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Freeport and Indonesia's security forces: Troubling new questions

Global Witness (London and Washington, D.C.) Press Release - July 25, 2005

The relationship between mining company Freeport McMoRan Copper & Gold and the Indonesian military -- controversial since the unexplained killings of three teachers working for the company in 2002 -- comes under renewed scrutiny today in a report by Global Witness.

After the killings, Freeport revealed payments by its local subsidiary totaling US$10.3 million in 2001 and 2002 for military and police protection of its mine in Indonesia's rebellious Papua province. Freeport said these payments were for infrastructure, travel, food and other legitimate costs for the military and police, but the company has not told the whole story.

A new Global Witness report, Paying for Protection: The Freeport Mine and the Indonesian Security Forces, reveals that prior to April 2003, large sums appear to have gone directly to individual military and police officers, not to the Indonesian government. Most troubling, payments totaling US$247,705 appear to have gone to General Mahidin Simbolon, a controversial figure who held a senior position in the Indonesian military command covering East Timor in 1999, where soldiers and militiamen committed crimes against humanity that included at least 1,200 murders.

Global Witness campaigner Diarmid O'Sullivan said: "Freeport's subsidiary appears to have made some payments directly to individual Indonesian military and police officers, rather than to the government, in a conflict region where the security forces have a bad reputation for corruption and brutality. This raises a big red flag about the purpose and nature of the payments. We are calling for them to be investigated under the US Foreign Corrupt Practices Act and other applicable US and Indonesian laws."

Global Witness campaigner Gavin Hayman added: "We wrote to Freeport executives with a long list of detailed questions and they responded with little more than bland assurances, so it is time for the US and Indonesian authorities to take over and investigate."

More broadly, Global Witness is calling for mining, oil and gas companies that operate in the world's conflict regions to stop payments to security forces that are not required by law, to publish full details about those that are required, and to have them independently audited.

"Transparency is vital if natural resource companies are to show local people, and their own shareholders, that they are sharing wealth rather than rendering themselves vulnerable to complicity in corruption and conflict", said Hayman.

For more information contact Global Witness: Diarmid O'Sullivan or Gavin Hayman on + 1 202 721 5670, + 1 202 721 5634, +1 202 294 8079 (cell) or +44 784 305 8756 (cell).

The report itself is available at www.globalwitness.org.
 

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