Global Witness - Breaking the links between natural resources, conflict and corruption
Freeport payments to Indonesian military draw official scrutiny
Press Release – 25/01/2006
Global Witness welcomes reports that the authorities in the United States and Indonesia are inquiring into suspicious payments to the Indonesian military and police by Freeport McMoRan Copper & Gold Inc, the US mining company.
Freeport has said that it pays towards “government-provided security” at its mine in Indonesia but refused to say where the money goes. Global Witness revealed in a July 2005 report, “Paying for Protection” that some money appears to have gone directly to Indonesian military and police officers, not to government institutions. A New York Times report, published in December 2005, came to the same conclusion.
Of particular concern are payments, totalling US$247,705 between 2001 and 2003, which appear to have been paid to one of Indonesia’s highest-ranking officers. Major-General Mahidin Simbolon, who has denied receiving payments from Freeport, is currently the Army Inspector-General.
In July 2005, Global Witness called for law enforcement authorities in the United States and Indonesia to investigate whether such payments violate anti-corruption laws. Freeport McMoRan has said its payments comply with applicable laws.
Freeport McMoRan (FCX) said in a US regulatory filing, dated 17th January 2006, that it has “received informal inquiries from governmental agencies related to FCX’s support of Indonesian security institutions.” On 25th January 2006, Indonesian Defence Minister Juwono Sudarsono was quoted by the Dow Jones news agency as saying: “I have asked the inspector general of the defence forces to look into this matter and verify whether these payments have been made.”
Global Witness campaigner Diarmid O’Sullivan said: “We are encouraged that authorities in both countries are looking into these payments. Indonesia is trying to throw off the shackles of corruption and make the military and its finances fully accountable to the democratically-elected government. It is vital that the authorities get to the bottom of Freeport’s financial dealings with the security forces and find out whether or not there have been violations of the law.”
Citizens of resource-rich countries like Indonesia have a right to full information about payments to their governments by extractive companies. Global Witness campaigns for all such payments to be fully disclosed, independently audited and monitored by citizens.
For more information contact Diarmid O’Sullivan or Gavin Hayman at Global Witness on +44 784 305 8756 (cell), +44-207-561-6363 or +44-207-561-6361.
The report itself is available at www.globalwitness.org
Latest Publications
September 2010
Global Witness stands by findings on Sudanese oil data
Global Witness today refuted claims that it had apologized for the findings of its September 2009 report, Fuelling Mistrust, on the lack of transparency in Sudan's oil sector. The organisation said that although very important commitments on improving transparency were made recently by the Government of National Unity (GoNU), the full disclosure of oil revenue data and the results of an independent audit remain necessary to prove the concerns were unfounded.
August 2010
Global Witness welcomes Norwegian government disinvestment from predatory loggers Samling
Global Witness welcomes the Norwegian Government Pension Fund's decision to disinvest from the notorious Malaysian timber giant Samling. Global Witness has previously exposed illegal logging by Samling in Cambodia as well as evidence of legal breaches by two Samling-associated companies in Liberia.
Global Witness welcomes new commitment to transparency in Sudan
Global Witness has participated in a landmark seminar on oil revenue transparency in Khartoum, organised by the Sudanese government and attended by foreign oil companies. We welcome the commitment to increase transparency, including an audit of the oil sector and publication of key production and revenue figures.
Global Witness applauds RBS penalty over terrorist financing
Global Witness welcomes the decisive action taken by the UK financial regulator, the FSA, which has fined the Royal Bank of Scotland (RBS) £5.6 million for failing to check whether its customers were on the UK terrorist sanctions list.
Campbell testimony shines light on blood diamonds and the importance of international justice
Global Witness is attending the trial of former Liberian President Charles Taylor in The Hague as supermodel Naomi Campbell is called to testify. The event offers a useful reminder of the role of natural resources in funding conflict, and of the importance of pursuing justice for the victims of war crimes and crimes against humanity.
