RI to probe Freeport payments to military: Minister
Thursday, January 26 2006 - 01:14 AM WIB
"I have asked the inspector general of the defense forces to look into this matter and verify whether these payments have been made," Sudarsono told reporters.
The pending military investigation into Freeport-McMoRan's financial support for security forces posted around the company's massive Grasberg gold mine in remote Papua province reflects the widening fallout of a New York Times report last month that Freeport-McMoRan made payments of nearly $20 million to military and police officials in Papua from 1998 to 2004.
Freeport-McMoRan has said it gave "financial support" to Indonesian security officials in Papua for items including infrastructure and logistics, according to a letter by the firm's chief executive, Richard Adkerson, posted Jan. ll on the firm's Web site.
But Sudarsono said evidence that Freeport-McMoRan made direct payments to military officials would indication violations of Indonesian and U.S. law.
"Based on government policy, all provisions of security support by foreign companies should be made through an Indonesian civil executing agency," he said.
"Direct payments (by firms to military personnel) are illegal and shouldn't remain (and this view is) also in line with the Foreign Corrupt Practices Act in the U.S. which disallows this kind of behavior."
The Times' report prompted "informal inquiries" from U.S. government agencies about the firm's financial payments to Indonesian security forces that Freeport-McMoRan is fully cooperating with, Adkerson said in a fourth-quarter 2005 earnings conference call last week, without elaborating.
Payments by Freeport-McMoRan to the police and military in remote Papua province were "logical" and not necessarily graft because of a lack of government financing for effective security, the chairman of the Corruption Eradication Commission, Erry Riyana Hardjapamekas, said last week.
Sudarsono said that his interest in clarifying Freeport-McMoRan's financial relationship with security forces in Papua was the result of allegations of impropriety by non-governmental organizations. (*)