Mining company's payments to Indonesian military was graft:corruption boss

A US mining giant's payments to the Indonesian military in exchange for security services constituted graft, the head of Indonesia's anti-corruption commission said, as reported by AFP on Thursday.

But commission deputy chairman Erry Riyana Hardjapamekas said the body would not itself investigate millions of dollars paid out by Freeport-McMoRan for services at its mine in Papua unless ordered to so by the attorney-general's office.

Freeport-McMoRan paid 20 million dollars to high-ranking Indonesian security officials between 1998 and 2004, according to a New York Times report published last month.

The company made the payments both to build facilities for troops such as barracks and to provide cash in amounts of up to 150,000 dollars to individual military and police commanders, the report said.

"The whole thing is corruption," Hardjapamekas, head of the Corruption Eradication Commission, told a panel discussion on graft in Jakarta.

Hardjapamekas said however that the provision of some items such as buildings in the remote area was "logical", and that any legal action would need to be started by the attorney-general's office.

"If the AG will do that, we will support it," he said.

Attorney-general's spokesman, Mashudi Ridwan, said his office was "analysing" the New York Times report, which named people who received benefits, and would decide next week whether to pursue the case.

Officials at Freeport in Indonesia could not immediately be reached for comment.

A general named in the report, Mahidin Simbolon, reportedly conceded after its publication that the military had received payments for guarding its facilities that were spent on meals, transportation, clothing and medication.

He said the area was difficult and asked: "Don't we deserve better supplies?"

New Orleans-based Freeport defended itself to the New York Times, saying that it had provided a secure working environment for its more than 18,000 employees and contract workers in accordance with US and Indonesian laws.

Freeport in 2003 acknowledged paying the military about 5.6 million dollars the previous year to protect its employees.

President Susilo Bambang Yudhoyono was elected in October 2004 on a platform which included a pledge to clean up corruption in opne of the world's most graft-prone countries.

However an entrenched and corrupt bureaucracy make eradicating the practice extremely difficult, the commission's Hardjapamekas said.

"There is no common level of perception in how to fight corruption among cabinet officials, and also the state executive," he told the panel. (*)