Freeport claims ‘meal money’ to security forces is legitimate

JAKARTA. Mining company PT Freeport Indonesia claims that funds given to security personnel guarding project sites in Papua are allowed under a multi-national pact.

Initiated in 2000 by the governments of the United States and the United Kingdom, as well as energy companies, the Voluntary Principles on Security and Human Rights binds countries and extractive companies, stipulating that companies are allowed to contribute or reimburse the costs of protecting their facilities and personnel, which are borne by public security.

“[Freeport] use the voluntary principles as guidelines to disburse the security funds,” said Freeport Indonesia spokesman Ramdani Sirait on Tuesday.

He said the money was also given voluntarily and without any intention of bribing state officials.

Freeport, which operates the world’s largest gold mine in Grasberg, West Papua, has frequently been at the center of controversy since it revealed that it spent millions of US dollars for Indonesian government-provided security measures.

Amid recent tensions in the region, following several fatal incidents, the National Police chief Gen. Timur Pradopo admitted that his personnel had received “meal money” to guard the company’s mining site in Papua.

During negotiations between the company and its labor union over minimum salaries, his statement has sparked criticisms that these contributions have encouraged the police to side with the company’s interests as they attempt to maintain the region’s security.

According to its financial reports, the company’s spending on government-provided security measures had increased significantly from US$8 million in 2008, to $10 million in 2009, to $14 million in 2010.

Ramdani said that last year, his company had allocated $14 million for security measures.

“About 80 percent of the funds were spent to support facilities and infrastructure, including meals for officers,” he said.

“The rest of the funds were transferred to the bank accounts of military units.”

In January 2006, The New York Times reported that US Vice President Joe Biden, then a senator, said investigations into Freeport’s business practices in Indonesia were needed, as large payments by Freeport officials to individual Indonesian Army (TNI) officers were highly irregular.

A New York City comptroller said the company might have violated the US Foreign Corrupt Practices Act (FCPA), which forbids American companies from bribing foreign officials.

US Embassy assistant press attaché Corina R. Sanders declined to comment, including on whether such practices were legal, saying that the statement may only have been “judgmental”.

A member of the Indonesian Forum for the Voluntary Principles for Security and Human Rights, Agus Widjojo, said that security officers should not directly receive “meal money” without reporting it to the Finance Ministry.

“It may be true that police officers face particularly tough situations in Papua. But it does not mean they can receive the money directly from Freeport without reporting it to the state’s finance agency,” he said. (Ina Parlina/The Jakarta Post)