On Freeport's violations

According to recent reports, U.S. Ambassador Robert Gelbard has complained to President Abdurrahman Wahid about allegations from the attorney general and the finance minister of corrupt practices by U.S. companies, PT. Freeport Indonesia in particular. Ambassador Gelbard said he does not believe the allegations -- as if corruption were like the tooth fairy, something one has the option of believing in or not. Then, sounding more like Andi Ghalib than like a statesman, the ambassador warned that continuing accusations by Indonesian officials would lead to the cancellation of U.S. investment in Indonesia. Is Freeport's corruption a figment of Cabinet members' imaginations?

Corruption takes many forms. But whatever form it takes we can be sure that no corrupt deed is ever labeled "corruption" per se by its perpetrators. If the ambassador is waiting for someone to do this, he will never know about corporate America's Indonesian corruption. Many U.S. companies began operations long before there was a Foreign Corrupt Practices Act (FCPA) to constrain their business practices. Corruptive practices ingrained over generations of management are not easily eliminated, especially if people will not acknowledge the problem. It is hard to believe that Freeport has no problems, when other companies acknowledge the pressures.

Does the ambassador want to know about corruption? In January in an article in this newspaper, I suggested steps the United States Embassy might take to encourage companies to report corruption, collusion and nepotism (KKN). If any steps were taken, they are being kept a secret. In February, two American organizations cosponsored a forum in Jakarta on corruption and business ethics. The President of Indonesia took the time to address the gathering, as did the foreign minister, the attorney general and other ministers and directors general; nearly 400 business executives were present. The Australian ambassador and other diplomats stayed for most of the day. The U.S. ambassador was conspicuous for his absence. There may have been a perfectly good reason that Ambassador Gelbard was not personally available on Feb. 17, but was there no other high level embassy representative who could have shown support for Indonesia's efforts against business-related corruption?

For a leading G-7 country to have missed this event seems almost criminally negligent. Although the ambassador cries foul when an American corporation comes under the spotlight for alleged corruption, neither the U.S. Embassy nor the American Chamber of Commerce here has taken much of a lead in assisting companies to avoid corrupt and collusive relationships. Where does this leave companies like Freeport if they do have unwelcome problems? It leaves them with nowhere to turn.

The ambassador asked for proof of corruption. Unless the ambassador follows his words with actions, the obvious conclusion is that the words have public relations value only. He has blamed people's reluctance to discuss problems on the provision of the FCPA that requires the embassy to report violations to the Department of Justice.

There is a time, sometimes even an obligation, for the embassy to threaten disclosure of crimes. But this need not be the first course of action; this strategy is sure to have a chilling effect on companies' willingness to speak honestly. There are ways for the ambassador to encourage companies to report problems before their reports become self-incriminating. If, that is, the embassy really wants to know what is going on. Rightly or wrongly, Freeport has a poor public image. It and other American enterprises are not well served by an ambassador whose words of defense do not ring true.

DONNA K. WOODWARD

Medan, North Sumatra