Freeport-Rio Tinto Joint Statement on payments to the Indonesian military

Freeport-Rio Tinto Joint Statement

Indonesia, 19 March 2003

Mining companies' role in rights abuses and violence The acknowledgement by Freeport McMoran (partly owned by Rio Tinto, the world's [second] largest mining transnational) that it pays money to the armed forces (TNI) for security in its area of operation, confirms suspicions about the close ties between the armed forces and the police and transnational corporations.

In a report to the US Security Exchange Commission, Freeport said it paid $5.6 million to the armed forces during 2002. Such payments are in breach of Indonesian law and raise questions about the independence of the TNI and the police in security matters. Senior officers have admitted that their troops are being paid wages directly by transnationals.

The corporation's argument that the mining company is a vital object which needs protection is no excuse for such a practice. The TNI and police are state institutions all of whose activities should be paid for out of the state budget and not by corporations. It is well known that in many areas where mining is being conducted, there is a very close relationship between the companies and the armed forces and police. The result is that when conflicts erupt between the mining corporations and local communities, the latter are at a great disadvantage.

A number of incidents have shown how the armed forces and the police have been used by the corporations to stifle unrest and facilitate their mining operations which are very exploitative and damaging. It is no exaggeration to say that the transnationals have been able to create imperiums on the territory of a sovereign state. This only goes to show that security has now become a private business in this republic where security is available to those in a position to pay the armed forces.

The payment of money by Freeport to the armed forces and the fact that the armed forces have been able to make use of transnational facilities when violating human rights and committing violence means that the transnationals are themselves directly involved in and contribute towards this violence and these abuses.

The transnationals cannot wash their hands, hide behind the armed forces and police and say that they have not been involved in the abuses and violence in their areas of operation.

It is clear from a number of incidents that the state security forces and the transnationals stand shoulder to shoulder in committing violence and human rights abuses. Still worse, such payments only promote corrupt practices by the state apparatus with very harmful consequences for the people.

It is also clear from a number of incidents that Freeport is not the only transnational that pays money to the security forces; others are doing the same thing. We therefore demand:

1. Parliament should immediately summon the directors of Freeport Indonesia and the leadership of the armed forces and the police to clarify these matters openly, to the public.

2. An independent investigation team should be set up to investigate unofficial payments being made by other transnationals operating in Indonesia, whether to the security forces or other state institutions.

3. The National Human Rights Commission should conduct investigations into human rights violations and acts of violence committed in the vicinity of mining operations and investigate the involvement of transnationals in these events, either in the form of providing company facilities for such purposes or in the payment of money to finance 'security' operations that have resulted in human rights abuses or acts of violence.

4. All mining companies including the transnationals and state companies should make their financial accounts public and stop deceiving and manipulating public opinion.

5. The goveernment should immediately give an account of the use of unofficial funds to the public.

Signatories:

1. Kontras (Commission for the Disappeared and Victims of Violence)
2. Imparsial (Indonesian Human Rights Watch)
3. JATAM (Mining Advocacy Network)
4. MPI (Mineral Policy Institute)
5. WALHI (Friends of the Earth Indonesia)
6. ELSAM (Institute for Social Study and Advocacy)
7. AMAN (Alliance of Traditional Peoples)
8. APM (Alliance of Struggling Women)
9. ICW (Indonesian Corruption Watch)
10. YAPPIKA
11. LSPP (Institute for the Study of the Press and Development)
12. YLBHI (Indonesian Legal Aid Institute)