- The Washington Times - Monday, November 10, 2003

JAKARTA, Indonesia — The head of Indonesia’s military said yesterday he has proposed to withdraw military forces protecting vital oil and mining projects around the country, potentially exposing foreign investors to separatist violence.

The move would affect several American companies just as the United States is moving to cut military aid to the Indonesian military and shift support to the country’s police.

Most heavily dependent on military protection is PT Freeport Indonesia, a subsidiary of the U.S. gold and copper mining company Freeport-McMoRan, which is guarded by some 2,500 soldiers and police under military command.

Freeport had been renegotiating its security arrangements with the military as recently as two weeks ago.

“I haven’t heard anything about this,” said Freeport Senior Vice President Daniel Bowman just hours after Gen. Endriartono Sutarto made the announcement at a military complex outside the capital.

Gen. Sutarto said the military had proposed at a Cabinet-level meeting last week “to hand over the security task from the military to the internal security [apparatus] of each company.” It was not clear when the Cabinet would decide on the matter.

“Basically, the task and responsibility of the security of vital national projects should be undertaken by their managements. They should secure their projects and, if necessary, will be backed by the police,” Gen. Sutarto said.

Despite the timing, the general denied the decision was linked to a U.S. Senate vote at the end of October cutting $400,000 in training assistance to the Indonesian military.

The vote, taken over President Bush’s objections, reflected dissatisfaction with the results of a joint FBI-Indonesian investigation into the ambush killing last year of two American teachers working at a company-sponsored school. There has been speculation in the United States that the military was involved in the shooting.

Indonesia’s military guards a number of important exploration sites around the country, and reportedly receives large sums of money in return. In addition to Freeport, which is located in West Papua, it secures companies such as Exxon Mobil, which has interests in the unstable province of Aceh — which is under martial law.

According to Maj. Gen. Sjafrie Sjamsuddin, the military has one battalion protecting Freeport, another protecting Exxon Mobil and the equivalent of a third battalion divided among 10 other vital projects.

A Western analyst based in Jakarta said the impact would be felt most severely by Freeport. He noted that Exxon Mobil was reducing its operations in the area and considering shutting down altogether because of the security situation.

Freeport pays the military more than $7 million a year for the army’s protection. Until now, the payment had been made on an informal basis, but the company had been pushing to formalize the arrangement.

“We are not mercenaries. We never sign any contracts,” Gen. Sutarto said.

The Western analyst agreed that the move was probably not linked to the U.S. Senate decision involving military-to-military training.

“What [the Indonesian military] want is foreign military sales,” he said. “They know now that they can’t get American hardware anytime soon … so they … have stopped trying to please the United States.”

He also said the military may be trying to negotiate a better deal with the companies it protects.

“I think it is part of a gamble on Mr. Sutarto’s side, because financially, they can’t afford to leave these very lucrative [deals],” he said. “So there will be some compromise, I’m sure.”

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