[ppi] [ppiindia] General confirms Freeport payments

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http://www.thejakartapost.com/detailheadlines.asp?fileid=20051229.@02&irec=1

General confirms Freeport payments 


Tiarma Siboro and Tony Hotland, The Jakarta Post, Jakarta



Former Trikora Military Commander in Papua Maj. Gen. Mahidin Simbolon has 
confirmed direct payments from U.S. gold miner Freeport-McMoRan to Indonesian 
military and police personnel guarding the firm's mine.

Mahidin said on Wednesday that the money from Freeport was used to support the 
military's logistical and other expenses, including meals, transportation, 
clothing and medication. 

On-duty soldiers, said Mahidin, also received daily allowances, the total 
amount of which was set by Freeport. 

Mahidin did not say whether such payments also protected the mining firm from 
any unwelcome intrusions by officials or environmentalists in connection with 
open-pit mining. 

With the Freeport payments, the military benefits from extra income as the 
government also pays for soldiers' needs and basic expenses. 

"The soldiers are deployed for security purposes to guard vital objects in the 
country. I suppose (U.S. oil firm) ExxonMobil is also paying the soldiers 
assigned to guard its site in Aceh. 

"It might well be the case that Exxon is paying more than Freeport because the 
risks are more severe in Aceh," Mahidin said, referring to the Free Aceh 
Movement (GAM). 

ExxonMobil spokesperson Deva Rachman admitted that the firm paid for security, 
but said that the money was paid to and fully managed by the government's Oil 
and Gas Regulatory Body (BP Migas). 

Mahidin added, though, that such payments should not result in the military 
being seen as mercenary. 

"We've been deployed to difficult areas. Don't we deserve better supplies?" he 
argued. 

Mahidin, now the inspector general of the Army, denied ever having received 
part of the money, saying it was paid directly to the commander of the 
battalion guarding Freeport's mine. 

This despite the fact that, during his tenure, he was the one responsible for 
determining the rotation of battalions. 

Since Freeport commenced operations in Papua, the Indonesian Military (TNI) has 
stationed a battalion of troops from the Army's Strategic Reserves Command 
(Kostrad) at the mine on a rotating basis. 

Each battalion is deployed for one year to protect the firm's 
100-kilometer-long pipeline, which runs from Gezberg to the Portside area. 

The mine taps one of the world's largest gold deposits, and contributes quite 
significantly to Indonesia's state revenue. 

Mahidin is one of the senior TNI and police officers named in a new 
investigative report published in The New York Times on Wednesday as having 
received many thousands of dollars into their pockets. 

In the report, which was based on authentic documents, Freeport paid nearly 
US$20 million between 1998 and 2004 to military and police generals, colonels, 
majors, captains, and also military units, to provide security at its mine. 

Mahidin is listed as having received a whooping US$130,000 in 2002 in 
connection with what are described in the Freeport records as "military project 
plan 2002" and "humanitarian civic action project". 

Since 2003, the report says Freeport has been paying the money to units instead 
of individuals, including the Mobile Brigade on more than $200,000 and the 
police with $1 million in 2003 for "monthly supplement payment", 
"administrative costs" and "administrative support" requirements. 


[Non-text portions of this message have been removed]



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