ACEH

GAM violently defies ban on anniversary observance

Jakarta Post - December 5, 2003

Nani Farida and Teuku Agam Muzakkir, Banda Aceh/Lhokseumawe -- Celebrations marking the Free Aceh Movement (GAM) anniversary proceeded in the province on Thursday despite the heavy military presence there to prevent the observance.

Efforts to deny GAM members a chance to commemorate the self- proclaimed independence by the movement's founders 27 years ago left two Army's Special Forces (Kopassus) soldiers seriously wounded during an armed clash in the hilly Siron area in Aceh Besar regency.

The military also deployed dozens of troops equipped with mortars and armored vehicles to Nissam area in North Aceh, which was once known as the base of GAM commander-in-chief Muzakkir Manaf.

Soldiers lowered separatist flags hoisted in coconut trees in the eastern part of Sigli district in Pidie regency, one GAM flag in Lhokseumawe and several others in East and South Aceh regencies.

Police joined the military operation to prevent the celebration and to maintain security by deploying at least 1,500 personnel who patrolled suspected GAM strongholds.

In several hamlets, GAM, nevertheless, tried to hoist the separatist Crescent-Star flags. At least three flags were hoisted. But the military lowered the flags immediately after receiving reports from locals.

Except for several gunfights between government troops and GAM rebels, the situation remained calm across the province. Traders continued their business as shops were open and public transportation was operating.

In South Aceh, a firefight between the Indonesian Military and GAM fighters took place, resulting in the death of Second Pvt. Yaser Arafat.

Aceh military operation spokesman Lt. Col. Ahmad Yani Basuki claimed three GAM rebels were shot dead and four others were arrested during a raid in Tanah Luas subdistrict in North Aceh.

In another raid in Bireum Bayeun area in East Aceh, three GAM fighters were killed, while another one was killed during a raid in Seunobok village, East Aceh regency. Despite the attacks, GAM claimed to have held ceremonies almost simultaneously at around 8 a.m. in separate undisclosed locations across East Aceh and Sabang.

"Due to the situation, we only held a modest flag-hoisting ceremony," Teungku Zainal Abidin, GAM spokesman overseeing Sabang and Aceh islands region, said.

The celebration took place separately at three locations -- Idi Rayeuk, Simpang Ulim and Peureulak, with Teungku Ishak Daud leading an observance in Peureulak, Teungku Mansor, GAM spokesman for East Aceh regency, said.

Nearly 1,000 GAM fighters in the region took part in the celebration, Abidin said, In a release made available to The Jakarta Post, Muzakkir asked all GAM members to remain on alert and maintain discipline.

Meanwhile the military encouraged people to fight the rebels. As of Thursday, around 7,000 members of the People's Front Against Separatist GAM (FPSG), gathered in Bireuen regency and burned GAM flags and two replicas of GAM founder Hassan Tiro who is now in self exile in Sweden.

The rally was an expression of the people's anger toward GAM who had brought the Acehnese to poverty, the group said in its statement.

Aceh rebels' struggle enters 27th year

Straits Times - December 5, 2003

Jakarta -- Acehnese rebels celebrated the 27th anniversary of their independence struggle yesterday with the sporadic raising of flags and a rare battlefield success, killing four soldiers and injuring two in clashes across the restive province.

The Indonesian military, which launched a fresh offensive against the Free Aceh Movement (GAM) in May, had warned that anyone celebrating the anniversary would be punished severely. They threatened to shoot anyone caught raising a rebel flag and said offenders would be charged with treason.

Troops staged helicopter and road patrols to stop GAM members from raising rebel flags. The threats and increased military patrols in the oil- and gas-rich province appeared to work, with witnesses seeing only a smattering of rebel flags -- black and red with a star -- flying across the province on the northern tip of Sumatra.

Soldiers took down several flags raised in the Nagan Raya area in west Aceh, the state Antara news agency said.

Two soldiers were killed and two were injured in fierce fighting that started on Wednesday in a mountainous region of eastern Aceh, said Lieutenant-Colonel Joko Warsito. Two other soldiers were killed in gunbattles in western Aceh, he said. No rebels were hurt yesterday, he added, although seven were killed a day earlier in separate fighting.

Yesterday's killings marked one of the few days that the Indonesian army lost more men than rebels and came after months of military dominance on the battlefield.

The GAM had in previous years invited journalists to cover its anniversary flag-raisings and parades and called general strikes which shut down much of the province.

This year, the province is under martial law, with 40,000 police officers and troops mounting an all-out drive to crush the guerillas.

Shops and offices remained open and buses were operating yesterday. "In the past, people were afraid to go about their activities as usual because they were threatened with violence. Under martial law, the people have nothing to worry about," an Aceh military spokesman, Colonel Ditya Sudarsono, told AFP. "Aceh has been under military control and there's nothing that the rebels can do now."

Since the May offensive began, the military claims it has killed more than 1,000 rebels but lost only 47 soldiers and 16 police officers. A rebel spokesman could not be reached for comment.

Rebels launched their independence campaign in 1976 after the Indonesian government reneged on promises to give the province increased autonomy. Fighting intensified in May after peace talks collapsed amid accusations that the rebels were taking advantage of a lull in violence to regroup. About 12,000 people have died in the conflict.

Aceh separatists to celebrate anniversary despite threats

Jakarta Post - December 1, 2003

Tiarma Siboro and Teuku Agam Muzakkir, Jakarta/Lhokseumawe -- Despite warnings and threats of attacks by the Indonesian Military (TNI), the separatist Free Aceh Movement (GAM) plans on celebrating its 27th anniversary, which falls on December 4.

Ishak Daud, a GAM commander overseeing East Aceh, said his troops had already prepared for a modest ceremony in the territory, while GAM fighters in Pidie regency have been holding rehearsals outside the town of Sigli since last week.

"We will celebrate the 27th anniversary, even though the military is continuing its operations here. We welcome the press in covering it, but of course, we will only hold modest events on December 4," Ishak said, not like past celebrations.

In the past, thousands of GAM members held events simultaneously across the province at around 8 a.m. GAM flags were hoisted in a show of force and the province was generally quiet, with many shops closed for the anniversary and most public transportation not operating.

In Pidie, GAM spokesman Teungku Anwar Hussein expected that people would respect the movement's historical day by supporting the anniversary. "I believe that all Acehnese will honor December 4 as independence day, even without our calling upon them to do so," he said.

Meanwhile, ahead of the GAM celebration, the TNI's intelligence officers are heightening monitoring activities for press believed to be planning coverage of the day. Several military personnel have even questioned reporters as to whether they planned to go elsewhere in Aceh to cover the anniversary, including the make and model of their vehicles and license plate numbers.

President Megawati Soekarnoputri declared martial law on May 19 and launched an integrated operation focusing mainly on wiping out GAM, which has been fighting for an independent Aceh since 1976. The operations were extended for another six months from November 19, despite widespread criticisms.

The military has claimed that more than 1,000 guerrillas had been killed since May, 2,000 others had been arrested or had surrendered and 485 weapons had been seized. The TNI initially estimated a rebel strength of about 5,000. Meanwhile, 319 civilians have been killed while thousands have become refugees.

In the latest developments in Aceh, TNI soldiers killed six suspected GAM rebels and captured four women believed to be members of the movement's female wing Inong Bale in separate operations. The troops also confiscated a handgun and two walkie-talkies from the dead rebels, military spokesman Lt. Col. A. Yani Basuki said on Sunday.

Rights group calls for lifting of press restrictions in Aceh

Agence France Presse - November 26, 2003

An international rights group called for the immediate and unconditional lifting of press restrictions in Indonesia's Aceh province, where a major military campaign to crush separatist rebels is in its seventh month.

The New York-based Human Rights Watch also urged the government to allow a special UN rapporteur to visit the province soon to ensure the promotion and protection of the right to freedom of opinion and expression.

"Remove immediately and unconditionally the prohibition on direct news gathering and reporting from Aceh by the Indonesian and foreign media," Human Rights Watch said in a report entitled: "Muzzling the Messengers: Attacks and Restrictions on the Media." It said Jakarta and the military have effectively barred nearly all independent and impartial observers including diplomats and aid workers from the province.

"A shroud of secrecy has enveloped Indonesia's Aceh province since the Indonesian government renewed its war there against the armed separatist Free Aceh Movement (GAM) on May 19, 2003," the group said.

It said any observers or aid workers allowed into Aceh are generally not permitted to venture beyond the provincial capital Banda Aceh.

The group said the shroud of secrecy parts occasionally to provide glimpses of vulnerable civilans caught up in the military campaign with inadequate humanitarian relief.

"The hard reality is that at present no one, except perhaps the Indonesian military, knows what is happening to Aceh's civilian population." The military has said that some 395 civilians have been killed since the military operation began. It blames the rebels. It says more than 1,100 rebels have been killed in the same period.

Human Rights Watch said both the military and GAM have engaged in physical and verbal intimidation of the press on the ground and of editors or correspondents in Jakarta.

GAM has held two Indonesian TV journalists hostages since the end of June. The report said an Indonesian television cameramen was killed, one radio journalist severely beaten by solders and numerous others shot at by unidentified attackers while driving in clearly marked press vehicles.

"The lack of access and monitoring by independent observers, including a free press, has created a climate in which armed forces on both sides believe they can act with impunity and commit abuses, unreported and away from the public eye," Human Rights Watch said.

The group called on the government to ensure that a special rapporteur of the UN Commissioner on Human Rights is able to visit promptly. Indonesia, it said, has already extended an invitation to the rapporteur.

West Papua

FBI in Indonesia's Papua to probe American deaths

Reuters - December 4, 2003 Jakarta -- Four FBI agents have been in Indonesia's Papua since early this week to probe the killing of two Americans in the remote province last year that strained ties between Washington and Jakarta, police said on Thursday.

Indonesian police have neither made any arrests nor named any suspects from the August 31, 2002 incident in which gunmen sprayed bullets at a van carrying teachers from an international school owned by PT Freeport Indonesia, which runs copper and gold mines in the Papuan mountains.

Accusations that Indonesian troops might have been involved in the attack, in which an Indonesian was also killed, have dogged the case.

The head of the national police criminal investigation department declined to say whether the agents from the United States Federal Bureau of Investigation have questioned Indonesian soldiers in their third trip to Papua.

"They reached Timika four days ago on Monday. They want to get more information from there while they are working under the auspices of the Indonesian police," General Erwin Mappaseng told reporters, referring to the area where the incident took place. "I don't remember all of the names they want to question but what is clear is that they seek to collect several testimonies."

FBI teams have come to Indonesia twice over a case that has put sensitive relations between the Indonesian military and foreign facilities in the vast country under the spotlight.

Because of the shooting, the US Senate has cut off $400,000 in military training assistance that would have gone to Indonesia next year in an $18.4 billion foreign aid bill. But the aid ban could be waived by President George W. Bush on national security grounds.

Separatist rebels in resource-rich Papua, at the eastern end of the sprawling archipelago, have been waging a low-level insurgency for decades. The military, which provides security at the site, has blamed the rebels for the attack and repeatedly denied any role. However, Indonesian military chief Endriartono Sutarto has said he would not mind if the agents interview his men.

On Wednesday, US-based Yale University issued a report accusing the Indonesian government, especially the military, of imposing "conditions of life calculated to bring about the destruction of West Papuans." Indonesia's Papua province shares an island with its eastern neighbour, the country of Papua New Guinea.

HIV/AIDS, a clear danger for Papuans

Jakarta Post - December 5, 2003

Nethy Dharma Somba, Jayapura -- The number of people living with HIV/AIDS in Papua, Indonesia's easternmost province, has reached an alarming level.

The province has a 2.3 million-strong population, and the number of people living with the potentially life-threatening virus, according to the latest data, is 1,018. The figure is second only to that of the capital, Jakarta, which has recorded 1,197 people living with HIV/AIDS out of its 10 million population.

Dr. Gunawan Ongkokusumo of the USAID-sponsored Stop AIDS Action Program identified illicit sexual relations as the major cause of the spread of HIV/AIDS in Papua.

Citing recent data, he said a staggering 94 percent of those living with HIV/AIDS had contracted the virus through unsafe sex. Other major causes were needle sharing among drug users and intrauterine transmission.

Gunawan said most HIV/AIDS carriers in Papua were people who had frequent sexual contact with commercial sex workers (62 percent), the wives or husbands of those who often had sexual contact with people of affected communities, particularly commercial sex workers (25 percent), commercial sex workers (11 percent), drug users who shared needles (1.6 percent) and homosexuals (0.4 percent).

Tahi Butar-Butar, acting executive director of the Public Health Development Foundation (YPKM), said the high rate of people infected with HIV/AIDS in Papua was attributable to changing cultural values.

In the past, people who had premarital sex or extramarital sex would receive stiff punishment from the community, including beatings, expulsion from society and the death sentence.

As Papua developed into a modern society, the punishments were gradually lifted. Free sex, for example, is now only subject to a fine.

"As people become more and more wealthy as an impact of national development, fines are no longer a problem for them. Fines only will not deter people from committing unsafe free sex," he said.

An American researcher, Leslie Butt, assisted by Gardha Numbery and Jack Morin from Cenderawasih University in Jayapura, found in a recent survey that male Papuans are highly sexually active. The survey found that over 30 percent of male respondents admitted they had at least 10 sexual partners during the course of their lives, and 25 percent had more than 50 partners.

The majority of respondents acknowledged that they had experienced sexual contact before the age of 15. Unfortunately, the high rate active sexual behavior was not met with an equal rate in the use of condoms.

The awareness of Papuans to use condoms is very low. Butt found that, out of the 175 respondents of the survey, 149 said they never used condoms. Several respondents admitted that they did not know condoms could protect them from HIV/AIDS, while others argued that they were reluctant to use condoms, because condoms would decrease sexual pleasure. The low awareness in regards condoms has thus contributed greatly to the spread of HIV/AIDS in Papua.

In order to raise people's awareness on the importance of condoms, the Papua Provincial Commission on AIDS Eradication is currently deliberating a bylaw that will oblige proprietors of entertainment establishments to provide condoms. The commission is also actively campaigning in the media on the dangers of unprotected sex.

The first HIV/AIDS case in Papua emerged 10 years ago in Merauke. The virus then spread across the province, and commercial sex workers were blamed as being the source of the epidemic.

Indonesia says FBI to investigate Papua murders

Reuters - December 4, 2003

Jakarta -- FBI agents will come to Indonesia this week to investigate the killing of two Americans in remote Papua province last year that strained ties between Washington and Jakarta, officials said on Thursday.

Police have neither made any arrests nor named any suspects from an incident in which gunmen sprayed bullets at a van carrying teachers from an international school owned by PT Freeport Indonesia, which runs copper and gold mines in the Papuan mountains.

Accusations that Indonesian troops might have been involved in the attack, in which an Indonesian was also killed, have dogged the case. "What I know is that they will come tomorrow or the day after and follow what we have discussed in Washington and Jakarta," chief security minister Susilo Bambang Yudhoyono told reporters, referring to agents from the US Federal Bureau of Investigation.

FBI teams have come to Indonesia twice over a case that has put sensitive relations between the Indonesian military and foreign facilities in the vast country under the spotlight. Because of the shooting, the US Senate has cut off $400,000 in military training assistance that would have gone to Indonesia next year in an $18.4 billion foreign aid bill. But under Senate provisions, the aid ban could be waived by President George W. Bush on national security grounds.

Foreign Minister Hassan Wirajuda said the the FBI agents would visit the crime scene near the giant mines run by the unit of US-based Freeport-McMoRan Copper and Gold Inc.

Separatist rebels in the resource-rich Papua, at the eastern end of the sprawling archipelago, have been waging a low-level insurgency for decades. The military, which provided security at the site, has blamed the rebels for the attack and repeatedly denied any role.

Chief of the Indonesian military (TNI) Endriartono Sutarto told reporters he would not mind the agents interviewing his men. "Go ahead. Principally, we want the truth to come out. If there is no involvement, say there is none. If there is TNI involvement, say there is," said the general.

In October, a senior US official said Indonesia had committed to cooperate with the United States including giving the FBI "unfettered access to people they wanted to interview."

Lessons of East Timor keep Papua tied down

South China Morning Post - December 4, 2003

Peter Kammerer -- The Indonesian government's experiment with autonomy in the restive province of Papua has been dismantled by growing nationalism among the ruling elite in Jakarta, observers said yesterday.

They concluded that concessions made by President Megawati Sukarnoputri's approving of new laws last year had been eroded to the point of being meaningless. Indonesian military and police were using increasing force to quash independence moves by separatists.

Muted celebrations were held this week to mark the 42nd anniversary of a failed independence push. Human rights groups also condemned the appearance of two men in the province linked to atrocities in East Timor as proof of the government's caring little for human rights and justice in Papua.

Australian expert on Papua, Richard Chauvel, said yesterday the clamping down by Indonesia on Papuan political activities had been a gradual process spurred by the experience of losing East Timor.

Former president Bacharrudin Habibie had offered autonomy to the former Portuguese colony and the independence-minded provinces of Papua and Aceh in October 1998. The resultant struggle for nationhood in East Timor had sparked fears of a breakup of Indonesia and a two-track approach to autonomy.

"What we're seeing is very strong determination of a drawing of a line in the sand after East Timor," Dr Chauvel, of Melbourne's Victoria University, said. "A lot of the discussion of what East Timor meant regarding the other separatist movements in Indonesia has often been read looking over the shoulders of independence leaders. But from the point of view of the political and military elite in Jakarta, the East Timor effect has consolidated their determination not to let anything else fall off the edge." He said as governments had gone ahead with drawing up plans for autonomy for Papua, they had also started restricting the effect of those measures.

The decision had become clear in late 2000, when independence leader Theys Eluay and four other separatists were arrested and tried for trying to undermine the central government. In October 2001, the Indonesian parliament passed a bill aimed at giving the province more autonomy and a greater share of tax revenues. It allowed for the flying of an independence flag and playing of a national anthem. But the following month, Eluay was kidnapped and found strangled to death, allegedly by police. Dozens of other separatists have since been killed and arrested amid a rising tide of protest by human rights groups.

The police chief in East Timor during the violent struggle for independence in 1999, Timbul Silaen, was on Monday appointed the head of the province's force. Feared militia leader in East Timor, Eurico Guterres, has recruited 200 men in Papua to support the military and police. Brigadier-General Silaen was charged with involvement in the bloodshed in East Timor, but found not guilty by a tribunal. Guterres was sentenced to 10 years' jail for instigating the unrest and is free pending the hearing of his appeal.

Experts agreed that with the taking of the presidency by Ms Megawati a hardened tone against autonomy for Papua and Aceh had emerged in the government. "Since Ms Megawati came to power, elements within the military, home affairs and other parts of the government didn't want anything to do with them -- it was like the unwanted baby," Dr Chauvel said. "In a sense, Megawati's presidential instructions to divide the province into three were quite specifically directed at undermining and winding back the concessions granted under special autonomy."

The head of the research centre for police science at the Indonesian Institute of Sciences, Ikrar Nusa Bhakti, said the government seemed determined to go ahead with dividing Papua. But he did not believe Ms Megawati's approach differed from that envisaged by Mr Habibie.

"Habibie's government was trying to give autonomy to Papua, but would not allow independence," Dr Bhakti said from his Jakarta office. "The Megawati government is only continuing that policy. Nonetheless, it is at odds with the bill signed last year granting Papua special autonomy."

Papuans reject plan to form pro-integration group

Jakarta Post - December 4, 2003

Nethy Dharma Somba, Jayapura -- Former East Timorese militia leader Eurico Guterres plans to establish a branch of his pro- integration Red and White Defender Front (FPMP) in troubled Papua province, but local people have opposed it.

"What does he want in Timika [Papua]? What's his goal to set up an organization here? He may have another purpose. Such an organization should not exist in Papua.

Currently, we live in peace," local resident Benny said. Similar resistance came from Alosyus Renwarin, the acting director of the Papua-based Elsham human rights group. Speaking to reporters in the provincial capital of Jayapura on Wednesday, he said the presence of the Red and White Defender Front in Papua could spark new conflict in the troubled province.

"We already know about Eurico Guterres' track record in Timor Leste [East Timor]. He has been involved in gross human rights violations there. Therefore, we strongly reject his presence in Papua," Renwarin said.

Eurico was convicted by an ad hoc human rights court in Jakarta for a rampage in East Timor when it voted for independence from Indonesia in 1999. The court sentenced him to 10 years in November 2002, but he remains free as he appealed the verdict. The sentence quickly sparked anger from Eurico, who questioned the fairness of the human rights trial for failing to punish military and police officers for their involvement in the atrocities that marked the territory's breakaway from the republic after 23 years of occupation.

Papua Police chief Insp. Gen. Budi Utomo confirmed Eurico's plan to open a branch of his organization, saying the former East Timorese militia leader had submitted a request with the provincial police for permission. However, Utomo said he was yet to decide whether to endorse the plan or not.

"I would not take a hasty decision on this matter as we are studying the group's purpose here. If it is to support security, it's no problem. But if its presence is to foment disturbances, we will not issue a permit," he added. Utomo said the plan would be discussed in a security meeting with senior officials in Papua.

Eurico had issued a letter dated September 16, 2003, ordering the establishment of a FPMP branch office in Mimika regency. Munawir Yacob, who was recently elected the FPMP secretary of Mimika branch, said he has distributed 1,500 forms to Papuans wanting to register to join his group. He dismissed the reasons of those opposed to the presence of his group in Papua, arguing the FPMP was a youth organization like others in the province.

"Our goal is to strengthen the unity and cohesion youth in maintaining the unitary state of Indonesia. I think other youth organizations such as AMPI and KNPI have similar visions," Munawir said.

Separatist groups have long been campaigning for independence in Papua, a resource-rich province where people complain about a unfair share of their region's natural resource profits. Rampant human rights abuses have also fueled separatism there.

Fears that Papua could become a New Timor

Sydney Morning Herald - December 5, 2003

Matthew Moore, Jakarta -- The former East Timorese militia leader Eurico Guterres is trying to set up a new group in Indonesia's Papua province that human rights groups fear may quickly become a militia used to attack suspected separatists.

Although an Indonesian human rights court this year sentenced Guterres to 10 years' jail for crimes committed in East Timor's bloody vote for independence, he remains free pending an appeal and appears to have support among security forces in Papua for his new venture.

In September Guterres instructed two members of his new organisation, the Red and White Defender's Front (FPMP), to set up a branch in Timika, Papua, to counter a decades old campaign among some Papuans to separate from Indonesia.

One of those, Munawir Yakub, confirmed yesterday that he was recruiting members for a Timika branch of the FPMP but said it was yet to be declared open.

The secretary-general of the FPMP, Norman Sophan, said Guterres had letters outlining their plans to the Papua police as well as the government and military in Timika.

Although he denied his group was establishing a militia, he said his members would use force if necessary against separatists, who, he said, were numerous in Timika, a town set up to support the US and Australian owned Freeport gold and copper mine.

"Timika has big problem," he said. "You know, there is the Morning Star [independence] flag there. We have to fight it, with our blood if necessary. I think it is very normal if you fight back, with or without arms ... So, I told my members, if your area is attacked you are free to join any militia group to fight the attackers back."

He accused foreign and Indonesian non-government organisations of encouraging Papua to secede from Indonesia and singled out Australian NGOs for special mention, although he refused to name any. "Most of the NGOs who want Papua to separate from Indonesia come from Australia."

Revelations of the Guterres plan have emerged with the announcement that Papua's new police chief will be General Timbul Silaen, who was East Timor's police chief when militias and security forces killed hundreds of pro-independence East Timorese.

The acting head of the Papuan human rights group Elsham, Aloysius Renwaring, said he believed the new group in Timika had mainly recruited members who were refugees from other troublespots in Indonesia, including Poso, Maluku and East Timor.

"It seems to me there is a conspiracy between Timbul Silaen and Guterres," he said. "They had a relationship in the past in East Timor."

This year there has been a steady increase in separatist-related violence in Papua, with at least 10 suspected members of the Free Papua Movement shot dead by security forces in one raid last month. A spokesman for the Papua provincial government, Enos Yansen Akasian, said it was aware of Guterres's plans and was not concerned about a repeat of the violence in East Timor.

The Timika police chief, Lieutenant-Colonel Paulus Waterpauw, said he had heard the organisation would formally be declared this month and his troops would be on full alert to prevent violence, especially over Christmas.

Troops cut down separatist flag in on anniversary

Agence France Presse - December 1, 2003

Jakarta -- Indonesian police and troops cut down a separatist flag in Papua province on the anniversary Monday of an independence proclamation, activists said, but there were no immediate reports of violence.

Authorities had banned any attempt to mark the December 1 anniversary and more than 1,100 extra troops and police had been deployed. The Bintang Kejora (Morning Star) flew outside the home of murdered pro-independence leader Theys Hiyo Eluay for almost three hours before it was cut down, said Reverend Herman Awom, a former colleague of Eluay.

Special forces troops in November 2001 murdered Eluay, who had campaigned peacefully for independence. Seven soldiers were jailed for the killing but Indonesia's army chief General Ryamizard Ryacudu described them as heroes.

Awom said members of the pro-independence Papua Taskforce raised the flag at 6am to the strains of an independence hymn, "O Papua, My Land." The red-and-white Indonesian national flag also flew outside Eluay's former home at Sentani near the provincial capital Jayapura. "The raising of the flag alongside the Red-and-White had been agreed with the local military, police and administration leaders during the rule of former president Gus Dur (Abdurrahman Wahid)," Awom told AFP.

He said police and soldiers arrived on trucks. After their demand to take down the Morning Star was ignored, they cut it down. "There was no incident. Maybe some panic among those attending Mass inside the house, but there was no arrest or violence," said Awom.

Most indigenous Papuans are Christians. More than 500 people attended the two-hour Mass to mark the anniversary. "Everyone has gone home now and there was no incident," Awom said. "We Papuans are tired of death. We all want peace." Papua police could not immediately be reached for comment.

Alo Renwarin, deputy director of the Elsham provincial rights group, said his office had received a similar report of events at Eluay's house, along with peaceful religious gatherings elsewhere.

Seven people will face trial for treason after flying a separatist flag on November 27 at Manokwari in the west of the province.

Separatists on December 1, 1962, proclaimed the state of West Papua. Indonesia ignored the proclamation and took control of the mountainous jungle-clad territory from Dutch colonisers in 1963. The Free Papua Movement has waged a sporadic low-level armed revolt since then and other groups have campaigned peacefully for independence.

Papuans have complained they did not get a fair share of the province's rich natural resources. Gross abuses by troops also fuelled separatist sentiment. Jakarta in 2001 granted the province special autonomy and a greater share of mineral wealth. But recent plans to split the province into three, ostensibly to improve administration, sparked discontent and killings.

Concerns over new Papuan provincial police chief

Radio Australia - December 2, 2003

In the Indonesian province of Papua, the appointment of a new police chief has been greeted with protests. Last year, Inspector General Timbul Silaen was charged and acquitted of human rights violations and crimes against humanity, relating to his time as police chief in East Timor.

Presenter/Interviewer: James Panichi

Speakers: Willy Mandowan, Papuan indpendence activist; Saafroedin Bahar, National Commission for Human Rights- KOMNAS-HAM; Dr Richard Chauvell, director of the Australia Asia Pacific Institute, at Victoria University.

Panichi: This week, Papuans were offered a sharp reminder of the important role played by Indonesian military and police in the province. Independence activist Willy Mandowan was one of several hundred protestors in the town of Sentani, near the provincial capital Jayapura.

Mandowan: "In the morning, there was the Morning Star flag at Sentani. Forty-five minutes later, the police force, the air force and the military came to force the raising of the red and white Indonesian flag.

"People were saying prayers and singing, until 8:30. Then the rope of the Morning Star, the West Papuan flag, was cut off by the police."

Panichi: That's in spite of the fact that in 2001, Indonesia approved legislation designed to kick-start Papua's move towards autonomy. And one of those laws granted Papuans the right to fly their flag and celebrate December 1st. That's the day in which -- in 1961 -- separatists proclaimed Papua's independence from Dutch colonial rule.

But most of the regulations required to enact that legislation have yet to be approved, leaving the province facing an uncertain political future. Inspector Silaen's appointment also follows the killing of 10 suspected separatist fighters by the military -- an incident which has hightened tension.

Mr Mandowan says many independence activists are keeping an open mind about the new police chief, but are concerned by the suddenness of the decision.

Mandowan: "We don't know him yet, but we think that the changing was too quick. "Mr Budi Utomo, the current chief of police, has been doing very [well]. Committing himself to peaceful means, of handling the differences."

Panichi: That means, all eyes in the province will be on Inspector Silaen, to see whether he too is able to build community trust. However, human rights activists in Indonesia argue the doubts over his conduct while police chief in East Timor makes him the wrong person for the job.

The National Commission for Human Rights government with a long list of human rights abuses in the province, and is keen not have to add to those concerns. Although Saafroedin Bahar, the Commission's team-leader in the Papua investigation, says he expects Inspector Silaen to approach his new job with great caution.

Bahar: "I think he has learned his lesson, you know. According to my opinion, Mr Silaen has been cleared by the special tribunal for East Timor. So I don't think there will be similar problems within Papua."

Panichi: The Commission claims that, with the 2001 greater autonomy must be respected by Indonesian police. But that raises the question of whether the appointment of a new much difference.

According to Richard Chauvel, from Australia's Victoria University, it does.

Chauvel: "The police chiefs in Papua do have a degree of autonomy and if we look back over the past three or four years, the police chiefs and their particular personalities and approaches have been critical, certainly General [Sylvanus] Wenas, who was there from 2000-2001, had particular attitudes which were critical. "General [Made] Pastika likewise brought a particular approach. "I'm not sure whether in this particular case the appointment of someone who has had controversial experience in East Timor, and was put on trial for alleged human rights violations in East Timor, is necessarily particularly significant or sinister, as many senior police and army officers in Indonesia have had experience in East Timor.

Danger of violent instability in West Papua

Tapol press release - December 4, 2003

The appointment of Indonesia's former East Timor police chief, Timbul Silaen, as the new police chief of West Papua and the involvement of notorious East Timor militia leader, Eurico Guterres, in a new West Papua militia group renew fears of increased instability and violence in the territory and are a triumph for impunity over justice, says Tapol the Indonesia Human Rights Campaign.

Silaen's appointment was announced on 1 December. At a press conference the following day, outgoing police chief, Budi Utomo, revealed that Guterres had written to him requesting official permission to set up a militia group known as FPMP (Front Pembela Merah Putih - Red and White Defenders Front) in the mining town of Timika. According to reports, Utomo has not yet decided whether to give permission for the group and is awaiting the outcome of an investigation into its background and objectives. The fear is that even if Utomo does not issue a permit, Silaen, who was associated with Guterres in East Timor, will do so. There are indications that Guterres has already recruited around 200 men for the group.

This is an extremely dangerous development for West Papua. Recent violent incidents there and the threat of a military crackdown suggest that the Indonesian military is involved in a systematic attempt to destabilise the territory and create conflict. As with East Timor, it is likely that militia groups, such as that proposed by Guterres, will play a deadly role in this destabilisation strategy.

The situation in West Papua is already extremely tense following provocative attempts by the central government to "divide and rule" the people by splitting the territory into three provinces. "It beggars belief that persons convicted or strongly suspected of involvement in gross rights violations can re-surface in an area of conflict which has suffered from widespread human rights violations over many years.

This demonstrates Indonesia's contempt for justice and its unwillingness to ensure that atrocities are not repeated," said Paul Barber, a spokesperson for Tapol. Both Silaen and Guterres have been implicated in serious crimes committed at the time of East Timor's 1999 vote for independence when systematic and gross violations of human rights were perpetrated against the country's civilian population by the Indonesian security forces and their militia proxies.

Guterres, leader of the Aitarak militia group, was convicted of crimes against humanity by Jakarta's ad hoc human rights court on East Timor in November last year. He was given a minimal sentence of ten years imprisonment, but is free pending an appeal, which could take many years.

Silaen, East Timor's police chief in 1999, was acquitted by the court -- which has been widely criticised as being deeply flawed and failing to provide justice for the victims of violence in East Timor -- but along with Guterres has been indicted on crimes against humanity charges by East Timor's Special Panel for Serious Crimes.

Tapol is calling for Silaen's appointment as Papua police chief to be rescinded, for him to be removed from active duty and transferred to East Timor to face trial. It is further calling for Guterres's militia activities to be stopped forthwith and for him to begin serving his sentence of imprisonment pending his appeal and transfer to East Timor to face trial.

Tapol and other members of the international solidarity movement for West Papua have previously warned that the failure of Indonesia's ad hoc trial process would undermine efforts to end impunity and result in increased violence and oppression in areas such as West Papua and Aceh.

Seven declared suspects for flying independence flags

Jakarta Post - November 29, 2003

Nethy Dharma Somba, Jayapura -- Seven of 42 Papuans arrested on Thursday for flying the Morning-Star independence flag in Manokwari have been declared suspects and will be charged with treason under the Criminal Code, a police officer says.

Manokwari Police chief Adj. Sr. Comr. Dedy Kusnadi also said on Friday that the seven, identified as Carlos Yumame, Luter Duansiba, Ishak Toansiba, Han Mandacan, Terry Korayem, Yulianus Indem, and leader Yohakim Mensi, were being detained at the police detention center in Manokwari.

"The seven will be charged with treason as stipulated in Article 106 of the Criminal Code, which carries a maximum sentence of life imprisonment," Dedy told The Jakarta Post by phone from Manokwari.

"The remaining 35 people have been released because they did not have any idea about the plan to raise the independence flag," he added. "Some of them even attended merely because they were promised T-shirts."

Police arrested 42 Papuans in Manokwari early on Thursday for hoisting the flags symbolizing the independent state of West Papua inside the compound of an elementary school in Amban and at a transmitter belonging to state-owned radio station Radio Republik Indonesia (RRI).

The flag-raising ceremony was organized to commemorate the sixth anniversary of independence of the so-called West Papua state, which falls on November 27.

The declaration of the West Papua state was first made by Michaeil Kareth in 1997 in Port Moresby, the capital of neighboring Papua New Guinea.

According to Dedy, Yohakim was a wanted man because he committed a similar violation last year. At the time, he led a flag- hoisting ceremony inside the compound of a junior high school in Fanindi Dalam, but managed to escape from police after the ceremony.

Papua Governor J.P. Salossa has banned the raising of separatist flags and urged the Papuan people not to celebrate the commemoration of the Papuan independence day on December 1.

Security officers have approached local public figures and religious leaders to convey the ban, expecting that people would voluntarily follow leaders' calls.

Since 1999, Papuan people have tried to commemorate the independence of the state of Papua on December 1 and to raise flags all around the territory.

On December 9, 2000, local officials -- including former governor Musiran, former Trikora Military commander Maj. Gen. Albert Inkiriwang, former provincial police chief Brig. Gen. S. Wenas and former local council speaker the late TN Kaiway -- decided that the flag hoisting could only be held at residences of tribal leaders.

Due to the decision, the Morning-Star flag is still being raised at the house of Amungme tribal leader, the late Dortheys "Theys" Hiyo Eluay, in Sentani, Jayapura.

Theys was a former leader of the Papuan Presidium Council (PDP) who was killed in November 2001. Several soldiers of the Army's Special Forces (Kopassus) were sentenced to jail after being found guilty of his murder.

A number of groups have been fighting since the late 1960s for independence for the oil-and-mineral-rich province. Many of them are factions of the Free Papua Movement (OPM), which has been waging a low-level guerrilla war with support from various ethnic groups in the region.

Demands for independence appeared to die down in 2002, when the government granted special autonomy status to the province, giving greater authority to the local administration to manage the province.

The central government, however, has dragged its feet in implementing the law, indefinitely delaying the establishment of the Papuan People's Council, the highest legislative body under the special autonomy arrangement.

Papuans were further angered by the government decision to partition the province into three, with most Papuans and analysts seeing the move as part of a divide-and-rule policy.

The government declared Papua -- a former Dutch colony -- as part of the Republic of Indonesia in 1963, and the declaration was formalized in 1969 following a UN-sponsored referendum widely known as Pepera.

Government & politics

Mega calls party members 'thugs'

Associated Press - November 24, 2003

Jakarta -- Indonesian President Megawati Sukarnoputri yesterday lashed out at members of her own party, calling them "thugs" who are out of touch with voters -- an apparent attempt to rein in corrupt cadres seen as hindering her re-election next year.

"There are legislators who have never gone back to their constituencies, let alone fight for their causes," Ms Megawati told leaders of her Indonesian Democratic Party of Struggle (PDI-P) at the start of a week-long national party convention in Jakarta.

"Why have I been lied to?" she said, adding that senior party leaders had been paid off or were "involved in money politics" to keep silent about corrupt members. She vowed to fire anyone found to be involved in corruption or a cover-up.

"I like being the head of PDI-P, but I am tired of looking out for these thugs," she warned. Her comments -- rare for the soft- spoken, media-shy president -- are probably meant to boost support ahead of next year's national election. Ms Megawati is ahead in the polls, but her party is expected to lose many seats in Parliament.

Public dissatisfaction with her party is growing. Critics say she has failed to keep her promises to curb graft and bring economic benefits to the poor since she took office two years ago.

Cabinet member Kwik Kian Gie on Monday denounced the ruling party as corrupt and predicted that it would suffer at the ballot box.

In January, weeks of street protests forced Ms Megawati's government to reinstate expensive state subsidies for electricity, fuel and water -- subsidies that foreign lenders say must be slashed to control a ballooning budget deficit.

Some protesters were arrested for defacing portraits of Ms Megawati during the demonstrations -- a throwback to methods used by former dictator Suharto, who often imprisoned dissenters before he was ousted in 1998.

Indonesia's current economic growth rate of around 4 per cent is considered too low to keep up with the legions of young people entering the workforce.

2004 elections

Big names qualify to run for DPD candidates

Jakarta Post - December 5, 2003

Bambang Nurbianto, Jakarta -- The Jakarta General Elections Commission (KPUD) announced some big names among the 36 candidates that qualified for the Regional Representatives Council (DPD) for next year's general election.

These included businessman Pontjo Sutowo, former state minister of the environment Sarwono Kusumaatmadja, businesswomen Mooryati Soedibjo and Kemala Motik, politicians Aberson Marle Sihaloho and Bambang Warih Koesoemo, former ambassador to Singapore H.B.L. Mantiri and Betawi (native Jakartan) figures Biem T. Benyamin, son of the late actor Benyamin Sueb, and chairman of the Betawi Brotherhood Forum (FBR) Fadloli El Muhir.

KPUD chairman M. Taufik told a media conference on Thursday that some of the big names, including Pontjo and Aberson, had qualified conditionally.

According to Taufik, some people from the Thousand Islands regency claimed that Pontjo's men had promised to give them rice and money if they supported the businessman.

As for Aberson, he was unable to show his high school diploma to KPUD officials during the verification process; however, he did produce a document saying that he was once registered as a student at the University of Indonesia (UI).

The information on both candidates was revealed earlier by Taufik late last month.

Another member of the KPUD, Riza Patria, said that the two candidates could be scrapped from the list should they be implicated in "money politics," although they had been declared as qualified by the General Elections Commission (KPU).

KPUD will report its results on the final verification process to the KPU later on Thursday for further checking before the candidates are announced publicly on December 9.

The 36 names on the KPUD list would not automatically be entered for the general election on April 5, 2004, as the KPU would make its decision based on a recommendation from the KPUD, itself determined by significant findings on the candidates.

The 36 candidates have passed the final verification from an initial 74. The remainder comprise 36 who failed in the earlier stage of verification while two others withdrew from the race.

The announcement of the candidates had been originally scheduled for Tuesday but was delayed twice.

Taufik said that most candidates had failed in the factual verification as people, claimed to be their supporters, denied their support when asked by KPUD verification team members.

Only four winning candidates from each province will represent 32 provinces in the DPD. They will team up with 550 members of the House of Representatives to form the People's Consultative Assembly.

A total 575 people took registration forms from the KPUD but only 104 returned them.

For the first time in history, citizens from all over the country will directly elect their DPD candidates in a general election.

Politicians welcome Tutut's bid for presidential seat

Jakarta Post - December 5, 2003

Jakarta -- State officials and politicians welcomed on Thursday former president Soeharto's eldest daughter Siti "Tutut" Hardiyanti Rukmana's plans to run for the presidency in next year's elections, stressing that democracy allowed anyone to join the presidential election.

Coordinating Minister for Political and Security Affairs Susilo Bambang Yudoyono, who has also been tipped to participate in the presidential race, said that it should be up to the people to decide on who is able to contest the elections.

"We should not immediately foresee the return of the old regime, let the people decide what is best for them," Susilo said when asked about Tutut's presidential ambition.

Tutut was asked to join next year's presidential race by the Concern for the Nation Functional Party (PKPB), a party established by Gen. (ret) Raden Hartono under the order of former president Soeharto.

The party has passed the General Elections Commission's (KPU) factual verification and is considered to be eligible to join the elections in 2004.

Should she formally enter the race, Tutut will be contesting against incumbent President Megawati Soekarnoputri, a daughter of founding president Sukarno, in the upcoming 2004 direct election.

Susilo said the people would use their common sense to determine who was going to be their leader in the future. "So let the people decide," the minister concluded.

National Mandate Party (PAN) chairman Amien Rais, responded similarly, saying that in democracy all are welcome to join the presidential bid. "There should be no problem as long as they enter the bid with good programs and not with money politics," Amien said as quoted by Antara.

Tutut's entry into the presidential race may change the country's political landscape in the 2004 elections. Amien played down anxiety, saying that the people were more intelligent (than that) and would be able to elect the leader that the country's needed to survive.

Meanwhile, Golkar's deputy chairman Ginandjar Kartasasmita said Thursday that Tutut's candidacy would pose a new challenge for Golkar to maintain its constituents. Tutut served as Golkar deputy chairman from 1993 through 1998 and the party was the main supporter of Soeharto's 32 years of leadership.

"This should be a challenge for us to maintain our constituent and it is the right of everybody to join the presidential race," Ginandjar said.

Banking scam may affect Jakarta election

Straits Times - December 1, 2003

Robert Go, Jakarta -- The latest Indonesian banking scandal, in which hundreds of millions of dollars disappeared into thin air, may seem like a run-of-the-mill bank-fraud case, but besides worrying potential investors, it could also affect the outcome of next year's election.

The scandal first broke two months ago after sources leaked information about alleged irregularities in transactions involving the state-owned Bank Negara Indonesia (BNI).

The police and banking regulators said that, between December last year and July this year, BNI channelled through 105 separate transactions, export credits worth a total of S$345 million to seven local companies seeking to export Indonesian commodities to Kenya and the Congo.

The companies belonging to two small groups allegedly set up for the BNI scam, supported their loan requests using letters of credit issued by banks in Kenya, Switzerland and the Cook Islands. Two BNI managers did not check the borrowers' background and the validity of their foreign letters of credit before approving the loans. This violated BNI's internal rules and Indonesia's banking laws. What was worse was that the companies never exported anything to Africa.

Although 800 billion rupiah of the borrowed money was finally returned to BNI by some of the companies through their repayments, the rest vanished. Police are tracking down those suspected of having been involved in the scam.

To date, 11 people -- nine businessmen linked to the seven companies and the two BNI managers -- have been nabbed and questioned by the police. They face charges of having broken corruption, banking and money-laundering laws.

The authorities have frozen and inspected at least 31 bank accounts belonging to suspects and their companies, in an attempt to trace the missing cash.

The investigation now focuses on 55-year-old Maria Lumowa, an Indonesian with Dutch citizenship, who was a shareholder at one of the companies which received BNI's money.

Chief of detectives Erwin Mappaseng said last Tuesday that Lumowa, who has been described by the local media as a plump, bejewelled woman, was hiding abroad. "We're having difficulties apprehending her. She is possibly in Hong Kong or Singapore," he said.

The scandal is hurting the bank directly. BNI top executive Saefuddin Hasan said the bank could lose as much as S$190 million this year, around half of the profits forecast. Jakarta wanted to privatise BNI next year, but lawmakers said they may now demand a delay to this process.

MP Paskah Suzetta, a senior member of the permanent parliamentary commission which oversees banking matters, told The Jakarta Post that investigations have to be completed and all guilty parties punished before legislators would allow the government to sell BNI. Edy Santoso, one of the two BNI managers arrested, wrote a confession that was widely published in the local media.

In it, he named a number of top politicians -- including retired General Wiranto, a presidential candidate from the Golkar party -- as parties involved in the scam. Edy also claimed to have met other politicians and Cabinet members with whom he discussed "fund-raising activities" ahead of next year's elections.

Mr Wiranto and other politicians have vehemently denied links to the case. In a press conference last week, the former armed forces commander said: "I want to reiterate once more that I have no knowledge or involvement, or benefited in any way, from the BNI scam."

Political observers noted that it remained unclear at this point the extent to which the BNI affair would turn into a political hot potato. But several argued that it could resemble the Bank Bali case, another banking fiasco that hurt Golkar's efforts to retain its hold on power before the last elections.

That case, dating back to June 1999, involved the transfer of US$78 million from Bank Bali to a company that was closely linked with the Golkar party. The money was supposedly a commission from Bank Bali in return for Golkar's help in securing payment of US$150 million in bad loans owed to the bank.

Geographical conditions in Papua obstacle to elections

Jakarta Post - November 29, 2003

Nethy Dharma Somba, Jayapura -- Contrary to the general fear that security issues could be the major threat to the success of the 2004 general elections in Papua, a local election official cited the province's geographical condition as the most serious electoral constraint.

General Elections Commission (KPU) Papua secretary Sangadji added that Papua's high illiteracy rate was another problem that the KPU must tackle to ensure that the 2004 general elections stay on track.

Sangadji told a visiting KPU team from Jakarta last week to pay special attention to the province, because many cities and remote regencies could only be reached by plane.

"Don't look at Papua the way you look at Java because geographical condition here is very severe. It takes a longer time and a larger amount of money to complete just one of the stages in the election process," he told KPU team leader Daan Dimara.

Besides this, when bringing residents of remote areas to the polling booth, their expenses for food must also be paid by the KPU, Sangaji said. He explained that villages are located far one from another, and that there were usually only four families to a village. As it is not feasible to set up a polling booth at each village, the KPU plans to set up booths only in key locations.

Due to the distance and geographical factors involved, it is expected that Papuans travel on foot to polling booths and stay for a day or two in makeshift shelters to be erected nearby.

The shelter and food provided by the KPU are intended to encourage Papuans to travel the long distances in order to vote. "If these conditions are not taken into account by KPU headquarters, we are afraid that at the most, only 30 percent of voters will turn up," Sangaji said.

Papua consists of 26 regencies and two mayoralties, many of which are situated in mountainous areas and can only be reached by air transportation. Only those regencies located in coastal areas can be reached by boat. The distance is not only a challenge for the voters, but also for KPU officials.

Similar complaints were also voiced by the KPU Kerom head Budi Setyanto. The newly established regency is situated about 60 kilometers to the east of provincial capital Jayapura.

In Kerom, four of its five districts can be reached over land despite bad road conditions. However, the Web district, which borders Papua New Guinea, can only be reached by plane.

"It costs Rp 8 million to charter a helicopter to fly there, so including the return trip, we will need Rp 16 million just for Kerom alone," said Budi.

He said it was much easier for electoral officials during Soeharto's New Order era, because they did not need to spend energy trying to reach voters.

"Officials didn't need to go to remote villages. They only counted the number of prospective voters in a village and then punched the ballot on the voters' behalf at the subdistrict office."

This indirect method of voting was perpetuated by electoral officials in the past to influence the outcome in favor of the New Order regime.

As for the illiteracy issue, 63 percent of the 2.2 million of Papua population above 15 years old cannot read or write. At a simulated election conducted on Oct. 23 in Skanto district in cooperation with non-governmental organizations, like the Center for Electoral Reform (CETRO), it was found that most polling errors were made by illiterate voters. "It will be a problem with such a great number of illiterate voters come election time," said Budi.

Corruption/collusion/nepotism

Just another Indonesian bank scandal

Asia Times - November 27, 2003

Bill Guerin, Jakarta -- Just when investors might have been thinking it was safe to look at Indonesia a little less skeptically, the biggest banking scandal to hit the country since the central bank liquidity scandal, this one involving Bank Negara Indonesia (BNI) and allegedly fraudulent letters of credit, has shattered confidence yet again.

With BNI marked for semi-privatization next year, the scandal could hardly have come at a worse time. It highlights concerns raised by the International Monetary Fund (IMF) over corporate governance in Indonesia and the central Bank Indonesia's failure to detect the scam until a year after it allegedly began. The BNI embezzlement involves huge losses in connection with the alleged issuance of fictitious letters of credit worth Rp1.7 trillion (US$200 million) between December 2002 and July 2003. It also involves an apparent femme fatale, Maria Pauliene Lumowa, a middle-aged Indonesian woman with Dutch citizenship who lives in Singapore, as well as, according to local newspapers, three of the Golkar party's seven presidential candidates who allegedly received campaign funds.

Chief among them is the former military commander Wiranto, a leader in the sweepstakes to become the country's next president. The retired four-star general, who temporarily launched a singing career after being cashiered from his cabinet position for not taking action to stop massacres in East Timor in 1999, has heatedly denied any meetings with Edi Santoso, a key suspect in the case. Santo, according to his lawyer, met twice with Wiranto, once to discuss campaign funds.

National Police chief General Da'i Bachtiar told local reporters on Monday that his investigators would question everyone believed to be connected with the flow of BNI money. "We shall summon every relevant actor connected to the scandal, including those who have received money from the main suspects," Da'i was quoted as saying.

BNI, with some 8 million accounts and assets of Rp123.7 trillion, now faces huge losses from the scandal, in which the money was allegedly disbursed through 105 transactions without formal assessments or checks. Losses from the bogus transactions could equal half of BNI's forecast 2003 net profit, the bank says. The credits were disbursed to local companies by BNI's Kebayoran Baru branch in South Jakarta, ostensibly to finance commodity exports to the Congo and Kenya between December and July, even though the exports were never made.

The requests for export credit facilities were supported with letters of credit from little-known banks in Kenya, Switzerland and the Cook Islands that were not only unknown to staff but were not on the BNI list of correspondent banks. This alone meant the transactions violated BNI internal regulations.

The key mover and key suspect is Lumowa, a plump 55-year-old known as Erry, who, according to the local press, was "always clad in sparkling, expensive jewelry", reportedly has businesses spread over at least four countries and is said to have a "sparkling personality". She shows no intention of coming back from Singapore to face questioning. Nor has Singapore, which has steadfastly refused to sign an extradition treaty with Indonesia and which has been accused of sheltering errant Indonesian bankers and conglomerate owners on the run from justice, shown any sign of wishing to turn her over.

As the full extent of the scam was being exposed in Jakarta, BNI's president director, Saifuddien Hasan, and compliance director Mohammad Arsjad flew to Singapore this month to meet with Lumowa. BNI senior officials remain tight-lipped about the meeting other than confirming it took place.

Five days later, police in Indonesia listed Lumowa and seven others as fugitives. Eleven people ultimately have been charged with corruption, violations of banking laws and embezzlement and are currently in police custody being interrogated. Jeffrey Baso, Lumowa's former husband, has also been arrested along with another key suspect, Adrian Waworuntu.

The letters of credit were disbursed to accounts of several local companies: PT Pan Kifros, PT Metrantara, PT Bhinnekatama Pacific, PT Magnetique Usaha Esa Indonesia, PT Triranu Caraka Pacific, PT Basomasindo and PT Gramarindo Mega Indonesia (Gramarindo). An internal BNI audit showed that Gramarindo was owned by Lumowa, Baso, and Waworuntu. The latter cut his teeth with Bank of America before teaming up with Endang Utari Mokodompit, the eldest daughter of the late Ibnu Sutowo, founder of state-owned oil giant Pertamina and who, in the words of one local commentator, had connections that "sometimes allow them to evade the laws of financial gravity".

Mokodompit, in what was almost standard operating procedure for bank owners at the time, had been channeling loans from Bank Pacific, jointly owned by Bank Indonesia and the Sutowo family, to her own businesses, creating bad debts of Rp1 trillion for the bank.

In 1995 the attorney general instructed that investigations be halted into claims that she and Waworuntu had defrauded Bank Pacific. Bank Pacific was then taken over by BNI, but was liquidated by the government in November 1997.

Lumowa, Baso and Wawarunto are also connected through businesses set up to meet Singapore's relentless demands for sand. PT D'Consortium Indonesia, a sand-mining and dredging consortium operating out of Riau province, had ex-banker Dicky Iskandar Dinata as chief executive officer, and Waworuntu as a commissioner. Baso had his own sea-sand-dredging outfit, PT Bahtera Bintang Selatan, and Waworuntu owned another dredger, PT Sumber Sarana Bintang Jaya.

Dinata, once deputy CEO of Bank Duta, was sentenced to 10 years in prison in 1990 over a Rp780 billion foreign-exchange fraud at the bank. Unfortunately for Dinata, though he has not been charged or even questioned in the BNI case, he heads up another of Lumowa's operations, PT Brocolin International, which is alleged to have also received money from the BNI fraud. Perhaps fearing another conviction, he has been nearly hysterical to local reporters in denying involvement.

Brocolin, set up in March this year, is 70 percent owned by Lumowa's sister, Indonesian national Jane Iriany Lumowa, with the rest equally split between Waworuntu and Baso.

The investment company has been buying up assets being sold off at big discounts by the Indonesian Bank Restructuring Agency (IBRA), including rubber, cocoa and palm-oil plantations.

Edi Santoso, head of the international services division at the Kebayoran Baru branch, is one of those detained along with his boss Kusadiyuwono, head of the branch. Kusadiyuwono put up his own umbrella, saying last Thursday through his lawyers that he was "bypassed" in the fraudulent credit disbursement by Santoso.

Santoso, the lawyers said, had gone ahead with the transactions even without their client's approval. Santoso's lawyer, Herman Kadir, hit back, saying that all the statements made by Kusdiyuwono's lawyer were lies and that finalization of the transactions "should be made by the branch manager and someone at headquarters", so his client could not possibly have disbursed money without their approval. Santoso is in deep water with Wiranto after Santoso told local media last week that he had met the former military commander twice in the course of disbursing the funds, suggesting that he had been psychologically pressured into disbursing the letters of credit despite Wiranto's denials. Wiranto in turn has reported Santoso and his lawyer Herman Kadir to police for alleged defamation and slander in their statements linking him to the scam. Little wonder, given that one of the Santoso statements claimed that at a meeting in April, Wiranto told Santoso he lacked sufficient funds for his presidential bid.

Kusadiyuwono's lawyers said their client did not know Wiranto at all.

Non-performing loans, some Rp2.3 trillion worth, are a persistent problem for BNI. On top of that the Texmaco Group, the failed textiles and engineering giant, owes $100 million. Four years ago, BNI was also in the spotlight over three pre-shipment credits of $276 million, $240 million and Rp240 billion disbursed to Texmaco.

Marimutu Sinivasan, the charismatic founder, had enjoyed political patronage from the ousted dictator Suharto, who, persuaded that Texmaco needed to be "saved" as a national asset, instructed the governor of Bank Indonesia to release the credits to settle Texmaco's foreign debts. Since April 2002 several other instances of branch office fraud have been discovered.

The bank has set aside a provision of Rp941 billion to cover the losses from the latest scandal. Consequently September's net profit dropped to Rp1.17 trillion from Rp2.1 trillion in the same period last year.

State Enterprises Minister Laksamana Sukardi has said BNI's management will be reshuffled at a shareholders meeting next month, though the bank's board has denied any wrongdoing and directors have refused to accept responsibility for the loss. Sukardi and senior deputy governor of Bank Indonesia Anwar Nasution earlier called on the management of the bank to accept responsibility for the case.

Nasution said the board of directors and the board of commissioners of Bank BNI should be held accountable, even if they were not directly involved in the crime, adding that the central bank may impose sanctions on BNI. He added that the fraud could not have been committed without the complicity of parties at the bank.

Though the central bank, now independent, monitors banks and conducts spot checks, analysts say the challenge to improve accountability of public officials and public institutions at all levels has not been met to the full. The banking sector has swallowed up $75 billion of government funds for recapitalization and restructuring since the crisis, but once again corruption is likely to affect adversely the business and financial climate and investor confidence in Indonesia.

The government is hoping to raise nearly $500 million by selling 40.5 percent of state-owned Bank Rakyat Indonesia (BRI). Kookmin Bank of Korea and Temasek Holdings, the investment arm of the Singaporean government, won the bidding for 51 percent of Bank Internasional Indonesia in late October just as the BNI scandal was breaking.

Regional/communal conflicts

Fresh armed attacks in Poso target Balinese community

Jakarta Post - December 1, 2003

Irvan NR, Palu -- Four people were killed in two separate attacks on a single village in the Central Sulawesi town of Poso over the weekend, apparently targeting Balinese migrants. A bomb also exploded at a traditional market, but no casualties were reported.

Balinese migrant I Made Simson was killed on Saturday evening during an attack on Kilo Trans village, Poso Pesisir by unidentified gunmen. Most of the residents in the village are Balinese migrants. Another Balinese migrant, I Ketut Sarma, died on Sunday morning from serious gunshot wounds to his stomach he had sustained in Saturday's attack.

It is the first ever attack on the Balinese community since prolonged sectarian clashes between Muslims and Christians that erupted in 1999 reached a ceasefire in December 2001 through a government-brokered peace deal. At least 2,000 people have been killed in the bloody conflict.

A witness, Udin, said the attackers opened fire at around 7 p.m. on Saturday at Kilo Trans, located about 50 kilometers north of Poso. Sarma and Simson rushed out, as they realized that the attackers were also firing at their houses.

Simson was killed almost instantly, while Sarma, who was hit in the stomach, was rushed to a local hospital, Udin said.

"We never thought that Balinese would fall victims to the attack," Udin said. "We have never been involved in any violence here." Sarma and Simson were buried at Kilo Trans on Sunday.

Adj. Sr. Comr. Agil Assegaf, spokesman for the Sintuwu Maroso security restoration task force, said the attackers were riding RX-King motorcycles, but provided no other details. To guard against further attacks, a police unit has been deployed to Kilo Trans.

Meanwhile, a low explosive bomb went off at a traditional market in Kilo Trans at around 10 p.m., also on Saturday. No one was killed or injured in the blast, which could be heard within a two-kilometer radius. The police bomb squad arrived and sealed the area to check for any additional bombs.

A half-hour after the explosion, another unidentified group opened fire at the predominantly Christian village of Marowo in Ulu Bongka subdistrict, killing two people -- Ruslan Terampi, 33, and Ritin Bodel, 36. Four others -- Lumin Layagi, 26, Sandra Pinkar, 37, Yusmin, 23, and Yunan, 46 -- were injured in the attack. The victims were praying in church when the attackers opened fire, witnesses said.

Poso Police immediately took chase, but it is not known whether the attackers were caught. Two companies of police reinforcements from Central Sulawesi and East Java are expected to arrive soon.

Attacks on villagers resumed in October of this year, initiated by a group of masked gunmen, claiming 10 lives. Police reinforcements were dispatched to Poso, but the violence has not subsided, although six alleged attackers have been shot dead and 16 others arrested.

A group of armed men launched a new attack and a bomb exploded on the second day of Idul Fitri on Wednesday, but no fatalities were reported.

Focus on Jakarta

Fishermen's woes to recur with river expansion plan

Jakarta Post - December 1, 2003

Evi Mariani, Jakarta -- Hundreds of evicted fishermen and their families living along the banks of the Muara Angke river in North Jakarta will again be forced to move, as the Jakarta administration started widening the river over the weekend to ease flooding.

"The secretary of the [Pluit] subdistrict office came on Saturday and said we had to leave the riverbank because the city would widen the river," said Kajidin, chairman of the Traditional Fishermen's Union (SNT), on Sunday.

Three excavators were seen parked on a section of the riverbank. "Two of them have been working since yesterday, sometimes passing our boats and shanties. They haven't touched our area though," he said.

Around 240 fishermen families have been homeless since October 22, when North Jakarta public order officers demolished their stilt houses.

Kajidin said he argued with the official that they could deepen the river, instead of widening it, to ease flooding.

"The official told me that it was impossible [to deepen the river] because the city bylaw said so," he said. "I got angry with him, as the bylaw is made by the officials themselves. Why can't they change it?" Kajidin said the SNT had discussed the matter and its members agreed to resist the second eviction, as they had nowhere else to live.

Since the first eviction, the fishermen families have been living on their boats or in makeshift tents along the riverbank. Several families have built shanties on the cleared land. Hundreds of others have moved to a large fishpond to the north of the river and have built stilt huts.

"The subdistrict official suggested that we move to the pond during the project. He didn't realize that there's no more space around the pond -- it's fully occupied," said Kajidin.

"The official even refused to give us an official letter for the Jakarta Fishery Agency to notify them that we will stay there temporarily." To build a hut, a family needs between Rp 2 million (US$235) and Rp 3 million.

The union members have insisted on staying at Muara Angke until either the government or the city administration allotted a specific location near the water for them.

The evictions are nothing new for the fishermen, as their families have been forced to move from place to place in the name of development.

Most fishermen families on the Muara Angke have lived there since 1977, when they were evicted from the Muara Karang river, an western estuary of the Muara Angke.

Muara Karang is now the site of a power plant run by state electricity company PT PLN.

Before Muara Karang, the fishermen's parents had been evicted from an estuary of the Ciliwung river in Ancol, North Jakarta. The estuary was later developed into a recreational marina, home to luxurious yachts owned by affluent individuals.

Earlier, the Ministry of Settlement and Regional Infrastructure promised to provide the fishermen with low-cost housing on Song Beach, Indramayu, West Java. The houses are expected to be ready next March.

The North Jakarta municipality had also promised to provide low- cost rental apartments on a 4.5-hectare plot of land in Muara Angke, but it has yet to determine a specific timeframe.

The fishermen have agreed to move to Indramayu once the houses are ready, but for the time being, they have no choice but to stay on their boats in the river.

"We will visit the [Pluit] subdistrict office tomorrow (Monday) to ask that they allow us to stay here until there's word about our housing," said Kajidin.

News & issues

State pawnshop expands to east Indonesia

Jakarta Post - December 1, 2003

Sandy Darmosumarto, Jakarta -- The lack of financial institutions in the eastern part of Indonesia is the main reason for the state-owned pawnshop company Perum Pegadaian to further expand operations in the region, where Islamic-based pawnshop activities have been on the rise.

According to Deddy Kusdedi, director of Pegadaian, it has been the company's policy to expand operations into regions outside Java, especially to eastern islands where there is scarce availability of modern financial institutions that cater to micro-financing.

"We will commit Rp 500 billion [US$35.27 million] for the expansion of our operations in 2004. Out of the fund, Rp 300 billion will be used for expansion outside Java, and the remaining Rp 200 billion for expansion within Java," Deddy told The Jakarta Post in a recent interview.

"Potential markets in Kalimantan are located in Balikpapan, Samarinda, Banjarmasin and Pontianak. Within Sulawesi, Manado and its surroundings are highly regarded," said Deddy.

In Java, potential markets are located in big cities where Pegadaian is already widely presented. "The market in Java is already saturated due to the presence of many banks," he commented.

The company has previously closed down its Ambon, Poso and Aceh branches due to rioting and wars in those areas. But it aims to resume full operations in the lucrative markets of Ambon and Aceh. In addition, Deddy said the company was targeting East and West Nusa Tenggara, as well as Timika in Papua.

Another lucrative location is Bitung in North Sulawesi, where the presence of a seaport involving export activities helps push up Pegadaian's credit extension to some Rp 55 billion each year.

Pegadaian has secured government loans to help finance its expansion program.

In terms of market competition, the state-owned pawnshop has been facing challenges from Islamic-based pawnshops that only accept gold as loan collateral. "This runs counter to Government Regulation No.103/2002, which allows only Pegadaian to engage in the pawnshop business," said Deddy.

The contradiction is possible because there are now two authorities regulating the pawnshop business, the Ministry of Finance and the central bank through the banking law. Sharia (Islamic) pawnshops are regulated by the banking law, while conventional pawnshops are regulated by the ministry.

In light of this market threat, Pegadaian has joined forces with Bank Muamalat to engage in sharia pawnshop activities. "This year, we will convert 16 branches of Pegadaian across the nation to sharia pawnshops. They include branches in Jakarta, Makassar, Madura, Batam, Semarang, Banda Aceh, Surakarta, Yogyakarta, Kuala Simpang, Langsa and Lhokseumawe," said president of the bank A. Riawan Amin.

"So far, we have invested Rp 30 billion in this joint project, and will not hesitate to continue investing. There will be 100 more sharia pawnshops opening in the next three years," Riawan told the Post. "Profit sharing is expected to be equally distributed." Pegadaian employs 6,845 workers nationwide. The firm aims to channel Rp 11 trillion to its customers next year.

Despite plans to expand operations, the company claims that it will not hire additional workers because it practices a zero- growth policy in labor and chooses to outsource many of its units.

Aid & development

Infrastructure a bigger threat than terrorism: World Bank

Agence France Presse - December 2, 2003

Indonesia's dilapidated infrastructure poses a greater threat to human life than terrorism and will hamper long-term growth unless there is urgent new investment, the World Bank says.

"In terms of the impact on human lives it's obviously dramatically worse than terrorism for Indonesia. There's no comparison," World Bank country director Andrew Steer said on the sidelines of a conference on averting an infrastructure crisis.

He told a press conference that only 1.7 percent of the people in the world's fourth most populous nation have access to network sewerage and only 16 percent have access to piped water at household level.

"As a result of this, obviously the burden of disease, especially among children, is much, much higher than it should be," he said.

Steer said Indonesia lags behind the region in almost all infrastucture sectors. "Unless some serious new investment and improved management takes place in infrastructure, Indonesia's long-term growth will be threatened," he said.

According to a recent World Bank report, Indonesia's infrastructure performance "remains highly unsastisfactory".

Many outer island regions are now suffering regular power outages and only about half the population is connected to an electricity grid, the report said. Roads in and around major cities are heavily congested throughout the day.

And while telephone connection has increased very rapidly in the last few years, it remains very low at 9.1 subscribers, including both fixed and cellular, per 100 people.

The report also said pervasive corruption, especially in the procurement area, affects infrastructure "acutely" and costs the economy extremely highly.

Estimates of the total amount of money lost through corrupt procurement practices range from 700 million dollars to 2.1 billion dollars per year. Indonesia's top economic minister Dorodjatun Kuntjoro-Jakti said the country's infrastructure development had virtually ground to a halt since the regional economic crisis struck in mid-1997 and it would take up to 15 years to catch up.

"If Indonesia is not successful in developing infrastructure I'm afraid that the coveted [economic] growth of six to seven percent is just a dream," he said.

Koetjoro-Jakti said the government was planning to establish a provident fund to enable it to build millions of low-cost houses. "It's so distressing when you see the number of houses built in the last five years in comparison to the demand," he said.

"You cannot increase the nation's productivity unless you provide good housing to the people," the minister said.

He said the private sector must be involved in building infrastructure such as seaports, airports and railways, because the state budget alone was not adequate.

The goverment still has to repay a domestic debt amounting to 650 trillion rupiah (76.5 billion dollars) and 460 trillion rupiah of bank recapitalization bonds, he said.

11 trillion allocated to rehabilitate infrastructure

Antara - December 5, 2003

Jakarta -- The government will allocate Rp 11.7 trillion to build and repair infrastructure across the country in 2004.

"The budget will mainly be used to repair damaged infrastructure, build new infrastructure and meet public demand for housing," Minister for Resettlement and Regional Infrastructure Soenarnosaid.

He said 55 percent of the budget allocation for infrastructure would go to western parts of the country and 45 percent to the eastern part. New infrastructure will include roads, bridges and irrigation networks to be built almost in all parts of the country, he said.

The use of the budget allocation for Eastern Indonesia would give priority to the construction of new infrastructure, while for Western Indonesia will focus on repairing old infrastructure, he said.

He said the construction of a trans-Papua highway would give priority to the construction of roads linking one district capital to another in the province. The construction of a 200-km road linking Jayapura and Wamena and a road leading to Puncak Jaya will top the list of priorities, he said.

All carrot, no stick offers easy way out for Jakarta

Straits Times - December 5, 2003

Robert Go, Jakarta -- Foreign donors make this a merry season for the cash-strapped Indonesian government.

The World Bank has said Indonesia needs to show only "incremental reforms" to deserve fresh aid worth US$450-US$850 million annually for the next four years.

If Indonesia fights graft, helps the poor, cuts wasteful spending, fixes its fraud-ridden banks, builds infrastructure, and cleans up its courts -- all aims that effective governments should naturally take on -- it gets more, up to US$1.4 billion each year.

The CGI, a lenders' group that includes the World Bank, the Asian Development Bank and bilateral donors, is also set to announce more help, with foreign credit totalling up to US$3.5 billion just for next year alone. Many, however, are not happy with this process.

They said the bank and other lenders might actually be rewarding Indonesia for its snail's pace when it comes to concrete reforms.

Dr Rizal Ramli, economic czar during Abdurrahman Wahid's presidency, said: "I don't see how Indonesia deserves loans." He pointed out how few public officials here have been jailed for graft, even if local media frequently highlight corruption cases.

Despite Jakarta's pledges to enforce banking rules, two major bank-fraud cases have occurred recently. Rumours fly about another scandal involving a big bank.

All these happened despite Jakarta's injection of a staggering 600 trillion rupiah into banks, supposedly to bring them back to health and to improve how they are run.

The World Bank itself admitted some of the critics' assessments are true. Its strategy paper for Indonesia published on Wednesday highlighted "widespread concerns about governance and corruption across Indonesian society".

The report also argued the biggest risk to its success here may be that "political will [from Jakarta] to address issues of governance will not be forthcoming".

Yet the bank is bringing Indonesia back to the Suharto days, when annual loans averaged US$1.3 billion and as much as 30 per cent of aid fell victim to graft.

Critics differ on why the aid continues. Some, like Dr Rizal, say it happens because of lenders' basic raison d'etre: "Bank directors who don't lend won't advance within the bank's hierarchy." Others say donors who have billions invested cannot afford to let Indonesia fail.

There is agreement on one thing, however. When foreign donors decry lack of reform but justify additional billion-dollar loans year after year, the result is obvious.

When they offer no stick to balance an all-carrot approach, donors do little to advance reform.

World Bank to boost lending, warns against corruption

Agence France Presse - December 3, 2003

The World Bank announced plans to boost lending to Indonesia to help lift millions out of poverty but said much of the extra aid depends on greater efforts to fight rampant corruption and improve governance.

The World Bank, in its country assistance strategy for 2004-7, proposes lending of 450-850 million dollars a year should Indonesia make "continued but incremental" progress towards better governance and an improved investment climate.

This is far below the average annual 1.3 billion dollars during the last years of dictator Suharto but higher than the 400 million earlier this decade. Sharply accelerated reform would qualify Indonesia for up to 1.4 billion dollars in annual loans.

The World Bank, in an unusually frank report, took itself to task for its record during Suharto's final years. The autocratic ruler stepped down in 1998 after 32 years in power.

It said its own image had been tarnished "as it was perceived to have failed to take a stand against corruption while lending large sums of money in support of the Suharto regime." The bank said "our entire success will be judged by the contribution that our programs are seen to make towards greater transparency and accountability, and by the standards of integrity with which we implement these programs." It said Indonesian democracy has gained much ground in recent years, macro-economic stability has been restored and poverty has almost been reduced to the levels before the 1997-98 economic crisis.

At the same time, more than half the population still lives on less than two dollars a day and health and education services are inferior to most Southeast Asian neighbours. As a result, the achievements "continue to be clouded by widespread concerns about governance and corruption across Indonesian society.

"The high hopes that the Reformasi [reform] movement would break the hold of the vested interests and the corruption, collusion and nepotism that characterised the later years of the Suharto era have not been realised."

The World Bank said only a few people have been held to account for the theft of public resources and there are signs that "money politics" is still at work, allowing old elites to re-acquire their previous assets and new elites to consolidate their positions. "The perception that corruption is still entrenched in the political system has damaged Indonesia's investment climate and generated popular resentment and resignation," it said.

The problem of weak government institutions has wider implications than that of graft and is the single most important factor in reducing poverty.

The World Bank said Indonesia has undertaken reforms to make politicians more accountable to voters. Elections next summer, including the first direct presidential poll, "will be an important first test" of whether money politics rules the day.

A huge programme to devolve power from Jakarta to more than 400 local regions had also made government potentially more resposive to public demand but bold reforms had been undermined by weak implementation and "the gap between the promise and the reality of reform in Indonesia has been large." It also warned of risks to political and social stability including separatist tensions in Aceh and terrorism threats from extremist Islamic movements.

These twin threats dampened investor responses to the country's strong macro-economic achievements and "underlie a continued powerful political role for the military."

World Bank gets tough on Jakarta

Melbourne Age - December 4, 2003

Matthew Moore, Jakarta -- The World Bank has announced an ambitious new lending program for Indonesia where money will go to organisations or local governments that can show they have taken steps to wipe out corruption.

Announcing a four-year strategy for one of the world's most corrupt countries, the bank's director for Indonesia, Andrew Steer, said the bank had agreed on a series of "triggers" that would see lending increase if certain goals were met.

In the past the bank had "run a mile" when asked to face up to the corruption endemic in Indonesia, he said. Now it had decided to confront the issue head on because it believed corruption was a fundamental reason investment had dried up and the poverty level remained stuck at 16 per cent.

Services such as health, education and sanitation were woefully inadequate for a country of Indonesia's wealth and corruption was now seen as the major obstacle preventing improvements in those areas.

"Our entire program will be focused on helping to improve the quality, responsiveness and accountability of public institutions as they seek to promote development," Mr Steer said.

"All local governments need better roads, schools, clinics, irrigations etc, but we will give preference to those that are willing to adopt more transparent, accountable efficient and pro-poor approaches."

Because the World Bank says it does not know how successful its strategy will be, it has decided to lend Indonesia between $US450 million and $850 million each year depending on whether local governments sign its plan to foster good governance. Should Indonesia perform exceedingly well, the bank says it will increase lending to $1.4 billion a year from the average of $400 million over the past three years.

In its country assistance strategy released yesterday, the bank said corruption remained a huge problem five years after the fall of the dictator Soeharto.

The report says: "The achievements of the past few years continue to be clouded by widespread concerns about governance and corruption across Indonesian society. The high hopes that the Reformasi movement would break the hold of the vested interests and the corruption, collusion and nepotism that characterised the later years of the Soeharto era have not been realised.

"Few have been held to account for the theft of public resources and there are signs that 'money politics' is at work, allowing old elites to reacquire their previous assets and new elites to consolidate their positions." The bank has admitted its own reputation is still damaged as a result of its past support for the Soeharto regime and its practice of turning a blind eye when its funds were siphoned off by Soeharto's family and friends. That history of tolerating corruption had seen organisations such as the World Bank accused of contributing to the problem.

Health & education

High-risk behavior spurs Indonesia's AIDS rate

Jakarta Post - December 1, 2003

Jakarta -- As the globe commemorates World AIDS Day on December 1, Indonesia's response continues to remain dangerously slow while millions of its people continue to obliviously engage in high risk behavior.

The United Nations' new report on AIDS also revealed that injecting drug use "is the major driver" of the spread of HIV/AIDS here. Meanwhile condom use remains low, despite various campaigns, even in the commercial sex trade, where "it is estimated that fewer than 10 percent of the between 7 million and 10 million Indonesian men who avail of the services of sex workers use condoms consistently," read the UNAIDS report, released ahead of World AIDS Day.

Haikin Rachmat, director of Communicable Diseases Control at the Ministry of Health, said Sunday that according to the ministry's behavior survey, "80 percent of high risk groups know about the transmission mode of HIV but less than 10 percent of them use a condom." Experts have urged the need to scale up programs to overcome HIV/AIDS in a bid to check the potentially rapid spread of the virus, experts here say.

Zubairi Djoerban, chairman of the Indonesian AIDS Society, said a shortcut measure would be for all stakeholders "to learn success stories from other institutions [in other countries] so that they can scale up existing programs without having to start from scratch."

The experts, along with Amaya Maw-Naing, medical officer at World Health Organization's Representative Office for Indonesia, agreed that government, non-governmental organizations (NGOs), people living with HIV/AIDS (PLWHA), the private sector and donors needed to strengthen and integrate their efforts in tackling the epidemic.

Agence-France Presse on Sunday quoted epidemiologist Elizabeth Pisani as saying that Indonesia has one of the fastest growing epidemics in the world today.

Among female sex workers, she said the rate of HIV infection is low compared to other Asian countries but is growing extremely rapidly. The rate is eight percent in Riau, home to a red light district popular among some Singaporeans, and also eight percent in Merauke in Papua province. Sorong, also in Papua, has the country's highest level of infection at 16 percent according to government data, said Pisani of Aksi Stop AIDS, an AIDS prevention and care group, a project of the above ministry and USAID.

The figures were an increase from zero in the last three or four years, Pisani said.

The Ministry of Health recorded that from 1987 until September 30 this year, there were 3,924 PLWHA across the country. This figure comprises 2,685 HIV cases and 1,239 AIDS cases, while 428 of them have died. However, according to an official estimation from UNAIDS, Indonesia is home to 130,000 PLWHA.

From July to September this year, the ministry recorded 277 new cases, most of them reported from Papua (105 HIV and 62 AIDS), East Java (33 AIDS), Yogyakarta (19 HIV and 5 AIDS), and North Sumatra (2 HIV and 13 AIDS). About 66 AIDS cases are among the 20-29-year-old age group while 46 AIDS cases are in the 30-39 age bracket. Most of the transmission modes involve injecting drug use and sexual encounters.

"All partners need to strengthen their efforts. Prevention, care, treatment and support programs must go together. None is over the other," said Maw-Naing.

Zubairi pointed out that the country still lacked Voluntary, Counseling and Test (VCT) services and only a few pregnant women received information and treatment that could help them avoid transmitting HIV to their children.

"Currently, we only have 10 such centers in the country. We can learn from Africa which has more than 100 VCT centers, or from America, which obliges gynecologists to inform pregnant women about the risk of transmitting the virus to their babies." Zubairi said that teenagers, especially those who are sexually active, have not received adequate information about the prevention of Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome. There are only some schools in Greater Jakarta that pass on such information while the government has yet to insert make any provision for it in school curricula.

Government comes under attack on AIDS

Jakarta Post - December 2, 2003

Dewi Santoso, Jakarta -- With HIV/AIDS emerging as an increasingly ominous threat, the government appears to lack concrete plans to fight the virus, non-governmental organization activists and a legislator have said.

Indonesian AIDS Foundation (YAI) chairman Sarsanto W. Sarwono said that thus far the government's commitment to combating AIDS had consisted of nothing more than words. As a consequence, he said, public awareness of the dangers of the virus remained low.

"People still consider AIDS to be a personal problem. They don't realize that the virus can infect almost everybody, whether they are members of a high-risk group or not," he said.

Ministry of Health figures reveal that from 1987 to Sept. 30 this year, there were 3,924 people living with HIV/AIDS (PLWHA) in Indonesia, of which 2,685 are HIV positive and 1,239 have full- blown AIDS. A total of 428 people have died of the virus. In a UNAIDS report, however, the estimated number of PLWHA in Indonesia is given as 130,000.

"Within 10 years, these 130,000 PLWHAs will definitely get full- blown AIDS and will need treatment. If no action is taken, the number will just get bigger and bigger," Sarsanto told The Jakarta Post.

Chris W. Green of the Spiritia Foundation said the government appeared not to be prepared to accept the responsibility for pursuing the fight against AIDS. "There are 10 Voluntary Counseling Testing (VCT) centers in the Greater Jakarta, plus at least one VCT in each provincial capital. But the government hasn't been promoting these among the public," said Green.

Sarsanto said that the absence of a dedicated government campaign against the virus had led the public to believe that HIV/AIDS was sexually-transmitted only. "For the past two years, our survey shows that 44 percent of PLWHAs were infected through the sharing of drug syringes. Before this, the proportion was less than 10 percent," he said.

Another study conducted by the Aksi Stop AIDS group disclosed that in Jakarta alone around one out of every two injectors was infected with HIV and around 90 percent were sharing needles.

eputy chairman of the House of Representatives Commission VII for population and welfare affairs, Surya Chandra Surapatty, joined the chorus of criticism, suggesting that the government raise public awareness of HIV/AIDS to a higher level. "The government's effort to promote the fight against the virus has not been effective. It still considers AIDS to be a moral issue, whereas the fact is that AIDS can infect anybody, not only through sexual activities," said Surya.

The activists also said that religious institutions shared the blame for the country's ineffective campaign against AIDS. "We have introduced ABC (Abstinence, Be faithful, Condom) programs. For the first and second programs, there was no problem. But when it came to the third program, the religious leaders opposed it, saying it was like promoting extramarital sex," Sarsanto said.

He said these religious leaders perceived HIV/AIDS as a matter of sinfulness. "This is a totally wrong perception," he said, giving the example of a housewife infected with HIV/AIDS by her husband. "The wife never have extramarital sex. She was infected with the virus, so were two of their children. What kind of sins have she and her children committed?" he asked.

As part of the national commemoration of AIDS Day, President Megawati Soekarnoputri is scheduled to deliver a short speech on December 5 and spell out the details of a government promise to subsidize antiretroviral drugs so that the cost can be reduced from Rp 650,000 (US$76.47) to Rp 450,000 for one month's supply. Indonesia used to import the drugs from India, but this has been stopped as an international agreement says that they drugs can be produced by any country provided they are not exported.

The president director of pharmaceutical firm PT Kimia Farma, Gunawan Pranoto, said his company, a licensed manufacturer of the drugs, was still waiting for approval from the Indonesian Food and Drug Supervisory Agency (BPOM) to start producing the life- saving drugs.

HIV epidemic one of the fastest growing, expert says

Agence France Presse - November 30, 2003

Ian Timberlake, Jakarta -- On paper Indonesia doesn't have much of a problem with HIV and AIDS. But the huge country's relatively low adult HIV infection rate belies a rapidly escalating level of infection among prostitutes, their customers, injection drug users and prisoners, an AIDS worker said.

"Indonesia has one of the fastest growing epidemics in the world now," said Elizabeth Pisani, an epidemiologist with Aksi Stop AIDS, an AIDS prevention and care group. The World Health Organization and UNAIDS warned in a report this month that HIV in Indonesia, along with China and India, is in danger of leaping from the high-risk groups and into the mainstream.

Based on government figures, there are about 130,000 Indonesians currently living with HIV/AIDS, up from 110,000 last year, Pisani said in an interview with AFP. According to the UNAIDS agency, Indonesia's overall adult HIV prevalence is a "relatively low" 0.1 percent of the adult population. Pisani said the figure is low because of Indonesia's huge adult population of 115 million, a relatively small proportion of whom -- about 14 million -- engage in risky behaviour.

For the injection drug users, prostitutes, their customers and others in that high-risk group, the figures are alarming. "Around one in two injectors in Jakarta is already infected with HIV and around 90 percent are sharing needles," said Pisani, whose agency is a joint project of Indonesia's Ministry of Health and USAID, implemented by Family Health International.

Citing government data, she said 13 percent of clients of female prostitutes used a condom in all their encounters over the past year, "which compares very, very poorly with some of Indonesia's ASEAN neighbours." Among female prostitutes the rate of HIV infection is still low compared with other Asian countries but is growing extremely rapidly, Pisani said. The rate is more than eight percent in Riau province, whose red-light district is a popular destination for some Singaporeans.

Merauke in Papua province also has an infection rate of more than eight percent. Another Papua town, Sorong, has the country's highest level of infection at 16 percent, she said, again citing government figures. "These have all gone from zero in basically the last three or four years," she said, adding that among transvestite and transsexual prostitutes in Jakarta the infection rate is 22 percent. By comparison, more than a quarter of adults aged 15-49 have the virus in southern Africa.

In a speech to mark the launching of "Indonesia's National AIDS Strategy" last May, Peter Piot, executive director of UNAIDS, said Indonesia could forestall the devastation seen elsewhere if it seized the opportunity to "deal a decisive blow" against the epidemic. "But that will require full-scale prevention efforts -- reaching every schoolgirl and schoolboy, man and woman across the country, and full-scale care accessible to all who need it," he said.

"However, if there is no change to the intensity of the response to AIDS, then the epidemic will inevitably grow," Piot said. Pisani said drug addiction and prostitution, driving factors behind HIV infection in Indonesia, were behaviours the government found difficult to address particularly with an election next year. Indonesia is the world's largest Muslim nation and President Megawati Sukarnoputri, a moderate, cannot risk losing support from Islamic-based political parties, political analysts say.

However, Pisani said there were increasing signs of political awareness about the extent of Indonesia's HIV threat. "I think we've really come quite a long way," she said. "But turning awareness into policy and action in Indonesia has always been a great challenge".

Armed forces/police

Soldiers, police clash in South Sulawesi

Jakarta Post - December 5, 2003

Andi Hajramurni and Fabiola Desy Unidjaja, Makassar/Jakarta -- A soldier and a policeman were wounded on Thursday in shoot-outs between troops and police in the town of Palopo, Luwu regency, South Sulawesi, officials and residents said.

The clash erupted briefly near the Luwu Police station at around 9:30 a.m., and ended after Army commanders arrived at the scene. However, officials could not say who had started firing first, as the investigation was still underway.

Local residents said they saw gun-wielding soldiers approaching the police station, located about 200 meters from the Army's Yonif 721 Unit office, and then began firing. Luwu Police officers confirmed the soldiers had initiated the attack.

The shootout continued when, at 1 p.m., police Mobile Brigade officers arrived and attacked the Yonif 721 Unit office, said Luwu Military chief Lt. Col. Wardoyo. No injuries were reported in the Yonif 721 incident.

The two injured in the first clash are First Brig. Yohanes Lande and Second Sgt. Johanes. They are being treated at a local Army hospital for sustaining gunshot wounds in the leg and arm, respectively.

The shootouts appeared to be a response to the skirmish that broke out last month between soldiers and policemen in Palopo, 370 kilometers from the South Sulawesi capital of Makassar.

A soldier, Second Pvt. Alwi, was shot in the leg during the Nov. 21, 2003 clash at Palopo Central Market, which apparently erupted after an argument.

Wardoyo indicated that the initial clash in November, which remains unsolved, may have sparked Thursday's incident.

Before the shooting began, soldiers had beat up two policemen, First Brig. Daniel Pabisa and Second Brig. Luther Mangape, at the Palopo bus terminal, Wardoyo said.

He said Palopo was now under control, as South Sulawesi Police chief Insp. Gen. Yusuf Manggabarani and provincial military chief Maj. Jen. Suprapto had arrived for talks to prevent more clashes.

All local police and military commanders were ordered to calm their subordinates and to remove all firearms. No one has been arrested as of yet.

In Jakarta, Indonesian Military (TNI) chief Gen. Endriartono Sutarto played down the shootout between soldiers and police in Luwu. "Once in a while it is okay, but we will settle it and deal with the problem," he said on Thursday.

He said the condition of society at large was also reflected in the military and police. "If our society is sick, then our troops are sick too." Thursday's shootout was the latest in a series of often deadly clashes between the two security forces since the police force was separated from the military in 1999.

Clashes are sometimes triggered by disputes over protection rackets operated separately by soldiers and police to raise extra cash. In September 2002, eight people were killed over 10 hours of fighting between the army and police in Binjai town, North Sumatra.

Firearms, grenades and mortars were used in the clash that followed an attempt by several soldiers to seek the release of a civilian "friend" detained by police on drug charges.

In February this year, soldiers and police officers were involved in a clash in Dumai, a Riau port town, in which two policemen were injured. The clash was sparked by an earlier brawl between hoodlums and soldiers in a red-light district some 15 kilometers from Dumai.

Polri's Hot Potato

Tempo Magazine - November 25-Desember 1, 2003

Sudrajat and Hanibal -- Due to criticisms of human rights violations, TNI will no longer guard sites of vital national interest.

A good intention does not always become a blessing for others. On the contrary, it can become a "hot potato" which one is reluctant to receive.

The good intention we are talking about here is the measure which is about to be taken by the Indonesian Military (TNI) commander General Endriartono Sutarto, namely handing the responsibility for the security of valuable sites over to the National Police (Polri).

This is an appropriate measure, as safeguarding national security against any kind of danger is the responsibility of the police. However, overall, the police are unprepared, which only adds to their present burdens. For that reason, National Police chief General Da'i Bachtiar is trying to persuade Endriartono not to make good on his idea too quickly.

"Please don't be in such a hurry," said the head of the TNI's Information Center, Maj. Gen. Sjafrie Sjamsoeddin, to Tempo, imitating Da'i's statement in a coordination meeting for politics and security, held on Thursday of last week.

Da'i's reaction is understandable. In addition to the limited number of police personnel available, the routine operational budget hardly suffices.

In such a predicament, Da'i himself is more inclined to agree if each company hires its own security personnel. Even if the police were involved, it would only be to coordinate matters. Alternatively, police can be dispatched at certain times, but only when they are truly needed.

Endriartono has a strong reason for wanting to release the TNI from this responsibility as soon as possible. From the beginning, the basis for TNI's involvement in securing such locations was only to be found in a decree made by the TNI commander, not in a government decree. Of course, this decree became obsolete when Law No. 3/2002 on National Defense came into being. There it is emphasized that the duties of the TNI are in the field of defense, more in facing threats from abroad.

Meanwhile, security on the home front is fully under the jurisdiction of Polri. So? "Why should we drag our feet on the matter? I mean, we don't have the legal authority," said Sjafrie. This time he was imitating Endriartono's reply to Da'i.

The Ambassador of the United States to Indonesia, Ralph L. Boyce, applauded the stance taken by the TNI commander. But, he reminded that someone has to continue to guarantee the security of US assets in Indonesia. "I respect the decision of the TNI commander, but we hope that our economic assets in Indonesia will continue to be well-guarded," said Boyce.

Endriartono first made mention of his intention to fully concentrate on defense at a press conference in Cilangkap early last week. On this occasion, he said that there are 17 sites of national interest which are guarded by 2,170 soldiers. The soldiers hail from their respective Regional Military Commands (Kodam), where the sites of vital national interest are located (see table). From that total, 700 of the soldiers are stationed at Freeport. Meanwhile, security for PT Arun and ExxonMobil in Aceh is completely under the responsibility of the martial law administration.

Aside from the legal and formal reasons, Endriartono also revealed that there has been an attitude change on the part of company owners, who feel that the TNI resembles a hired army. As an indication, these companies are now requesting written work contracts to be made with the TNI. Endriartono did not mention exactly which companies are behaving this way.

A government official who deals with petroleum matters confirmed that, of late, a number of foreign companies have tended to be cautious in the use of TNI personnel. "Foreign companies are truly wary of TNI due to human rights concerns," he said. But in general this was due to the demands of stockholders in the home country. It seems that they always mention the Timika case as an example.

This refers to the shooting of two American citizens, Edwin Leon Burgen and Rickey Lynn Spier, which took place in the vicinity of PT Freeport at the end of August 2002. The accusation which has strongly been made was that TNI soldiers perpetrated the incident. This is despite the fact that the investigation, which involved the FBI, has not yet made a conclusion in that direction.

This controversial incident dragged on with the release of Freeport's financial report last March. The report mentioned that Freeport spent US$5.6 million in 2002 for TNI security operations. It was mostly paid in kind for expenses such as food for soldiers, maintenance of transportation, and the construction of barracks. "Those soldiers only received additional pocket money of Rp500,000 per month, Rp5 million in tactical funds for the Kodams, and Rp2 million in tactical funds for the Battalion Commands [Danyon]," said Sjafrie.

Now, as a middle road between TNI's intention and Polri's preparedness, the government is set to redefine the roles of the two institutions in securing vital interests in Indonesia. This, according to Coordinating Minister for Politics & Security, Susilo Bambang Yudhoyono, will be accomplished over a transition period, so as not to disturb current security operations for vital sites. If fact, if a site is no longer considered to have strategic value, "Security will immediately be handed over to local and internal security personnel," he said.

Even so, under certain conditions the TNI can still be assigned to secure vital interests, for instance in the Province of Nanggroe Aceh Darussalam. "In a situation of martial law, and in the context of restoring security, this duty is still generally borne by the TNI," said Yudhoyono.

Companies in the oil and gas industry have not been affected much by the TNI commander's statement. Many have already begun to direct their own security affairs in recent years. They have also involved local residents as a part of their community relations endeavors.

For instance, in mid-May, the Oil & Gas Upstream Authority Body (BP Migas), as the coordinator for security for oil and gas companies, signed a memorandum of understanding with the National Police chief. Three months later, this was followed by compiling an operations manual and a fieldbook, made in conjunction with police ranks all across Indonesia.

In accordance with the MoU, Tjokro Suprihatono, Head of Security for BP Migas, said that assistance from Polri is only requested if it is impossible for their internal security detail to deal with a particular disturbance. On top of that, each time a company requests assistance, it must first be authorized by BP Migas. If not? "We will not process claims for reimbursing their security expenditures," said Tjokro to Tempo.

With this type of working arrangement, the amount of outlays for security funds is relatively small. This is because the total budget set aside by BP Migas for about 100 existing companies is only about 2 percent of revenues. "The level of disturbances is very incidental, and they do not take place every month. At the most there are only [peaceful] protests," said Tjokro.

TNI-Guarded Vital Interests

Bukit Barisan I Kodam - (500 personnel)

Sigura-sigura HEP Plant: 150 soldiers
PT Inalum: 150 soldiers PT Caltex Dumai: 200 soldiers

Sriwijaya II Sriwijaya - (140 personnel)

Plaju Oil Refinery: 50 soldiers
Sungai Gerong Oil Refinery: 50 soldiers
PT Pupuk Sriwijaya: 40 soldiers

Siliwangi III Siliwangi - (120 personnel)

Suralaya Electricity Plant: 40 soldiers
PT Dirgantara Indonesia: 40 soldiers
Regional Ammunition Depot: 40 soldiers

Diponegoro IV Diponogoro - (140 personnel)

Kilang Minyak Cilacap

Brawijaya V Kodam - (140 personnel)

Paiton Electricity Plant: 30 soldiers
Petrokimia Gresik: 30 soldiers
Madiun Ammunition Depot: 30 soldiers
PLTU Gresik: 30 soldiers
PT Pindad: 20 soldiers

Tanjung Pura VI Kodam - (140 personnel)

PT Badak: 15 soldiers
LNG Bontang Plant: 40 soldiers
PT VICO: 20 soldiers
PT UP V Pertamina Balikpapan: 40 soldiers
Pupuk Kaltim: 25 soldiers

Wirabuana VII Kodam - (140 personnel)

PT Nikel Soroako: 60 soldiers
Regional Ammunition Depot: 80 soldiers

Trikora XVII Kodam - (700 personnel)

PT Freeport Indonesia Corporation, Tembaga Pura, Papua

Kodam Jaya - (150 personnel)

Puspitek Serpong: 110 soldiers

Regional Ammunition Depot: 40 soldiers

Total Personnel: 2,170

International relations

Don't think twice: Bush does Bali

Counterpunch - November 29, 2003

Ben Terrall -- George W. Bush's late October visit to Indonesia was heavy on the superficial, upbeat sloganeering that characterizes his Administration's explanations of US foreign policy. For this trip, the line seemed to be "message: we don't hate Muslims." Bush explained that in his brief travels in Southeast Asia he wanted "to make sure that people who are suspicious of our country finally understand our motivation is pure."

Given this stated goal of placating testy Islamic sensibilities, it's ironic that Bush (or Karl Rove) chose to limit the three hours in Indonesia to a stopover on Bali, the one island in the archipelago that is overwhelmingly Hindu. But then in the rush to commemorate the anniversary of the 2002 Bali bombings which killed more than 200 people, mostly Australians, perhaps there just wasn't enough time to take such details into consideration. As a senior White House official told the New York Times regarding Bush's lack of insight into widespread Indonesian disgust for his foreign policy, "when you are moving at warp speed, there isn't a lot of time to think about what you are hearing."

Warp speed surely precluded seeing protestors' banners, which read "hang Bush, he is a terrorist" along the road to the ocean front resort photo op.

Bush apparently also didn't have time for a briefing on Congressional support for "re-engagement" with the Indonesian military: in an interview with Indonesian TV before departing for his whirlwind tour of Asia, Bush claimed, "Congress has changed their attitude" about support for the Indonesian Armed Forces "because of the cooperation of the government on the killings of two US citizens."

This was news to Patsy Spier, a feisty Colorado resident who has been working virtually non-stop to keep military aid from flowing to Jakarta since surviving the August 2002 attack Bush referred to with characteristic brevity. Spier, who worked with her husband at an international school run by mining giant Freeport- McMoRan Copper and Gold, was driving on a road in West Papua controlled by the Indonesian military (TNI) when men firing at least three types of automatic weapons which are standard issue for the TNI opened fire, killing three teachers, one Indonesian and two (including Spier's husband) from the US The Sydney Morning Herald later reported that "United States intelligence agencies have intercepted messages between Indonesian army commanders indicating that they were involved" in the attack.

Since 1996, Freeport has paid the TNI $35 million, in part to "secure" West Papua against pro-independence fighters. Ed McWilliams, political counselor for the US Embassy in Jakarta from 1996 to 1999 and now a human rights activist who works closely with the East Timor Action Network and is on the board of the Indonesia Human Rights Network, notes, "the Indonesian military has relied on and profited hugely from their relationship with Freeport. But TNI theft of heavy equipment and gold and copper concentrate grew to a level that suggested senior military involvement in the systematic larceny. This created major tensions with Freeport."

Representatives Joel Hefley (R-CO) and Tom Tancredo (R-CO) recently sent a letter to all 100 members of the Senate detailing their reasons for successfully advancing an amendment to limit the officer training program IMET (International Military Education and Training) for Indonesia in the House version of the Foreign Operations Appropriations bill. In it, they noted, "the two senior Indonesian police officers who uncovered evidence of the army's involvement have been transferred to new posts, and the investigation has now been handed over to a joint military police team. Not surprisingly, the Indonesian military has exonerated itself.

American investigative teams, including the FBI, have not been able to complete their investigations due mainly to the Indonesian military's refusal to cooperate and its tampering of evidence. The evasions and obstructions of the Indonesian military are wholly unacceptable, and it is incumbent upon this Congress to see that a thorough investigation is conducted."

As Ed McWilliams points out, "the attack that killed Patsy's husband, another American and an Indonesian is unusual only insofar as its victims were foreigners. Amnesty International, Human Rights Watch and the State Department's annual country human rights reports have recorded decades of Indonesian military assaults against Papuans. During the spring and summer there was a military crackdown in Papua's central highlands, where the military drove thousands of villagers into the jungle. Papuan clergy and human rights activists working to provide humanitarian assistance to victims of famine and to document extra-judicial killings and torture have routinely been targeted by the military. Government restrictions on access to the afflicted regions, have effectively limited coverage of the crackdownswhile we constantly read stories about the threat of fundamentalist terrorism in Indonesia, the reality of military terror is barely discussed."

Nor has their been much coverage of the environmental and human devastation wreaked by Freeport and other Western corporations in Indonesia. As Bush breezed through Bali, the Indonesian Forum for the Environment (Walhi) issued a press statement calling for an investigation of an October 9 landslide at Freeport's Grasberg gold and copper mine that killed eight workers. Walhi charged Freeport with operating beyond the carrying capacity of the environment and pointed to the company's complicity in the killings of "thousands" of others. The Indonesian weekly Tempo ran the story, quoting a native Papuan who pointed to the thousands of acres of land contaminated by Freeport tailings and lamented, "people who used to live off products from the rivers and forests now can no longer do so," but the Western press was disinterested.

Relentless lobbying by the East Timor Action Network also led to inclusion of provisions limiting IMET in the Senate's version of the Foreign Operations Appropriations bill. "Many past Congressional conditions, including accountability for rights violations in East Timor and Indonesia and transparency in the military budget, have never been met," said Karen Orenstein, the organization's Washington coordinator. "A massive military assault is now being perpetrated against the people of Aceh -- replete with extra-judicial executions, torture, rape and displacement -- utilizing US-supplied weapons."

George W. Bush told the Indonesian press that "it's very important not to let a splinter group of murderers determine Indonesia's [direction] ... we do not want Indonesia determined by a small group of hate-filled people [sic]." Unfortunately, he was not referring to the coterie of generals who hold sway over President Megawati Sukarnoputri.

One of the most influential of those generals is chief security minister Susilo Bambang Yudhoyono, who met with Deputy Secretary of Defense and former ambassador to Jakarta (under Ronald Reagan) Paul Wolfowitz in late September. Yudhoyono spelled out why he is a favorite of the Bush Administration while visiting New York, where he told an audience of institutional investors and representatives of large mining and energy companies that "my role is to create an environment that is more conducive to business. Indonesia must continue to foster tolerance, harmony, and security in its regions."

In Aceh, the resource-rich region of Northern Sumatra where the military maintains a mutually beneficial relationship with ExxonMobil and has been waging a war on pro-independence guerrillas for more than two decades, that pursuit of "security" led to the recent extension of martial law. And though Bush conceded that the war there "ought to be solved through peaceful negotiations" he has said nothing about the high command in Aceh consisting of state killers who have not been forced to answer for crimes they oversaw during the 1999 destruction of East Timor.

Despite Wolfowitz's claim that "exposure of Indonesian officers to US [military personnel] has been a way to promote reform efforts in the military," since the mass slaughter of hundreds of thousands of Indonesians that brought the former dictator Suharto to power in 1965-66, US executive policy has always condoned military atrocities in the archipelago. As Ed McWilliams points out, "For over three decades, the US and Indonesian militaries were extremely close and we saw no move to reformthe TNI's worst abuses took place when we were most engaged."

In Aceh the Washington influence took a perverse new twist this year as the TNI "embedded" reporters with its troops in imitation of the Bush Administration's Iraq war tactic. The TNI also launched an "invasion" (troops were actually already present en masse in the region) of paratroopers jumping from US-made C-130 transport planes for the benefit of conveniently placed news cameras. And in what could have been a nod to Fox News, Maj. Gen. Endang Suwarya, the military commanders in the region, announced, "I want all news published to contain the spirit of nationalism. Put the interests of the unitary state of Indonesia first."

While Bush intoned, "Americans hold a deep respect for the Islamic faith, which is professed by a growing number of my own citizens," few observers expect Indonesian public opinion to be swayed by his disingenuous lecture.

Three years ago, 75% of those Indonesians surveyed by the Pew Charitable Trust looked favorably upon the US; this year that figure dropped to 15%.

And though Bush also claimed, "we know that Islam is fully compatible with liberty and tolerance and progress because we see the proof in your country and in our own," it has been widely reported that Franklin Graham, who blessed Bush's inauguration and quadrupled the number of missionaries in occupied Iraq, called Islam a "very evil, wicked religion."

Further Christian right nonsense has been spouted by special forces veteran Lt. General William G. Boykin, recently named by Secretary of Defense Donald Rumsfeld to a new position as deputy undersecretary of Defense for intelligence (where he will be in charge of tracking down Bin Laden, Hussein, Mullah Omar and other big name "evildoers"). Boykin explained that Islamists resent the US "because we're a Christian nation, because our foundation and our roots are Judeo-Christian and the enemy is a guy called Satan," and bragged that he defeated a Muslim warlord in Somalia because "I knew that my God was bigger than his. I knew that my God was a real God and his was an idol." Rumsfeld later told reporters that "it doesn't look like any rules were broken" by these statements.

In addition to popular disgust with the Iraq war (which Megawati called in an "act of aggression which is in contravention of international law"), most Indonesians are repelled by Bush's lockstep support for rightist Israeli policies in occupied Palestine. As the Jakarta Post, a moderate paper read mostly by expatriates and local elites, editorialized, "how can the US preach to the world about justice when it permits Israel's efforts to subjugate the Palestinians by whatever means it deems fit to continue?"

After meeting with Islamic leaders in Bali (along with the last minute addition of Christian and Hindu figureheads, included after the country's most popular TV Muslim preacher refused to attend), Bush told reporters on Air Force One that "they said the United States' policy is tilted toward Israel, and I said our policy is tilted toward peace."

But as the Jakarta Post wrote of Bush's "reiteration of his stance on Islam and his high regard for Indonesia," [what Indonesians] "want to see from the president is concrete action to back up what he says, not just lip service and empty statements."

[Ben Terrall is a San Francisco-based writer and activist who co-edits the journal Indonesia Alert!.]

Military ties

Ministers flout arms sales code

The Guardian (UK) - December 6, 2003

Richard Norton-Taylor -- The government is selling arms and security equipment to countries whose human rights record it has strongly criticised, according to lists of weapons cleared for export that have been seen by the Guardian.

The countries include Indonesia, where the Foreign Office has reported allegations of extrajudicial killings, Nepal, where it has reported summary executions, and Saudi Arabia, where torture is just one abuse of basic human rights attacked by the FO.

Licences have been approved this year for the export to Saudi Arabia of "security and paramilitary goods", hitherto unpublished figures show.

The list of items under this category is: "Acoustic devices... suitable for riot control purposes, anti-riot shields... leg irons, gangchains, electric shock belts, shackles... individual cuffs... portable anti-riot devices... water cannon... riot control vehicles... portable devices for riot control or self- protection by the administration of an electric shock".

The government's arms export guidelines state that licences will be refused if there is a "clear risk [they] might be used for internal repression".

The exports to Saudi Arabia, which also include a wide range of military hardware and weapons systems, were cleared despite sharp criticism of the country in the FO's latest annual human rights report published in the summer.

"We continue to have deep concerns about Saudi Arabia's failure to implement basic human rights norms," it says, referring explicitly to capital and corporal punishment and restrictions on freedom of movement, expression, assembly and worship.

It adds: "We believe that between January and December 2002, the Saudi authorities executed about 46 people, one of the highest figures for any country in the world."

The government also approved export licences for categories of arms including machine guns, rockets and missiles, to Indonesia.

Indonesian forces are engaged in fierce fighting against pro- independence rebels in Aceh where British equipment is being used despite assurances from the government they would not be used for offensive or counter-insurgency measures.

After foreign observers were refused acces to Aceh, the government told MPs last month that it "remained concerned about the situation in Aceh".

British-built Saracen armoured vehicles were being used by Indonesian forces in Aceh, Tapol, the Indonesia human rights campaign and the Campaign Against Arms Trade said this week.

Next week human rights activists in Indonesia are planning to challenge the legality of British arms exports to the country, Tapol said yesterday.

There have already been reports of Hawk jets and Scorpion tanks deployed in Aceh.

The FO says in its human rights report that while the professionalism of the Indonesian security forces had improved, "serious problems remain, with allegations of extrajudicial killings, disappearances, arbitrary detention, rape, torture and mistreatment of prisoners".

The government has also approved big increases in the sale of arms to Nepal where security forces are fighting Maoist guerrillas. Last year Britain provided Nepal with two military helicopters with funds from its "conflict prevention" fund.

Yet the FO accuses the Nepalese army and Maoists of "gross and widespread human rights abuses". Its annual report adds: "The security forces were responsible for extensive and systematic illegal detentions, torture and summary executions".

The government's arms export criteria state it "will not issue licences for exports which would provoke or prolong armed conflicts or aggravate existing tensions".

The list of export licences was provided by Nigel Griffiths, the trade minister, in response to questions from Menzies Campbell, Liberal Democrat foreign affairs spokesman.

Mr Campbell said yesterday: "There is clearly a substantial disconnection between the government's avowed policy on human rights and its implementation of its own guidelines on arms exports".

"If we are serious about human rights we should not be exporting equipment under these categories to governments with such doubtful records."

The government says it keeps export licensing policy under review and that its controls are among the the toughest in the world.

Economy & investment

Indonesia's wily textile traders

Asia Times - December 5, 2003

Bill Guerin, Jakarta -- While the news this week that the European Union, the US and Canada are to end the current textile quota system to meet a World Trade Organization ruling is a severe blow to Indonesia's textile industry, it also has the potential to clear up a distorted production system that has led to a flourishing and shady trade in the quotas themselves.

Though Industry and Trade Minister Rini M Soewandi has lobbied trade ministers in the three markets, the system will end by the close of 2004, leaving Indonesia at the mercy of international competition. The country's total textile production is valued at more than $US15 billion, although export revenues have declined steadily over the past few years, from around $8.4 billion in 2000 to $6.8 billion last year.

The sector, which employs around 1.5 million people, has been hard hit by soaring operating costs, earlier reductions in textile quotas and weakening purchasing power in the US and Europe, which, with Japan, account for about 45 percent of Indonesia's textile exports. Non-quota countries in the Middle East, Latin America and Africa take the remainder of Indonesia's export volume. The US is the most exclusive and demanding market by far for Indonesian textile producers, but it rewards those who succeed with high prices for high-quality garments, provided they can obtain quotas and factor the cost into the selling price.

In addition to fuel price hikes, the industry has also had to cope with higher minimum wages imposed by the government, an electricity price hike, higher import duties for imported raw materials and heavier taxation burdens. The regional textile industry as a whole faces crucial obstacles to becoming competitive and efficient. Among the diverse problems are labor, high tariffs and duties and government regulations, which have retarded development of the industry.

But Indonesia also faces the problem of blatant trading of textile exports and product quotas by brokers, which present exporters with an added hurdle to be dealt with, one that inflates the industry's operating costs while distorting the supply chain. The practice has also raised allegations by opposition politicians of favoritism toward well-connected textile companies. Some estimates put the broker-controlled transactions at 60 percent of government-allocated quotas.

The quotas were originally fixed and could not be changed. However, in January 2001 former trade minister, Luhut B Pandjaitan, issued a decree empowering the government to reallocate unused fixed quotas to companies that could use them. The idea was that Indonesia would thus be able to fulfill its entire national production allocation under WTO rules.

Never mind that the simple laws of supply and demand had already ensured that any part of a quota not realized would usually be sold off to another party. The name of the company that sells the unrealized quota is used on the export documents to avoid detection. Exporters call this "under the name of shipment", but the practice makes it difficult for the government to pin down the culprits as company sales records at the Ministry of Industry and Trade appear in order and the quotas are fully realized.

In any case, the result of Pandjaitan's decree was that savvy brokers learned that they could snap up the unused quotas from companies not fulfilling them and sell them to companies with textile products to get rid of. This has since led to a bewildering but lucrative market in quotas, with even a "season" for quota distribution when a mad scramble for quotas by producers and brokers ensues.

Quotas are now frequently sold at around $30 for every dozen export items, compared with the more average $5 to $8 at which they were previously sold. Industry sources say many of the quotas are in fact sold to companies in other countries. Only garment quotas have any significant value, depending on the type of product and how much it is sought after in the market. The higher the value, the higher the quota price.

In 2001, fixed quotas equivalent to millions of garments were returned by 152 genuine textile exporters as they were unable to realize the mandatory half of their quotas. This, said the Indonesian Textile Association (API), was ample proof that many exporters, including some without the necessary production facilities, had overstated their production capabilities simply to get the prized quotas.

The scale of the problem is still alarming. By May 2002, for example, when in a normal year more than three quarters of the country's annual export quota of trousers and jeans should still have been available, 70 percent had already been taken up. Though this equated in quota value to some 190,000,000 million pairs of jeans, there had been no corresponding boost in output from the producers. This prompted the API to call for an independent audit of quota management by the Ministry of Industry and Trade, complaining they were unable to trace the total quotas allocated by the government and their holders.

API, condemning the government's lack of transparency in distributing export quotas, said it was even prepared to pay for a costly audit by Pricewaterhouse Coopers to get to the bottom of the situation. Amid claims by opposition legislators that companies with a close relationship with the current administration make up the bulk of quota holders, API urged the government to come clean and publicize the name of 21 quota- holders, which the ministry had said ended up with the quotas.

The original decree has since been modified by Soewandi in a vain effort to clear up matters although the problem is still alarming for the textile companies. Those failing to fully use up their fixed quotas face reduction in their next year's quotas. There is also a maze-like series of temporary, flexibility, growth or shift specification quotas. Exporters can transfer their fixed quotas to other exporters in pursuit of a larger export share in value or volume, but must first obtain approval from the Minister of Industry and Trade.

In addition to quota constraints, textile producers have raw material issues to contend with. Jakarta has several times asked for, and failed to get, special treatment from the US on account of Indonesia's position as the largest importer of American cotton. It imports 30 percent of the total 500,000-ton cotton imports for raw materials, worth $1 billion, from the US every year. Australia accounts for another 40 percent of the cotton imports.

The trade relationships over textiles are tetchy at times. US textiles and apparel exports to Indonesia are not significant, around $17 million a year at best, but the US textile industry and its supporters in Congress were irked last year when Jakarta temporarily banned all textiles and apparel imports. This was in response to a flood of imports from China but was a violation of WTO rules. US manufacturers charged that Indonesia had high tariff rates, arbitrary customs valuations, add-on taxes, excessive paperwork and customs delays that have limited US textile exports.

The EU projects an increase in the global market for textiles and garments to around $400 billion in 2005 from $350 billion this year once the quota system has ended. Much will depend on the quality of products, rather than the price.

API believes that the local textile industry must improve its competitiveness to succeed in this growing market, and to do this, it needs the government to improve the investment climate.

On the sidelines of a recent Association of Southeast Asian Nations (ASEAN) business and investment summit, API's chief of international relations, Sunjoto Tanudjaja, said that only 20 percent or so of textile exports would be affected by the quota elimination. He pointed out that the government must quickly finalize the long awaited new investment law, amend the labor law, accelerate tax reforms and take other measures to improve the unfavorable business climate.

The problems may be even more multi-dimensional than APO admits, however. In addition to the need to produce quality products, textile exports are exposed to external volatility, such as the sluggish global economy. Now that China is in the WTO it is likely to be Indonesia's strongest competitor in Western markets.

The US and the EU have also been implementing standards needed to promote better market protection though product standardization that will come into effect by 2005. Rules issued by markets there have become a major source of concern for the Indonesian industry.

The implementation of WTO standards is yet another hurdle. More challenges lie ahead for Indonesia with human rights issues, labor concerns and environmental protection being put on the agenda.

Last year's implementation of the standards of Worldwide Responsible Apparel Production (WRAP) by the US essentially means that textiles from Indonesia and other Asian countries should be produced by exporters with licenses issued by human rights and labor certifying agencies. Further regulations to follow include compliance with safety at the workplace and other non-tariff barriers.

Industry analysts believe that other forms of trade barriers will be created to replace the quota system of the main importing countries. As Benny Benyamin, director of Amico Group, explains: "Every month there is now a new form of vendor compliance involving visits to the factories to ensure they fulfill requirements in respect of wages, health insurance, environmental issues etc."

Thus, notwithstanding the encouraging figures for January to September, when exports reached $6.3 billion against the target of $7 billion, the textile industry's target of around 9 percent growth in annual production seems somewhat misplaced.