Freeport MacMoRan
Freeport-McMoRan gave nearly 20 mln usd to Indonesian military, police -report
By http://www.forbes.com/finance/feeds/afx/2005/12/27/afx2416515.html
Jan 3, 2006, 21:10

JAKARTA (AFX) - US mining company Freeport-McMoRan, extracting gold from the largest reserve in the world in Indonesia's remote Papua province, gave nearly 20 mln usd to military and police here, the New York Times reported.

The report on Freeport-McMoRan's Grasberg mine operations is based on company records from 1998 to 2004, it said.

'Individual commanders received tens of thousands of dollars, in one case up to 150,000 dollars, according to the documents,' the newspaper said.

The biggest beneficiary was the commander of the troops in the mine's area, Lieutenant Colonel Togap Gultom, according to the report, which also named other senior Indonesian police.

Payments to individuals are illegal under Indonesian law, a former Indonesian attorney-general told the newspaper.

The revelations come amid a corruption crackdown ordered by President Susilo Bambang Yudhoyono, who came to power in Oct 2004 pledging to tackle corruption in the country.

The New Orleans-based company has defended itself, saying that it had provided a secure working environment for its more than 18,000 employees and contract workers in accordance with US and Indonesian laws.

'There is no alternative to our reliance on the Indonesian military and police in this regard,' the company wrote.

'The need for this security, the support provided for such security, and the procedures governing such support, as well as decisions regarding our relationships with the Indonesian government and its security institutions, are ordinary business activities.'

Freeport-McMoRan has been one of the top sources of revenue for Indonesia's government, providing it with 33 bln usd in benefits from 1992 to 2004, almost 2 pct of the country's gross domestic product, the newspaper reported.

This year it expects to pay the government 1 bln usd.

After riots disrupted production in 1996, the company also spent 35 mln usd on military infrastructure, the report claimed.



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