General confirms Freeport payments

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.