the launching of the Jakarta chapter of the Justice Party, declaring readiness to contest the planned general election in May next year.
The event also marked the simultaneous launching of four other provincial chapters in Bengkulu, South, East and West Kalimantan, bringing the number of party chapters to 14. This is the minimum amount required for a party to qualify for the polls, according to the draft law on general elections still pending deliberation by the House of Representatives.
Chapter chairman Ahmad Heriawan, who was installed by party president Nurmahmudi Ismail said it aimed to be among the top five vote-gaining parties in Jakarta in the election. "We're confident ...because we enjoy the support of students, professionals and young intellectuals," he said. "Workers, traders, teachers, civil servants and preachers are our constituents." Nurmahmudi, a civil servant and senior researcher at the state Agency for the Assessment and Application of Technology (BPPT), downplayed the concern of military officials that mobilization of students and youths would lead to unrest, saying the party would not be stirred by disruptive political maneuvers of others.
"We will not be provoked by campaigns to topple (President B.J.) Habibie's government, which is already a transitional government (anyway)," he said. The Justice Party also champions the abolition of a decree that forces all social and political organizations to embrace Pancasila as their sole ideology. "We reject the imposition of Pancasila as the sole ideology for all organizations ...because (it backfires and) creates apathy and diminishes patriotism," he said.
"This does not mean we seek to undermine the state. We believe in Pancasila and the Constitution as the basis for national unity. Our struggle against the imposition of Pancasila as the state ideology is in fact a call on other groups -- be they Christians, Catholics, Hindus, Buddhist--to participate and develop Indonesia own their own parties." Separately, the Bhinneka Tunggal Ika (Unity In Diversity) party inaugurated its Jakarta's chapter on Sunday in a ceremony at the Gedung Joang building in Central Jakarta. The party's chairman Nurdin Purnomo, who led the launching, installed Daniel Abbas Purwasabda as chairman for the Jakarta chapter. In his speech, Nurdin vowed to lead his party to win the 1999 general election even though it would not be an easy task Antara reported.
Jakarta -- Indonesian forestry companies grouped under Masyarakat Perhutanan Indonesia will launch an investigation of an estimated $2.04 billion which former President Suharto's golfing partner Mohamad "Bob" Hasan collected between 1991 and 1997. Bob Hasan served as the chairman of MPI from 1991 until March this year. After he resigned, MPI split up into two groups, namely a group backed by Hasan, and the pro-reform group calling for the ending of forestry business monopolies by Hasan.
The chairman of the renegade faction in the MPI, Agus Miftah, said Monday that on top of the $2.04 billion Hasan collected as commissions, promotion funds, and trading monopolies on plywood products, he also gathered an estimated $8 billion from sawn timber, wood working, pulp and paper products as well as monopolies on aerial photography, and insurance.
Agus said that MPI has set up a team to recover the money, which Hasan allegedly put in bank accounts in Indonesia as well as Singapore and Hong Kong. He stated Hasan deposited some 25 billion rupiah (IDR) ($1=IDR10,975) of MPI funds in Bank Muamalat, which he partly owns. He also deposited MPI funds in his other banks, namely IDR25 billion in Bank Bukopin, and IDR800 billion in the shut down Bank Umum Nasional. Agus said it's not clear if Hasan put the money under his name. "We will summon Bob Hasan in mid October to verify the funds," Agus said. He accused Hasan of using MPI funds to back his offshore loans.
If the team manages to recover the funds, some of them will be paid back to companies under MPI, and the rest will be for the poor to buy basic commodities, he added. He claimed his faction is backed by 1,100 forestry companies out of 1,200 forestry companies under MPI.
Jakarta -- A prominent critic of former leader Suharto Monday urged the government of President B.J. Habibie to call on friendly foreign states to freeze all Suharto-linked assets in their countries. "I would propose that the Indonesian government, the Habibie government, strongly urges friendly governments to freeze the assets, confiscate them, sell them and return the money to the Indonesian people," George Aditjondro told journalists here. "The Indonesian people need this (money) badly," he added. Aditjondro on Sunday returned to a hero's welcome for a week-long visit after spending the past three years in Australia, where he had fled after being put on the police wanted list for slandering Suharto. A teacher of the sociology of corruption at Australia's Newcastle University, Aditjondro is well known in Jakarta for his research -- disseminated on the Internet -- into the wealth of both Suharto and Habibie.
"If the Habibie government is sincere in its intention to overcome the crisis of essentials for the poor, and at the same time probe the wealth of Suharto ...then it should urge the governments of the countries concerned to confiscate and sell all assets of the Suharto family there," Aditjondro said. "I do not have a personal grudge against Suharto ...I just do not have the heart, to see that they (Suharto and his family) can be so rich with so much riches abroad while people here, such as in Jakarta, have to separate (rice grains) from sand and small stones to be able to eat," he said.
Aditjondro said there five houses worth up to two million pounds owned by three of Suharto's six children and one half-brother in London, five houses in the United States, several in Bermuda and the Cayman Islands and a sprawling ranch in New Zealand owned by Suharto's youngest son.
He also cited a forest concession in Surinam controlled by Suharto's half brother, a luxury cruiser of his youngest son berthed in Darwin and several gas shipping companies of his sons in Singapore. Suharto's eldest daughter, he said, owned the operational rights on some 300 kilometres (186 miles) of toll roads in Malaysia, the Philippines, Myanmar and China. "This list is only a small part of the wealth of the Suharto family ...that are partly or entirely in the possession of the family of the world's third richest head of state," Aditjondro said. Justifying his proposal, he cited as precedent international action over the overseas wealth of Philippine former leader Ferdinand Marcos and Zairean former president Mobutu Sese Seko. "These are precedents and that can be followed," Adicondro said.
Students protest against communist taint Agence France Presse - September 28 Jakarta -- A small group of Indonesian university students protested outside a daily newspaper here Monday against suggestions that student activists were tainted by communism, student sources said. A dozen students from the pro-reform Forum Kota (Forkot) group, which agitated for the ouster of ex- president Suharto, protested outside the Republika daily, whose general manager is close to President B.J. Habibie, Suharto's successor.
In a leaflet they said they objected to a banner headline in Republika last week which suggested they were tainted by communists and urged Indonesian newspapers not to "slant stories." The headline read "ABRI (Indonesian military) alerts of a 30 September Forkot movement."
September 30, 1965 was the date of a failed coup blamed on the then-legal Indonesian Communist Party (PKI), which was followed by the slaughter of more than half a million people by official count, the jailing of millions more and the outlawing of the PKI. The article used a quote by armed forces commander General Wiranto to suggest that there was a "communist-like pattern" to some of the Forkot activities. Witnesses at the Republika office however said the protesters from Forkot, which embraces students from some 40 universities in the greater Jakarta area, carried no posters or banners nor did they make any demands of the daily.
"Forum Kota is an independent university student alliance," the leaflet said. "Rumours/opinions stating that Forum Kota is an anti-Islam and a communist group is not true," it said, adding that a number of Moslem universities were included in the group.
The release went on to stress that the group had no plans nor would it hold any mass demonstrations on September 30, the eve of Indonesia's commemoration on the state ideology of Pancasila. "We condemn any cruel allegations or accusations aimed at the Forum Kota," it said, adding that the students believed the accusations had been made to serve "the interests of a certain group." With the outlawing of the PKI, the Suharto government and the military regularly used the accusation of communist leanings or the possession of books referring to communism to jail dissidents.
Sydney -- Indonesian opposition leader Amien Rais said Monday he could form a coalition government if elected to power but still insisted on major reforms, including a reduced political role for the army. Rais, leader of the National Mandate Party, told a student audience here he was confident President B.J. Habibie would stay in office long enough to call polls. He had not seen the policy platform of fellow opposition figures Megawati Sukarnoputri and Gus Dur but a coalition was possible. "I must have a good attitude and intention to see what they have got to offer," he said. "It will be easy for my party to co-exist with other parties if they have close ideological theories and the same aspirations."
Outlining his vision of Indonesia in the 21st century, he pledged to integrate the country and end division between Moslems and Chinese, eliminating "stupid discrimination laws". "We simply must implement democracy," he said. "More importantly, at a deeper level, we must change for the better our feudal and paternalistic ways."
He would limit the presidency to two terms, outlaw a political process based on nepotism and implement freedom of expression. Monopolies or oligopolies would be eliminated and the banking system reformed, he said, describing a government decision to pump trillions of rupiah into bankrupt banks as "stupid and irrational". A non-discriminatory legal system would be introduced, with a concerted push to break the "legal mafia" which corrupts local, provincial and national courts. "I believe my ideas will be accepted," he said.
He acknowledged that the military was still in power, but under his democratic government the armed forces "must finally return to their villages". "I remind army leaders that they would have to reduce systematically their involvement in parliament. Their main functions would be defence and security like other military in democratic countries."
At the moment, the military does not vote in elections, but is guaranteed a number of seats in parliament and plays a crucial behind-the-scenes role in government. "I don't believe religion can be the basis of the state unless 99.9 percent of the people have the same belief," he said.
On East Timor, a referendum on self-determination would be put in place. "A referendum is the only solution to solve the problem, however I believe a referendum must not be given as a quick fix because there are two conflicting groups in East Timor and we have to ask them to sit down together and then to swear ...that whatever the result of the referendum, they will respect it." He said Indonesia had become an international laughing stock under Suharto, who managed with a "psychology of fear" and acted "like a Japanese emperor", putting his personal interests ahead of the nation's. "Of course Suharto must be blamed for the failure to establish a democracy. He was greedy and the crisis he created will be with us for years unless there is a quick prescription to overcome it." Rais played a key role in Suharto's demise and is close to Habibie but said the current president was a continuation of the old regime. "I would like to tell you that Dr Habibie wants to cover up what happened in May."
Tensions between Indonesia's majority Moslem population and the minority Chinese led to mass rioting which played a major role in the downfall of Suharto. Rais, who was general chairman of Indonesia's second largest Moslem group until he resigned in August, refused to accept any blame, saying it was Suharto who created a divided nation. He called the riots "inhuman, uncivilised and barbaric".
Jakarta -- Thousands of soldiers and police remained on alert in the capital and other cities Tuesday as Indonesia prepared to mark the anniversary of what the government says was a failed communist coup 33 years ago. The military has warned that anti- government groups might use Wednesday's anniversary as an excuse to stage protests.
Rumors of possible unrest have spread through the city of 11 million people during the past week, despite the presence of troops and police across Jakarta. The heavy security has been in place for almost a month to counter rising student protests against the government, which is struggling under the weight of the worst economic crisis since the coup attempt more than three decades ago.
Jakarta police spokesman Lt. Col. Edward Aritonang downplayed the significance of the rumors, but said security personnel would remain on alert. "Jakarta is safe as usual," he said.
Sept. 30, 1965, was a bloody turning point in the history of the sprawling Southeast Asian nation. Six army generals were executed and their bodies tossed down a well on the outskirts of Jakarta. The military at the time blamed communists for the murders and swiftly crushed what they said was a coup attempt.
The operation was led by Suharto, then a major general, who later replaced Indonesia's founding President Sukarno as head of state. Tens of thousands are said to have been slaughtered in a backlash against leftists during the following months. The burgeoning Indonesian Communist Party was decimated and remains banned to this day.
The government solemnly commemorates the anniversary of the 1965 events every Oct. 1, the date the alleged plotters were stopped. Last week, Indonesia's military claimed that university students were planning to hold demonstrations across the country Wednesday. However, student leaders have denied this.
Jakarta -- The Indonesian government Tuesday abandoned a proposed law to control protests and demonstrations that critics had said would curb newfound freedom of expression following the end of the authoritarian Suharto regime.
Armed forces commander and Defense Minister Gen. Wiranto announced the withdrawal of the controversial bill at a session of the 500-member Parliament.
The proposed law would have placed limits on the size and scope of demonstrations, rallies and public gatherings outside the presidential palace in Jakarta as well as places of worship and military installations across the nation. It had demanded that organizers of rallies with more than 100 participants obtain prior written permission from the police before staging a protest.
Pro-democracy activists had called on legislators to reject the bill after it was put forward by Suharto's successor President B.J. Habibie. Critics say it contradicted repeated claims by Habibie that he wants to introduce greater democratic freedom and human rights.
Habibie came to power in May after Suharto resigned amid riots and protests over his 32-year authoritarian rule. About 1,200 people were killed in the violence. Since then Habibie himself has been targeted by a series of protests over the worst economic crisis in 30 years. Wiranto said the government will soon submit an alternative bill that he said would protect freedom of expression while guaranteeing law and order.
Peter Waldman, Mount Jaya -- At 13,000 feet up this remote crag, Steve Drake, operations chief of Freeport-McMoRan Copper & Gold Inc.'s huge Grasberg mine, looks out uneasily across Lake Wanagon. The dazzling turquoise pool is loaded with copper leached from the mine's waste-rock dump, so much copper that Freeport intends to mine the lake water some day. Mr. Drake scans the dump, itself 1,000 feet tall, for fissures. Sensors have picked up a surge of water downstream in the Wanagon River. Seismometers indicate movement within the dump itself. Rains may have dislodged big chunks of waste rock into the lake, sending waves of copper water cascading down the river valley. He orders the dump temporarily shut -- too late. At the village of Banti downstream, 11 Amungme tribesmen, out on a bow-and-arrow hunting expedition, are reported missing in the flood.
The flood's actual casualties, it turns out, are some pigs. Freeport settles the matter for about $5,000. But the fissures in its Indonesia mining operations are still widening, and won't be so easily resolved.
For years, critics have held up Freeport's operations in Irian Jaya, the Indonesian half of the island of New Guinea, as a poster child of corporate neo-colonialism. The mining has generated billions of dollars for New Orleans-based Freeport since it arrived in 1967, and billions more for the Indonesian government. But, critics say, the mining has brutalized one of the world's most pristine ecosystems and done little to lift local tribes, just decades removed from Stone Age isolation, out of poverty and primitiveness.
Freeport also has been assailed in international human-rights circles for its financial assistance to Indonesia's military, which periodically has crushed tribal unrest stemming in part from anger over the mining. Many Amungme have died in those sweeps. An Amungme chief accuses Freeport of "cultural genocide," and Amungme have sued the company in state and federal courts in the US Media
Yet the criticism hardly registered among the people who mattered most in Indonesia -- the regime of former President Suharto. For one thing, the government was given about a 10% stake in the mine, the world's largest copper and gold deposit. For another, as evidence emerging in the aftermath of the May collapse of Mr. Suharto's 32-year dictatorship shows, financial and personal ties between Freeport and its chairman, James "Jim Bob" Moffett, and Mr. Suharto and his inner circle run deep. Indeed, that relationship stands as a study in how multinational companies adapted to the crony capitalism that helped bring down Suharto -- and that helped push Indonesia into economic and social chaos.
Between 1991 and 1997, Freeport made at least $673 million of loan guarantees to three Indonesians with close ties to Mr. Suharto or his ministers. One of those loans helped one of the Indonesians turn a one-year profit of 500% on his $40 million investment -- and helped Freeport renew a crucial mining license. Suharto allies, including at least one cabinet minister, bought assets from the company, such as housing and a hotel near the mine, in deals that Freeport not only helped finance, but in which the company also guaranteed buyers sizable annual profits. In another deal, Freeport not only guaranteed debt, but also agreed to subsidize interest payments for a Suharto-family business partner, enabling him to buy 4.7% of Freeport's Indonesian unit.
With Mr. Suharto out of power, many in Indonesia for the first time are calling for a reckoning of Freeport's role; some, including a recent parliamentary commission, call for a possible ban on the company. Freeport says it has broken no Indonesian or US laws, including the US Foreign Corrupt Practices Act, which bars US public companies from providing "anything of value" to curry favor with foreign governments. In fact, Freeport says, it has repeatedly rejected appeals for payoffs from officials in Indonesia's corruption-tainted system.
The company notes that it is the country's biggest taxpayer. In the jungles of Irian Jaya, where it is the only economic engine, it has built schools, roads, hospitals. It pledges hundreds of millions of dollars over the next several decades to mitigate the mine's environmental and social impacts. It says the tribes, long neglected by the Jakarta government, would be poorer without the mine.
"If we're not there, what do those people have?" asks Mr. Moffett, a brash former University of Texas football player noted for his Elvis imitations. Freeport's opponents "don't see what those people looked like before we got there. If they had, they wouldn't like what they saw."
Friends in high places
Mr. Moffett says Freeport has no intention of leaving Indonesia. It still has friends in high places. Mr. Moffett's closest friend in the Suharto regime, say Freeport executives, was a gregarious minister named Ginandjar Kartasasmita. He turned against Mr. Suharto on his last night in office and has emerged as the powerful minister in charge of Indonesia's economy. One of his proteges, Kuntoro Mangkusubroto, now the minister of mines and energy, dismisses talk of cronyism connected to Freeport. The company, he says, has a "legal and legitimate" mining contract. The government is "not in a position to review it." It rarely has been. Freeport, the Suharto regime's first foreign investor, wrote its first mining contract, in 1973. Indonesia lacked the expertise to draft the contract, recalls Mohammad Sadli, Indonesia's foreign-investment czar at the time. Safeguards for the environment and tribes were unheard of then, he says. "Freeport got away with murder," Mr. Sadli says. Twenty-four years later, when Freeport wanted to more than double its Grasberg output last year, Mr. Moffett took the case directly to Mr. Suharto. The president scrawled his approval of the controversial expansion in the margins of Mr. Moffett's personal letter to him -- many months before required environmental reviews had even begun.
Freeport's first Irian Jaya mine, called Ertsberg, was an engineering marvel, but a modest economic success. Just getting to the copper deposit required building 68 miles of road scaling 9,100 feet from the Arafura Sea, through dripping tunnels and along white-knuckle ridges. The final 2,600-foot push to both Ertsberg and Grasberg -- nestled beneath rare equatorial glaciers -- is covered by a mile-long aerial tramway.
In the mid-1980s, Mr. Moffett took an enormous gamble, pouring more money into exploring one of the most inaccessible mineral zones in the world. The payoff, in 1988, was Grasberg. The open- pit mine has proven ore reserves of about $60 billion and is expected to provide 10% of the world's copper in coming years. The find converted Freeport from a midsize miner of sulfur and other minerals into an industry giant; last year alone, Freeport pulled $1.5 billion of copper, gold and silver ore from Grasberg.
Hitting the motherlode
The Grasberg motherlode was struck within Freeport's 1973 contract-of-work area. But that first contract was set to expire in 2003; Freeport needed longer-term assurance to help attract the billions in financing needed to develop mighty Grasberg. Mr. Moffett turned to a rising star in the Suharto cabinet, the new minister of mines in 1988, Mr. Ginandjar.
"Oh hell yeah, we became very close friends," Mr. Moffett says of Mr. Ginandjar. "When you fight an adventure like this Grasberg adventure, and it turns out like this, you become very, very well acquainted with a guy who helps you, and he with you."
Over the years, Messrs. Moffett and Ginandjar visited each other's homes, spending days on the golf course and evenings crooning in night clubs, associates say. (Mr. Moffett doesn't drink alcohol.) Mr. Ginandjar traveled frequently on Freeport jets. The minister's brother and son pursued business deals with Freeport, with varying degrees of success. Mr. Ginandjar's son-in-law works for Freeport in New Orleans.
By the late 1980s, Indonesia's mining technocrats were happy to renegotiate Freeport's 1973 mining contract. "Nobody else cared about Irian Jaya," recalls Kosim Gandataruna, director general of mines at the time. In exchange for mining rights to an initial 6.5 million acres for up to 50 years, Freeport agreed to pay higher taxes, do more community and environmental planning and look into building Indonesia's first copper smelter (now nearly complete in East Java). But talks bogged down over Freeport's unfulfilled 1973 pledge to divest 51% of its Irian Jaya venture to Indonesian nationals, says Mr. Kosim, lead negotiator for Indonesia. Freeport demanded to be treated under current law, which by then allowed 100% foreign ownership of mining ventures. Mr. Ginandjar approved a compromise: In addition to a 10% Freeport stake already held by Indonesia's government, Freeport agreed to divest another 10% to Indonesian nationals by the year 2001. But according to Mr. Kosim and Freeport executives, Mr. Ginandjar recommended Freeport not wait -- and introduced his friend and political ally, Aburizal Bakrie, to be the purchaser.
Last-minute hitches
Freeport followed the minister's advice. But there were some last-minute hitches. Bankers for the Bakrie purchase insisted on having a letter from the Indonesian government certifying its approval of the deal.
"I wrote the letter for Ginandjar to sign," recalls Mr. Kosim, "but he said he couldn't have anything to do with it; I still don't know why. So I signed it myself."
Other objections arose over Mr. Bakrie's use of a British Virgin Islands company to buy the Freeport shares, ostensibly meant for an "Indonesian national." Mr. Ginandjar overrode their concerns and approved the deal, say people involved in it.
In an interview, Mr. Ginandjar says Freeport conferred mostly with Mr. Kosim on the deal. Mr. Ginandjar says he assured Freeport that Mr. Bakrie "was a good pribumi," or indigenous Indonesian. But the minister says he "didn't give any recommendation, formal or informal," and in no way profited from the sale.
In a separate interview, Mr. Bakrie says he approached Mr. Moffett on his own. Mr. Moffett says what mattered was that Mr. Bakrie could afford to put up equity. "He not only knew Ginandjar, he knew everybody," Mr. Moffett recalls. "I had to find a 10% partner, and we couldn't find anybody to do it. When I took people from Jakarta to that area, they didn't even know those 13,000-foot peaks existed. They'd say, 'God O'mighty, I feel like I'm in Switzerland!' "
In December 1991, one day after Freeport inked its new government mining contract, Mr. Bakrie paid $212.5 million for a 10% stake in Freeport's Indonesian unit. The purchase was financed by a $173 million bank loan guaranteed by Freeport. One year later -- following Freeport's disclosures of steadily higher Grasberg reserves -- Mr. Bakrie sold nearly half that stake back to Freeport for roughly what he paid for all of it the year before, giving him a 500% profit on his initial equity investment. In essence, he wound up with a 5.1% stake in Freeport's Indonesian operations for free. (The value of both deals was based on Freeport's stock price at the time.) With the new contract under his belt, Mr. Moffett turned to developing Grasberg. It needed billions of dollars to build a port and power system, housing and towns for 20,000 workers, bases and barracks for hundreds of Indonesian troops, a golf course, a hotel, and eventually an industrial complex capable of milling up to 300,000 tons of ore a day. Mr. Moffett's solution: what he calls "privatization."
"We didn't want to own nonmining assets" such as power plants, he says. "If we own the son of a b----, the natives think we ought to provide power for nothing. Where does that stop?"
Freeport sold most of its infrastructure assets to a Jakarta company controlled by Abdul Latief, another businessman introduced to Freeport by Mr. Ginandjar, according to Mr. Kosim and Freeport executives. In 1993, two months after Freeport signed its first pact with Mr. Latief's company, Mr. Suharto appointed him minister of manpower.
Over the next four years, while Mr. Latief was a minister, his company and some partners purchased roughly $370 million of Freeport assets, financed by approximately $255 million of debt guaranteed by Freeport. Freeport is the assets' sole customer; it has guaranteed Mr. Latief's company a minimum, after-tax return on equity of about 15% a year.
Mr. Moffett denies any conflict of interest in guaranteeing loans and profits to an Indonesian minister. He says the broad outlines of the arrangement were set before Mr. Latief joined the Suharto government. He says that when Mr. Latief became a minister, Freeport insisted Mr. Latief do everything required by Indonesian law, including distancing himself from his companies. "We're clean as a hound's tooth," Mr. Moffett says. Mr. Latief didn't respond to requests for comment. Mr. Ginandjar's brother and his son, both named Agus Kartasasmita, also dabbled in Freeport's "privatization" program. His brother's company, PT Catur Yasa, took a stake in Freeport's privatized charter airline. It also tried to become the Indonesian partner in Freeport's $215 million power project, led by a joint venture of Duke Energy Corp. and Fluor Corp.'s Fluor Daniel unit, according to an executive who took part in the Catur Yasa effort. But when Catur Yasa didn't want to pay for the stake, this executive says, it was awarded a 20% share of a separate Duke-Fluor Daniel joint venture to maintain and operate the power system.
Clarence Ray, president of the Duke-Fluor Daniel joint venture, based in Charlotte, N.C., says Catur Yasa was recommended by Freeport. Today, the Indonesian partner has one employee working for the joint venture, says Agus G. Kartasasmita, Mr. Ginandjar's brother. The joint venture has a total of about 200 employees. Mr. Agus says Catur Yasa was picked for its professionalism, "without help or direction from any third party."
Mr. Ginandjar's son sought part of Freeport's waste-water and solid-waste management. The younger Agus Kartasasmita, fresh out of college, asked Mr. Moffett for the business while his father and the Freeport chairman were playing golf one day, according to a former colleague of the minister's son.
"I've watched those kids grow up," Mr. Moffett says. "I can't tell you whether Agus ever did that or not, but I can tell you they're a very, very sophisticated family."
When a Jakarta-based executive with Waste Management Inc. expressed interest in handling the Freeport job, it directed him to the younger Agus Kartasasmita's company, called Agumar, says Ian Sharp, project manager for the Waste Management unit that worked with Freeport. But the venture never took off; Freeport eventually decided to handle its own waste treatment. The younger Mr. Agus didn't respond to requests for comment.
Mr. Moffett says Freeport's business ties to the Ginandjar family "aren't even on the Richter scale," given Freeport's massive capital spending. He says the family has gotten its Freeport business fair and square. Says Mr. Ginandjar: "My family has never gotten any business without having to fight for it. ... They're on their own."
A victim of cronyism
More often than not, Freeport was a victim of Indonesia's endemic cronyism, its executives say. In 1992, when the company sought another expansion of its mining area, the ministry approved it on two conditions, Freeport executives say: that Freeport create a new company to lease the extra acreage, and that it take on another ministry-recommended equity partner named Setiawan Djody, a business partner of the Suharto family. Eventually, after Mr. Djody didn't pay his share of the venture's bills, Freeport repossessed his shares, Mr. Moffett says. Mr. Djody says the deal had never been finalized. Media
Freeport executives say the squeeze got worse in 1993, after I.B. Sudjana, a rival of Mr. Ginandjar, replaced him as minister of mines and energy. Mr. Sudjana had his own list of 16 retired generals and others whom ministry officials badgered Freeport to help, Mr. Moffett says. Ministry pressure also mounted on the company to do business with Mr. Suharto's family, particularly with second-son Bambang Trihatmodjo, Freeport executives say. Messrs. Sudjana and Bambang didn't respond to requests for comment.
For years, Freeport had avoided direct ties to the first family, in part because Freeport board member Henry Kissinger and others had warned of an eventual backlash against the Suhartos. But in the mid-1990s, Mr. Moffett, through a budding personal relationship with one of Mr. Suharto's best-known Indonesian confidants, Mohamad "Bob" Hasan, began spending much more time with the first family. He golfed with the president and became close friends with his second daughter, Siti Hedianti Prabowo, and her husband, a controversial general at the time.
The first-family friendship, coming at the twilight of the Suhartos' rule, troubled even some Freeport executives. When one warned Mr. Moffett of the growing perception that Mr. Moffett had himself become part of the Suharto inner circle, the boss told the executive to butt out -- not in those words, the executive says.
"Part of the problem is that nobody wants to confront Jim Bob; he's such a forceful figure," this executive says.
Mr. Moffett met his match in Mr. Suharto. In 1995, the Indonesian president was outraged to learn about Mr. Bakrie's 1992 windfall profits on Freeport stock, say several current and former high- ranking officials in the ministry of mines and energy who were involved. They say Mr. Suharto ordered the 5% Freeport stake Mr. Bakrie still held be liquidated. "The president insisted [his son] Bambang or Bob Hasan should get those shares," says Umar Said, the No. 2 mining ministry official at the time.
Mr. Bakrie says his investment bankers told him to sell his Freeport stake. In any case, it fell to Mr. Moffett to make the deal happen. Talks began with Mr. Bambang's representatives, but the Suharto son refused to put up any cash for the shares, asking instead to have the stake "carried" by Freeport dividends and loan guarantees, according to executives involved in the talks. Freeport balked. Eventually, Mr. Hasan agreed to invest $61 million to buy the Bakrie stake, valued then at $315 million. Freeport agreed to guarantee a $254 million bank loan to Mr. Hasan's company, and pledged, through future loans, to cover any shortfall in interest payments. The deal closed in March 1997. To date, Freeport has paid more than $8 million of interest on behalf of Mr. Hasan's company. Concerned about US anticorruption laws, Freeport's lawyers and lenders were wary of the terms extended to such a close Suharto partner, Mr. Moffett says. The company that bought the shares, called PT Nusamba Mineral Industri, was 100%-owned by PT Nusantara Ampera Bakti. The parent, known as Nusamba, is widely accepted in Indonesia as being controlled by the Suharto family. Mr. Hasan himself has said in interviews that Nusamba is 80%-owned by three Suharto- chaired foundations, 10%-owned by his eldest son, and 10%-owned by Mr. Hasan.
Yet for the Bakrie-Hasan deal, Freeport officials say, Mr. Hasan provided its banks with documents stating that Nusamba is 99%- owned by Mr. Hasan and 1%-owned by a Nusamba employee. Some Freeport officials acknowledge that is hard to buy.
"Bob Hasan is part and parcel of the Suharto family," one says. Arguing otherwise would "make us the laughing stock of Indonesia." Separating Mr. Hasan and the Suhartos "is important legally and to the international banks," the executive says. "But in Indonesia, where we have to live and work, it would look pretty silly." In Jakarta, executives warned Mr. Moffett about deepening ties with Mr. Hasan. But with Mr. Suharto steaming and his son looming as the first-family buyer of choice, Mr. Hasan "was the lesser of all evils," a Freeport executive says.
He was also a loyal friend. In 1996, when a battle erupted among the Suharto kids over who would exploit the trumpeted Busang gold deposit -- later proven a fraud -- Mr. Suharto asked Mr. Hasan, who asked Mr. Moffett, to take charge of Busang. At other times, senior mining-ministry officials say, Mr. Hasan berated them for questioning Freeport's plans to boost ore production, saying their concerns were hurting Freeport's share price. Mr. Suharto himself eventually OK'd the massive expansion, in the margins of the Moffett letter.
"I would hope he would be supportive," given Freeport's importance to Indonesia, Mr. Moffett says. "I went in there as a geologist with my hat in my hand and talked about a dream -- and it came true!" Mr. Suharto and Mr. Hasan didn't respond to requests for comment.
Mr. Moffett says he hasn't talked to Mr. Suharto in months. He stays in closer touch with Mr. Ginandjar. In April, he attended the wedding of Mr. Ginandjar's son Agus at the minister's home in Jakarta. There, he ran into his old mining-ministry friend, Mr. Kosim, whose daughter almost went to work for Freeport years ago. "He asked about my girl and I told him she wants to work in America but needs a green card," Mr. Kosim says. "He said, 'No problem, have her contact me.' " When she did, Freeport offered her a job in New Orleans. She opted to work elsewhere, but Mr. Kosim was still touched. I was flattered by his generosity," he says. "Jim Bob is a very kind man."
| Environment/health |
Jakarta -- Two people were injured as thousands of farmers in the Indonesian province of West Sumatra protested against a palm oil plantation firm which they said had polluted a local river, sources there said Sunday.
"There were thousands of them, children, youth, the elderly, men and women who came armed with knives and machetes," the source said from the West Sumatra provincial capital of Padang.
The farmers on Saturday attempted to protest at the base camp of PT Tri Agro Adhiniaga (TAAN) at the Limapuluh Kota district to demand that the company halt the pollution of the Batang Mangilang river. The villagers attempted to attack the base camp but were repulsed by the company security guards who were backed by about 35 soldiers from a local battallion, the source said. Warning shots were fired by some of the soldiers, who had been put on standby at the company since protest against the firm began last month.
One man, identified as Eka, 22 from the Mangilang village, was run over by a truck carrying employees of the company trying to flee the attack, the source said, adding that Eka was rushed to the hospital in Bukittinggi. A second man, identified as Icen, 23, also from Mangilang village, was slashed with a machete by one of the company guards during a scuffle that broke out between the villagers and the company security guards, the source added. The mob disbanded after Icen was rushed to the same hospital as Eka in Bukittinggi.
The villagers were angered by the pollution of the river following the felling of forests by TAAN. The company had dumped the waste from the felling into the river and villagers, who rely on the river for their daily water needs, have been complaining of serious skin irritation. The villagers have demanded that TAAN halt its operation. Angry villages last month attacked the base camp, damaging and burning vehicles and a few buildings there, prompting the deployment of the soldiers.
Bogor -- An expert has expressed concern that the rood crisis and malnutrition affecting an untold number of babies in various Indonesian areas will lead to the birth of stupid generations in the future. Acting rector of the Bogor Institute of Agriculture Aman Wirakartakusumah cited in a graduation ceremony here on Saturday the many reports of people and babies already facing food shortages, and pictures of children with distended bellies because of malnutrition.
"The reports that have reached us are only the tip of an iceberg," he said, echoing an earlier concern by Unicef area representative Stephen J. Woodhouse. "Such a situation could mean (eventual) 'massive stupidity' in any given area," he said, citing the need to anticipate problems of the current food shortage.
"The nutritional status of a baby today has much to do with her or his intellectual development and capabilities as an adult," he said. "This sorry economic state, unless systematically handled, would also mean a vulnerable state of social, economic and political affairs," he added.
State Minister of Food and Horticulture A.M. Saefuddin recently estimated that 17.1 million Indonesian families--70 million people if there are four members to one family--were already facing food shortages. More than seven million families were already in a critical situation as they were only able to eat once a day or even less. Official statistics have put the number of poor people to reach 100 million by year's end.
Saefuddin said in Yogyakarta on Saturday that the government planned to import 4.1 million metric tons of rice for 1998/1999. Some 1.9 million tons have been pledged under a. contract, 0.6 million tons are still in a tender process and the remainder is to be processed next month. The short-term procurement of food by rice imports under foreign assistance is received in different ways, such as grants, medium- and long-term loans and under commercial schemes, said Saefuddin, reported Antara. The aid was given by the donors directly to target groups, non-governmental organizations and the government. The government has formed a team to avoid confusion in channeling the aid, called Food Supply Monitoring Team.
Its tasks include coordinating the allocation of aid, deciding priorities in the channeling of aid, and the areas with the highest eligibility. Saefuddin said that the rice aid was provided under the World Food Program (WFP) through the government, and under the Food for Work Program managed by the agriculture ministry. The food aid received from Japan, Thailand, Vietnam and Taiwan amounted to 900,000 tons of rice. The grants came from Japan, consisting of 50,000 tons for poor families in Java and Sumatra, and distributed through WFP, 5,000 tons from Thailand, 10,000 tons from Vietnam through the national logistics agency (Bulog), and 21,000 tons from Singapore through the security and defense ministry.
Wirakartakusumah suggested that the government's social safety net program be launched in a holistic manner, which includes natural, financial, technological and institutional resources. "The program should be handled well ...to overcome problems such as food shortages and unemployment, and should produce commodities which replace imported goods, earn foreign income and conserve the natural resource," he said. For 1998/1999, the government has allocated Rp 17.25 trillion (US$ 1. 6 billion) for the social safety net program. The bulk of the funds -- Rp 1.010 trillion -- was allocated for labor-intensive projects in order to absorb dismissed workers.
The government only allocated Rp 65.7 billion to develop small industries and Rp 147.2 billion to develop cooperatives. Experts have said it was actually small and medium industries that had so far proven to be the safety valve for the crisis, absorbing not only manpower but also had stronger economic potentials.
| Arms/armed forces |
Jakarta -- Indonesia's armed forces mark their 53rd anniversary on Monday amid one of their toughest battles to date -- the fight to restore their honour as a defender and not oppressor of the people.
Following the resignation of former president Suharto in May, the armed forces (ABRI) have been besieged by revelations of human rights violations spanning his 32-year rule. The list includes the kidnapping and torture of political activists, mass killings in the restive province of Aceh, and the killing of four students during a demonstration in May-- an incident that helped spark riots in the capital which left 1,200 dead and added to the pressure on Suharto to quit.
President B.J. Habibie and armed forces chief General Wiranto have offered unprecedented apologies for past military abuses, and military operations in Aceh and Irian Jaya have been ended. Indonesia says all combat troops have been pulled out of East Timor, where it has also faced a separatist insurgency.
The hated Lieutenant-General Prabowo Subianto, son-in-law of Suharto, has been discharged from the army after a probe into the abduction and torture of activists, and Wiranto has promised reform. But analysts say the abuses of the past still haunt ABRI. "They are under attack from civilians and the international community because of their human rights violations," said independent military analyst Salim Said. Indonesia's Human Rights Commission says the revelations have called the military's legitimacy into question. "Its legitimacy is on the line because it cannot claim any democratic role, for it needs to account for the past violations," said commission vice-chairman Marzuki Darusman.
In a recent poll by the Centre for the Study of Development and Democracy, 46.5 percent of respondents said they did not believe the military was really protecting the people, against 39.1 percent who believed it was.
Students have stepped up demonstrations in recent weeks calling for the military to end its so-called "dual function" which gives it a significant political as well as security role, with unelected seats in parliament and senior cabinet positions. "We want ABRI to end its involvement in social and political affairs," said student Trisutiadi of the University of Indonesia.
A draft law on the structure of parliament has proposed reducing ABRI's representation to 55 seats from 75, in an expanded parliament of 550 members, up from 500 at present. ABRI's parliamentary leader, Lieutenant-General Hari Sabarno, says the military would accept parliament's decision.
Lieutenant-General Agum Gumelar, governor of the National Resilience Institute, a military think tank, said the military was making efforts to respond to the people's desire for reform but this would take time. "These accusations are based on the people's desire for ABRI to be better than before," he said.
Wiranto has tried to shield his men by urging Indonesians to stop condemning the army, saying its past mistakes were not a consequence of military policy but an inevitable result of the previous political regime in the country of more than 200 million people.
He said soldiers were also human and many had died while maintaining security in the country. "They are also suffering, with their small salaries which have not been raised despite the current monetary crisis," he told a recent parliament meeting. "But do you see them holding demonstrations to protest against their fate?"
According to a military spokesman, regular soldiers' salaries, excluding the basic food they are provided, are less than the country's minimum wages, which vary between districts. He declined to give any figure. The Jakarta minimum wage is 198,500 rupiah ($18) a month.
Political analyst Soedjati Djiwandono said soldiers' salaries were "inhuman," and Darusman warned of the possibility of increasing desertions due to economic hardship. "It is a very human problem -- soldiers having to make ends meet for their families," he said.
According to Said, ABRI was serious in reforming itself and was likely to take on a reduced role in day-to-day politics. "They have no choice. This is what the people want," he said. But a senior military source disagreed, saying he doubted ABRI would give up its dual function. "ABRI is very stubborn... they will not give up the foundation of their power," he said.
He said ABRI's dual function applied mainly to the land forces. "The navy and air force have no opportunity for political power. They stick to social and security matters." In order to redeem itself, the army needed to show that it was no longer merely a tool of the government, Said said. "Suharto used ABRI as a tool to keep himself in power. If ABRI can demonstrate it is not the tool of the government, it will regain the respect of the people," he said.
Jakarta -- After a recent storm of public condemnation over past alleged human rights violations, the Armed Forces (ABRI) took another blow on Monday when an independent survey found its public image wanting.
The poll, titled ABRI and the People, was conducted by the Center for the Study of Development and Democracy (CES-DA), a body linked to the respected Institute for Social and Economic Research, Education and Information (LP3ES). It questioned face- to-face 1,000 people in Jakarta, Medan in North Sumatra and the East Java capital of Surabaya from Aug. 13 to Aug. 28.
Twelve questions posed covered, among other things, ABRI's dual role, police separation from ABRI, the military taking government positions like governors and regents, and ABRI's image. On the question of image, 46.5 percent of the respondents said they did not believe ABRI was really protecting the people, compared to 39.1 percent who believed it was and 14.4 percent who abstained. As many as 50.2 percent said they did not believe "ABRI and the people are one" as the military has trumpeted over the years; 42.6 percent said they believed ABRI was united with the people, while 7.3 percent said they did not know.
"The image is negative," Rustam Ibrahim, LP3ES director, who supervised the survey, said at his office. Accompanying him at the media conference were chief researcher E. Shobirin Nadj. and researcher M. Husain.
So low was the public's confidence in the military, CESDA pointed out, that when respondents were asked about the position the military often took when facing street demonstrations, labor strikes or evictions, they said ABRI often did not side with the people.
The study showed 56.1 percent said ABRI always took the side of the owners. Only 23.3 percent said ABRI tended to be neutral when dealing with such cases, while 8.2 percent said ABRI backed the people. To cap its survey on ABRI's public image, CESDA asked whether the respondents felt any sense of belonging regarding ABRI. The finding was that 20.7 percent of the respondents said they were still proud of ABRI. The majority, 59.9 percent said they felt "just so so" and 16 percent said they had no pride at all in ABRI. CESDA also gauged how respondents viewed the debate about separating the National Police from ABRI.
Fifty-seven percent of respondents said they wanted ABRI to be separate from the police, while 24.9 percent they did not agree with the idea. "The higher the education level of the respondents the more they wanted the police to be separated from ABRI," Rustam said, adding that all respondents with a military background supported the separation.
The respondents were 500 men and 500 women: 22.7 percent were below 25 years old, 32.2 percent between 26 and 35, 24.9 percent between 36 and 45, 12.8 percent between 46 and 55, and 7.4 percent were older than 55. On respondents' education level, a majority (46.2 percent) were senior high school graduates, 16 percent junior high school graduates, 15.4 percent elementary school graduates, 13.2 percent university graduates and 9.2 percent undergraduates. The survey claimed a margin of error of plus or minus 3.1 percent and a reliability level of 95 percent. "This means that if a similar survey is conducted again in the three cities, there is a 95 percent chance that it will be of the same result -- with only a 3.1 percent chance of error," Husain said.
CESDA revealed a "split finding", however, on the public's perception of ABRI's long-retained dwifungsi, a 40-year-old doctrine that justifies the military's role in politics. It said 74.3 percent of all respondents wanted ABRI to only have responsibility for defense and to be professional without meddling into the country's political affairs. Only 17.4 percent agreed ABRI should retain its dwifungsi.
Here, CESDA concluded, the higher the education level of the respondents the more they wanted dwifungsi scrapped. The "split finding" was that 60 percent of respondents said they still wanted ABRI to be represented at the House of Representatives. "One thing that we must also bear in mind is that these are findings in cities where people are less repressed by the military. So there could be a great difference if the survey was conducted in Aceh, East Timor or Irian Jaya," researcher Shobirin said. Mob torches prostitution complex Reuters - September 28, 1998 Cileungsi -- An angry mob attacked and torched a complex of nightclubs and guesthouses on the outskirts of Jakarta on Monday, which locals said was a centre for prostitution. Around 100 people attacked the three-hectare (seven-acre) complex in Cileungsi and set it ablaze at three pm, witnesses said. No casualties were reported.
"For 15 years we have had to put up with (the prostitution) complex. Local people can no longer tolerate its existence," said one resident at the scene. Residents said local officials had raided the complex repeatedly but failed to shut it down.
Outbreaks of violence and rioting have been rising in Indonesia in recent weeks amid the country's savage economic downturn which has pushed millions into poverty and sent food prices soaring. Human rights groups say the economic crisis has driven thousands of women into prostitution.
Jakarta -- Police clashed with troops after an exchange of insults on the island of Borneo Tuesday, leaving four people dead and 12 others injured, police and a news report said. A police source, who spoke on condition of anonymity, said two police officers and two soldiers had died from gunshot wounds. "I just heard that four officers were killed," said the officer, who refused to give further details.
The clash between soldiers from a cavalry unit and members of the police special mobile brigade broke out in Pontianak, about 800 kilometers (500 miles) north of Jakarta.
The official Antara news agency said the clash between the two groups, who live in neighboring dormitories, began after an exchange of insults between policemen competing in a walking event and a carload of soldiers. It quoted Col. Encip Kadarusman of the local military as saying 12 officers were hospitalized for serious wounds. A police dormitory was badly damaged, he added without elaborating. Some witnesses said they heard gunshots and that some security personnel had been wounded.
The walking competition was part of celebrations ahead of national Armed Forces Day next Monday. In Indonesia, the police force is part of the military. However, in recent months there have been growing calls for the police to be made a separate organization as part of a push for greater democracy following the forced resignation of autocratic President Suharto in May.
| International |
Beijing -- Vice Premier Qian Qichen on Tuesday repeated China's calls to Indonesia to take action over the violence directed against ethnic Chinese during Jakarta's May riots.
"The Chinese government is deeply concerned about the attacks on Chinese-Indonesians which occurred in Indonesia in May," Qian said, according to the Xinhua news agency. "We have noticed that the Indonesian government promised to deal with the incident in a serious way," Qian told a reception marking China's National Day.
"We hoped that the Indonesian side would handle the incident properly as soon as possible and prevent such things from happening again," he added. Ethnic-Chinese had made "indelible contributions" to the development of Indonesia and thus "should enjoy the same treatment and rights" as other Indonesians, he said.
The official China Daily earlier this month accused Indonesian President B.J. Habibie of trying to confuse the public over the reported mass rape of ethnic Chinese women during the May violence in Jakarta.
"It is all too clear that what he is attempting is just to confuse public opinion on what did happen," the China Daily said in an editorial. "With their unhealed wounds still bleeding, ethnic Chinese now have to endure their president's irresponsible words. Is this fair?"
Habibie has said he believed media reports of rape cases had been exaggerated, and Indonesian military chief General Wiranto says no evidence has been found to support allegations of mass rapes during the bloody May riots.
| Economy and investment |
Jakarta -- Indonesia's first real attempt at a bankrupcty case in 95 years came unstuck on Tuesday and analysts warned it would make investors even less comfortable with the country's cloudy legal system.
An Indonesian commercial court rejected a suit under the one- month old bankruptcy law against PT Ometraco Corp (OMTR.JK), because a similar suit is pending against one of its subsidiaries. "This certainly is not sending a good signal about the bankruptcy law," said the head of research at a foreign brokerage in Jakarta.
The verdict is the first under the new law, replacing one imposed during Dutch colonial rule in 1903 and hardly ever used, meant to help the crisis-hit country deal with its huge corporate debt burden. "It is going to make foreign investors lose their confidence with commercial courts over the bankruptcy law. The law is good but they have not been able to implement it because the judges don't understand it," PT Trimegah Securindo Lestari head analyst David Chang said.
He predicted that creditors would eventually give up and seek out-of-court settlements, a move that should also appeal to debtors rather than pay exorbitant administration charges.
Ometraco's lawyer called the court decision "courageous," though others were less enthusiastic and its creditors are considering an appeal. "This is a new and highly controversial decision. It's going to spark concerns on the willingness (of the government) to implement the law fairly," said James Purba of Makarim & Taira law firm, adding that the two cases should be tried separately.
Some analysts were less downcast, seeing it as no more than a predictable bump as courts try out the new law. "It is inevitable that we are going to have these technical obstacles. What is terribly important is that they are overcome," said William Daniel, president director of ABN-AMRO Asia Securities Indonesia.
Merrill Lynch head of research Alex Wreksoremboko said the problem also lay in the fact that imprudent banks had in the past been so willing to lend to holding companies without any collateral other than now worthless share certificates of their subsidiaries. He said plenty of other creditors would be watching the early bankruptcy cases to see if it was worth suing.
"I think the government is buying time," said the research head of another securities house. "It is in their interest to delay the verdict. If the companies are declared bankrupt it will lower GDP and also create more social problems."
Jakarta -- Indonesia Tuesday announced a bank recapitalisation program to restore the ailing banking sector back to health.
"The aim of the recapitalisation is to retain (banks) which has a prospect of surviving and develop, and also primarily to accelerate economic restoration through a restructurisation of their ownership", Bank Indonesia Governor Syahril Sabirin said.
He said the program would cover all banks except those with a capital adequacy ratio (CAR) of more than four percent. Sabirin said banks currently under the treatment of the Indonesian Bank Restructuring Agency (IBRA) and those not under its supervision were eligible under the program.
The government is currently undertaking due diligence on all banks to calculate the funds needed. Banks with a CAR of below four percent and above minus 25 percent must join the recapitalisation program, Sabirin said.
Those with a CAR of lower than minus 25 percent would be given the opportunity to strenghten their capital or improve the quality of their productive assets so that they can move to the eligible category. "If they cannot, banks in this category will be jointly settled by Bank Indonesia and IBRA," Sabirin said without elaborating.
Sabirin said banks would be required to submit a business plan within one month detailing problematic loans, forecasts for the next three years and their intention to meet all prudency regulations. Once the plan is approved, the owners of the banks would be asked to pay back any state liquidity they had taken and used, and to strengthen their capital. The government, Sabirin said, will provide up to 80 percent of the fresh capital injection.