Military Denies Freeport Payments

Military Denies Freeport Payments

Jakarta Globe
Markus Junianto Sihaloho & Agencies

The military on Monday denied a report that it had received illegal protection payments from US mining giant Freeport McMoran in Papua Province, saying that it was no longer in charge of security in the area.

"How could Freeport pay the military?" said Sagom Tamboen, a military spokesman. "The law bars us from securing objects of vital national interest. It says the security of all vital projects must be handled by the police."

Sagom said the military headquarters had never issued any orders to secure Freeport.

Dow Jones Newswires reported late Sunday that the Arizona-based company said its local subsidiary paid "less than" $1.6 million through wire transfers and checks in 2008 to provide a "monthly allowance" to police and soldiers at and around Grasberg, one the world's largest copper mines.

Bill Collier, a Freeport spokesman, said the less-than-$1.6 million in direct payments were part of $8 million Freeport paid in broader "support costs" for 1,850 police and soldiers protecting Grasberg last year. While most of the direct payments went to the police-led Amole task force officially assigned to guard the mine, he said, soldiers and police in surrounding areas were also receiving payments.

"Although the bulk of our support is directed to supporting the Amole task force, we do provide some financial assistance to the police and military who are assigned to the general area surrounding our operations," Collier said, as reported by Dow Jones.

Dow Jones also reported that according to Nyoman Suastra, the Amole commander, there were 447 personnel in the task force, which includes some soldiers.

After subtracting that number from the 1,850 police and military Freeport acknowledges it paid last year, the company appears to be paying 1,400 security personnel outside the mine, an unspecified number of them soldiers.

Sagom did not deny that Freeport might have provided additional funds to establish a better partnership with other agencies' offices surrounding its mine. As an example, he said that additional funding was needed to entertain partners in an effort to maintain good personal or business relations.

But he said it was improper for Freeport to refer to such discretionary funds as security payments in Papua.

"We ban our personnel everywhere from receiving any security payments," Sagom said. "So if Freeport says something about additional money being security funding, we would think about filing a complaint."

Papua Police Chief Brig.Gen. Bagus Eko Danto on Monday told the Jakarta Globe that less than 400 of his subordinates, under the Amole task force, provide security assistance inside the Freeport mine. Sixty personnel in the force come from the local military command, he said.

Without disclosing the number of security payments he received from Freeport, Bagus admitted that all the money was distributed to the team members, with each receiving Rp 750,000 ($62) per month.

"I add to this a payment from our own money, because that sum is not enough. The local minimum monthly payment in Timika is Rp 1,200,000," Bagus said. "I don't know about other payments by Freeport and I do not want to comment on it."

Brig. Gen. Christian Zebua, an Army spokesman, declined to comment, saying he knew nothing about military operations in securing Freeport's mine.